[Translation]

Quarterly Report(The First Quarter of 152nd Business Term)
From April 1, 2020 to June 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]

August 31, 2020

[Fiscal Year]

The First Quarter of 152nd Business Term (from April 1, 2020 to June 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]

Masachika Sawada, Manager, Legal Division[Contact Address]

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

03-3258-1111[Contact Person]

Masachika Sawada, 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 ………………………………………………………………………………………………

7
8

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

88(2) Information on the stock acquisition rights, etc. ………………………………………………………………………
(3) Information on moving strike convertible bonds, etc. …………………………………………………………………

88(4) Changes in the total number of issued shares and the amount of common stock and other …………………………
(5) Major shareholders ……………………………………………………………………………………………………

88(6) Information on voting rights …………………………………………………………………………………………
2. Changes in Senior Management …………………………………………………………………………………………

9
9

IV. Financial Information ……………………………………………………………………………………………………… 10
Part II Information on Guarantors, etc. for the Company ………………………………………………………………………… 10[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)
Three months ended June Three months ended June30, 2019
30, 2020
Revenues

Year ended
March 31, 2020

2,032,582

1,594,277

8,767,263

Income from continuing operations, before
income taxes

181,872

339,709180,268

Net income attributable to Hitachi, Ltd.
stockholders

120,303223,251

87,59677,450242,291(8,465)

Total Hitachi, Ltd. stockholders’ equity

3,288,305

3,036,533

3,159,986

Total equity

4,420,146

3,700,850

4,266,739

Total assets

9,732,754

10,160,516

9,930,081

124.58231.13

90.71

124.42230.86

90.60

33.8

29.9

31.8

Net cash provided by operating activities

78,861

153,796

560,920

Net cash provided by (used in) investing
activities(105,115)

357,457(525,826)

Net cash provided by financing activities

72,937

526,681

2,837

Cash and cash equivalents at end of period

833,566

1,851,083

812,331

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.

1

2. Description of Business
There were no material changes in principal businesses of Hitachi during the three months ended June 30, 2020. The HitachiGroup is comprised of the Company, 739 consolidated subsidiaries, and 410 equity-method associates and joint-ventures.
Changes in Business Unit (BU) of the Company and principal affiliated companies during the three months ended June 30,
2020 were as follows.
(As of June 30, 2020)
BU and principal affiliated companies
Main products and services
BU
Affiliated companies
IT(Change by organization merger) (Note 1)
Defense Systems BU
Industry[Consolidated subsidiaries](Change in company name) (Note 2)
Hitachi Industrial Holdings Americas, Inc.
Smart Life[Consolidated subsidiaries](Reclassification of segment) (Note(Reclassification of segment) (Note 3)
3)
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 4)(Excluded by the share transfer)
Hitachi Chemical Company, Ltd.
(Note 4)
Functional Materials (Electronics
Materials, Printed Wiring Boards
Materials, Electronics
Components), Advanced
Components and Systems(Mobility Components, Energy
Storage Devices, Life Sciencerelated Products)[Consolidated subsidiaries]
Others(Dissolved by the merger) (Note 5)
Hitachi Life, Ltd.
(Change in company name) (Note 5)
Hitachi Real Estate Partners, Ltd.
(Notes) 1. Defense Systems BU merged with Social Infrastructure Systems BU on April 1, 2020.
2. Sullair US Purchaser, Inc. changed its name to Hitachi Industrial Holdings Americas, Inc. on April 1, 2020.
3. 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.
4. 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.
5. 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 three months ended June 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 three months ended June 30, 2020 were as follows.
Revenues decreased 22% to 1,594.2 billion yen, as compared with the three months ended June 30, 2019, due mainly to theimpact of COVID-19 and lower revenues owing to the sale of shares of Hitachi Chemical Company, Ltd., despite higher
revenues in the Energy sector and the Industry sector.
Cost of sales decreased 21% to 1,179.4 billion yen, as compared with the three months ended June 30, 2019, and the ratio of
cost of sales to revenues was increased 1% to 74%, as compared with the three months ended June 30, 2019. Gross profit
decreased 24% to 414.8 billion yen, as compared with the three months ended June 30, 2019.
Selling, general and administrative expenses (“SG&A”) decreased 15% to 356.4 billion yen, as compared with the threemonths ended June 30, 2019, and the ratio of SG&A to revenues increased 1% to 22%, as compared with the three months ended
June 30, 2019.
Adjusted operating income (presented as revenues less cost of sales as well as SG&A) decreased 66.0 billion yen to 58.3
billion yen, as compared with the three months ended June 30, 2019, due mainly to lower profits in the Smart Life sector, Hitachi
Construction Machinery and Hitachi Metals.
Other income increased 240.5 billion yen to 284.1 billion yen, as compared with the three months ended June 30, 2019, due
mainly to the gains on business reorganization and others by selling shares of Hitachi Chemical Company, Ltd. Other expenses
increased 13.6 billion yen to 15.1 billion yen, as compared with the three months ended June 30, 2019.
Financial income (excluding interest income) decreased 0.1 billion yen to 2.2 billion yen and financial expenses (excludinginterest charges) decreased 2.6 billion yen to 0.7 billion yen, as compared with the three months ended June 30, 2019,respectively.
Share of profits (losses) of investments accounted for using the equity method decreased 5.5 billion yen to profits of 11.5
billion yen, as compared with the three months ended June 30, 2019.
As a result of the foregoing, EBIT (earnings before interest and taxes, which is presented as income from continuing
operations, before income taxes less interest income plus interest charges) increased 157.9 billion yen to 340.4 billion yen, as
compared with the three months ended June 30, 2019.
Interest income decreased 1.3 billion yen to 3.6 billion yen and interest charges decreased 1.2 billion yen to 4.3 billion yen,
as compared with the three months ended June 30, 2019, respectively.
Income from continuing operations, before income taxes increased 157.8 billion yen to 339.7 billion yen, as compared withthe three months ended June 30, 2019.
Income taxes increased 71.6 billion yen to 112.8 billion yen, as compared with the three months ended June 30, 2019.
Loss from discontinued operations was 0.3 billion yen, which was the same level as for the three months ended June 30,
2019.
Net income increased 86.2 billion yen to 226.4 billion yen, as compared with the three months ended June 30, 2019.
Net income attributable to non-controlling interests decreased 16.6 billion yen to 3.2 billion yen, as compared with the threemonths ended June 30, 2019, due mainly to the business reorganization of Hitachi High-Tech and Hitachi Chemical and decline
in earnings in Hitachi Construction Machinery and Hitachi Metals.
As a result of the foregoing, net income attributable to Hitachi, Ltd. stockholders increased 102.9 billion yen to 223.2 billion
yen, as compared with the three months ended June 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 three months ended June 30, 2019
have been restated in conformity with the new segments.
(IT)
Revenues decreased 7% to 430.1 billion yen, as compared with the three months ended June 30, 2019, due mainly to theimpact of COVID-19 and higher revenues by the transient services in the front business and the services & platforms businessposted in the three months ended June 30, 2019.
Adjusted operating income decreased 1.9 billion yen to 38.2 billion yen, as compared with the three months ended June 30,
2019, due mainly to the decreased revenues, despite improved profitability resulted from cost structure overhaul.
EBIT decreased 5.4 billion yen to 38.0 billion yen, as compared with the three months ended June 30, 2019, due mainly tothe decreased adjusted operating income and decrease in gains from selling the land of former production basis posted in thethree months ended June 30, 2019.

