Hitachi Announces Consolidated Financial Results for Fiscal 2007Tuesday May 13 3:08 PM
Notes: 1. All figures, except for the outlook for fiscal 2008, were
converted at the rate of 100 yen to the U.S. dollar, the
approximate exchange rate on the Tokyo Foreign Exchange Market
as of March 31, 2008.
2. Segment information and operating income (loss) are
presented in accordance with financial reporting principles
and practices generally accepted in Japan.
Summary
--------
In millions of yen and U.S. dollars, except Net income (loss) per
share (6) and Net income (loss) per American Depositary Share (7).
The years ended March 31
----------------------------------------------
U.S.
Yen Dollars
(B)/(A)X100
(millions) (%) (millions)
----------------------------------------------
2007 (A) 2008 (B) 2008
----------------------------------------------
1. Revenues 10,247,903 11,226,735 110 112,267
---------------------------------------------------------------------
2. Operating income 182,512 345,516 189 3,455
---------------------------------------------------------------------
3. Income before
income taxes
and minority interests 202,338 324,782 161 3,248
---------------------------------------------------------------------
4. Income before
minority interests 39,524 52,619 133 526
---------------------------------------------------------------------
5. Net income (loss) (32,799) (58,125) - (581)
---------------------------------------------------------------------
6. Net income (loss)
per share
Basic (9.84) (17.48) - (0.17)
Diluted (9.87) (17.77) - (0.18)
---------------------------------------------------------------------
7. Net income (loss)
per ADS
(representing 10
shares)
Basic (98) (175) - (1.75)
Diluted (99) (178) - (1.78)
---------------------------------------------------------------------
1. The Company's consolidated financial statements are
Notes: prepared based on U.S.GAAPs.
2. Segment Information and operating income (loss) are
presented in accordance with financial reporting principles
and practices generally accepted in Japan.
3. The figures are for 910 consolidated subsidiaries,
including Variable Interest Entities, and 171 equity-method
affiliates.
1. Business Results and Financial Position 1-1. Summary of Fiscal 2007 Consolidated Business Results
(1) Business Results
Year ended March 31, 2008
-------------------------------------------
Billions of Year-over-year Millions of
yen % change U.S. dollars
----------------------------------------------------------------------
Revenues 11,226.7 10% 112,267
----------------------------------------------------------------------
Operating income 345.5 89% 3,455
----------------------------------------------------------------------
Income before income taxes
and minority interests 324.7 61% 3,248
----------------------------------------------------------------------
Income before minority
interests 52.6 33% 526
----------------------------------------------------------------------
Net loss (58.1) - (581)
----------------------------------------------------------------------
During fiscal 2007, ended March 31, 2008, the global economy remained firm as a whole, driven by strong economies in the European Union (EU) and China. This was despite soaring crude oil and raw material prices, financial market turmoil triggered by the sub prime loan problem, a slowing U.S. economy and other contributing factors. The Japanese economy continued to grow, albeit moderately, driven overall by capital investment and exports. On a negative note, however, consumer spending declined combined with a rapid appreciation in the yen's value against the U.S. dollar and falling share prices beginning in January 2008 affected the economy. Hitachi's consolidated revenues were 11,226.7 billion yen, up 10% year over year. Revenues were higher year over year in the Information & Telecommunication Systems segment on growth in system integration, services and other areas. The Power & Industrial Systems segment also recorded higher revenues, primarily mainly due to growth in power systems, such as nuclear power plant equipment in Japan and coal-fired thermal power plant equipment with a lower environmental impact overseas, and construction machinery. Other segments with increasing revenues included High Functional Materials & Components, on the back of strong demand mainly for automotive- and electronic-related products, and Logistics, Services & Others. Overseas revenues climbed 14%, to 4,742.2 billion yen. Revenues were higher year over year in all industry segments, centered on growth in Asia including China, and Europe, especially in the Power & Industrial Systems segment. Consolidated operating income rose 89%, to 345.5 billion yen. Although the Digital Media & Consumer Products segment experienced an earnings decline, the Power & Industrial Systems segment posted much higher operating income, and the Information & Telecommunication Systems recorded strong performances and Electronic Devices segments also represent an increase in growth. Other income increased 60%, to 165.1 billion yen, due mainly to net gains on sale of securities, including the sale of some shares for Hitachi-GE Nuclear Energy, Ltd. following its establishment and the sale of some shares for Hitachi Displays, Ltd. to Canon Inc. Other deductions increased 124% year over year, to 185.8 billion yen. This figure includes business structural reform-related expenses in the flat-panel TV business such as an impairment loss on plasma display panel production facilities at the second and third plants of the Miyazaki Works of Fujitsu Hitachi Plasma Display Ltd. (now Hitachi Plasma Display Ltd.). It also includes currency exchange losses resulting from the yen's rapid appreciation. As a result, Hitachi recorded income before income taxes and minority interests of 324.7 billion yen, up 61% year over year. Income taxes increased 109.3 billion yen, to 272.1 billion yen. This mainly reflected a 62.0 billion yen one-off write-down of deferred tax assets related to local taxes following re-assessment of the realizability of deferred tax assets in line with lower earnings in the Digital Media & Consumer Products segment. However, income before minority interests increased 33% year over year, to 52.6 billion yen. After deducting minority interests of 110.7 billion yen, Hitachi recorded a net loss of 58.1 billion yen. (2) Revenues and Operating Income (Loss) by Segment Results by segment were as follows.
