[Translation]

Quarterly Report(The Second Quarter of 148th Business Term)
From July 1, 2016 to September 30, 2016

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

Hitachi, Ltd.

[Cover][Document Filed]

Quarterly Report (“Shihanki Hokokusho”)[Applicable Law]

Article 24-4-7, Paragraph 1 of the Financial Instruments and Exchange Act of Japan[Filed with]

Director, Kanto Local Finance Bureau[Filing Date]

November 14, 2016

[Fiscal Year]

The Second Quarter of 148th Business Term (from July 1, 2016 to September 30, 2016)[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]

Taro Kaiho, Manager, Legal Division[Contact Address]

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

03-3258-1111[Contact Person]

Taro Kaiho, 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

1. Key Financial Data ………………………………………………………………………………………………………

1

2. Description of Business ……………………………………………………………………………………………………

1

II. Business Overview …………………………………………………………………………………………………………

2

1. Risk Factors ………………………………………………………………………………………………………………

2

2. Material Agreements, etc. …………………………………………………………………………………………………

2

3. Analyses of Consolidated Financial Condition, Operating Results and Cash Flows ……………………………………

2

III. Information on the Company ………………………………………………………………………………………………

9

1. Information on the Company’s Stock, etc. ………………………………………………………………………………

9(1) Total number of shares, etc. ……………………………………………………………………………………………

9(2) Information on the stock acquisition rights, etc. ………………………………………………………………………

9(3) Information on moving strike convertible bonds, etc. ………………………………………………………………… 10(4) Information on shareholder right plans ………………………………………………………………………………

10(5) Changes in the total number of issued shares and the amount of common stock and other …………………………

10(6) Major shareholders ……………………………………………………………………………………………………

10(7) Information on voting rights …………………………………………………………………………………………

11

2. Changes in Senior Management …………………………………………………………………………………………

12

IV. Financial Information ……………………………………………………………………………………………………… 12
Part II Information on Guarantors, etc. for the Company ………………………………………………………………………… 12[Condensed Quarterly Consolidated Financial Statements] ……………………………………………………………………… F1[Confirmation Letter] ……………………………………………………………………………………………………………… A1

Part I Information on the Company
I. Overview of the Company
1. Key Financial Data
Consolidated financial data, etc.
(Millions of yen, unless otherwise stated)
Six months ended
September 30, 2015

Six months ended
September 30, 2016

Year ended
March 31, 2016

4,806,888

4,353,774[2,492,865][2,223,307]

254,693

214,165

Net income attributable to Hitachi, Ltd.

97,591

113,500

stockholders[42,633][57,050]

30,621(81,156)(127,557)

Total Hitachi, Ltd. stockholders’ equity

2,942,965

2,624,281

2,735,078

Total equity

4,317,460

3,864,800

4,125,570

Total assets

12,354,327

11,779,351

12,551,005

Revenues
Income from continuing operations, before
income taxes

Comprehensive income attributable to Hitachi,Ltd. stockholders

10,034,305
517,040
172,155

Earnings per share attributable to Hitachi, Ltd.

20.21

23.51

stockholders, basic (yen)[8.83][11.82]

20.19

23.50

35.62

23.8

22.3

21.8

Net cash provided by operating activities

309,588284,948812,226

Net cash used in investing activities(332,480)(216,541)(730,799)

37,414145,967(26,467)

695,141

851,528

699,315

Earnings per share attributable to Hitachi, Ltd.
stockholders, diluted (yen)Total Hitachi, Ltd. stockholders’ equity ratio (%)

Net cash provided by (used in) financing
activities
Cash and cash equivalents at end of period

35.65(Notes) 1. Our consolidated financial statements have been prepared in conformity with the International Financial Report
Standards (“IFRS”) as issued by the International Accounting Standards Board.
2. Revenues do not include the consumption tax, etc.
3. A part of the thermal power generation systems business is classified as a discontinued operation in accordance with theprovision of IFRS 5 “Non-current Assets Held for Sale and Discontinued Operations,” which was not transferred to
MITSUBISHI HITACHI POWER SYSTEMS, LTD. for the business integration in the thermal power generation
systems with Mitsubishi Heavy Industries, Ltd. The results of the discontinued operation are reported separately fromcontinuing operations.
4. The figures of “Revenues,” “Net income attributable to Hitachi, Ltd. stockholders” and “Earnings per share attributable
to Hitachi, Ltd. stockholders, basic” in square bracket are those for the three months ended September 30, 2015 and2016, respectively.
2. Description of Business
There were no material changes in principal businesses of Hitachi during the six months ended September 30, 2016. The
Hitachi Group is comprised of the Company, 947 consolidated subsidiaries, and 354 equity-method associates and joint-ventures.
Consolidated trust accounts are not included in the number of consolidated subsidiaries.
Changes in businesses and principal affiliated companies for each segment during the six months ended September 30, 2016
were as follows. Effective from April 1, 2016, the Company changed the name of the “Others (Logistics and Other services)”segment to the “Others” segment.

• Hitachi Medical Corporation, which belongs to the Electronic Systems & Equipment segment, changed its name to Hitachi
Healthcare Manufacturing, Ltd. as of April 1, 2016, following the reorganization of Hitachi’s healthcare business.

• Hitachi Transport System, Ltd., which belonged to the Others segment, has become an equity-method associate of the Company
as a result of transfer of a part of its shares in Hitachi Transport System, Ltd. on May 19, 2016. Consequently, Hitachi Transport
System, Ltd. and its major services of logistics have not belonged to any of segments since then.
1II. Business Overview
1. Risk Factors
There were no new risk factors recognized during the six months ended September 30, 2016.
There were no material changes in the risk factors stated in the Annual Securities Report for the 147th business term
pursuant to the Financial Instruments and Exchange Act of Japan.
2. Material Agreements, etc.
No material agreements were entered into during the three months ended September 30, 2016.
3. Analyses of Consolidated Financial Condition, Operating Results and Cash Flows(1) Outline of Business Results
Results of Operations
During the six months ended September 30, 2016, consumer spending and housing investment remained firm in the U.S. due
to improving employment. Meanwhile, in Europe, the pound sterling depreciated, reflecting the result of the Brexit referendum in
the U.K. In China and emerging markets, the economic growth continued to slow. The Japanese economy also remained
standstill, due mainly to the appreciation of the yen since the end of 2015.
Under these conditions, results of operations in the six months ended September 30, 2016 were as follows.
Revenues decreased 9% to ¥4,353.7 billion, as compared with the six months ended September 30, 2015, due mainly to
lower revenues in the Information & Telecommunication Systems, High Functional Materials & Components, Smart Life &Ecofriendly Systems and Others segments owing to group-wide decrease in yen-based revenues of overseas subsidiaries after
currency translation along with the appreciation of the yen and business reforms. This decrease was partially offset by increased
revenues in the Social Infrastructure & Industrial Systems segment.
Cost of sales decreased 9% to ¥3,219.6 billion, as compared with the six months ended September 30, 2015, and the ratio of
cost of sales to revenues accounted for 74%, which was the same level as the six months ended September 30, 2015. Gross profit
decreased 9% to ¥1,134.1 billion, as compared with the six months ended September 30, 2015.
Selling, general and administrative expenses (“SG&A”) decreased 8% to ¥901.3 billion, as compared with the six months
ended September 30, 2015, and the ratio of SG&A to revenues increased 1% to 21%, as compared with the six months ended
September 30, 2015.
Other income increased ¥17.6 billion to ¥49.0 billion, as compared with the six months ended September 30, 2015, due
mainly to posting net gain on business reorganization and others related to the sale of a part of shares of Hitachi Transport
System, Ltd. Other expenses increased ¥7.7 billion to ¥51.2 billion, as compared with the six months ended September 30, 2015,
due mainly to an increase in impairment losses, despite lower special termination benefits and expenses related to competition
law and others.
Financial income (excluding interest income) decreased ¥3.4 billion to ¥4.2 billion and financial expenses (excludinginterest charges) increased ¥0.6 billion to ¥19.6 billion, as compared with the six months ended September 30, 2015, respectively.
This was due mainly to posting exchange loss.
Share of profits of investments accounted for using the equity method decreased ¥8.6 billion to ¥3.3 billion, as comparedwith the six months ended September 30, 2015.
EBIT (earnings before interest and taxes, which is presented as income from continuing operations, before income taxes lessinterest income plus interest charges) decreased ¥44.0 billion to ¥218.5 billion, as compared with the six months ended
September 30, 2015.
Interest income was ¥5.5 billion, the same level as the six months ended September 30, 2015, and interest charges decreased¥3.4 billion to ¥9.9 billion, as compared with the six months ended September 30, 2015.
Income from continuing operations, before income taxes decreased ¥40.5 billion to ¥214.1 billion, as compared with the six
months ended September 30, 2015.
Income taxes decreased ¥23.5 billion to ¥53.5 billion, as compared with the six months ended September 30, 2015.
Income from discontinued operations was ¥24 million, as compared with loss of ¥11.7 billion for the six months ended
September 30, 2015.
Net income decreased ¥5.2 billion to ¥160.6 billion, as compared with the six months ended September 30, 2015.
Net income attributable to non-controlling interests decreased ¥21.1 billion to ¥47.1 billion, as compared with the six
months ended September 30, 2015.
As a result of the foregoing, net income attributable to Hitachi, Ltd. stockholders increased ¥15.9 billion to ¥113.5 billion, as
compared with the six months ended September 30, 2015.