3

(Energy)
Revenues increased 3% to 74.4 billion yen, as compared with the three months ended June 30, 2019, due mainly to thehigher revenues in both of the nuclear energy business and the energy business.
Adjusted operating income increased 1.5 billion yen to 2.0 billion yen, as compared with the three months ended June 30,
2019, due mainly to the increased revenues and reduced fixed costs.
EBIT decreased 3.2 billion yen to 3.0 billion yen, as compared with the three months ended June 30, 2019, due mainly to thedecrease in share of profits of investments accounted for using the equity method.
(Industry)
Revenues increased 4% to 165.8 billion yen, as compared with the three months ended June 30, 2019, due mainly to theacquisition of JR Technology Group, LLC, despite the impact of COVID-19.
Adjusted operating income increased 0.3 billion yen to 1.7 billion yen, as compared with the three months ended June 30,
2019, due mainly to the increased revenues.
EBIT increased 2.2 billion yen to 4.4 billion yen, as compared with the three months ended June 30, 2019, due mainly to thegains posted by selling the land as well as the increased adjusted operating income.
(Mobility)
Revenues decreased 11% to 248.2 billion yen, as compared with the three months ended June 30, 2019, due mainly to theimpact of foreign currency translation as well as the impact of COVID-19, despite the increased revenues by expanding thebusiness in the building systems business.
Adjusted operating income decreased 0.7 billion yen to 19.1 billion yen, as compared with the three months ended June 30,
2019, due mainly to the decreased income in the railway systems business owing mainly to the decreased revenues, despite theincreased income in the building systems business due mainly to profitability improvement resulted from cost reduction, etc.
EBIT decreased 22.5 billion yen to 20.0 billion yen, as compared with the three months ended June 30, 2019, due mainly to
the gains posted in the three months ended June 30, 2019 by selling a part of shares of Agility Trains West (Holdings) Limited
stock.
(Smart Life)
Revenues decreased 19% to 403.6 billion yen, as compared with the three months ended June 30, 2019, due mainly to theimpact of COVID-19, despite the increased revenues resulted from the acquisition of Chassis Brakes International B.V. andhigher sales of semiconductor processing equipment.
Adjusted operating income decreased 21.5 billion yen to 1.8 billion yen, as compared with the three months ended June 30,
2019, due mainly to the decreased revenues.
EBIT worsened 25.7 billion yen to loss of 1.7 billion yen, as compared with the three months ended June 30, 2019, due
mainly to the decreased adjusted operating income.
(Hitachi Construction Machinery)
Revenues decreased 27% to 170.1 billion yen, as compared with the three months ended June 30, 2019, due mainly to theimpact of COVID-19 and foreign currency translation.
Adjusted operating income decreased 19.9 billion yen to 2.6 billion yen, as compared with the three months ended June 30,
2019, due mainly to the decreased revenues, despite an improvement in profitability owing mainly to the reduced costs.
EBIT decreased 20.0 billion yen to 2.4 billion yen, as compared with the three months ended June 30, 2019, due mainly tothe decreased adjusted operating income.
(Hitachi Metals)
Revenues decreased 34% to 154.7 billion yen, as compared with the three months ended June 30, 2019, due mainly to adecrease in demand for products for automobile owing to the impact of COVID-19.
Adjusted operating income worsened 12.7 billion yen to loss of 7.2 billion yen, as compared with the three months ended
June 30, 2019, due mainly to the decreased revenues.
EBIT worsened 11.8 billion yen to loss of 6.6 billion yen, as compared with the three months ended June 30, 2019, due
mainly to the decreased adjusted operating income.
(Others)
Revenues decreased 8% to 98.5 billion yen, as compared with the three months ended June 30, 2019.
Adjusted operating income decreased 1.7 billion yen to 1.6 billion yen, and EBIT decreased 0.3 billion yen to 4.4 billion
yen, as compared with the three months ended June 30, 2019, respectively.
Revenues by Market
Revenues in Japan decreased 15% to 818.0 billion yen, as compared with the three months ended June 30, 2019, due mainly
to the decreased revenues in the Smart Life sector and lower revenues owing to the sale of shares of Hitachi Chemical Company,
Ltd. The decrease was partially offset by the increased revenues in the Industry sector.
Overseas revenues decreased 27% to 776.2 billion yen, as compared with the three months ended June 30, 2019, due mainly
to the decreased revenues in North America, particularly in Hitachi Metals and the Smart Life sector, the decreased revenues in
Europe, mainly in the Mobility sector and Hitachi Construction Machinery and decreased revenues in Asia and other area, mainlyin Hitachi Construction Machinery, despite higher revenues in the Energy sector and the Industry sector. This decrease was also