(Information & Telecommunication Systems)
Year ended March 31, 2008
------------------------------------------------
Billions of Year-over-year Millions of
yen % change U.S. dollars
----------------------------------------------------------------------
Revenues 2,761.1 12% 27,611
----------------------------------------------------------------------
Operating income 116.1 92% 1,161
----------------------------------------------------------------------
Information & Telecommunication Systems segment recorded revenues of 2,761.1 billion yen, up 12% year over year. Software and services experienced an increase in revenues, reflecting strong growth in software sales, centered on middleware, and growth also in services due to both increased sales in system integration, particularly for financial institutions, and also expansion in the outsourcing and consulting businesses. Hardware revenues also rose year over year, the result of higher sales of HDDs, disk array subsystems, telecommunications networks and ATMs. Segment operating income climbed 92% year over year, to 116.1 billion yen. Earnings in software and services rose sharply due to solid earnings growth in software as well as higher earnings in services stemming mainly from increased sales and stronger project management initiatives. Hardware was profitable due to higher earnings in telecommunications networks and an improvement in servers and HDDs. Note: HDD operations are conducted by Hitachi Global Storage Technologies (Hitachi GST), which has a December 31 fiscal year-end, different from Hitachi's March 31 year-end. Hitachi's results for the year ended March 31, 2008 include operating results of Hitachi GST for the period from January through December 2007.
(Electronic Devices)
Year ended March 31, 2008
-----------------------------------------------
Billions of Year-over-year Millions of
yen % change U.S. dollars
----------------------------------------------------------------------
Revenues 1,293.5 0% 12,935
----------------------------------------------------------------------
Operating income 54.0 18% 540
----------------------------------------------------------------------
Electronic Devices revenues were 1,293.5 billion yen, almost the same as fiscal 2006. While Hitachi High-Technologies Corporation experienced sales growth of medical analysis equipment for Europe and the U.S. markets and lower sales of semiconductor devices, optical devices and other sales businesses simultaneously, revenues in the display business were flat in accordance with as Hitachi focused on small and medium-sized LCDs. Segment operating income rose 18% year over year, to 54.0 billion yen, reflecting the growth in medical analysis equipment and improved earnings in semiconductor devices and other areas.
(Power & Industrial Systems)
Year ended March 31, 2008
------------------------------------------------
Billions of Year-over-year Millions of
yen % change U.S. dollars
----------------------------------------------------------------------
Revenues 3,568.1 18% 35,682
----------------------------------------------------------------------
Operating income 138.4 280% 1,385
----------------------------------------------------------------------
Power & Industrial Systems revenues rose 18%, to 3,568.1 billion yen in fiscal 2007. The main factor was growth in sales in the power systems business due to higher sales of nuclear power plant equipment in Japan, and of coal-fired thermal power plant equipment overseas with a lower environmental impact. The overall segment revenue growth also reflected growth in railway vehicle and systems and robust revenues for Hitachi Construction Machinery Co., Ltd. Growth in automotive systems, due in part to Clarion Co., Ltd. becoming a consolidated subsidiary in December 2006, which also lifted overall segment performance. Segment operating income was 138.4 billion yen, a 280% increase year over year. There was a large improvement in earnings in the power systems business, mainly reflecting higher sales and the absence of lump-sum charges for dealing with unprofitable projects and others that were recorded in fiscal 2006. In addition, Hitachi Construction Machinery maintained strong earnings.
(Digital Media & Consumer Products)
Year ended March 31, 2008
-------------------------------------------------
Billions of Year-over-year Millions of
yen % change U.S. dollars
----------------------------------------------------------------------
Revenues 1,504.6 0% 15,047
----------------------------------------------------------------------
Operating loss (109.9) - (1,099)
----------------------------------------------------------------------
Digital Media & Consumer Product revenues were 1,504.6 billion yen, largely unchanged from the previous fiscal year. While air-conditioning equipment and home appliances reflected a sales increase and optical disk drives also maintained strong growth; the flat revenues were due to such factors as contraction and withdrawal in the projection TV and consumer PC businesses. The segment saw its operating loss widen by 51.4 billion yen year over year, to 109.9 billion yen, mainly due to sluggish growth in flat-panel TVs, particularly large-screen models, and falling prices, as well as business structural reform-related expenses for rebuilding the sales framework and expenses for improving the product mix by reducing and withdrawing low-margin products. On a positive note, air-conditioning equipment continued to record strong earnings overseas. Note: Optical disk drive operations are conducted by Hitachi-LG Data Storage, Inc (HLDS), which has a December 31 fiscal year-end, different from Hitachi's March 31 year-end. Hitachi's results for the year ended March 31, 2008 include operating results of HLDS for the period from January through December 2007.