2

Operations by Segment
The following is an overview of results of operations by segment. Revenues for each segment include intersegment
transactions. Segment profit is measured by EBIT.
(Information & Telecommunication Systems)
Revenues decreased 7% to ¥927.0 billion, as compared with the six months ended September 30, 2015, due mainly to thenegative impact of foreign currency translation for overseas subsidiaries and decreased revenues from ATMs for overseas
markets.
Segment profit decreased ¥25.6 billion to ¥19.6 billion, as compared with the six months ended September 30, 2015, due
mainly to posting restructuring charges, including impairment losses mainly in the telecommunications & network business, andexchange loss, despite the effect of structural reform centered on the telecommunications & network business and an
improvement in profitability of the social infrastructure-related information systems.
(Social Infrastructure & Industrial Systems)
Revenues increased 8% to ¥1,029.8 billion, as compared with the six months ended September 30, 2015, due mainly to
substantial revenue increase in the rail systems business resulting from the acquisition of the business of AnsaldoBreda S.p.A.
(excluding a part of its operations) and Ansaldo STS S.p.A., and from increased sales for the U.K. This increase was partially
offset by the negative impact of foreign currency translation in the elevators and escalators business and revenue decrease in theindustrial plant-related business that strategically promoted selective acceptance of orders.
Segment profit decreased ¥9.4 billion to ¥3.4 billion, as compared with the six months ended September 30, 2015, due
mainly to worsening of share of profits (losses) of investments accounted for using the equity method and posting exchange loss,
despite increased revenues.
(Electronic Systems & Equipment)
Revenues decreased 2% to ¥537.5 billion, as compared with the six months ended September 30, 2015, due mainly to lower
revenues at Hitachi Kokusai Electric Inc. owing to the end of a phase of aggressive capital investment by semiconductor
manufacturers and at Hitachi High-Technologies Corporation owing to lower sales of advanced industrial products, despite
higher revenues at Hitachi Koki Co., Ltd. due to the acquisition of metabo Aktiengesellschaft, a German company.
Segment profit decreased ¥5.5 billion to ¥26.4 billion, as compared with the six months ended September 30, 2015, due
mainly to lower earnings at Hitachi Kokusai Electric Inc. owing to lower revenues and posting exchange loss, despite higher
earnings at Hitachi High-Technologies Corporation which recorded firm sales of clinical analyzers and semiconductor processing
equipment.
(Construction Machinery)
Revenues decreased 8% to ¥334.9 billion, as compared with the six months ended September 30, 2015, due mainly to theimpact of weaker local currencies in Asia and Africa and continued sluggish market conditions in Asia, as well as the Americas.
Segment profit decreased ¥8.1 billion to ¥3.5 billion, as compared with the six months ended September 30, 2015, due
mainly to lower revenues.
(High Functional Materials & Components)
Revenues decreased 12% to ¥703.2 billion, as compared with the six months ended September 30, 2015, due mainly to
lower revenues at both of Hitachi Metals, Ltd. and Hitachi Chemical Company, Ltd. owing to the negative impact of foreign
currency translation for overseas subsidiaries and lower sales of electronics-related products.
Segment profit decreased ¥36.4 billion to ¥49.7 billion, as compared with the six months ended September 30, 2015, due
mainly to the absence of net gain on business reorganization and others related to the sale of equity interest in Hitachi Tool
Engineering, Ltd. by Hitachi Metals, Ltd. recorded in the six months ended September 30, 2015 and posting exchange loss.
(Automotive Systems)
Revenues decreased 4% to ¥471.8 billion, as compared with the six months ended September 30, 2015, due mainly to thenegative impact of foreign currency translation for overseas subsidiaries, despite higher sales especially in North America andChina, where demand for automobiles was firm.
Segment profit decreased ¥4.6 billion to ¥20.6 billion, as compared with the six months ended September 30, 2015, due
mainly to lower revenues.
(Smart Life & Ecofriendly Systems)
Revenues decreased 27% to ¥287.4 billion, as compared with the six months ended September 30, 2015, due mainly to theeffect of reorganization of the air-conditioning systems business with an equity-method associate, a joint venture company withJohnson Controls, Inc.
Segment profit decreased ¥3.3 billion to ¥9.7 billion, as compared with the six months ended September 30, 2015, due
mainly to the effect of the reorganization of the air-conditioning systems business.
3(Others)
Revenues decreased 42% to ¥359.3 billion, as compared with the six months ended September 30, 2015, due mainly to theconversion of Hitachi Transport System, Ltd. to an equity-method associate.
Segment profit decreased ¥11.7 billion to ¥12.5 billion, as compared with the six months ended September 30, 2015, due
mainly to lower revenues.
(Financial Services)
Revenues decreased 1% to ¥179.2 billion, as compared with the six months ended September 30, 2015, due mainly todecreased overseas revenues owing primarily to foreign currency translation, despite the strong performance of business in the
U.S.
Segment profit decreased ¥1.7 billion to ¥22.8 billion, as compared with the six months ended September 30, 2015, due
mainly to lower revenues.
Revenues by Market
Revenues in Japan decreased 8% to ¥2,223.1 billion, as compared with the six months ended September 30, 2015, due
mainly to substantial revenue decrease in the Others Segment, in which Hitachi Transport System, Ltd. was converted to an
equity-method associate, and lower revenues in the Electronic Systems & Equipment and High Functional Materials &Components segments.
Overseas revenues decreased 11% to ¥2,130.6 billion, as compared with the six months ended September 30, 2015, due
mainly to lower revenues in Asia mainly in the Smart Life & Ecofriendly Systems segment, and in North America mainly in theHigh Functional Materials & Components segment. This decrease was partially offset by higher revenues in Europe mainly in theSocial Infrastructure & Industrial Systems segment.
As a result, the ratio of overseas revenues to total revenues decreased 1% to 49%, as compared with the six months ended
September 30, 2015.
(2) Summary of Financial Condition, etc.
Liquidity and Capital Resources
During the six months ended September 30, 2016, there were no major changes in the Company’s policies of maintaining
liquidity and ensuring funds, efforts for improvement in fund management efficiency, and ideas regarding funding sources andfundraising.
Cash Flows(Cash flows from operating activities)
Net income in the six months ended September 30, 2016 decreased by ¥5.2 billion, as compared with the six months ended
September 30, 2015. Working capital in the six months ended September 30, 2016 improved, due mainly to net cash inflow of¥22.8 billion from a change in trade payables, as compared with net cash outflow of ¥104.9 billion in the six months ended
September 30, 2015, despite decreased net cash inflow from a change in trade receivables by ¥109.0 billion, as compared withthe six months ended September 30, 2015. Dividends received decreased by ¥9.9 billion as compared with the six months ended
September 30, 2015. As a result of the foregoing, net cash provided by operating activities was ¥284.9 billion in the six months
ended September 30, 2016, a decrease of ¥24.6 billion compared with the six months ended September 30, 2015.
(Cash flows from investing activities)
Net amount of investments related to property, plant and equipment* was ¥279.6 billion in the six months ended September
30, 2016. This net sum decreased by ¥27.1 billion compared with the six months ended September 30, 2015. Purchase ofinvestments in securities and other financial assets (including investments in subsidiaries and investments accounted for using theequity method) in the six months ended September 30, 2016 decreased by ¥65.4 billion, as compared with the six months ended
September 30, 2015, in which Hitachi Data Systems Corporation acquired Pentaho Corporation. Proceeds from sale ofinvestments in securities and other financial assets (including investments in subsidiaries and investments accounted for using theequity method) in the six months ended September 30, 2016 increased by ¥22.7 billion, as compared with the six months ended
September 30, 2015, due mainly to the transfer of a part of shares of Hitachi Transport System, Ltd. As a result of the foregoing,
net cash used in investing activities was ¥216.5 billion in the six months ended September 30, 2016, a decrease of ¥115.9 billion
compared with the six months ended September 30, 2015.
* The sum of the purchase of property, plant and equipment, the purchase of intangible assets and the purchase of leased assets,less the proceeds from sale of property, plant and equipment, and intangible assets, the proceeds from sale of leased assets andthe collection of lease receivables

4(Cash flows from financing activities)
Net cash outflow from a change in short-term debt in the six months ended September 30, 2016 decreased by ¥39.8 billion,
as compared with the six months ended September 30, 2015. Proceeds related to long-term debt** in six months ended
September 30, 2016 was ¥207.3 billion, an increase of ¥61.0 billion compared with the six months ended September 30, 2015. As
a result of the foregoing, net cash flows provided by financing activities was ¥145.9 billion in the six months ended September
30, 2016, an increase of ¥108.5 billion compared with the six months ended September 30, 2015.
** The proceeds from long-term debt, less the payments on long-term debt
As a result of the foregoing, cash and cash equivalents as of September 30, 2016 was ¥851.5 billion, an increase of ¥152.2
billion from March 31, 2016. Free cash flows, the sum of cash flows from operating and investing activities, were an inflow of¥68.4 billion in the six months ended September 30, 2016, as compared with an outflow of ¥22.8 billion in the six months ended
September 30, 2015.
Assets, Liabilities and Equity
The following is an overview of Hitachi’s assets, liabilities and equity as of September 30, 2016.
Total assets were ¥11,779.3 billion, a decrease of ¥771.6 billion from March 31, 2016. This was due mainly to decreases inthe value of assets denominated in foreign currency owing to the appreciation of the yen, converting Hitachi Transport System,
Ltd. to an equity-method associate and progress on collecting trade receivables recorded as of March 31, 2016.
Total interest-bearing debt, the sum of short-term debt and long-term debt, was ¥3,576.8 billion, a decrease of ¥27.5 billion
from March 31, 2016. This was due mainly to the impact of the appreciation of the yen.
Total Hitachi, Ltd. stockholders’ equity decreased by ¥110.7 billion from March 31, 2016, to ¥2,624.2 billion, due mainly toposting other comprehensive loss owing primarily to foreign currency translation adjustments caused by the appreciation of theyen, despite posting net income attributable to Hitachi, Ltd. stockholders. The ratio of total Hitachi, Ltd. stockholders’ equity tototal assets increased 0.5% from March 31, 2016 to 22.3%.
Non-controlling interests were ¥1,240.5 billion, a decrease of ¥149.9 billion from March 31, 2016.
Total equity was ¥3,864.8 billion, a decrease of ¥260.7 billion from March 31, 2016. The ratio of interest-bearing debt tototal equity was 0.93, as compared with 0.87 as of March 31, 2016.
(3) Challenges Facing Hitachi Group
1) Business and Financial Condition
There were no material changes in Hitachi’s business strategy during the six months ended September 30, 2016.
2) Fundamental Policy on the Conduct of Persons Influencing Decision on the Company’s Financial and Business Policies
The Group invests a great deal of business resources in fundamental research and in the development of market-leading
products and businesses that will bear fruit in the future, and realizing the benefits from these management policies requiresthat they be continued for a set period of time. For this purpose, the Company keeps its shareholders and investors wellinformed of not just the business results for each period but also of the Company’s business policies for creating value in the
future.
The Company does not deny the significance of the vitalization of business activities and performance that can be brought
about through a change in management control, but it recognizes the necessity of determining the impact on company value
and the interests of all shareholders of the buying activities and buyout proposals of parties attempting to acquire a large shareof stock of the Company or a Group company by duly examining the business description, future business plans, past
investment activities, and other necessary aspects of such a party.
There is no party that is currently attempting to acquire a large share of the Company’s stocks nor is there a specificthreat, neither does the Company intend to implement specified so-called anti-takeover measures in advance of the appearanceof such a party, but the Company does understand that it is one of the natural duties bestowed upon it by the shareholders andinvestors to continuously monitor the state of trading of the Company’s stock and then to immediately take what the Company
deems to be the best action in the event of the appearance of a party attempting to purchase a large share of the Company’s
stock. In particular, together with outside experts, the Company will evaluate the buyout proposal of the party and holdnegotiations with the buyer, and if the Company deems that said buyout will not maintain the Company’s value and is not in
the best interest of the shareholders, then the Company will quickly determine the necessity, content, etc., of specificcountermeasures and prepare to implement them. The same response will also be taken in the event a party attempts to acquirea large percentage of the shares of a Group company.