attributable to the decreased revenues owing to the sale of shares of Hitachi Chemical Company, Ltd.
As a result, the ratio of overseas revenues to total revenues decreased 3% to 49%, as compared with the three months ended
June 30, 2019.
4

(2) Analysis of Financial Condition and Cash Flows
Liquidity and Capital Resources
During the three months ended June 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 three months ended June 30, 2020 increased by 86.2 billion yen, as compared with the three months ended
June 30, 2019. Net cash outflow from a change in trade payables increased by 25.7 billion yen, as compared with the threemonths ended June 30, 2019. However, net cash inflow from a change in trade receivables and contract assets increased by 115.1
billion yen, as compared with the three months ended June 30, 2019. And, net cash outflow from a change in inventories
decreased by 27.6 billion yen, as compared with the three months ended June 30, 2019 as well as 31.4 billion yen of decrease inincome taxes payment. As a result of the foregoing, net cash provided by operating activities was 153.7 billion yen in the threemonths ended June 30, 2020, an increase of 74.9 billion yen compared with the three months ended June 30, 2019.
(Cash Flows from Investing Activities)
Net amount of investments related to property, plant and equipment* was 62.0 billion yen in the three months ended June30, 2020. This net sum decreased by 29.9 billion yen compared with the three months ended June 30, 2019. Proceeds from sale ofinvestments in securities and other financial assets (including investments in subsidiaries and investments accounted for using theequity method) in the three months ended June 30, 2020 increased by 396.2 billion yen, as compared with the three months ended
June 30, 2019, due mainly to the sale of shares of Hitachi Chemical Company, Ltd. Purchase of investments in securities andother financial assets (including investments in subsidiaries and investments accounted for using the equity method) in the threemonths ended June 30, 2020 decreased by 20.5 billion yen, as compared with the three months ended June 30, 2019. As a resultof the foregoing, net cash provided by investing activities was 357.4 billion yen in the three months ended June 30, 2020, as
compared with 105.1 billion yen of net cash outflow in the three months ended June 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 threemonths ended June 30, 2020 increased by 428.9 billion yen, as compared with the three months ended June 30, 2019, due mainly
to the purchase of shares of Hitachi High-Tech Corporation. However, net cash outflow related to long-term debt** in the threemonths ended June 30, 2020 decreased by 48.5 billion yen, as compared with the three months ended June 30, 2019.
Furthermore, net cash inflow from a change in short-term debt in the three months ended June 30, 2020 increased by 828.2
billion yen, as compared with the three months ended June 30, 2019. As a result of the foregoing, net cash flows provided infinancing activities were 526.6 billion yen in the three months ended June 30, 2020, an increase of 453.7 billion yen comparedwith the three months ended June 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 June 30, 2020 were 1,851.0 billion yen, an increase of 1,038.7
billion yen from March 31, 2020. Free cash flows, the sum of cash flows from operating and investing activities, were an inflow
of 511.2 billion yen in the three months ended June 30, 2020, an increase of 537.5 billion yen compared with the three months
ended June 30, 2019.
Assets, Liabilities and Equity
The following is an overview of Hitachi’s assets, liabilities and equity as of June 30, 2020.
Total assets were 10,160.5 billion yen, an increase of 230.4 billion yen from March 31, 2020, due mainly to an increase in
cash and cash equivalents and an increase in inventories, despite decreased trade receivables due to the lower revenues caused by
the impact of COVID-19 and efforts for cash collection of trade payables.
Total interest-bearing debt, the sum of short-term debt and long-term debt, was 2,441.2 billion yen, an increase of 956.1
billion yen from March 31, 2020. This was due mainly to an increase in short-term debt.
Total Hitachi, Ltd. stockholders’ equity decreased by 123.4 billion yen from March 31, 2020, to 3,036.5 billion yen. The
ratio of total Hitachi, Ltd. stockholders’ equity to total assets was 29.9%, as compared with 31.8% as of March 31, 2020.
Non-controlling interests were 664.3 billion yen, a decrease of 442.4 billion yen from March 31, 2020.
Total equity was 3,700.8 billion yen, a decrease of 565.8 billion yen from March 31, 2020. The ratio of interest-bearing debt
to total equity was 0.66, 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 three months ended June 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 three months ended June 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 three months ended June 30, 2020.
5