(High Functional Materials & Components)
Year ended March 31, 2008
---------------------------------------------
Billions of Year-over-year Millions of
yen % change U.S. dollars
----------------------------------------------------------------------
Revenues 1,875.0 4% 18,750
----------------------------------------------------------------------
Operating income 141.0 7% 1,410
----------------------------------------------------------------------
High Functional Materials & Components revenues were 1,875.0 billion yen, up 4% year over year. One factor was steady sales at Hitachi Metals, Ltd., principally in automotive- and IT-related products. Another factor was steady sales growth for Hitachi Chemical Co., Ltd, mainly in the semiconductor-related field. Furthermore, Hitachi Cable, Ltd. posted increased sales, mainly due to higher sales of wires and cables as well as submarine optical fiber cables. Segment operating income rose 7%, to 141.0 billion yen, due to healthy earnings growth for Hitachi Metals, Hitachi Chemical and Hitachi Cable.
(Logistics, Services & Others)
Year ended March 31, 2008
---------------------------------------------
Billions of Year-over-year Millions of
yen % change U.S. dollars
----------------------------------------------------------------------
Revenues 1,271.4 5% 12,715
----------------------------------------------------------------------
Operating income 27.8 38% 279
----------------------------------------------------------------------
Logistics, Services & Others revenues were 1,271.4 billion yen, 5% higher year over year. This was the result mainly of higher sales for Hitachi Transport System, Ltd. due to expansion in the third-party logistics solutions business and other factors. Segment operating income posted a 38% year over year increase, to 27.8 billion yen, the result of higher earnings for a Hitachi Transport System on increased sales in the third-party logistics solutions business and improved transportation efficiency.
(Financial Services)
Year ended March 31, 2008
---------------------------------------------
Billions of Year-over-year Millions of
yen % change U.S. dollars
----------------------------------------------------------------------
Revenues 445.4 (11%) 4,454
----------------------------------------------------------------------
Operating income 25.4 8% 255
----------------------------------------------------------------------
Financial Services revenues were 445.4 billion yen, 11% lower year over year, the result mainly of selective order-winning activities for Hitachi Capital Corporation. Segment operating income rose 8% year over year, to 25.4 billion yen, mainly due to the sale of investments in leases for Hitachi Capital.
(3) Revenues by Market
Year ended March 31, 2008
--------------------------------------------
Billions of Year-over-year Millions of
yen % change U.S. dollars
----------------------------------------------------------------------
Japan 6,484.4 6% 64,845
----------------------------------------------------------------------
Outside Japan 4,742.2 14% 47,422
----------------------------------------------------------------------
Asia 2,167.1 17% 21,672
----------------------------------------------------------------------
North America 1,023.7 (3%) 10,237
----------------------------------------------------------------------
Europe 1,073.8 24% 10,739
----------------------------------------------------------------------
Other Areas 477.4 30% 4,775
----------------------------------------------------------------------
Revenues in Japan rose 6% year over year, to 6,484.4 billion yen. Overseas revenues overall rose 14%, to 4,742.2 billion yen due to growth in Europe and Asia, primarily in China. As a result, the ratio of overseas revenues to consolidated revenues rose 1 percentage point to 42%. (4) Capital Investment, Depreciation and R&D Expenditures Capital investment on a completion basis, excluding leasing assets, declined 2%, to 512.4 billion yen, mainly due to the end of a round of investment in the HDD business. The primary investments during fiscal 2007 were in manufacturing equipment for power systems for power plants, railcars, construction machinery, plasma display panels and other items. Depreciation, excluding leasing assets, increased 20% year over year, to 417.2 billion yen. This reflected an increase in capital investments in fiscal 2006 and a change in accounting estimates of depreciation for some assets. R&D expenditures, which were used to advance development primarily in power systems for power plants and automotive systems-related areas, rose 4% year over year, to 428.1 billion yen, and corresponded to 3.8% of consolidated revenues.
(5) Outlook for Fiscal 2008
Year ending March 31, 2009
-------------------------------------------
Billions of Year-over-year Millions of
yen % change U.S. dollars
----------------------------------------------------------------------
Revenues 11,100.0 (1%) 111,000
----------------------------------------------------------------------
Operating income 380.0 10% 3,800
----------------------------------------------------------------------
Income before income taxes
and minority interests 330.0 2% 3,300
----------------------------------------------------------------------
Income before minority
interests 150.0 185% 1,500
----------------------------------------------------------------------
Net income 40.0 - 400
----------------------------------------------------------------------
In terms of the overall business environment, the outlook for the global economy is clouded with uncertainty due to turmoil in financial markets sparked by the subprime loan problem, a slowing U.S. economy and other contributing factors. Adding to continued uncertainty are surging crude oil and raw material prices and the yen's appreciation. Due to these economic conditions, Hitachi is forecasting the results shown above for fiscal 2008, the year ending March 31, 2009. Hitachi will continue efforts to promote collaborative creation with customers, create new businesses, strengthen targeted businesses and expand overseas operations by maximizing the use of Group business resources, such as R&D and marketing capabilities, personnel and its funding system. Also, Hitachi will strengthen purchasing power, standardize and integrate business operations and take other steps leveraging Group synergies, to reduce procurement costs, business expenses, IT operational costs and other costs. Hitachi is implementing business restructuring measures aimed at building a high-earnings framework, and strengthening its financial position. Furthermore, in the flat-panel TV business, where there are still issues regarding profitability, the Hitachi Group is garnering its collective strengths to launch high-value-added products that are distinct from competitors' and also strengthening cost competitiveness. These actions are aimed at quickly improving the earnings structure in this business. Through steady implementation of these initiatives, Hitachi will work to become more competitive on a consolidated basis and to establish a more powerful earnings base by establishing a structure that consistently generates higher profits. Projections for fiscal 2008 assume an exchange rate of 100 yen to the U.S. dollar and 155 yen to the euro. 1-2. Financial Position