5(4) 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 147th business term pursuant to the Financial Instruments andExchange Act of Japan. The Hitachi Group’s R&D expenditures in the six months ended September 30, 2016 were ¥158.1
billion, 3.6% of revenues. A breakdown of R&D expenditures by segment is shown below.
(Billions of yen)Six months ended
September 30, 2016

Segment
Information & Telecommunication Systems

26.0

Social Infrastructure & Industrial Systems

22.4

Electronic Systems & Equipment

25.8

Construction Machinery

9.3

High Functional Materials & Components

23.3

Automotive Systems

35.6

Smart Life & Ecofriendly Systems

3.1

Others1.0

Financial Services

0.0

Corporate

11.0
Total

158.1

(5) Property, Plants and Equipment
The major property, plants and equipment materially changed during the six months ended September 30, 2016 are as
follows.
Hitachi Group(As of September 30, 2016)
Book value (Millions of yen)Segment

Others (Note)Land[Area inthousandsof m2]

Buildings
andstructures

Machineryand vehicles

Tools,
furnitureandfixtures

Other

Constructionin progress

36,770[2,013]63,3106,654

17,073

1,488

367

Total

125,662

Number of
employees

14,623(Note) The book value of the facilities in the Others segment materially decreased due mainly to the fact that Hitachi Transportation
Ltd. has become an equity-method associate of the Company from its subsidiary on May 19, 2016.
The Company(As of September 30, 2016)
Book value (Millions of yen)
Details ofLand
Tools,
Number ofmajor facilities [Area in Buildings Machinery furniture
Construction Total employees
and
and
Other
and equipment thousands
andin progressstructures vehicles
fixturesof m2]

Facility(Main location)

Segment

Healthcare
Business Unit
(Note)(Taito-ku,
Tokyo)

Manufacturing
Electronic
facilities for
Systems &medicalEquipment
equipment

6,614
[93]

5,150

566

1,882

623

544 15,382

2,968(Note) The Company newly discloses the facilities of Healthcare Business Unit as the major property, plants and equipment, since thebook value of the facilities materially increased due mainly to the absorption-type company split in which the Company
succeeded non-manufacturing divisions of Hitachi Medical Corporation and Hitachi Aloka Medical, Ltd. on April 1, 2016. In
addition, the Company reorganized in-house companies into business units.

6(6) Plans for Capital Investment, Disposals of Property, Plants and Equipment, etc.
The Hitachi Group (the Company and consolidated subsidiaries) engages in diverse operations in Japan and overseas, andhas not decided on specific plans to newly install or expand each of facilities as of the end of the consolidated fiscal year andeach quarter of the consolidated fiscal year. For this reason, it discloses amounts of capital investment by segment.
The amount of capital investment for the fiscal year ending March 31, 2017 is updated as follows (new installation andexpansions, based on the amount recorded as tangible fixed assets and the investment property) from the amount initially planned
as of March 31, 2016.
(Billions of yen)
The amount of capital investment
for the fiscal year ending March 31, 2017

Segment

Initial Plan

Updated Plan

Information & Telecommunication Systems

45.0

40.0

Social Infrastructure & Industrial Systems

70.0

70.0

Electronic Systems & Equipment

20.0

20.0

Construction Machinery

20.0

20.0

High Functional Materials & Components

110.0

105.0

Automotive Systems

80.0

60.0

Smart Life & Ecofriendly Systems

15.0

15.0

Others20.0

20.0

Financial Services (Note 4)

45.0

67.5

425.0

417.5

Subtotal
Corporate items and Eliminations

0.0

0.0

Total

425.0

417.5

(Notes) 1. The figures in the above table include the amount of the tangible fixed assets leased under finance leasetransactions and the investment property, each of which is recorded as property, plant and equipment and othernon-current assets, respectively.
2. These planned investments are expected to be mostly financed with the Hitachi Group’s own capital.
3. There are no plans to dispose or sell principal facilities, with the exception of disposing and selling facilities due
to routine upgrading.
4. Even though Hitachi Capital Corporation was planned to be accounted as the Company’s equity-method
associate following the share transfer in August 2016, the effective date of transfer of shares was changed to
October, 2016. As a result of the rescheduling, the amount of capital investment for the fiscal year ending
March 31, 2017 in the Financial Services segment was updated.
(7) Forward-Looking Statements
Certain statements found in “3. Analyses of Consolidated Financial Condition, Operating Results and Cash Flows” and otherdescriptions 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 with respect to certain future eventsand 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 andare 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 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:• 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 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, 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;7• 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;• the possibility of cost fluctuations during the lifetime of, or cancellation of, long-term contracts for which Hitachi uses thepercentage-of-completion method to recognize revenue from sales;• credit conditions of Hitachi’s customers and suppliers;• 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 productdemand, exchange rates and/or price of raw materials or shortages of materials, parts and components;• 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;• increased commoditization of and intensifying price competition for products;• 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;thepotential for significant losses on Hitachi’s investments in equity-method associates and joint ventures;•• 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;
uncertainty
as to the success of cost structure overhaul;•• uncertainty as to Hitachi’s ability to attract and retain skilled personnel;• uncertainty as to Hitachi’s access to, or ability to protect, certain intellectual property rights;• 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;• 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 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; 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.

8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

10,000,000,000

Total

10,000,000,0002) Issued shares
Class

Number of sharesissued as of the end of
second quarter (shares)(September 30, 2016)

Number of sharesissued as of the filingdate (shares)(November 14, 2016)

4,833,463,387

4,833,463,387

Tokyo, Nagoya

4,833,463,387

4,833,463,387－

Stock exchange on which
the Company is listed

Description
The number of shares

Commonstock

per one unit of shares is
1,000 shares.

Total

－

(Note) The "Number of shares issued as of the filing date" does not include shares issued upon exercise of stock acquisition rightsfrom November 1, 2016 to November 14, 2016.
(2) Information on the stock acquisition rights, etc.
The stock acquisition rights which the Company issued during the three months ended September 30, 2016 are as follows.
Date of resolution

June 29, 2016

Number of stock acquisition rights

24,219Number of stock acquisition rights held by the Company－

Class of shares to be issued upon exercise of stock acquisitionrightsNumber of shares to be issued upon exercise of stockacquisition rights

Common stock
2,421,900 shares (Note 1)

Amount to be paid in upon exercise of stock acquisition rights¥1 per share

Exercise period of stock acquisition rights

From July 15, 2016 to July 14, 2046

Issue price for shares issued upon exercise of stock acquisitionrights and amount of capitalization

Issue price: ¥269 (Note 2)
Amount of capitalization: (Note 3)

Conditions for the exercise of stock acquisition rights(Note 4, 5)

Matters regarding acquisition of stock acquisition rights
through transfer

Acquisition of stock acquisition rights through transfer
shall be subject to the approval of the Board of Directors.

Matters regarding substitute payment－

Matters regarding grant of stock acquisition rights uponorganizational restructuring－(Notes) 1. If the Company implements a stock split (including gratis allotment of shares of common stock; the same shall apply
to references to a stock split hereinafter) or a reverse stock split with respect to common stock of the Company after
the date of allotment of the stock acquisition rights, the Number of Shares to be Issued with respect to the stockacquisition rights not exercised at that time will be adjusted in accordance with following formula:
Number of Shares to be Issued
Number of Shares to be
Ratio of stock split or=×after adjustment
Issued before adjustment
reverse stock split
In addition, if there is an unavoidable ground requiring an adjustment of the Number of Shares to be Issued, theNumber of Shares to be Issued may be adjusted to the extent necessary by a resolution of the Board of Directors.
Any fractions of less than one share resulting from the adjustment will be rounded down.
2. Issue price for shares issued upon exercise of stock acquisition rights is the sum of the amount to be paid in upon
exercise of stock acquisition rights (¥1 per share) and the fair value of the stock acquisition right as calculated at thedate of allotment (¥268 per share).
3. The amount of common stock to be increased upon issuing shares through the exercise of stock acquisition rights shallbe one half of the maximum amount of common stock, etc. to be increased calculated in accordance with Article 17,
Paragraph 1 of the Ordinance on Company Accounting. Any fractions of less than one yen resulting from thecalculation shall be rounded up to the nearest yen.
4. A holder of stock acquisition rights may exercise all the stock acquisition rights together only within 10 days (in casethe last day is not a business day, the following business day) from the day immediately following the date on which
he/she ceases to be an Executive Officer, a Director or a Corporate Officer of the Company.

