Outline of Consolidated Financial Results for the Second
Quarter ended September 30, 2011
November 1, 2011

Hitachi, Ltd.

Outline of Consolidated Financial Results for the Second Quarter ended
September 30, 2011

Contents1.

2.
3.

Outline of Consolidated Financial Results for
the Second Quarter ended September 30,
2011
Outlook for Fiscal 2011
Initiatives for Growing the Social Innovation
Business and Strengthen the businessstructure to stabilize profitability
Copyright © 2011, Hitachi, Ltd., All rights reserved.

2

Outline of Consolidated Financial Results for the Second Quarter ended
September 30, 2011

Contents1.

2.
3.

Outline of Consolidated Financial Results for
the Second Quarter ended September 30,
2011
Outlook for Fiscal 2011
Initiatives for Growing the Social Innovation
Business and Strengthen the businessstructure to stabilize profitability
Copyright © 2011, Hitachi, Ltd., All rights reserved.

3

1-1. Financial Results Highlights
Highlights of Fiscal 2011 1st Half Financial Results
Rose 2% YoY, rose 4% compared to previous forecast*

Revenues

OperatingincomeNet other income(deductions)
Net income
attributable to
Hitachi, Ltd.
Free cash flows• Primarily reflected higher YoY revenues in the Others, Information & Telecommunication
Systems and Construction Machinery segments. In Others segment, Hitachi Transport System,
Ltd. acquired Vantec Corporation.
• All segments exceeded the previous forecasts excluding Construction Machinery segment.

Declined 47.4 billion yen YoY, rose 70.6 billion yen compared toprevious forecast*• The overall decline reflected the impact of the Great East Japan Earthquake, yen’s
appreciation and other factors. However, materials expenses were reduced.
• All segments exceeded the previous forecasts due to increased sales and cost reductions.

Declined 83.3 billion yen YoY, 12.6 billion yen worse compared toprevious forecast*• Large gains on the sale of marketable securities were recorded in the previous fiscal year.
• Fell short of the previous forecasts due to the impact of yen’s appreciation.

Declined 107.1 billion yen YoY, improved 40.9 billion yen compared toprevious forecast*• Hitachi has remained in the black for eight consecutive quarters despite the impact of the Great
East Japan Earthquake.
• Net income attributable to Hitachi, Ltd. exceeded the previous forecasts.

Negative 128.6 billion yen, declined 400.5 billion yen YoY• Decrease in net income• Outflows for acquisitions* Previous forecast announced on July 29, 2011

Copyright © 2011, Hitachi, Ltd., All rights reserved.

4

1-2. Consolidated Statements of Operations
Billions of Yen
Year over year

Previous
forecast
comparison(＊)[102%][104%]

70.2+172.7170.6(47.4)

+70.6

45.7

(37.6)(83.3)(12.6)

Income before
income taxes

263.8

133.0

(130.7)+58.0

Income taxes

59.3

55.2

(4.0)

+10.2

Net income

204.4

77.7

(126.7)+47.7

Net income attributable tononcontrolling interests

46.3

26.7

(19.6)+6.7

Net income attributable to
Hitachi, Ltd.

158.0

50.9

(107.1)+40.9

Fiscal 2010/1H

Fiscal 2011/1H

4,502.4

4,572.7

Operating income

218.0

Net other income(deductions)

Revenues* Previous forecast announced on July 29, 2011
Copyright © 2011, Hitachi, Ltd., All rights reserved.

51-3. Impact of the Great East Japan Earthquake

Revenues

Operating loss
Other
deductions

Net loss
attributable to
Hitachi, Ltd.

(190.0) billion yen
Lower capacity utilization due to the difficulty in procuring parts(70.0) billion yen
Lower capacity utilization due to the difficulty in procuring parts(20.0) billion yen
Impact of the earthquake on equity-method affiliates, etc.

(70.0) billion yen

Copyright © 2011, Hitachi, Ltd., All rights reserved.

6

1-4. Major Factors for Change in Operating Income (Year over Year)
Billions of Yen

Operating income
Impact of
the earthquake :(70.0)

Lower sales
prices :(85.0)

218.0(47.4)
170.6

Effect offoreign exchange
movements :(28.0)

Improved capacity
utilization :45.6

FY 2010 1H

FY 2011 1H

Material procurement
cost cutting :90.0

Copyright © 2011, Hitachi, Ltd., All rights reserved.