(1) Financial Position
Year ended March 31, 2008
----------------------------------------
Billions of Change from Millions of
yen March 31, 2007 U.S. dollars
----------------------------------------------------------------------
Total assets 10,530.8 (113.4) 105,308
----------------------------------------------------------------------
Total liabilities 7,217.7 90.0 72,177
----------------------------------------------------------------------
Interest-bearing debt 2,531.5 (155.9) 25,315
----------------------------------------------------------------------
Minority interests 1,142.5 68.7 11,425
----------------------------------------------------------------------
Stockholders' equity 2,170.6 (272.1) 21,706
----------------------------------------------------------------------
2.3 point
Stockholders' equity ratio 20.6% decrease -
----------------------------------------------------------------------
D/E ratio (including minority
interests) 0.76 times - -
----------------------------------------------------------------------
Total assets as of March 31, 2008 were 10,530.8 billion yen, a decrease of 113.4 billion yen from March 31, 2007, the result of efforts to reduce operating assets to improve cash flows. Interest-bearing debt decreased 155.9 billion yen, to 2,531.5 billion yen. Stockholders' equity decreased 272.1 billion yen, to 2,170.6 billion yen; due mainly to an increase in accumulated other comprehensive loss from the application of fair-value accounting and the net loss for fiscal 2007. As a result, the stockholders' equity ratio declined 2.3 points to 20.6%. The debt-to-equity ratio (including minority interests) was unchanged at 0.76.
(2) Cash Flows
Year ended March 31, 2008
-------------------------------------------
Billions of Year-over-year Millions of
yen change U.S. dollars
----------------------------------------------------------------------
Cash flows from operating
activities 791.8 176.7 7,918
----------------------------------------------------------------------
Cash flows from investing
activities (637.6) 148.5 (6,376)
----------------------------------------------------------------------
Free cash flows 154.2 325.3 1,542
----------------------------------------------------------------------
Cash flows from financing
activities (185.5) (306.8) (1,856)
----------------------------------------------------------------------
Operating activities provided net cash of 791.8 billion yen, an improvement of 176.7 billion yen year over year, reflecting progress in quickly collecting accounts receivable and reducing inventories, among other factors. Investing activities used net cash of 637.6 billion yen, 148.5 billion yen less than in fiscal 2006. This resulted mainly from selective order-winning activities in leasing business and strict selection of investments. Free cash flows, the sum of cash flows from operating and investing activities, were 154.2 billion yen. Financing activities used net cash of 185.5 billion yen, mainly for the repayment of debt and payment of dividends. The net result of the above items was a decrease of 56.9 billion yen in cash and cash equivalents, to 560.9 billion yen.
(3) Trend of Cash Flow Index
Half year Half year
ended Year ended ended Year ended
September March 31, September March 31,
30, 2006 2007 30, 2007 2008
----------------------------------------------------------------------
Shareholders'
equity ratio (%) 23.4 22.9 22.6 20.6
----------------------------------------------------------------------
Equity ratio
based on market
value (%) 22.3 28.6 23.7 18.7
----------------------------------------------------------------------
Cash flow to
interest-bearing
debt ratio 14.7 4.4 7.0 3.2
----------------------------------------------------------------------
Interest coverage
ratio (times) 10.3 16.3 18.0 18.7
----------------------------------------------------------------------
(a) Shareholder's equity ratio: Shareholders' equity / Total assets (b) Equity ratio based on market value: Market capitalizations / Total assets (c) Cash flow to interest-bearing debt ratio: Interest-bearing debt / Cash flows from operating activities (d) Interest coverage ratio: Cash flows from operating activities / Interest charges Note: Market capitalization is computed based on the number of issued shares, excluding treasury stock. 1-3. Basic Policy on the Distribution of Earnings and Fiscal 2007 and 2008 Dividends Hitachi views enhancement of the long-term and overall interests of shareholders as an important management objective. The industrial sector encompassing energy, information systems, social infrastructure and other primary businesses of Hitachi is undergoing rapid technological innovation and changes in market structure. This makes vigorous upfront investment in R&D and plant and equipment essential for securing and maintaining market competitiveness and improving profitability. Dividends are therefore decided based on medium-to-long term business plans with an eye on ensuring the availability of internal funds for reinvestment and the stable growth of dividends, with appropriate consideration of a range of factors, including Hitachi's financial condition, results of operations and dividend payout ratio. Hitachi believes that the repurchase of its shares should be undertaken, when necessary, as part of its policy on distribution to shareholders to complement the dividend payout. In addition, Hitachi will repurchase its own shares on an ongoing basis in order to implement a flexible capital strategy, including business restructuring, to maximize shareholder value so far as consistent with the dividend policy. Such action will be taken by Hitachi after considering its future capital requirement under its business plans, market conditions and other relevant factors. Based on the above policies, Hitachi declared a dividend of 6 yen per share for fiscal 2007. The dividend for fiscal 2008 is still undecided. 