(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 three months ended June 30, 2020 were 56.3 billion yen,
3.5% of revenues. A breakdown of R&D expenditures by segment is shown below.
(Billions of yen)Three months ended
June 30, 2020

Segment
IT

12.2

Energy1.4

Industry

2.3

Mobility

6.1

Smart Life

21.6

Hitachi Construction Machinery

4.7

Hitachi Metals

3.5

Others0.4

Corporate Items

3.7
Total

56.3

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

Land[Area inthousandsof m2]

Buildings
andstructures

MachineryandvehiclesTools,
furnitureandfixtures

Right-of-use
Assets134,112

177,51247,67530,257-

47,919496,648

55,927

-

-

-

-

-

-

-

-

-

-

-

-

-

-

-

-

Constructionin progress

Other

Number of
employees

Total

59,173
Smart Life
[8,002]
Hitachi High-Tech-(Note 1)[-]

Hitachi Chemical-(Note 2)[-]

(Notes) 1. The book value of the facilities in the Smart Life segment materially increased due mainly to the fact that Hitachi
High-Tech Corporation became a wholly-owned subsidiary of the Company on May 20, 2020, and the Hitachi High-Tech segment was abolished and reclassified in the Smart Life segment.
2. Hitachi Chemical Company, Ltd. has ceased to be a consolidated subsidiary of the Company due to the sharetransfer on April 20, 2020. As a result, there are not the property, plants and equipment in the Hitachi Chemical
segment.
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.

6

(7) 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 three months ended June 30, 2020.

7

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
third quarter (shares)(June 30, 2020)

Number of sharesissued as of thefiling date (shares)(Note)(August 31, 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 August 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
Change in
the total
number ofissued shares(shares)Date

May 27, 2020

(Note）

604,800

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

928

460,790928

178,756(Note) This increase is due to the issuance of new shares as restricted stock compensation.
Issue price: 3,067 yen per share
Amount by which stated capital is to be increased: 1,533.5 yen per share
Allottees: 31 Executive officers of the Company and 33 Corporate officers of the Company(5) Major shareholders
Not applicable.

8(6) Information on voting rights
Information on voting rights as of May 28, 2020 is stated in this item because the Company does not identify the number ofvoting rights as of June 30, 2020 due to the lack of information on the number of the Company’s shares held by the entity which
the Company holds one quarter or more of total number of voting rights of such entity as of June 30, 2020.
1) Issued shares(As of May 28, 2020)
Classification

Number of voting
rightsNumber of shares (shares)

Description

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

1,054,900

Shares with full voting right (others)

Common stock

964,353,700

Shares less than one unit

Common stock

2,476,677－－

967,885,277－－

Number of issued shares
Total number of voting rights

9,643,537

9,643,537－－－(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.
2) Treasury stock, etc.
(As of May 28, 2020)

Name ofshareholder

Hitachi, Ltd.

Address

Number ofshares held
under own name(shares)

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

Number ofshares held
under thenames ofothers(shares)

Total shares
held (shares)

Ownership
percentage tothe total
number ofissued shares(%)

1,021,700－

1,021,700

0.11

Aoyama Special SteelCo., Ltd.