95. The number of stock acquisition rights which a holder of stock acquisition rights may exercise shall be determinedbased on the ratio of (i) the total shareholder return for shares of Hitachi for three years from the beginning of the
fiscal year in which the date of allotment of the stock acquisition rights falls to (ii) the growth rate of TOPIX (Tokyo
Stock Price Index) for the same period (the “TSR/TOPIX Growth Rate Ratio”), in accordance with the stock priceconditions:a. In case the TSR/TOPIX Growth Rate Ratio is 120% or more
All the stock acquisition rights allotted (the “Allotted Rights”) may be exercised.
b. In case the TSR/TOPIX Growth Rate Ratio is 80% or more but less than 120%
Only a part of the Allotted Rights may be exercised according to the degree of the TSR/TOPIX Growth Rate
Ratio (*).
*Number of stock acquisitionrights exercisable=

Number of
TSR/TOPIX×{(× 1.25) – 0.5}
Allotted Rights
Growth Rate Ratio

Any fraction less than one stock acquisition right will be rounded down.
c. In case the TSR/TOPIX Growth Rate Ratio is less than 80%
No Allotted Rights may be exercised.
(3) Information on moving strike convertible bonds, etc.
Not applicable.
(4) Information on shareholder right plans
Not applicable.
(5) Changes in the total number of issued shares and the amount of common stock and other
Change inBalance of
Change in the
Balance of thecommoncommontotal number of
total number of
Date
stock
stock
issued sharesissued shares(Millions of(Millions of(shares)(shares)yen)
yen)
From July 1, 2016－－
4,833,463,387
458,790
to September 30, 2016

Change incapital reserve(Millions ofyen)

Balance ofcapital reserve(Millions ofyen)－

176,757(6) Major shareholders

Name

Address

The Master Trust Bank of Japan, Ltd.

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

Tokyo

Japan Trustee Services Bank, Ltd.
(Trust Account)Hitachi Employees’ Shareholding
Association
Nippon Life Insurance Company
Japan Trustee Services Bank, Ltd.
(Trust Account 9)(As of September 30, 2016)
Ownership
Share
percentage to the
Ownership
total number of(shares)issued shares (%)
285,354,000

5.90

8-11, Harumi 1-chome, Chuo-ku, Tokyo

256,316,415

5.30

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

105,262,384

2.18

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

93,265,195

1.93

8-11, Harumi 1-chome, Chuo-ku, Tokyo

79,124,000

1.64

72,777,559

1.51

70,887,474

1.47

13-1, Yurakucho 1-chome, Chiyoda-ku, Tokyo

71,361,222

1.48

8-11, Harumi 1-chome, Chuo-ku, Tokyo

69,022,000

1.43

65,680,327

1.36

1,169,050,576

24.19

THE BANK OF NEW YORKMELLON SA/NV 10

Rue Montoyerstraat 46, 1000 Brussels, Belgium(Standing proxy: The Bank of Tokyo-(7-1, Marunouchi 2-chome, Chiyoda-ku, Tokyo)

Mitsubishi UFJ, Ltd.)State Street Bank and Trust Company

P.O. Box 351 Boston, Massachusetts 02101

505225

U.S.A.

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

The Dai-ichi Life Insurance Company,
LimitedJapan Trustee Services Bank, Ltd.
(Trust Account 7)
State Street Bank West Client-Treaty

1776 Heritage Drive, North Quincy, MA 02171,

505234

U.S.A.

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

Total

－
10

(Notes) 1. The number of shares held by The Dai-Ichi Life Insurance Company, Limited includes its contribution of 6,560,000
shares to the retirement allowance trust (the holder of said shares, as listed in the Shareholders’ Register, is “Dai-Ichi
Life Insurance Account, Retirement Allowance Trust, Mizuho Trust & Banking Co., Ltd.”).
2. The Company has received copies of reports on substantial shareholdings under the Financial Instruments andExchange Act. However, the information in the report is not described in the above table since the Company does notconfirm the actual status of shareholdings as of the end of September 30, 2016. The major contents of the reports are as
follows.
Holders

Mitsubishi UFJ Trust and Banking Corporation and three other persons

Date on which the duty to file report

May 23, 2011

Number of shares

237,294,613 shares

Ownership percentage to the total
number of issued shares

5.24%

Holders

BlackRock Japan Co. Ltd and nine other persons

Date on which the duty to file report

March 31, 2014

Number of shares

255,857,172 shares

Ownership percentage to the total
number of issued shares

5.29%

Holders

Sumitomo Mitsui Trust Bank, Limited and two other persons

Date on which the duty to file report

July 31, 2014

Number of shares

244,372,374 shares

Ownership percentage to the total
number of issued shares

5.06%(7) Information on voting rights
1) Issued shares(As of September 30, 2016)
Classification
Shares without voting right
Shares with restricted voting right(treasury stock, etc.)
Shares with restricted voting right(others)
Shares with full voting right

Number of shares (shares)

Number of voting rights

Description

－

－

－

－

－

－

－

－

－

－

－

Common stock

5,469,000

Shares with full voting right (others)

Common stock

4,805,769,000

Shares less than one unit

Common stock

22,225,387－－

4,833,463,387－－(treasury stock, etc.)

Number of issued shares
Total number of voting rights

4,805,769

4,805,769－－－(Note) The “Shares with full voting right (others)” column includes 26,000 shares registered in the name of Japan Securities
Depository Center, Incorporated (account for managing stocks whose shareholders have not transferred titles) and 26 voting
rights for those shares.

112) Treasury stock, etc.
(As of September 30, 2016)

Name of shareholder

Address

6-6, Marunouchi 1-chome,

Hitachi, Ltd.

Chiyoda-ku, Tokyo

Aoyama Special Steel Co.,

1-12, Minato 1-chome,Ltd.

Chuo-ku, TokyoISHII DENKOSHA
Co., Ltd.

Number ofshares held
under own
name (shares)

Number ofshares held
under thenames ofothers (shares)

Total shares
held (shares)

Ownership
percentage tothe total number ofissued shares (%)

5,303,000－

5,303,000

0.11

10,000－10,000

0.00

1,000

－

1,000

0.00

88,000－88,0000.00

52,000－52,0000.00

15,000－15,0000.00

5,469,000－

5,469,000

0.11

1-11, Oroshishinmachi
3-chome, Higashi-ku,
Niigata-shi, Niigata

SAITA KOUGYOU CO.,5-3, Takinogawa 5-chome,LTD.

Kita-ku, Tokyo
3268, Nagaoka,

Nitto Jidosha Kiki K.K.

Ibarakimachi,
Higashiibaraki-gun, Ibaraki

Mizuho Co., Inc.

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

Total

－

2. Changes in Senior Management
Changes in senior managements from the filing date of the Annual Securities Report for the 147th business term pursuant to
the Financial Instruments and Exchange Act of Japan to September 30, 2016 were as follows.
1) Resignation [Effective July 31, 2016]
Name

Position (Responsibility)

John Domme................

Vice President and Executive Officer(Regional strategies (Americas))(Note) Matters delegated to the Executive Officer by the Board of Directors are described in parentheses in “Position(Responsibility)” column.
2) Changes in Responsibility [Effective August 1, 2016]
Name

Former Position (Responsibility)

New Position (Responsibility)

Ryuichi Otsuki.................. Vice President and Executive Officer(ICT business (platform business))

Vice President and Executive Officer(ICT business (platform business) and regional
strategies (Americas))(Note) Matters delegated to the Executive Officer by the Board of Directors are described in parentheses in “New position(Responsibility)” column and “Former position (Responsibility)” column.
3) The Number of Men and Women and Women's Percentage after Changes in Senior Management
Men: 43 persons, Women: 2 persons(Women’s percentage to total number of Directors and Senior Management: 4%)
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.

12

Condensed Quarterly Consolidated Financial Statements
Condensed Quarterly Consolidated Statement of Financial Position
Millions of yen
September 30, 2016

March 31, 2016

AssetsCurrent assets
Cash and cash equivalents
Trade receivables (note 6)
Lease receivables (note 6)
Inventories
Other current assets (note 6)

851,528
2,578,112
350,233
1,323,290
524,745699,315
2,992,770
338,758
1,299,855
541,857

Total current assets

5,627,908

5,872,555

696,468
1,213,048
739,392
2,262,638
936,759
303,138

676,960
1,329,974
727,485
2,500,226
1,070,403
373,402

Non-current assets
Investments accounted for using the equity method
Investments in securities and other financial assets (note 6)
Lease receivables (note 6)
Property, plant and equipment
Intangible assets
Other non-current assets
Total non-current assets

6,151,443

6,678,450

Total assets

11,779,351

12,551,005

747,023
663,603
228,822
1,313,971
662,643
491,406
448,099

871,417651,518
280,048
1,451,918
727,402480,457
531,456

4,555,567

4,994,216

2,166,235
71,851
725,636395,2622,081,520
115,155
783,670
450,874

Total non-current liabilities

3,358,984

3,431,219

Liabilities
Current liabilities
Short-term debt
Current portion of long-term debt (note 6)
Other financial liabilities (note 6)
Trade payables
Accrued expenses
Advances received
Other current liabilities
Total current liabilities
Non-current liabilities
Long-term debt (note 6)
Other financial liabilities (note 6)
Retirement and severance benefits
Other non-current liabilities
Total liabilities

7,914,551

8,425,435

EquityHitachi, Ltd. stockholders’ equity
Common stock
Capital surplus
Retained earnings (note 7)
Accumulated other comprehensive income (loss)
Treasury stock, at cost

458,790586,297
1,696,567(113,554)(3,819)458,790586,790
1,609,761
83,543(3,806)

Total Hitachi, Ltd. stockholders’ equity

2,624,281

2,735,078

1,240,519

1,390,492

Non-controlling interests
Total equity

3,864,800

4,125,570

Total liabilities and equity

11,779,351

12,551,005

See accompanying notes to condensed quarterly consolidated financial statements.