71-5. Major Factors for Change in Net Income Attributable to Hitachi, Ltd.
Billions of Yen
Operating income
 Net income
Attributable to Hitachi, Ltd.

Effect offoreign exchange
movements :(14.9)

Equity in net lossof affiliatedcompanies* :
5.4

170.6

(119.6)Structuralreform-related
expenses:(7.3)

Losses on disposal of
fixed asset,
gains on securities, etc.:(0.8)

Impact of
the earthquake(Other deductions) :(20.0)

50.9
Income taxes :(55.2)Net income attributable
to noncontrolling interests :(26.7)

Fiscal 2011/1H

Operating
IncomeNet income
Attributable to
Hitachi, Ltd.

* The impact of the earthquake is not included in figures
Copyright © 2011, Hitachi, Ltd., All rights reserved.

8

1-6. Major Factors for Change in Net Income Attributable to Hitachi, Ltd. (Year over Year)
Losses on disposal of
fixed assets,gain (loss) on securities, etc. :(74.1)

Billions of Yen
Net income attributable
to Hitachi, Ltd.

158.0

(107.1)

Improved equity
in net lossof affiliatedcompanies* :10.8

Improved operating
income* :22.6

Impact of the earthquake : (90.0)
Operating loss
: (70.0)
Other deductions : (20.0)

Net income attributable tononcontrolling interests :
19.6

50.9

FY2010/1H

FY2011/1H

Decreasing ofincome taxes :4.0* The impact of the earthquake is not included in figures for improved operating income,and improved equity in net loss of affiliated companies.
Copyright © 2011, Hitachi, Ltd., All rights reserved.

91-7. Revenues by Market
Billions of Yen
Fiscal 2010/1H

Ratio

Fiscal 2011/1H

Ratio

Year
over yearJapan2,523.5

56%

2,572.4

56%

102%

Outside Japan

1,978.844%2,000.3

44%

101%

1,022.6

23%

1,003.2

22%

98%

China

575.4

13%

529.7

12%

92%

North America

380.5

8%

392.1

9%

103%

Europe

363.2

8%

374.4

8%

103%

Other Areas

212.4

5%

230.5

5%

109%

4,502.4100%

4,572.7

100%

102%

Asia

Total

Copyright © 2011, Hitachi, Ltd., All rights reserved. 10

1-8. Consolidated Balance Sheets
Billions of Yen
As of March 31,
2011

As of September 30,
2011

Change fromMarch 31, 2011

Total assets

9,185.6

9,199.1

13.5

Total liabilities

6,744.2

6,752.5

8.2

Interest-bearing debt

2,521.5

2,641.1

119.5

Total Hitachi, Ltd.
stockholders’ equity

1,439.8

1,450.5

10.6

Noncontrolling interests

1,001.5

996.0

(5.4)

15.7%

15.8%

Total Hitachi, Ltd.
stockholders’ equity ratio

D/E ratio(Including noncontrolling interests)

1.03 times

1.08 times

0.1
improvement

0.05
increase

Copyright © 2011, Hitachi, Ltd., All rights reserved. 11

1-9. Consolidated Statements of Cash Flows
Billions of Yen
Fiscal 2010/1H

Fiscal 2011/1H

Year over year

Cash flows
from operating activities

377.5

93.1

(284.4)

Cash flows
from investing activities(105.6)(221.7)(116.1)271.8(128.6)(400.5)(193.8)

104.0

297.9

Free cash flows
Cash flows
from financing activities

Copyright © 2011, Hitachi, Ltd., All rights reserved. 12

1-10. Summary Financial Statements
by “Manufacturing, Services and Others” and “Financial Services”
Summary Consolidated Balance Sheets

Billions of Yen
Manufacturing,Services and Others

Financial Services

Total assets

7,763.6

1,849.8

9,199.1

Total liabilities

5,552.2

1,604.1

6,752.5

Interest-bearing debt

1,687.7

1,184.7

2,641.1

Total Hitachi, Ltd. stockholders’ equity

1,317.1

144.9

1,450.5

Noncontrolling interests

894.2

100.7

996.0

Total Hitachi, Ltd. stockholders’ equity ratio

17.0%

7.8%

15.8%

0.76 times

4.82 times

1.08 times

D/E ratio(Including noncontrolling interests)