9-11, Shinkawa 2-chome, Chuoku, Tokyo

2,100

－

2,100

0.00

SAITA KOUGYOU
CO., LTD.

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

17,600－17,6000.00

Nitto Jidosha

3268, Nagaoka, Ibarakimachi,

Kiki K.K.

Higashiibaraki-gun, Ibaraki

10,500－10,500

0.00

3,000

－

3,000

0.00

1,054,900－

1,054,900

0.11Mizuho Co., Inc.
Total

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

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

9

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.

10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

55,7June 30, 2020

March 31, 2020

1,851,083
1,743,678
1,447,620
255,488482,237

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

5,780,106

5,217,589

459,633
443,042
1,936,447
604,532
455,046
481,710

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

Total non-current assets
Total assets

4,380,410

4,712,492

10,160,516

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

1,202,744
241,354367,872
1,098,284
463,953
634,394
626,896

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

4,635,497

3,733,178

997,117492,574
334,478

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

1,824,169

1,930,164

6,459,666

5,663,342

460,790
140,346
2,475,984(37,228)(3,359)459,862
464,795
2,296,208(57,070)(3,809)3,036,533

3,159,986

664,317

1,106,753

Total equity

3,700,850

4,266,739

Total liabilities and equity

10,160,516

9,930,081

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

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
Three months ended June 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
10
11
11

12

2020
1,594,277(1,179,428)
414,849(356,479)
284,154(15,126)
2,237
(754)

2019
2,032,582(1,488,390)
544,192(419,804)
43,603(1,477)2,367(3,445)

11,537

17,075

340,418
3,656(4,365)
339,709(112,881)
226,828(337)
226,491

182,511
4,963(5,602)
181,872(41,226)
140,646(409)
140,237

223,251
3,240

120,303
19,934231.48231.21

Yen
125.00124.85231.13230.86124.58124.4213

13

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

Millions of yen

Net income

2020
226,4912019
140,237

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

17,46239
17,501

128
25
153

Items that can be reclassified into net income
Foreign currency translation adjustments
Net changes in cash flow hedges
Share of OCI of investments accounted for using the equity method
Total items that can be reclassified into net income

11,015
1,173(4,862)
7,326(66,669)
295
4,588(61,786)

24,827251,318(61,633)
78,604242,291
9,027

77,450
1,154

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 Changes in Equity
Three months ended June 30, 2020

Millions of yen
2020

Balance at beginning of period

Commonstock

Capitalsurplus(note 5)Retainedearnings(note 8)

Accumulated
othercomprehensive
income459,862

464,795

2,296,208(57,070)(3,809)Treasurystock,
at cost

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

Total equity

3,159,986

1,106,753

4,266,739

Changes in equity
Reclassified into retained earnings

-

-

4,836

(4,836)

-

-

-

-

Net income--

223,251--

223,251

3,240

226,491

Other comprehensive income

-

-

-

19,040-19,0405,787

24,827

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

Dividends to non-controlling interests

-

-

-

-

-

-

(14,419)(14,419)

Acquisition of treasury stock

-

-

-

-

(15)

(15)

-

(15)

Sales of treasury stock

-

(203)

-

-

465

262

-

262

Issuance of new shares

928

928

-

-

-

1,856

-

1,856

-

(325,174)

-

5,638

-

(319,536)(437,044)(756,580)

Total changes in equity

928(324,449)

179,776

19,842450(123,453)(442,436)(565,889)

Balance at end of period

460,790

140,346

2,475,984(37,228)(3,359)3,036,533

664,3173,700,850

Changes in non-controlling interests

Three months ended June 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--

13,183(13,183)

-

-

-

-

Net income--

120,303--

120,303

19,934140,237

Other comprehensive income

-

-

-

(42,853)-(42,853)(18,780)(61,633)

Dividends to Hitachi, Ltd. stockholders--(48,280)--(48,280)-(48,280)(22,132)

Restated balance
Changes in equity

Dividends to non-controlling interests

-

-

-

-

-

-

(22,132)

Acquisition of treasury stock

-

-

-

-

(28)

(28)

-

(28)

Sales of treasury stock

-

(138)

-

-

269

131

-

131

Issuance of new shares

1,072

1,072

-

-

-

2,144

-

2,144

-

(3,245)-126-(3,119)2,094(1,025)

Changes in non-controlling interests
Total changes in equity

1,072(2,311)

85,206(55,910)241

28,298(18,884)

9,414

Balance at end of period

459,862

461,475

2,370,197

450(3,679)3,288,305

1,131,841

4,420,146

See accompanying notes to condensed quarterly consolidated financial statements.