F-1

Condensed Quarterly Consolidated Statement of Profit or Loss
Six months ended September 30, 2016 and 2015
Revenues
Cost of sales
Gross profit
Selling, general and administrative expenses
Other income (note 8)
Other expenses (note 8)
Financial income (note 9)
Financial expenses (note 9)
Share of profits of investments accounted for using the equity method
EBIT (Earnings before interest and taxes)
Interest income
Interest charges
Income from continuing operations, before income taxes
Income taxes
Income from continuing operations
Income (loss) from discontinued operations (note 10)
Net income
Net income attributable to:
Hitachi, Ltd. stockholders
Non-controlling interests
Earnings per share from continuing operations,
attributable to Hitachi, Ltd. stockholders (note 11)
Basic
DilutedEarnings per share attributable to Hitachi, Ltd. stockholders (note 11)
Basic
DilutedMillions of yen
2016
4,353,774(3,219,608)
1,134,166(901,326)
49,070(51,240)
4,207(19,631)3,319
218,565
5,576(9,976)214,165(53,562)
160,60324
160,627

2015
4,806,888(3,556,463)
1,250,425(976,418)
31,374(43,460)
7,692(18,979)
11,997
262,6315,490(13,428)
254,693(77,085)
177,608(11,758)
165,850

113,500
47,127

97,591
68,259

23.50
23.50

Yen
22.65
22.62

23.51
23.50

20.21
20.19

Condensed Quarterly Consolidated Statement of Comprehensive Income
Six months ended September 30, 2016 and 2015

Millions of yen

Net income

2016
160,627

2015
165,850

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(16,437)
(464)
(821)
(17,722)(40,840)1,131
1(39,708)

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(229,617)
23,756(41,638)(247,499)(53,208)
(387)
4,884
(48,711)(265,221)(104,594)(88,419)
77,431(81,156)(23,438)

30,621
46,810

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

F-2

Condensed Quarterly Consolidated Statement of Profit or Loss
Three months ended September 30, 2016 and 2015

Millions of yen

Revenues
Cost of sales
Gross profit
Selling, general and administrative expenses
Other income
Other expenses
Financial income
Financial expenses
Share of profits of investments accounted for using the equity method
EBIT (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

2016
2,223,307(1,635,381)
587,926(446,569)
6,319(41,721)911(6,291)
5,519
106,094
3,031(4,714)
104,411(20,177)
84,234(409)
83,8252015
2,492,865(1,845,207)
647,658(489,041)
2,308(31,134)
3,556(24,639)
7,455
116,163
2,483(6,647)111,999(31,028)
80,971(10,155)
70,81657,05026,77542,63328,183

11.90
11.90

Yen
10.93
10.93

11.82
11.81

8.83
8.83

Earnings per share from continuing operations,
attributable to Hitachi, Ltd. stockholders (note 11)
Basic
DilutedEarnings per share attributable to Hitachi, Ltd. stockholders (note 11)
Basic
Diluted
Condensed Quarterly Consolidated Statement of Comprehensive Income
Three months ended September 30, 2016 and 2015

Millions of yen

Net income

2016
83,825

2015
70,816

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

15,042(333)
14,709(49,120)
1,079
(378)
(48,419)

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(48,549)
13,020(15,906)(51,435)(98,669)
18,117(18,610)(99,162)(36,726)
47,099(147,581)(76,765)

28,40818,691(70,289)(6,476)

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

Condensed Quarterly Consolidated Statement of Changes in Equity
Six months ended September 30, 2016

Millions of yen
2016

Commonstock
Balance at beginning of period

Accumulated
othercomprehensive
income(loss)

Retainedearnings(note 7)

CapitalsurplusTreasurystock,
at cost

Total
Hitachi, Ltd.
stockholders’equityNoncontrollinginterests(note5)

Total equity

458,790586,790

1,609,761

83,543(3,806)

2,735,078

1,390,492

4,125,570

Reclassified into retained
earnings

-

-

2,275

(2,275)

-

-

-

-

Net income--

113,500--

113,500

47,127

160,627

Other comprehensive loss

-

-

-

(194,656)-(194,656)(70,565)(265,221)

Dividends to Hitachi, Ltd.
stockholders--(28,969)--(28,969)-(28,969)

Dividends to non-controllinginterests

-

-

-

-

-

-

(27,780)(27,780)

Acquisition of treasury stock

-

-

-

-

(52)

(52)

-

(52)

Sales of treasury stock

-

(15)

-

-

39

24

-

24

Changes in equity

Changes in non-controllinginterests

-

(478)

-

(166)

-

(644)

(98,755)(99,399)

Total changes in equity

-

(493)

86,806(197,097)(13)(110,797)(149,973)(260,770)

Balance at end of period

458,790586,297

1,696,567(113,554)(3,819)2,624,281

1,240,519

3,864,800

Six months ended September 30, 2015

Millions of yen
2015

Commonstock
Balance at beginning of period

Accumulated
othercomprehensive
incomeRetainedearnings(note 7)

CapitalsurplusTreasurystock,
at cost

Total
Hitachi, Ltd.
stockholders’equityNoncontrollinginterests

Total equity

458,790

608,416

1,477,517

401,100(3,542)

2,942,281

1,354,061

4,296,342

-

-

4,871

(4,871)

-

-

-

-

Changes in equity
Reclassified into retained
earnings
Net income--

97,591--

97,591

68,259165,850

Other comprehensive loss

-

-

-

(66,970)-(66,970)(21,449)(88,419)

Dividends to Hitachi, Ltd.
stockholders--(28,971)--(28,971)-(28,971)

Dividends to non-controllinginterests

-

-

-

-

-

-

(24,861)(24,861)

Acquisition of treasury stock

-

-

-

-

(169)

(169)

-

(169)

Sales of treasury stock

-

1

-

-

14

15

-

15

Changes in non-controllinginterests

-

(846)

-

34

-

(812)

(1,515)(2,327)

Total changes in equity

-

(845)

73,491(71,807)

(155)

684

20,434

21,118

Balance at end of period

458,790

607,571

1,551,008

329,293(3,697)2,942,965

1,374,495

4,317,460

See accompanying notes to condensed quarterly consolidated financial statements.

F-4

Condensed Quarterly Consolidated Statement of Cash flows
Six months ended September 30, 2016 and 2015

Millions of yen
2016

2015

160,627

165,850

231,410
24,14353,585(3,319)797(47,114)(289)
121,847(113,607)(821)
22,892(20,376)(65,258)(1,736)248,162
1,585
77,085(11,553)
1,280(30,085)
3,299
230,868(98,477)(8,535)(104,954)(39,164)(53,894)
6,175

362,781
5,123
5,899(9,389)(79,466)

387,642
5,845
15,840(13,457)(86,282)

284,948309,588(154,710)(49,114)(262,051)
14,865
8,023
163,334(189,557)(52,087)(264,081)
2,262
12,001
184,707(12,930)(78,366)

65,903
10,13943,1629,479(216,541)(332,480)(10,683)
470,142(262,779)
3,756(28,962)(21,302)(52)
24(4,225)(50,525)
372,170(225,870)
277(28,911)(26,828)(169)
15(2,665)

60
(12)

(80)

145,967

37,414

Effect of exchange rate changes on cash and cash equivalents(62,161)(21,084)

Change in cash and cash equivalents

152,213(6,562)

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 of investments accounted for using the equity method
Financial income and expenses
Net gain on business reorganization and others(Gain) loss on sale of property, plant and equipment
Change in trade receivables
Change in inventories
Change in other assets
Change in trade payables
Change in retirement and severance benefits
Change in other liabilities
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
Purchase of leased assets
Proceeds from sale of property, plant and equipment, and intangible assets
Proceeds from sale of leased assets
Collection of lease receivables
Purchase of investments in securities and other financial assets(including investments in subsidiaries andinvestments accounted for using the equity method)
Proceeds from sale of investments in securities and other financial assets(including investments in subsidiaries andinvestments 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
Proceeds from partial sales of shares of consolidated
subsidiaries to non-controlling interests
Other
Net cash provided by (used in) financing activities

Cash and cash equivalents at beginning of period

699,315

701,703

Cash and cash equivalents at end of period

851,528

695,141

See accompanying notes to condensed quarterly consolidated financial statements.

F-5

Notes to Condensed Quarterly Consolidated Financial Statements
September 30, 2016
(1) Nature of Operations
Hitachi, Ltd. (the Company) is a corporation domiciled in Japan, whose shares are listed on the Tokyo Stock Exchange. The
condensed quarterly consolidated financial statements of the Company as of and for the six months ended September 30, 2016
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 nine segments consisting of informationand telecommunication systems, social infrastructure and industrial systems, electronic systems and equipment, construction
machinery, high functional materials and components, automotive systems, smart life and ecofriendly systems, others andfinancial services.
(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 the Terminology, Forms, and Preparation Methods of Quarterly
Consolidated Financial Statements (Cabinet Office Ordinance No.64 of 2007), the condensed quarterly consolidated financial
statements of the Company have been prepared in accordance with International Accounting Standards (IAS) 34 “Interim Financial
Reporting”, as permitted by the provision of Article 93 of the Ordinance. They do not include all the information and disclosuresrequired for a complete 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, 2016.
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 effects 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, 2016.
(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, 2016.
Income taxes for the six months ended September 30, 2016 are computed using the estimated annual effective tax rate.

F-6

Notes to Condensed Quarterly Consolidated Financial Statements
September 30, 2016(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 nine 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 Social Infrastructure & Industrial Systems, Electronic Systems & Equipment and High Functional Materials &Components for financial reporting purposes so that financial statement users better understand the Company’s financial position
and business performance. The Company aggregates operating segments based on the similarities of economic characteristics
mainly using profit margin ratios of operating segment. The primary products and services included in each segment are as
follows:
Information & Telecommunication Systems:
Systems integration, Consulting, Cloud services, Servers, Storage, Software, Telecommunication & network and ATMs
Social Infrastructure & Industrial Systems:
Industrial machinery and plants, Elevators, Escalators, Railway systems, Thermal, Nuclear and Renewable energy power
generation systems and Transmission & distribution systems
Electronic Systems & Equipment:
Semiconductor processing equipment, Test and measurement equipment, Advanced industrial products, Medical electronics
equipment and Power tools
Construction Machinery:Hydraulic excavators, Wheel loaders and Mining machinery
High Functional Materials & Components:
Semiconductor and display related materials, Circuit boards and materials, Automotive parts (molded plastics, etc.), Energy
storage devices, Specialty steels, Magnetic materials and components, High grade casting components and materials and Wires andcablesAutomotive Systems:
Engine management systems, Electric powertrain systems, Drive control systems and Car information systems
Smart Life & Ecofriendly Systems:
Air-conditioning equipment, Room air conditioners, Refrigerators and Washing machines
Others:
Optical disk drives, Property management and others
Financial Services:
Leasing and Loan guarantees
Effective from April 1, 2016, the Company changed the name of Others (Logistics and other services) to Others.