Summary Consolidated Statements of Cash Flows

Total *

Billions of Yen

Manufacturing,Services and Others

Financial Services

Cash flows from operating activities

69.2

28.7

93.1

Cash flows from investing activities(236.3)26.4(221.7)

Free cash flows(167.0)55.1(128.6)140.9(23.0)

104.0

Cash flows from financing activities

Total ** Total Figures exclude intra-segment transactions
Copyright © 2011, Hitachi, Ltd., All rights reserved. 13

1-11. Consolidated Capital Investment, Consolidated R&D Expenditure(1) Consolidated capital investment

Billions of Yen

Fiscal 2010/1H

Fiscal 2011/1H

263.5

288.3

109%

Internal use assets

120.2

154.6

129%

Leasing assets

143.2

133.7

93%

Consolidated capital investment(2) Consolidated R&D expenditure

Year over year

Billions of Yen

Fiscal 2010/1H

Fiscal 2011/1HConsolidated R&D expenditure

194.8

199.1

102%

Percentage of revenues

4.3%

4.4%

-

Year over year

Copyright © 2011, Hitachi, Ltd., All rights reserved. 14

1-12. Revenues by Business Segment
Billions of Yen
Fiscal 2010/1H

Previous
forecast
comparison*Year overyear

Fiscal 2011/1H

Information & Telecommunication Systems

774.8

797.0

103%

104%

Power Systems

384.8

372.4

97%

101%

Social Infrastructure & Industrial Systems

508.9

513.5

101%

105%

Electronic Systems & Equipment

529.0

533.5

101%

103%

Construction Machinery

334.4

355.8

106%

96%

High Functional Materials & Components

700.4

700.6

100%

105%

Automotive Systems

382.3

388.1

102%

105%

Components & Devices

395.9

367.4

93%

105%

Digital media & Consumer Products

506.9

471.3

93%

100%

Financial Services

186.6

181.4

97%

101%

Others

375.2

467.8

125%

104%

Eliminations & Corporate items(577.1)(576.5)

-

-

Total

4,502.4

4,572.7

102%

104%

* Previous forecast announced on July 29, 2011

Copyright © 2011, Hitachi, Ltd., All rights reserved. 15

1-13. Operating Income by Business Segment
Billions of Yen
Fiscal 2010/1H

Year overyear

Fiscal 2011/1H

Previous
forecast
comparison*

Information & Telecommunication Systems

34.5

31.0

(3.5)

1.0

Power Systems

14.3

0.6

(13.7)

5.6

Social Infrastructure & Industrial Systems

10.7

6.3

(4.4)

3.3

Electronic Systems & Equipment

16.2

21.3

5.0

9.3

Construction Machinery

18.2

25.8

7.6

7.8

High Functional Materials & Components

50.2

33.8

(16.4)

7.8

Automotive Systems

5.6

14.7

9.0

8.7

Components & Devices

35.5

12.6

(22.9)

2.6

Digital media & Consumer Products

10.9

5.2

(5.7)

3.2

Financial Services

11.2

14.1

2.9

2.1

Others

12.8

16.3

3.5

5.3

Eliminations & Corporate items(2.6)(11.4)

(8.7)

13.5

Total

218.0

170.6

(47.4)

70.6* Previous forecast announced on July 29, 2011

Copyright © 2011, Hitachi, Ltd., All rights reserved. 16

Outline of Consolidated Financial Results for the Second Quarter ended
September 30, 2011

Contents1.

2.
3.

Outline of Consolidated Financial Results for
the Second Quarter ended September 30,
2011
Outlook for Fiscal 2011
Initiatives for Growing the Social Innovation
Business and Strengthen the businessstructure to stabilize profitability
Copyright © 2011, Hitachi, Ltd., All rights reserved. 17

2-1. Fiscal 2011 Outlook
Economic Environment
Japan

Japan’s economy should be driven by earthquake recovery demand, which will gradually
become apparent from the latter half of fiscal 2011, although the global economic slowdown
and historically strong yen may have an effect on the post-quake economic recovery.

U.S.

U.S. economic growth is expected to remain low in 2011, underperforming the potential
economic growth rate, reflecting persistently anemic employment and income levels. However,given the rebound in stock prices, the economy is unlikely to slide back into recession.