1-4. Business Risk and Other Risks The Hitachi Group is engaged in a broad range of business activities on a global scale. Furthermore, the group utilizes highly sophisticated and specialized technologies and information to conduct these businesses. As a result, business activities are vulnerable to a diverse array of risk factors. Major risk factors include, but are not limited to, economic trends in major markets; changes in foreign exchange rates; rapid technological innovations; intensifying competition; supply and demand balance; the procurement of raw materials and components; the ability to implement mergers and acquisitions and to form strategic alliances; progress in business restructuring; overseas business activities; recruiting activities; protection, maintenance and acquisition of intellectual property; litigation and other legal proceedings; product and service quality and liability; natural disasters and similar events; information security; governmental regulations; trends in capital markets; and retirement benefit liabilities. Cautionary Statement Certain statements found in this document may constitute "forward-looking statements" as defined in the U.S. Private Securities Litigation Reform Act of 1995. Such "forward-looking statements" reflect management's current views with respect to certain future events and financial performance and include any statement that does not directly relate to any historical or current fact. Words such as "anticipate," "believe," "expect," "estimate," "forecast," "intend," "plan," "project" and similar expressions which indicate future events and trends may identify "forward-looking statements." Such statements are based on currently available information and are subject to various risks and uncertainties that could cause actual results to differ materially from those projected or implied in the "forward-looking statements" and from historical trends. Certain "forward-looking statements" are based upon current assumptions of future events which may not prove to be accurate. Undue reliance should not be placed on "forward-looking statements," as such statements speak only as of the date of this document. Factors that could cause actual results to differ materially from those projected or implied in any "forward-looking statement" and from historical trends include, but are not limited to: -- increasing commoditization of information technology products, and intensifying price competition in the markets for such products, particularly in the Information & Telecommunication Systems segment, Electronic Devices segment and Digital Media & Consumer Products segment; -- fluctuations in product demand and industry capacity, particularly in the Information & Telecommunication Systems segment, Electronic Devices segment and Digital Media & Consumer Products segment; -- uncertainty as to Hitachi's ability to continue to develop and market products that incorporate new technology on a timely and cost-effective basis and to achieve market acceptance for such products; -- rapid technological change, particularly in the Information & Telecommunication Systems segment, Electronic Devices segment and Digital Media & Consumer Products segment; -- fluctuations in rates of exchange for the yen and other currencies in which Hitachi makes significant sales or in which Hitachi's assets and liabilities are denominated, particularly between the yen and the U.S. dollar; -- uncertainty as to Hitachi's ability to implement measures to reduce the potential negative impact of fluctuations in product demand and/or exchange rates; -- general socio-economic and political conditions and the regulatory and trade environment of Hitachi's major markets, particularly the United States, Japan and elsewhere in Asia, including, without limitation, a return to stagnation or deterioration of the Japanese economy, or direct or indirect restrictions by other nations on imports; -- uncertainty as to Hitachi's access to, or ability to protect, certain intellectual property rights, particularly those related to electronics and data processing technologies; -- uncertainty as to the results of litigation and legal proceedings of which the Company, its subsidiaries or its equity method affiliates have become or may become parties; -- the possibility of incurring expenses resulting from any defects in products or services of Hitachi; -- uncertainty as to the success of restructuring efforts to improve management efficiency and to strengthen competitiveness; -- uncertainty as to the success of alliances upon which Hitachi depends, some of which Hitachi may not control, with other corporations in the design and development of certain key products; -- uncertainty as to Hitachi's ability to access, or access on favorable terms, liquidity or long-term financing; and -- uncertainty as to general market price levels for equity securities in Japan, declines in which may require Hitachi to write down equity securities it holds. The factors listed above are not all-inclusive and are in addition to other factors contained in Hitachi's periodic filings with the U.S. Securities and Exchange Commission and in order materials published by Hitachi. 2. Corporate Strategy (1) Corporate Strategy This section has been omitted because there have been no major changes to the information disclosed by the Company on May 16, 2007 in a release titled "Hitachi Announces Consolidated Financial Results for Fiscal 2006." This earnings release can be viewed at the following URL http://www.hitachi.com/New/cnews/070516.html (2) Problems Facing Hitachi Group In the light of the current business circumstances and its business results, Hitachi will vigorously promote the following measures to increase the corporate value of the Hitachi Group. -- In the flat-panel TV business where profitability issues remain, all available resources of the Hitachi Group will be mobilized to market high value-added products for differentiation from other companies. In addition, cost competitiveness will be thoroughly reinforced in order to improve the profit structure at an early date. -- Market trends will be assessed accurately for aggressive investment in business areas and geographical regions where growth can be expected, and efforts will be made to create Group synergy. -- A strong commitment will be made to strengthen MONOZUKURI (designing, manufacturing and repairing products) capabilities, and efforts will be made to improve quality in order to provide customers with safe products that can be used with ease of mind. -- Efforts will be made to develop and promote the sales of products that satisfy the Company's environmental standards, embracing the conservation of global environment as a mission of the Hitachi Group as well as a significant business opportunity. -- Collaboration between designing and materials procurement will be reinforced, and competitiveness will be enhanced through cost reduction starting from the product development stage, as well as through thorough delivery date management. -- Risks related to large-scale overseas projects will be managed thoroughly, thereby improving profitability in the expanding overseas markets. -- An efficient operating infrastructure employing information technology will be promoted, and efforts will be made to ensure information security. -- Sustained growth will be realized by making efforts to foster human resources to lead our global business deployment, along with efforts to energize the workplace. -- Efforts will be made to establish business ethics, commit to "business basics and ethics," and thoroughly eliminate violations of laws and regulations in order to solidify the credibility from the customers and the society.