F-3

Condensed Quarterly Consolidated Statement of Cash flows
Three months ended June 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

2020

2019

226,491

140,237

98,449338
112,881(11,537)(1,418)(281,651)(2,857)422,176(128,435)(115,321)(119,227)(3,900)3,168

103,477388
41,226(17,075)(1,217)(24,602)(2,136)
307,038(156,093)(89,574)(141,486)(19,542)
14,897

199,157
3,273
5,585(4,429)(49,790)

155,538
7,883
2,235(5,544)(81,251)

153,796

78,861(53,135)(19,852)
10,900(79,003)(18,873)
5,839(23,617)(44,172)

433,629
9,532

37,371(6,277)357,457(105,115)

1,044,031
5,011(33,156)(48,367)(12,096)(15)
262(428,972)(17)

215,770
25,161(101,867)
2,603(48,328)(20,449)
(28)
131
(56)
-

526,681

72,937

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

818(20,710)

1,038,752

25,973

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

812,331
1,851,083

807,593
833,566

See accompanying notes to condensed quarterly consolidated financial statements.

F-4

Notes to Condensed Quarterly Consolidated Financial Statements
June 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 three months ended June 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 three months ended June 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 most of the impact of the slowdown in the global economy caused by the spread of COVID19 would occur in the first half of the fiscal year ending March 31, 2021, with the decrease in demand to continue in the second
half of the fiscal year in part of the business, but would not be material in the longer term, although the situation varies from one
segment or region to another since the Company is engaged in a wide range of business activities around the globe. The Company
judged that this is the best assumption as of June 30, 2020. However, if the impact lasts longer or is wider than the assumption
described above, it could affect significant accounting estimates or judgements 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 three months ended June 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 three months ended June 30, 2019,“Change in other liabilities” of (141,486) million yen has been reclassified as “Change in accrued expenses.” In addition, “Change
in other assets” of (6,152) million yen and “Change in other liabilities” of 17,554 million yen, which were separately presented,
have been reclassified as “Other” under cash flows from operating activities.

F-5

Notes to Condensed Quarterly Consolidated Financial Statements
June 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 three months ended June 30, 2020 are computed using the estimated annual effective tax rate.

F-6

Notes to Condensed Quarterly Consolidated Financial Statements
June 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 was unified to Smart Life. Figures for the threemonths ended June 30, 2019 have been restated on the basis of the reclassification.
In April 2020, the Company sold all shares of Hitachi Chemical Company, Ltd. (Hitachi Chemical). As a result, Hitachi Chemical
was deconsolidated. Accordingly, Hitachi Chemical segment ceased to be a business segment, but the segment figures for the threemonths ended June 30, 2020 and 2019 are disclosed individually to enhance fair disclosure.

F-7

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

2019

IT

397,549

426,528

EnergyIndustry

64,339134,239

59,872
129,695

Mobility
Smart Life

246,349
382,266

278,131468,212

Hitachi Construction Machinery
Hitachi Metals

170,119
149,062

234,626
226,601

Hitachi Chemical
Others47,554

151,104
55,423

Subtotal
Corporate items

1,591,477
2,800

2,030,192
2,390

Total

1,594,277

2,032,582

Revenues from Intersegment Transactions
Millions of yen
2020

2019

IT

32,63736,326

EnergyIndustry

10,07831,617

12,22030,500

Mobility
Smart Life

1,893
21,4172,222
30,978Hitachi Construction Machinery
Hitachi Metals

38
5,711

70
7,352

Hitachi Chemical
Others51,035

4,874
52,069154,426(154,426)

176,611(176,611)--

Subtotal
Corporate items and Eliminations
Total
Total Revenues

Millions of yen
2020

2019

IT

430,186

462,854

EnergyIndustry

74,417
165,856

72,092
160,195

Mobility
Smart Life

248,242
403,683

280,353
499,190

Hitachi Construction Machinery
Hitachi Metals

170,157
154,773

234,696
233,953

Hitachi Chemical
Others98,589155,978
107,492

Subtotal
Corporate items and Eliminations

1,745,903(151,626)

2,206,803(174,221)

Total

1,594,277

2,032,582

F-8

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

2019

IT

38,03543,531

EnergyIndustry

3,073
4,415

6,277
2,165

Mobility
Smart Life

20,011(1,779)42,593
23,952

Hitachi Construction Machinery
Hitachi Metals

2,429(6,699)22,520
5,122

Hitachi Chemical
Others

4,413

7,825
4,713

Subtotal
Corporate items and Eliminations

63,898276,520

158,698
23,813

Total

340,418

182,511

Interest income
Interest charges

3,656(4,365)

4,963(5,602)