EuropeEurope as a whole could suffer a protracted economic downturn, in light of concerns about
negative effect from the sovereign debt crisis spreading to core euro zone countries such as
Germany, whose economy has remained strong until now.

China

China’s economy is expected to see a soft-landing to a cruising speed, as surging demand
from the interior parts of the country, which still have room for growth, offsets a slowdown
mainly in coastal areas due to the effect of tighter monetary policy.

Emerging
Economies

Although tighter monetary policy is slowing growth, emerging economies are still expected todrive growth in the global economy going forward. There are concerns regarding the protracted
impact of flood damage in Thailand on supply chains for electronic components and other items.

Hitachi’s Initiatives

Accelerate global development of the Social Innovation Business
Bolster ability to propose total solutions, including operation and maintenance
Steadily contribute to the recovery from the Great East Japan Earthquake
Drive robust cost structure reforms
Copyright © 2011, Hitachi, Ltd., All rights reserved. 18

2-2. Fiscal 2011 Full-year Forecast
Hitachi expects to achieve its initial forecasts by accelerating global developmentof the Social Innovation Business, implementing business structure reforms, andpromoting cost structure reform projects, even amid considerable uncertainty
surrounding trends in the global economy, the impact of damage from flooding in
Thailand, foreign currency fluctuations, and fluctuations in raw materials prices.

Revenues
OperatingincomeProjecting a 2% YoY increase
Higher revenues are expected, centered on the Social Innovation Business

Projecting a 44.5 billion yen YoY decrease
90.0 billion yen negative impact from the Great East Japan Earthquake

Net other income Improvement of 22.3 billon yen YoY
Includes expected gain on sale of HDD business(deductions)
Net income
attributable to
Hitachi, Ltd.

Projecting at least 200.0 billion yen for the 2nd straightyear

Copyright © 2011, Hitachi, Ltd., All rights reserved. 19

2-3. Outlook for Fiscal 2011
Projections for the 2nd half of fiscal 2011 assume an exchange
rate of 75 yen to the U.S. dollar and 105 yen to the euro.
Fiscal 2010

Billions of Yen
Fiscal 2011
(Forecast)*

Year over year

[102%]

9,315.8

9,500.0

184.1

Operating income

444.5

400.0

(44.5)Net other income(deductions)(12.3)

10.0

22.3

Income before taxes

432.2

410.0

(22.2)

Income taxes

129.0

130.0

0.9

Net income

303.1

280.0

(23.1)Net income attributable tononcontrolling interests

64.2

80.0

15.7

Net income attributable to
Hitachi, Ltd.

238.8

200.0

(38.8)

Revenues* There have been no revisions from forecasts announced on July 29, 2011

Copyright © 2011, Hitachi, Ltd., All rights reserved. 20

2-4. Major Factors for Change in Net Income Attributable to Hitachi, Ltd.
Billions of Yen

444.5【FY2010】【FY2011】

Net otherdeductions(12.3)Net otherincome
10.0

400.0

238.8

Income taxes(129.0)

Income taxes(130.0)Attributable tononcontrollinginterests(64.2)
Operating
IncomeNet income
Attributable to
Hitachi, Ltd.

200.0

Attributable tononcontrollinginterests(80.0)
Operating
IncomeNet income
Attributable to
Hitachi, Ltd.
Copyright © 2011, Hitachi, Ltd., All rights reserved. 21

2-5. Outlook for Fiscal 2011 Revenues by Business Segment
Billions of Yen
Year overyear

Previous
forecast
Comparison*

1,700.0

103%

100%

813.2

810.0

100%

100%

Social Infrastructure & Industrial Systems

1,156.9

1,170.0

101%

100%

Electronic Systems & Equipment

1,079.3

1,110.0

103%

96%

751.3

830.0

110%

95%

1,408.1

1,460.0

104%

100%

Automotive Systems

773.5

810.0

105%

101%

Components & Devices

772.5

630.0

82%

100%

Digital media & Consumer Products

951.5

900.0

95%

95%

Financial Services

372.9

360.0

97%

100%

Others

767.4

930.0

121%

100%

(1,183.4)(1,210.0)--

9,315.8

9,500.0

102%

100%

Fiscal 2010

Fiscal 2011
(Forecast)