Consolidated Statements of Operations
----------------------------------------------------------------------
----------------------------------------------------------------------
The years ended March 31
-------------------------------------------
U.S.
Yen Dollars
(millions) (B)/(A) (millions)
----------------------- X100 -----------
2007 (A) 2008 (B) (%) 2008
----------------------------------------------------------------------
Revenues 10,247,903 11,226,735 110 112,267
----------------------------------------------------------------------
Cost of sales 8,088,371 8,777,657 109 87,777
----------------------------------------------------------------------
Selling, general and
administrative expenses 1,977,020 2,103,562 106 21,036
----------------------------------------------------------------------
Operating income 182,512 345,516 189 3,455
----------------------------------------------------------------------
Other income 102,987 165,133 160 1,651
(Interest and dividends) 31,977 37,532 117 375
(Other) 71,010 127,601 180 1,276
----------------------------------------------------------------------
Other deductions 83,161 185,867 224 1,859
(Interest charges) 37,794 42,448 112 424
(Other) 45,367 143,419 316 1,434
----------------------------------------------------------------------
Income before income
taxes
and minority interests 202,338 324,782 161 3,248
----------------------------------------------------------------------
Income taxes 162,814 272,163 167 2,722
----------------------------------------------------------------------
Income before minority
interests 39,524 52,619 133 526
----------------------------------------------------------------------
Minority interests 72,323 110,744 153 1,107
----------------------------------------------------------------------
Net income (loss) (32,799) (58,125) - (581)
----------------------------------------------------------------------
Consolidated Balance Sheets
----------------------------------------------------------------------
----------------------------------------------------------------------
U.S.
Yen Dollars
(millions) (millions)
----------------------- (B)-(A) ----------
As of March As of March As of
31, 31, March 31,
2007 (A) 2008 (B) 2008
----------------------------------------------------------------------
Assets 10,644,259 10,530,847 (113,412) 105,308
----------------------------------------------------------------------
Current assets 5,434,135 5,401,755 (32,380) 54,018
Cash and cash
equivalents 617,866 560,960 (56,906) 5,610
Short-term investments 33,986 61,289 27,303 613
Trade receivables
Notes 154,406 163,962 9,556 1,640
Accounts 2,341,609 2,365,823 24,214 23,658
Investments in leases 148,456 136,119 (12,337) 1,361
Inventories 1,450,258 1,441,024 (9,234) 14,410
Other current assets 687,554 672,578 (14,976) 6,726
----------------------------------------------------------------------
Investments and advances 1,049,724 1,042,657 (7,067) 10,427
----------------------------------------------------------------------
Property, plant and
equipment 2,688,977 2,653,918 (35,059) 26,539
----------------------------------------------------------------------
Other assets 1,471,423 1,432,517 (38,906) 14,325
----------------------------------------------------------------------
----------------------------------------------------------------------
Liabilities, Minority
interests and
Stockholders' equity 10,644,259 10,530,847 (113,412) 105,308
----------------------------------------------------------------------
Current liabilities 4,667,544 4,752,899 85,355 47,529
Short-term debt and
current portion
of long-term debt 1,197,607 1,109,899 (87,708) 11,099
Trade payables
Notes 85,282 66,265 (19,017) 663
Accounts 1,584,959 1,601,413 16,454 16,014
Advances received 284,704 412,642 127,938 4,126
Other current
liabilities 1,514,992 1,562,680 47,688 15,627
----------------------------------------------------------------------
Noncurrent liabilities 2,460,169 2,464,828 4,659 24,648
Long-term debt 1,489,843 1,421,607 (68,236) 14,216
Retirement and
severance benefits 818,457 822,440 3,983 8,224
Other liabilities 151,869 220,781 68,912 2,208
----------------------------------------------------------------------
Minority interests 1,073,749 1,142,508 68,759 11,425
----------------------------------------------------------------------
Stockholders' equity 2,442,797 2,170,612 (272,185) 21,706
Common stock 282,033 282,033 0 2,820
Capital surplus 560,796 555,410 (5,386) 5,554
Legal reserve and
retained earnings 1,713,757 1,626,497 (87,260) 16,265
Accumulated other
comprehensive loss (88,450) (267,198) (178,748) (2,672)
(Foreign currency
translation
adjustments) (20,906) (69,222) (48,316) (692)
(Pension liability
adjustments) (146,329) (221,007) (74,678) (2,210)
(Net unrealized
holding gain on
available-for-sale
securities) 77,883 22,581 (55,302) 226
(Cash flow hedges) 902 450 (452) 5
Treasury stock (25,339) (26,130) (791) (261)
----------------------------------------------------------------------
Consolidated Statements of Stockholders' Equity
----------------------------------------------------------------------
Yen (millions)
----------------------------------------------------------------------
Common Capital Retained
stock surplus earnings
----------------------------------------------------------------------
The year ended March 31, 2007 As of
March 31, 2006 282,033 561,484 1,778,203
----------------------------------------------------------------------
Decrease
arising from
equity
transaction,
net transfer
of minority
interest, and
other (3,293) (3,329)
Net income
(loss) (32,799)
Current-period
change of
accumulated
other
comprehensive
loss
Cash dividends (28,318)
Current-period
change
arising from
treasury stock 2,605
----------------------------------------------------------------------
As of March
31, 2007 282,033 560,796 1,713,757
----------------------------------------------------------------------
----------------------------------------------------------------------
The year ended March 31, 2008 As of
March 31, 2007 282,033 560,796 1,713,757
----------------------------------------------------------------------
Decrease
arising from
equity
transaction,
net transfer
of minority
interest, and
other (5,457) (9,186)
Net income