Income from continuing operations, before income taxes

339,709

181,872

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-9

Notes to Condensed Quarterly Consolidated Financial Statements
June 30, 2020
(5) Business Acquisitions and Divestitures
The following are the main Business Acquisitions and Divestitures for the three months ended June 30, 2020, including the period
up to the approval date of the condensed quarterly consolidated financial statements.
(a) 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 consideration for the acquisition of Hitachi ABB Power Grid was 6,850 million U.S. dollars (722,062 million yen).
Acquisition related costs of 5,391 million yen have been posted before 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 three months ended June 30, 2020 and 2019were 752 million yen and 284 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.
Due to a time constraint between the acquisition date and the filing date of the quarterly report, the initial accounting treatment
for the acquisition of Hitachi ABB Power Grid has not been completed. Accordingly, no disclosure has been made to theamounts of assets acquired and liabilities assumed that were recognized at the date of acquisition, the amounts of noncontrolling interests, or the balances of goodwill. The consideration may vary due to transaction price adjustment.
Assuming that such acquisition was made as of April 1, 2020, the impact on revenues and net income for the three months
ended June 30, 2020 has not been disclosed due to the time constraint of preparing the pro forma data.
(b) 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 three months ended June 30, 2020.
(c) 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.
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.

F-10

Notes to Condensed Quarterly Consolidated Financial Statements
June 30, 2020
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.
(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.
(c) 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. Other provision related to this agreement is included in Other current liabilities in thecondensed quarterly consolidated statement of financial position as of June 30, 2020. 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 andthe 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-sale assets in accordance with IFRS 5 “Non-current Assets Held for Sale andDiscontinued 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. As of June 30, 2020, the corresponding amount of assets meeting the criteria as held-for-sale assets included in
Other current assets is 263,614 million yen. The shares of MHPS will be delivered to MHI on September 1, 2020, as theprocedures required for the transfer were completed.

F-11

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

March 31, 2020

1,176,186

1,684,225

Contract assets

428,192

429,117

Others139,300

146,863

Total

1,743,678

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-12

Notes to Condensed Quarterly Consolidated Financial Statements
June 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 June 30 and March
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
June 30, 2020
Carrying amounts

March 31, 2020

Estimated
fair values

Carrying amounts

Estimated
fair values

AssetsInvestments in securities and otherfinancial assets
Lease receivables

85,84487,14583,55384,834

Debt securities

71,383

71,38673,04873,051Long-term loans receivable

25,70028,393

26,642

28,576

Bonds

355,640

356,615

385,293

386,082Long-term borrowings

612,125

615,363637,648

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-13

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

-

-

3,548

3,548

9,251

4,710

7,704

21,665-34,55585

34,640148,191-

106,957

255,148

157,442

39,265

118,294

315,001-

17,815-

17,815-

17,815-

17,815Derivatives
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-14

Notes to Condensed Quarterly Consolidated Financial Statements
June 30, 2020
The following tables present the changes in Level 3 instruments measured on a recurring basis for the three months ended June30, 2020 and 2019.
June 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]

(139)
1,205

57
-

(1)
-

(83)
1,205

Purchases
Sales and redemption

1,068(1,041)

303(613)(6,061)

1,371(7,715)Acquisitions and divestitures
Other(3,591)
118

(656)
(4)

-

(4,247)
114

Balance at end of period

110,505

7,704

85

118,294

(152)

57

(1)

(96)

Unrealized gain (loss) relating tofinancial assets held at end of period [3]June 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]

(62)
881

37
-

(29)
-

(54)
881

Purchases
Sales and redemption

1,018
(757)

359
(761)

-

1,377
(1,518)

Other
Balance at end of period(10)106,147

(24)
8,955

7,030

(34)
122,132

(62)

62

(29)

(29)

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.

F-15

Notes to Condensed Quarterly Consolidated Financial Statements
June 30, 2020
(8) Dividends
Dividends paid on the Company’s common stock for the three months ended June 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 paid on the Company’s common stock for the three months ended June 30, 2019 are as follows:

Decision
The Board of Directors
on May 10, 2019

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

F-16

Cash dividends
per share (yen)50.0

Record date

Effective date

March 31, 2019

May 31, 2019

Notes to Condensed Quarterly Consolidated Financial Statements
June 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 three months ended
June 30, 2019 have been restated on the basis of the reclassification. Details of the reclassification are described in note 4.
(Millions of yen)
June 30, 2020
Overseas
Revenues
Subtotal

Total
Revenues

8,907

118,505

430,186607

147

14,48574,417

19,943

3,308

3,311

42,975

165,856

103,467

11,982

47,911

9,192

172,552

248,242

188,252

114,91746,36338,14516,006215,431403,683

Hitachi Construction Machinery

39,93439,02627,906

17,85545,436130,223

170,157

Hitachi Metals

78,80834,08432,998

6,931

1,952

75,965

154,773

-

-

-

-

-

-

-

Others82,25012,244

1,967

1,387

741

16,33998,589Subtotal

959,428

368,451

183,199

149,133

85,692786,475

1,745,903

Corporate items and Eliminations(141,425)(7,805)

(994)

(781)

(621)

(10,201)(151,626)