1,652.0

Information & Telecommunication Systems
Power Systems

Construction Machinery
High Functional Materials & Components

Eliminations & Corporate items
Total* Previous forecast announced on July 29, 2011

Copyright © 2011, Hitachi, Ltd., All rights reserved. 22

2-6. Outlook for Fiscal 2011 Operating Income by Business Segment
Billions of Yen
Previous
forecast
Comparison*

Fiscal 2010

Fiscal 2011
(Forecast)Information & Telecommunication Systems

98.6

110.0

11.3

0.0

Power Systems

22.0

10.0

(12.0)

0.0

Social Infrastructure & Industrial Systems

39.9

46.0

6.0

0.0

Electronic Systems & Equipment

37.2

48.0

10.7

(4.0)

Construction Machinery

49.1

64.0

14.8

0.0

High Functional Materials & Components

84.5

74.0

(10.5)(12.0)

Automotive Systems

18.4

26.0

7.5

6.0

Components & Devices

54.7

29.0

(25.7)

6.0

Digital media & Consumer Products

14.9

5.0

(9.9)

0.0

Financial Services

14.2

25.0

10.7

2.0

Others

28.9

29.0

0.0

0.0

Eliminations & Corporate items(18.4)(66.0)(47.5)

2.0

Total

444.5

400.0

(44.5)

0.0* Previous forecast announced on July 29, 2011

Year overyear

Copyright © 2011, Hitachi, Ltd., All rights reserved. 23

Outline of Consolidated Financial Results for the Second Quarter ended
September 30, 2011

Contents1.
2.
3.

Outline of Consolidated Financial Results for
the Second Quarter ended September 30, 2011
Outlook for Fiscal 2011
Initiatives for Growing the Social Innovation
Business and Strengthen the businessstructure to stabilize profitability
Copyright © 2011, Hitachi, Ltd., All rights reserved. 24

3-1. Initiatives for Growing the Social Innovation Business (1)Globally develop the information & telecommunication systems business andaddress “big data”•Strengthened development capabilities for big data-related solutions throughthe acquisition of BlueArc Corporation of the U.S.
•Bolster Hitachi’s storage solution sales and service structure on the African continent
through the acquisition of Shoden Data Systems of South Africa.
•Establish new data centers supporting the cloud business (Japan, China).

Globally develop the nuclear power generation systems business•Selected as the Strategic Investor for a new nuclear power plant construction project in
Lithuania.
•Signed an R&D agreement with the Government of Saskatchewan (Canada) concerning
small modular reactor technology, nuclear medicine technology and other fields.
•Launched a human resource training program in the nuclear power field in Southeast
Asia.

Expand the thermal and hydroelectric power generation systems business•Ramping up production capacity in China for thermal power plant-related equipment.
•Established manufacturing subsidiary in China for DeNOx catalysts for thermal power
generation systems.
•Agreed with SFO Technologies Pvt. Ltd. of India to establish a joint venture in the fieldof advanced control systems for thermal power plants.
•Integrated the hydroelectric power generation system business with Mitsubishi Electric
Corporation and Mitsubishi Heavy Industries, Ltd. to strengthen businesscompetitiveness.
Copyright © 2011, Hitachi, Ltd., All rights reserved. 25

3-2. Initiatives for Growing the Social Innovation Business (2)Expand the water environment solutions business, primarily in emerging
countries•Agreed with LG Electronics Inc. of South Korea to establish a joint venturein the water business.

Globally develop the railway systems business•Continuing negotiations on an official agreement concerning planned intercity
high-speed trains in the U.K.
•Studying the feasibility of establishing rolling stock manufacturing bases,
including monorail systems, in Brazil.

Expand the industrial systems business and the elevator and escalator
business in the Asian belt zone
•Made majority equity investment in Hi-Rel Electronics Pvt Ltd. of India and a new
manufacturing facility to be constructed to drive expansion in the power electronics
business.
•Plan to construct a new manufacturing facility in the Western region of China
to strengthen the elevator and escalator business in the country.
•Acquired an elevator and escalator sales agency as a subsidiary to strengthen the sales
structure in the Philippines.