F-7

Notes to Condensed Quarterly Consolidated Financial Statements
September 30, 2016
The following tables show business segment information for the six months ended September 30, 2016 and 2015.
Revenues from Outside Customers
Millions of yen
2016

2015

Information & Telecommunication Systems

827,474

875,159

Social Infrastructure & Industrial Systems

902,665

843,053

Electronic Systems & Equipment

489,022495,292

Construction Machinery

328,361

356,974High Functional Materials & Components

676,094

768,777

Automotive Systems

470,138

487,429

Smart Life & Ecofriendly Systems

272,874

375,091

Others214,795

431,306

Financial Services

170,583

171,255

4,352,006

4,804,336

1,768

2,552

4,353,774

4,806,888

Subtotal
Corporate items
Total
Revenues from Intersegment Transactions

Millions of yen
2016

2015

Information & Telecommunication Systems

99,610124,976

Social Infrastructure & Industrial Systems

127,225

106,971

Electronic Systems & Equipment

48,48454,203

Construction Machinery

6,576

8,116

High Functional Materials & Components

27,17731,797

Automotive Systems

1,756

2,730

Smart Life & Ecofriendly Systems

14,58318,190

Others144,580

191,695

Financial Services

8,629

10,005

Subtotal

478,620548,683

Corporate items and Eliminations(478,620)(548,683)

-

-

Total

F-8

Notes to Condensed Quarterly Consolidated Financial Statements
September 30, 2016
Total Revenues
Millions of yen
2016

2015

Information & Telecommunication Systems

927,084

1,000,135

Social Infrastructure & Industrial Systems

1,029,890

950,024

Electronic Systems & Equipment

537,506

549,495

Construction Machinery

334,937

365,090

High Functional Materials & Components

703,271

800,574

Automotive Systems

471,894490,159

Smart Life & Ecofriendly Systems

287,457

393,281

Others359,375

623,001

Financial Services

179,212181,260

Subtotal

4,830,626

5,353,019

Corporate items and Eliminations(476,852)(546,131)

Total

4,353,774

4,806,888

Segment Profit (Loss)
Millions of yen
2016

2015

Information & Telecommunication Systems

19,60945,220Social Infrastructure & Industrial Systems

3,432

12,883

Electronic Systems & Equipment

26,481

32,064

Construction Machinery

3,564

11,738High Functional Materials & Components

49,70986,197

Automotive Systems

20,64325,250Smart Life & Ecofriendly Systems

9,788

13,115

Others12,551

24,341

Financial Services

22,841

24,548Subtotal

168,618

275,356

Corporate items and Eliminations

49,947(12,725)

Total

218,565

262,631

5,576

5,490

Interest income
Interest charges(9,976)(13,428)

Income from continuing operations, before income taxes

214,165

254,693

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
unallocated corporate expenses, such as expenditures for leading-edge R&D, a part of net gain on business reorganization, and others.

F-9

Notes to Condensed Quarterly Consolidated Financial Statements
September 30, 2016(5) Business Acquisitions and Divestitures
On October 3, 2016, Hitachi Construction Machinery Co., Ltd. (HCM), a subsidiary of the Company in the Construction
Machinery segment, signed a bid implementation agreement with Bradken Limited (Bradken) to implement a takeover offer for all
issued shares of common stock in Bradken, which conducts metal casting and operates manufacture and distribution services formetal casting products, in order to complement and bolster the parts service business in the mining business of HCM. The takeoveroffer period is scheduled from November 1, 2016 to February 10, 2017, and the total consideration will be AUD 689 million(¥53,080 million). Bradken will become a subsidiary of HCM if the takeover offer is successfully completed.
On May 13, 2016, the Company has concluded an agreement regarding the transfer of common stocks of Hitachi Capital
Corporation (Hitachi Capital), a subsidiary of the Company in the Financial Services segment, in order to strengthen financefunctions and accelerate the concentration of management resources in the Social Innovation Business. In accordance with thisagreement, a certain number of shares of Hitachi Capital common stocks owned by the Company were transferred to Mitsubishi
UFJ Financial Group, Inc. and Mitsubishi UFJ Lease & Financial Co., Ltd on October 3, 2016. As a result of this transfer ofshares, the Company’s ownership ratio of voting rights in Hitachi Capital decreased from 60.6% to 33.4%, and Hitachi Capitalceased to be the Company’s consolidated subsidiary and became its associate accounted for using the equity-method. The effectsof this transaction on the Company’s consolidated financial statements are currently being evaluated.
On March 30, 2016, the Company has concluded an agreement regarding the transfer of common stocks of Hitachi Transport
System, Ltd. (HTS), a subsidiary of the Company included in the Others in segment information, in order to expand the scope of
the Social Innovation Business by enhancing logistics platforms. In accordance with this agreement, a certain number of shares of
HTS common stocks owned by the Company were transferred to SG Holdings Co., Ltd. on May 19, 2016. As a result of thistransfer of shares, the Company’s ownership ratio of voting rights in HTS decreased from 59.02% to 30.01%, and HTS ceased tobe the Company’s consolidated subsidiary and became its associate accounted for using the equity-method. A gain on the sale ofshares of HTS in the amount of 44,958 million yen was recognized in Other income in the condensed quarterly consolidated
statement of profit or loss. Changes in non-controlling interests in the condensed quarterly consolidated statement of changes inequity include derecognition of non-controlling interest in HTS as a result of its deconsolidation.
On February 7, 2015, Hitachi Data Systems Corporation (HDS), a subsidiary of the Company in the Information &Telecommunications Systems segment, signed a definitive agreement with the shareholders of Pentaho Corporation (Pentaho) toacquire all the shares of Pentaho, for enhancing big-data technologies and solutions. Pentaho integrates data, develops technologies
for big-data analysis and visualization, and delivers solutions and supports. On May 29, 2015, HDS acquired all the shares ofPentaho in accordance with the definitive agreement, and HDS obtained control of Pentaho, and it became a wholly owned
subsidiary.
The following table summarizes the fair value of the consideration paid for Pentaho, the assets acquired and liabilities assumed
recognized as of the acquisition date.
Millions of yen
988
807
182
82

Cash and cash equivalents
Trade receivables
Other current assets
Non-current assets (excluding intangible assets)
Intangible assets
Goodwill (not deductible for tax purposes)
Other intangible assets
Total

55,901
10,275
68,235Current liabilities
Non-current liabilities
Total

3,449
9
3,458

Cash paid for acquisition

64,777F-10

Notes to Condensed Quarterly Consolidated Financial Statements
September 30, 2016
The goodwill mainly comprises excess earning power and expected synergies arising from the acquisition.
The results of operations of Pentaho for the period from the acquisition date to September 30, 2015 were not material.
On a pro forma basis, revenues and net income attributable to Hitachi, Ltd. stockholders using an assumed acquisition date forPentaho of April 1, 2015 would not differ materially from the amounts reported in the condensed quarterly consolidated financial
statements for the six months ended September 30, 2015.

F-11

Notes to Condensed Quarterly Consolidated Financial Statements
September 30, 2016
(6) 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, Short-term loans receivable, Short-term debt, Other payables and Trade payables
The carrying amount approximates the fair value because of the short maturity of these instruments.
Trade receivables
The fair value of trade receivables is measured by the present value of future cash flows discounted by risk-free rates after
considering early settlements, cancellation and the balance of doubtful accounts, for each type of receivable, class of receivable
based on collection records and term of collection.
Lease receivables
The fair value of lease receivables is based on the present value of lease payments receivable based on years to maturity, using
discount rates that reflect the time to maturity and credit risk.
Investments in securities and Other financial assets
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.
Fair values of subordinated interests and beneficiary interests in trust that are retained in transactions of transferring financial
assets are estimated by discounting future cash flows based on economic assumptions including expected rate of credit loss anddiscount rate since significant inputs for estimation of the fair value are unobservable.
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
September 30, 2016
Contract guarantee deposits are financial liabilities received from some customers and other parties as a credit enhancement totrade and lease receivables, and normally returned after the underlying assets are fully collected. The fair value of contract
guarantee deposits is measured by discounting the sum of the principals over the time to the contractual return dates, using therisk-free discount rate.
(b) Financial Instruments Measured at Amortized Cost
The carrying amounts and estimated fair values of the financial instruments measured at amortized cost as of September 30 andMarch 31, 2016 are as follows.
The fair value estimated for financial assets and liabilities measured at amortized cost is classified in Level 2 of the fair value
hierarchy.
Millions of yen
September 30, 2016
Carrying
amounts

March 31, 2016

Estimated
fair values

Carrying
amounts

Estimated
fair values

AssetsTrade receivables [1]3,184,134

3,204,986

3,676,298

3,691,667

Lease receivables

1,089,625

1,130,025

1,066,243

1,104,607

Investments in securities and otherfinancial assets [2]Debt securities

63,824

63,86875,32675,319Long-term loans receivable

88,56589,26690,944

91,773Liabilities
Long-term debt [3]Lease obligations

42,60742,55544,60044,696

Bonds

715,892

728,583

742,941755,325

2,071,339

2,091,583

1,945,497

1,970,687

30,37830,08031,987

31,528Long-term debt
Other financial liabilities
Contract guarantee deposits[1] Trade receivables are included in Trade receivables and Investments in securities and other financial assets in the condensed
quarterly consolidated statement of financial position.
[2] Investments in securities and other financial assets are included in Other current assets and Investments in securities andother financial assets in the condensed quarterly consolidated statement of financial position.
[3] 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
September 30, 2016
The following tables present the assets and liabilities that are measured at fair value on a recurring basis as of September 30 andMarch 31, 2016.
September 30, 2016
Class of financial instruments