(loss) (58,125)
Current-period
change of
accumulated
other
comprehensive
loss
Cash dividends (19,949)
Current-period
change
arising from
treasury stock 71
----------------------------------------------------------------------
As of March
31, 2008 282,033 555,410 1,626,497
----------------------------------------------------------------------
Consolidated Statements of Stockholders' Equity
----------------------------------------------------------------------
Yen (millions)
----------------------------------------------------------------------
Accumulated Total
other Treasury stockholders'
comprehensive stock equity
loss
----------------------------------------------------------------------
The year ended March 31, 2007 As
of March 31, 2006 (95,997) (17,950) 2,507,773
----------------------------------------------------------------------
Decrease
arising from
equity
transaction,
net transfer
of minority
interest, and
other (6,622)
Net income
(loss) (32,799)
Current-period
change of
accumulated
other
comprehensive
loss 7,547 7,547
Cash dividends (28,318)
Current-period
change
arising from
treasury stock (7,389) (4,784)
----------------------------------------------------------------------
As of March
31, 2007 (88,450) (25,339) 2,442,797
----------------------------------------------------------------------
----------------------------------------------------------------------
The year ended March 31, 2008 As
of March 31, 2007 (88,450) (25,339) 2,442,797
----------------------------------------------------------------------
Decrease
arising from
equity
transaction,
net transfer
of minority
interest, and
other (14,643)
Net income
(loss) (58,125)
Current-period
change of
accumulated
other
comprehensive
loss (178,748) (178,748)
Cash dividends (19,949)
Current-period
change
arising from
treasury stock (791) (720)
----------------------------------------------------------------------
As of March
31, 2008 (267,198) (26,130) 2,170,612
----------------------------------------------------------------------
U.S. Dollars (millions)
----------------------------------------------------------------------
Common Capital Retained
stock surplus earnings
----------------------------------------------------------------------
The year ended March 31, 2008 As of March
31, 2007 2,820 5,608 17,138
----------------------------------------------------------------------
Decrease
arising from
equity
transaction,
net transfer
of minority
interest, and
other (55) (92)
Net income
(loss) (581)
Current-period
change of
accumulated
other
comprehensive
loss
Cash dividends (199)
Current-period
change
arising from
treasury stock 1
----------------------------------------------------------------------
As of March
31, 2008 2,820 5,554 16,265
----------------------------------------------------------------------
U.S. Dollars (millions)
----------------------------------------------------------------------
Accumulated Total
other Treasury stockholders'
comprehensive stock equity
loss
----------------------------------------------------------------------
The year ended March 31, 2008 As
of March 31, 2007 (885) (253) 24,428
----------------------------------------------------------------------
Decrease
arising from
equity
transaction,
net transfer
of minority
interest, and
other (146)
Net income
(loss) (581)
Current-period
change of
accumulated
other
comprehensive
loss (1,787) (1,787)
Cash dividends (199)
Current-period
change
arising from
treasury stock (8) (7)
----------------------------------------------------------------------
As of March
31, 2008 (2,672) (261) 21,706
----------------------------------------------------------------------
Consolidated Statements of Cash Flows
----------------------------------------------------------------------
----------------------------------------------------------------------
The years ended March 31
------------------------------
U.S.
Yen Dollars
(millions) (millions)
------------------------------
2007 2008 2008
----------------------------------------------------------------------
Cash flows from operating activities
Net income (loss) (32,799) (58,125) (581)
Adjustments to reconcile net income
(loss) to net cash
provided by operating activities
Depreciation 472,175 541,470 5,415
Deferred income taxes 20,514 84,587 846
Loss on disposal of rental assets
and other property 31,590 13,424 134
Decrease in receivables 52,599 47,843 478
Increase in inventories (212,028) (107,546) (1,075)
Increase in payables 104,987 42,453 425
Other 178,004 227,731 2,277
--------------------------------------------------------------------
Net cash provided by
operating activities 615,042 791,837 7,918
Cash flows from investing activities
(Increase) decrease in short-term
investments 25,054 (25,437) (254)
Capital expenditures (497,771) (474,344) (4,743)
Purchase of rental assets, net (420,156) (339,756) (3,398)
Purchase of investments and
subsidiaries' common stock, net (99,688) (93,127) (931)
Collection of investments in leases 318,063 311,321 3,113
Other (111,672) (16,275) (163)
--------------------------------------------------------------------
Net cash used in investing
activities (786,170) (637,618) (6,376)
Cash flows from financing activities
Increase (decrease) in interest-
bearing debt 165,359 (176,897) (1,769)
Dividends paid to stockholders (28,243) (19,889) (199)
Dividends paid to minority
stockholders of subsidiaries (20,761) (25,787) (258)
Other 4,904 37,017 370
--------------------------------------------------------------------
Net cash provided by (used
in) financing activities 121,259 (185,556) (1,856)
Effect of exchange rate changes on
cash and cash equivalents 9,480 (25,569) (256)
------------------------------
Net decrease in cash and cash
equivalents (40,389) (56,906) (569)
Cash and cash equivalents at beginning
of year 658,255 617,866 6,179
------------------------------
Cash and cash equivalents at end of
year 617,866 560,960 5,610
==============================
----------------------------------------------------------------------
Segment Information
----------------------------------------------------------------------
(1) Industry Segments
----------------------------------------------------------------------
The years ended March 31
------------------------------------------
U.S.