Copyright © 2011, Hitachi, Ltd., All rights reserved. 26

3-3. Initiatives for Growing the Social Innovation Business (3)Promote the smart city and smart grid businesses•Actively participating in smart city and smart grid demonstration projects.
•Working together with partners in China in the areas of recycling resources and low-carbon
economy.
- Launched projects in Dalian City in the water treatment and home appliance recycling
business.
- Agreed on cooperative ties with Chongqing City.
•Strengthening the power distribution business, including the power transmission anddistribution businesses, by deciding to dissolve the joint venture Japan AE Power Systems
Corporation.
•Commenced an internal demonstration project for distributed energy management systems.

Globally develop the high functional materials & components business•Hitachi Chemical Co., Ltd. establishes a manufacturing subsidiary for powder metal productsin India.
•Hitachi Chemical Co., Ltd. establishes new production lines for carbon anode materials forlithium-ion batteries, and a new production base of conductive film for solar cells in China.
•Hitachi Metals, Ltd. entered into a master supply agreement with Molycorp, Inc. of the U.S.
to ensure a stable supply of rare earth materials.

Pursue further global development of the construction machinery business•Hitachi Construction Machinery Co., Ltd. and Deere & Company agreed to form a joint venture
in Brazil for manufacturing and sales of hydraulic excavators.
•Promoting joint research on construction machinery technology with Zhejiang Universityof China.
•Plan to construct a local manufacturing facility in Russia to expand business.
Copyright © 2011, Hitachi, Ltd., All rights reserved. 27

3-4. Initiatives for Growing the Social Innovation Business (4)Review Hitachi’s business structure•Plan to sell the hard disk drive (HDD) business to Western Digital Corporation.
•Agreed with Innovation Network Corporation of Japan, Sony Corporation and Toshiba
Corporation to establish a new company to operate the small and medium-sized display
business.

Globally develop the R&D framework•Reorganized domestic R&D laboratories and expanding overseas R&D bases.
•Established the Hitachi India R&D Centre to strengthen the development structure in
response to local needs.

Support the earthquake recovery effort•Assisting with the Fukushima Daiichi Nuclear Power Station and assistingwith the restoration of thermal power plants.
•Proposing and developing smart city concepts according to regional needs.
(Proposals are being made to more than 10 cities in the Tohoku region.)

Other initiatives•Bolstered the one-stop support structure for the entire IT lifecycle through the integrationof Hitachi Electronics Services Co., Ltd. and Hitachi Information Systems, Ltd.
•Hitachi Cable, Ltd. formulated a new medium-term management plan under which it isreinforcing the management foundation and concentrating management resources
on priority target areas.
•Developed and instituted a unified global personnel platform for education,
appointment and compensation.

Copyright © 2011, Hitachi, Ltd., All rights reserved. 28

3-5. Strengthen the business structure to stabilize profitability
Launched “Hitachi Smart Transformation Project”, a group-wide project (Apr. 2011)

Promote cost structure reforms across the entire Hitachi Group to be costcompetitive globally
Cost structure transformation
Manufacturing Re-evaluate the allocation of in-house, external and internal Group production,from the standpoint of bolstering global competitivenessStrategically expand local overseas production as overseas operations are strengthened
Optimize common manufacturing processes and enhance productivity

Direct costStrengthen pool purchase and global sourcing through standardization andcommonization of materials
Strengthen engineered sourcing to address surging raw material prices

Pool Purchase Ratio
Global Sourcing Ratio
Back-office
operations

Sales
operations

FY2009(actual)

FY2010(actual)

FY2011(target)

FY2012(target)

23%
28%

28%
36%

30%
40%

35%
50%

Streamline logistics costs : Logistics Management Center established in October 2011.
Reduce rent : Unified facility management, etc.
Standardize administration and unify IT platforms to enable greater useof shared services globallySimplify intra-group transaction procedures
Expand the use of shared services in domestic sales support operations
Copyright © 2011, Hitachi, Ltd., All rights reserved. 29

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
materially from 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 in Japan, 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 Components &Devices and the Digital Media & Consumer Products segments;•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,
or shortages 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
shortages of 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 andother 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 success 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 in Japan by earthquakes, tsunamis or other natural disasters, including the possibility of continuing adverse effects on Hitachi’s operations
as a result of the earthquake and tsunami that struck northeastern Japan on March 11, 2011;•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 Hitachi’s periodic filings with the U.S. Securities and Exchange Commission and in othermaterials published by Hitachi.

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