Millions of yen
Level 1

Level 2

Level 3

Total

FVTPL financial assets:
Investments in securities and otherfinancial assets [1]Equity securities
Debt securities

-

-

2,704

2,704

15,702

6,585

27,98250,269-59,6696,061

65,730257,964

176

109,802367,942

273,666

66,430146,549

486,645-

51,398-51,398-51,398-51,398Derivatives
FVTOCI financial assets:
Investments in securities and otherfinancial assets [1]Equity securities
Total financial assets at fair value
FVTPL financial liabilities:
Other financial liabilities
Derivatives
Total financial liabilities at fair value
March 31, 2016
Class of financial instruments

Millions of yen
Level 1

Level 2

Level 3

Total

FVTPL financial assets:
Investments in securities and otherfinancial assets [1]Equity securities
Debt securities

16

-

1,781

1,797

12,051

7,427

38,02557,503-37,4896,061

43,550280,978220

115,536

396,734

293,045

45,136

161,403499,584-

82,617-

82,617-

82,617-

82,617

Derivatives
FVTOCI financial assets:
Investments in securities and otherfinancial assets [1]Equity securities
Total financial assets at fair value
FVTPL financial liabilities:
Other financial liabilities
Derivatives
Total financial liabilities at fair value[1] Investments in securities and other financial assets are included in Other current assets and Investments in securities andother financial assets in the condensed quarterly consolidated statement of financial position.

F-14

Notes to Condensed Quarterly Consolidated Financial Statements
September 30, 2016
The following tables present the changes in Level 3 instruments measured on a recurring basis for the six months ended
September 30, 2016 and 2015.
September 30, 2016
Level 3 financial assets

Millions of yen
Equitysecurities

Balance at beginning of period

Debt
securities

Derivatives

Total

117,317

38,025

6,061

161,403

(88)

(73)

-

(161)

Loss in profit or loss [1]Loss in OCI [2](1,896)--(1,896)

Purchases

1,909

1,794

-

3,703

Sales and redemption(1,547)(10,966)-(12,513)

Acquisitions and divestitures(3,341)(567)-(3,908)Transfer from Level 3 [3]

(168)

-

-

(168)

Other

320

(231)

-

89

112,506

27,982

6,061

146,549

(88)

(143)

-

(231)

Balance at end of period
Unrealized loss relating tofinancial assets still held at end of period [4]September 30, 2015
Level 3 financial assets

Millions of yen
Equitysecurities

Balance at beginning of period

Debt
securities

Derivatives

Total

112,632

57,299-169,931

Loss in profit or loss [1]

(423)

(438)

-

(861)

Gain in OCI [2]

5,915

-

-

5,915

446

1,409

6,061

7,916

Purchases
Sales and redemption(1,144)(13,031)-(14,175)

Acquisitions and divestitures

295

261

-

556

Transfer from Level 3 [3](4,874)--(4,874)

Other
Balance at end of period
Unrealized gain (loss) relating tofinancial assets still held at end of period [4]

(193)

358

-

165

112,654

45,858

6,061

164,573

5,392

(66)

-

5,326

[1] 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 (loss) in OCI related to FVTOCI financial assets is included in Net changes in financial assets measured at fair value
through OCI in the condensed quarterly consolidated statement of comprehensive income.
[3] Transfer from Level 3 is mainly the result of an investee being listed on the stock market.
[4] Unrealized gain (loss) related to FVTPL financial assets still held at the end of period are included in Financial income andFinancial expenses in the condensed quarterly consolidated statement of profit or loss.

F-15

Notes to Condensed Quarterly Consolidated Financial Statements
September 30, 2016
Valuation techniques and unobservable inputs used for measuring financial instruments categorized as Level 3 on a recurring
basis as of September 30 and March 31, 2016 are as follows:
September 30, 2016
Level 3 financial instruments

Millions of yen
Fair value

ValuationtechniqueUnobservable inputs
Discount rate

Subordinated interests and beneficiary interests
in trusts that are retained relating to

16,320DCF

securitization of financial assetsof the entire transferred

0.12-0.36％

financial assets

Millions of yen
Fair value

ValuationtechniqueUnobservable inputs
Discount rate

Subordinated interests and beneficiary interests
in trusts that are retained relating to

0.00-0.55％

Expected rate of credit loss

March 31, 2016
Level 3 financial instruments

Range

25,389securitization of financial assets

DCF

Range
0.05-1.25％

Expected rate of credit lossof the entire transferred

0.15-0.36％

financial assets

The impact on the fair value is not material if unobservable inputs are changed to reasonably possible alternative assumptions inestimating the fair value of subordinated interests and beneficiary interests in trusts that are retained relating to securitization offinancial assets.
Fair values are measured by 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 financedepartments continually examine changes in important inputs that could affect the fair value. In case the fair value of a financial
instrument was significantly impaired, administrators review and approve the impairment loss.

F-16

Notes to Condensed Quarterly Consolidated Financial Statements
September 30, 2016
(7) Dividends
Dividends paid on common stock for the six months ended September 30, 2016 are as follows:

Decision
The Board of Directors
on May 13, 2016

Cash dividends(millions of yen)

Appropriationfrom28,969 Retained earnings

Cash dividends
per share (yen)
6.0

Record date

Effective date

March 31, 2016

May 30, 2016

Dividends on common stock whose record date falls in the six months ended September 30, 2016 and the effective date falls in thenext period are as follows:

Decision
The Board of Directors
on October 28, 2016

Cash dividends(millions of yen)

Appropriationfrom28,968 Retained earnings

Cash dividends
per share (yen)Record date

Effective date

6.0 September 30, 2016 November 28, 2016

Dividends paid on common stock for the six months ended September 30, 2015 are as follows:

Decision
The Board of Directors
on May 14, 2015

Cash dividends(millions of yen)

Appropriationfrom28,971 Retained earnings

Cash dividends
per share (yen)
6.0

Record date

Effective date

March 31, 2015

June 1, 2015

Dividends on common stock whose record date falls in the six months ended September 30, 2015 and the effective date falls in thenext period are as follows:

Decision
The Board of Directors
on Oct 28, 2015

Cash dividends(millions of yen)

Appropriationfrom28,970 Retained earnings

F-17

Cash dividends
per share (yen)Record date

Effective date

6.0 September 30, 2015 November 26, 2015

Notes to Condensed Quarterly Consolidated Financial Statements
September 30, 2016(8) Other Income and Expenses
Millions of yen
2016
Net gain (loss) on sales and disposals of fixed assets

2015
289

(3,299)Impairment losses(24,143)(1,585)

Net gain on business reorganization and others

47,11430,085Special termination benefits(9,277)(25,272)(692)(4,653)

Expenses related to competition law and others

Impairment losses are mainly recognized on property, plant and equipment, investment properties and intangible assets. Net gain on
business reorganization and others include gains and losses related to obtaining and losing control of investees and gains and losses
related to obtaining and losing significant influence over investees.
Restructuring charges (structural reform expenses) included in other expenses for the six months ended September 30, 2016 and2015 were ¥35,468 million and ¥26,857 million, respectively. Restructuring charges (structural reform expenses) mainly include
impairment losses and special termination benefits.

(9) Financial Income and Expenses
Millions of yen
2016
Dividends received
Exchange loss

2015
4,207

4,438

(18,847)(15,051)

Dividends received for the six months ended September 30, 2016 and 2015 are from FVTOCI financial assets.

F-18

Notes to Condensed Quarterly Consolidated Financial Statements
September 30, 2016(10) Discontinued Operations
In the Social Infrastructure & Industrial Systems, the Company classified the part of thermal power generation systems business
which was not transferred to 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 the condensed quarterly consolidated statement of profit or loss since the projects were completed in
the year ended March 31, 2015.
Profit or loss and cash flows from the discontinued operations for the six months ended September 30, 2016 and 2015 are as
follows:
Millions of yen
2016

2015

Profit or loss from discontinued operations
Revenues

1,171

46

Cost of sales and expenses(1,124)(11,804)

47(11,758)

(23)

-

24

(11,758)

Income (loss) from discontinued operations, before income taxes
Income taxes
Income (loss) from discontinued operations

Millions of yen
2016

2015

Cash flows from discontinued operations
Cash flows from operating activities(1,455)(1,833)

Cash flows from investing activities-

20

Cash flows from financing activities

1,939

1,597

F-19

Notes to Condensed Quarterly Consolidated Financial Statements
September 30, 2016(11) Earnings Per Share (EPS) Information
The computations of net income attributable to Hitachi, Ltd. stockholders used to derive basic and diluted EPS for the six months
ended September 30, 2016 and 2015 are as follows:
Six months ended September 30
Number of shares
2016
Weighted average number of shares on which basic EPS is calculated

4,828,184,694

4,828,461,350

845,435-

4,829,030,129

4,828,461,350

Effect of dilutive securities
Number of shares on which diluted EPS is calculated

2015

Millions of yen
2016

2015

Net income from continuing operations,
attributable to Hitachi, Ltd. stockholders
Basic113,476

109,349

Other

(0)

(116)

Diluted113,476

109,233

24(11,758)

Other

-

-

Diluted24(11,758)

113,500

97,591

Effect of dilutive securities

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

Net income attributable to Hitachi, Ltd. stockholders
Basic
Effect of dilutive securities
Other

(0)

(116)

Diluted

113,500

97,475
Yen

2016

2015

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

23.50

22.65

Diluted

23.50

22.62

Basic

0.00

(2.44)

Diluted

0.00(2.44)EPS from discontinued operations,
attributable to Hitachi, Ltd. stockholders

EPS attributable to Hitachi, Ltd. stockholders
Basic

23.51

20.21

Diluted

23.50

20.19

F-20

Notes to Condensed Quarterly Consolidated Financial Statements
September 30, 2016
The computations of net income attributable to Hitachi, Ltd. stockholders used to derive basic and diluted EPS for the threemonths ended September 30, 2016 and 2015 are as follows:
Three months ended September 30
Number of shares