Total

818,003360,646

182,205

148,352

85,071

776,274

1,594,277

North
America

Other
Areas

Japan

Asia

IT

311,681

38,13938,47032,989Energy59,932

10,161

3,570

Industry

122,881

16,413

Mobility

75,690Smart Life

Hitachi Chemical

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

Total
Revenues

8,666

137,268

462,854

1,031

678

8,382

72,092

12,103

2,426

5,256

40,419160,195

100,430

8,869

84,353

10,305203,957

280,353

247,624

105,351

82,21544,474

19,526

251,566

499,190

Hitachi Construction Machinery

40,876

56,64047,13738,28951,754

193,820

234,696

Hitachi Metals

104,610

43,104

69,107

11,696

5,436

129,343

233,953

Hitachi Chemical

56,80867,492

11,882

15,468

4,328

99,170155,978

Others87,17012,855

4,515

1,589

1,363

20,322

107,492

Subtotal

1,122,556

455,172

285,994

235,769

107,3121,084,247

2,206,803

Corporate items and Eliminations(156,212)(12,486)(3,294)(1,289)(940)(18,009)(174,221)

Total

966,344442,686

282,700

234,480

106,372

1,066,238

2,032,582

North
America

Japan

Asia

IT

325,586

43,81848,34136,443

Energy63,710

4,848

1,825

Industry

119,776

20,634

Mobility

76,396

Smart Life

F-17

Europe

Other
Areas

Notes to Condensed Quarterly Consolidated Financial Statements
June 30, 2020
The IT segment consists of Front Business and Services & Platforms, for which revenue amounted to 291,222 million yen and
172,847 million yen for the three months ended June 30, 2020 and 299,114 million yen and 196,288 million yen for the threemonths ended June 30, 2019, respectively (including intersegment transactions). Front Business is operated mainly in Japan, andServices & 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 three months ended June 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, and the Industry segment includes revenue
from businesses such as industry & distribution systems. These segments 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 in Europe.
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-18

Notes to Condensed Quarterly Consolidated Financial Statements
June 30, 2020(10) Other Income and Expenses
The main components of other income and expenses for the three months ended June 30, 2020 and 2019 are as follows:
Millions of yen
2020

2019

Net gain (loss) on sales and disposals of fixed assets

2,015

2,128

Impairment losses

(338)

(388)

Net gain (loss) on business reorganization and others

281,651

24,602

Special termination benefits(1,185)(976)

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 three months ended June 30, 2020 and 2019were 1,523 million yen and 1,517 million yen, respectively. Restructuring charges (structural reform expenses) mainly include
impairment losses and special termination benefits.
(11) Financial Income and Expenses
The main components of financial income and expenses for the three months ended June 30, 2020 and 2019 are as follows:
Millions of yen
2020

2019

Dividends received

1,976

2,367

Exchange gain (loss)(390)(2,559)Dividends received for the three months ended June 30, 2020 and 2019 are from FVTOCI financial assets.
(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. 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 thecondensed 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 three months ended June 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

4

18

(341)

(427)

(337)

(409)

-

-

(337)

(409)
Millions of yen

2020

2019

Cash flows from discontinued operations
Cash flows from operating activities

(260)

(693)

Cash flows from investing activities--

Cash flows from financing activities

381

740

F-19

Notes to Condensed Quarterly Consolidated Financial Statements
June 30, 2020(13) Earnings Per Share (EPS) Information
The calculations of basic and diluted EPS attributable to Hitachi, Ltd. stockholders for the three months ended June 30, 2020 and2019 are as follows:
Number of shares
2020
Weighted average number of shares on which basic EPS is calculated

2019

965,905,747

965,688,022

Stock options

681,400

878,640

Restricted stock

446,753

308,714

Effect of dilutive securities

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

5,506

-

967,039,406

966,875,376
Millions of yen

2020

2019

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

223,588

120,712--223,588

120,712

(337)

(409)

-

-

(337)

(409)

223,251

120,303--223,251

120,303

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
Basic231.48125.00

Diluted231.21124.85Basic(0.35)(0.42)

Diluted(0.35)(0.42)

Basic

231.13124.58

Diluted230.86124.42

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

EPS attributable to Hitachi, Ltd. stockholders

F-20

Notes to Condensed Quarterly Consolidated Financial Statements
June 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 and an associate in Europe received a complaint filed by a customer in Europe seeking
compensation for consequential losses of 263 million euro (31,849 million yen) and interest allegedly incurred by
performance defects of a power plant. As of June 30, 2020, the amount of compensation claimed by the customer waschanged to 270 million euro (32,694 million yen). Although the subsidiary and the associate in Europe will vigorously defend
themselves against this lawsuit, there can be no assurance that they 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 August 31, 2020 by Toshiaki Higashihara,
President and CEO of the Company.

F-21

[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
August 31, 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 first quarter of the 152nd fiscal year (from April 1, 2020 to June30, 2020) were adequate under the Financial Instruments and Exchange Act.
2. Special Notes
None.

A-2