Weighted average number of shares on which basic EPS is calculated

2016

2015

4,828,177,222

4,828,401,711

Effect of dilutive securities
Number of shares on which diluted EPS is calculated

1,645,900-

4,829,823,122

4,828,401,711
Millions of yen

2016

2015

Net income from continuing operations,
attributable to Hitachi, Ltd. stockholders
Basic57,45952,788

Effect of dilutive securities
Other

(0)

(20)

Diluted

57,45952,768(409)(10,155)

Other

-

-

Diluted(409)(10,155)

57,05042,633

Other

(0)

(20)

Diluted57,05042,613Net loss from discontinued operations,
attributable to Hitachi, Ltd. stockholders
Basic
Effect of dilutive securities

Net income attributable to Hitachi, Ltd. stockholders
Basic
Effect of dilutive securities

Yen
2016

2015

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

11.90

10.93

Diluted

11.90

10.93

Basic

(0.08)(2.10)

Diluted(0.08)(2.10)

Basic

11.82

8.83

Diluted

11.81

8.83

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

EPS attributable to Hitachi, Ltd. stockholders

F-21

Notes to Condensed Quarterly Consolidated Financial Statements
September 30, 2016(12) Contingencies(a)Litigation
In June 2009, a subsidiary in Japan received a grand jury subpoena in connection with the investigation conducted by the
Antitrust Division of the U.S. Department of Justice and received requests for information from the European Commission in
respect of alleged antitrust violations relating to optical disk drives. In November 2011, the subsidiary in Japan paid a fine in
relation to the investigation from the Antitrust Division of the U.S. Department of Justice. In July 2012, the subsidiary in Japan
received a statement of objections from the European Commission in respect of alleged antitrust violations. In October 2015, theEuropean Commission announced the amount of the fine for the subsidiary in Japan in respect of alleged antitrust violations, andin June 2016, two subsidiaries in Japan and Korea paid the fines.
In July 2011, a subsidiary in the U.S.A. received a grand jury subpoena from the Antitrust Division of the U.S. Department ofJustice, the Company and a subsidiary in Europe received requests for information from the European Commission, and a
subsidiary in Canada received requests for information from the Canadian Competition Bureau, all in respect of alleged antitrust
violations relating to automotive equipment. In November 2013, a subsidiary in Japan, which had been also primarily responsible
for responding to the investigation from the Antitrust Division of the U.S. Department of Justice, paid fines. In January 2016, theCompany and the subsidiary in Japan which had been also primarily responsible for responding to the investigation from
European Commission reached a settlement with the European Commission, and paid fines in April 2016.
In April 2014, a subsidiary in the U.S.A. received a grand jury subpoena in connection with the investigation conducted by the
Antitrust Division of the U.S. Department of Justice in respect of alleged antitrust violations relating to automotive equipment. In
August 2016, a subsidiary in Japan, which had been also primarily responsible for responding to the investigation, concluded anagreement in which the subsidiary will pay fines.
In June 2014, a subsidiary in Japan was investigated by the Japan Fair Trade Commission in respect of alleged antitrust violations
relating to capacitors. In March 2016, the subsidiary received a notice that the investigation was over from the Japan Fair Trade
Commission. The subsidiary in Japan and subsidiaries in Europe, the U.S.A., and others are being investigated by competition
authorities in each country or region, all in respect of alleged antitrust violations relating to capacitors. In April 2016, thesubsidiary in Japan concluded an agreement in which the subsidiary will pay fines, and in June 2016, the subsidiary in Japan paid
the fines. In November 2015, the subsidiaries in Japan received a statement of objections from the European Commission in
respect of alleged antitrust violations.
In addition to the above, the Company, its subsidiaries and associates have cooperated with the competent authorities. Depending
upon the outcome of these matters, fines or surcharge payments, the amount of which is uncertain, may be imposed on them.
Also, in connection with pending and settled antitrust violations, civil disputes, including class action lawsuits, involving theCompany and some of these companies have arisen in a number of countries, including in the U.S.A. and Canada. An amount,which was considered to be a reasonable estimate in respect of these claims, was accrued for the potential losses in relation tocertain of these civil disputes.
In August 2012, a subsidiary in Europe received a complaint filed by a customer in Europe seeking compensation forconsequential losses of EUR 1,058 million (¥120,002 million), additional costs and interest allegedly incurred by the delay in theconstruction process of a power plant against, jointly and severally, the Company, the subsidiary in Europe, a consortium
including the Company and the subsidiary in Europe, and two other companies. In addition, in October 2013 and February 2016,
the subsidiary in Europe received additional complains requesting compensation for consequential losses of EUR 239 million(¥27,148 million) and EUR 105 million (¥11,861 million), respectively. In June 2016, the Company was informed that thecustomer added an associate in Europe as one of the defendants. Although the Company, the subsidiary and the associate inEurope and the consortium will vigorously defend themselves against this lawsuit, there can be no assurance that they will not beheld liable for any amounts claimed.
In December 2013, the Company, a subsidiary in Europe and a consortium consisting of the Company and the subsidiary inEurope, jointly and severally received a request from a customer in Europe to refer a dispute to arbitration seeking compensation
for EUR 606 million (¥68,786 million) including consequential losses allegedly incurred by the delay in the construction
F-22

Notes to Condensed Quarterly Consolidated Financial Statements
September 30, 2016
process of a power plant. As of September 30, 2016, the amount of compensation claimed by the customer was changed to EUR
637 million (¥72,230 million). In December 2015, these companies, jointly and severally received a request for arbitration fromthe customer demanding EUR 161 million (¥18,288 million) in compensation for performance related deficiencies of a power
plant. Although the Company, the subsidiary in Europe, and the consortium consisting of the Company and the subsidiary inEurope, will vigorously defend themselves against this claim, there can be no assurance that they will not be held liable for any
amounts claimed.
In January 2016, a subsidiary in Europe notified its customer in Europe that the subsidiary had commenced arbitration
proceedings to resolve a disagreement about construction of a power plant, and then the arbitration was started. While thesubsidiary is seeking payments of the unpaid amounts based on the contract, a counterclaim was filed by the customer. Thus,
there can be no assurance that the subsidiary will not be held liable for any amounts.
The Company and its subsidiaries execute a number of business reorganizations, including mergers, acquisitions and divestitures.
Contracts for these reorganizations include clauses for transaction price adjustments subsequent to the reorganizations. As theresult of price adjustments, etc. there is a possibility that the Company 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. Accordingly, except as otherwise stated, no accrual for potential loss has been made. 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 theordinary course of business and have not been finally adjudicated. These actions when ultimately concluded and determined will
not, in the opinion of management, have a material adverse effect on the consolidated financial position or results of operations of
the Company and subsidiaries.
(b)Other
On February 1, 2014 (hereinafter the “effective date of company split”), the Company and Mitsubishi Heavy Industries, Ltd.
(hereinafter “MHI”) integrated their thermal power generation systems businesses into MHI’s consolidated subsidiary,
MITSUBISHI HITACHI POWER SYSTEMS, LTD. (hereinafter “MHPS”), through a spin-off in the form of an absorption-typecompany-split. As part of this business integration, assets and liabilities associated with boiler construction projects for Medupi
and Kusile Power Stations for which the Company’s consolidated subsidiaries in the Republic of South Africa, Hitachi Power
Africa Proprietary Limited (hereinafter “HPA”) and other companies received orders in 2007, as well as their contractual status
in relation to customers, and rights and obligations thereof were transferred from HPA to MHI’s consolidated subsidiary,
Mitsubishi Hitachi Power Systems Africa Proprietary Limited (hereinafter “MHPS Africa”) (hereinafter, the “Transfer of South
African Business”).
Under the agreement executed between the Company and MHI regarding the Transfer of South African Business, the Company
and HPA shall be liable for contingent liabilities resulting from events that occurred before the effective date of company split aswell as claims that had already been made as of the said date, while MHPS and MHPS Africa shall be held responsible for the
execution of business on and after the effective date of company split. Given these conditions, it has been agreed upon todetermine the final transfer price upon agreement on future construction schedule as of the effective date of company split andconfirmation of estimated project cash flows based on such schedule between the parties, and settle the difference with theprovisional price.
The said transfer price adjustment for the Transfer of South African Business is still under discussion between the Company and
MHI and not yet agreed upon at the moment. On March 31, 2016, MHI requested the Company to pay ZAR 48,200 million(approximately ¥379.0 billion when ZAR 1 = ¥7.87) to MHPS Africa as a portion of transfer price adjustment, etc. The Company
replied to MHI on April 6, 2016 that the details of the demand letter lacked legal grounds under any agreement and thus theCompany cannot accept it.

F-23

Notes to Condensed Quarterly Consolidated Financial Statements
September 30, 2016
The Company has recorded provisions based on reasonable estimates for the aforementioned agreement related to the South
African Business. The actual amount of payment resulting from the transfer price adjustment may be different from the accrued
amount.
(13) Approval of Condensed Quarterly Consolidated Financial Statements
The condensed quarterly consolidated financial statements were approved on November 14, 2016 by Toshiaki Higashihara,
President and CEO of the Company.

F-24

[Cover][Document Filed]

Confirmation Letter[Applicable Law]

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

Director, Kanto Local Finance Bureau[Filing Date]

November 14, 2016

[Company Name]

Kabushiki Kaisha Hitachi Seisakusho[Company Name in English]

Hitachi, Ltd.

[Title and Name of Representative]

Toshiaki Higashihara, President & CEO[Name and title of CFO]

Mitsuaki Nishiyama, Senior Vice President and Executive Officer[Address of Head Office]6-6, Marunouchi 1-chome, Chiyoda-ku, Tokyo[Place Where Available for Public Inspection]

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. Mitsuaki Nishiyama, Senior Vice President and Executive Officer,
confirmed that statements contained in the Quarterly Report for the second quarter of 148th fiscal year (from July 1, 2016 to
September 30, 2016) were adequate under the Financial Instruments and Exchange Act.
2. Special Notes
None.

A-2