Yen Dollars
(B)/(A)
(millions) X100 (millions)
----------------------- (%) ----------
2007 (A) 2008 (B) 2008
----------------------------------------------------------------------
Information
& Telecom 112 27,611
-munication 2,472,227 2,761,137
Systems 21% 22%
-------------------------------------------------------
Electronic 1,287,492 1,293,517 100 12,935
Devices 11% 10%
-------------------------------------------------------
Power &
Industrial 3,022,299 3,568,151 118 35,682
Systems 26% 28%
-------------------------------------------------------
Digital
Media & 100 15,047
Consumer 1,506,073 1,504,692
Products 13% 12%
-------------------------------------------------------
Revenues High
Functional 104 18,750
Materials 1,794,506 1,875,018
& Components 15% 15%
-------------------------------------------------------
Logistics,
Services & 1,213,529 1,271,465 105 12,715
Others 10% 10%
-------------------------------------------------------
Financial 500,065 445,400 89 4,454
Services 4% 3%
-------------------------------------------------------
Subtotal 11,796,191 12,719,380 108 127,194
100% 100%
-------------------------------------------------------
Eliminations
& Corporate (1,548,288) (1,492,645) - (14,926)
items
-------------------------------------------------------
Total 10,247,903 11,226,735 110 112,267
======================================================================
Information
& Telecom 192 1,161
-munication 60,343 116,105
Systems 23% 30%
-------------------------------------------------------
Electronic 45,755 54,046 118 540
Devices 18% 14%
-------------------------------------------------------
Power &
Industrial 36,391 138,455 380 1,385
Systems 14% 35%
-------------------------------------------------------
Digital
Media & - (1,099)
Consumer (58,435) (109,914)
Products (23%) (28%)
-------------------------------------------------------
Operating High
income (loss) Functional 107 1,410
Materials 132,399 141,007
& Components 51% 36%
-------------------------------------------------------
Logistics,
Services & 20,233 27,870 138 279
Others 8% 7%
-------------------------------------------------------
Financial 23,534 25,481 108 255
Services 9% 6%
-------------------------------------------------------
Subtotal 260,220 393,050 151 3,931
100% 100%
-------------------------------------------------------
Eliminations
& Corporate (77,708) (47,534) - (475)
items
-------------------------------------------------------
Total 182,512 345,516 189 3,455
----------------------------------------------------------------------
Note: Revenues by industry segment include intersegment transactions.
(2) Geographic Segments
----------------------------------------------------------------------
The years ended March 31
---------------------------------------
U.S.
Yen (B) Dollars
/
(millions) (A) (millions)
----------------------- X100 ----------
2007 (A) 2008 (B) (%) 2008
----------------------------------------------------------------------
Outside
customer 7,010,181 7,436,999 106 74,370
sales 57% 55%
----------------------------------------------------
Japan Intersegment 1,274,048 1,459,260 115 14,593
transactions 11% 11%
----------------------------------------------------
Total 8,284,229 8,896,259 107 88,963
68% 66%
------------------------------------------------------------
Outside
customer 1,459,549 1,771,600 121 17,716
sales 12% 13%
----------------------------------------------------
Asia Intersegment 561,208 637,719 114 6,377
transactions 4% 5%
----------------------------------------------------
Total 2,020,757 2,409,319 119 24,093
16% 18%
------------------------------------------------------------
Outside
customer 981,098 962,267 98 9,623
sales 8% 7%
----------------------------------------------------
North Intersegment 89,912 123,841 138 1,238
America transactions 1% 1%
----------------------------------------------------
Revenues Total 1,071,010 1,086,108 101 10,861
9% 8%
------------------------------------------------------------
Outside
customer 645,354 826,188 128 8,262
sales 5% 6%
----------------------------------------------------
Europe Intersegment 37,454 60,650 162 607
transactions 1% 0%
----------------------------------------------------
Total 682,808 886,838 130 8,868
6% 6%
------------------------------------------------------------
Outside
customer 151,721 229,681 151 2,297
sales 1% 2%
----------------------------------------------------
Other Intersegment 21,574 39,841 185 398
Areas transactions 0% 0%
----------------------------------------------------
Total 173,295 269,522 156 2,695
1% 2%
------------------------------------------------------------
Subtotal 12,232,099 13,548,046 111 135,480
100% 100%
------------------------------------------------------------
Eliminations & (1,984,196) (2,321,311) - (23,213)
Corporate items
------------------------------------------------------------
Total 10,247,903 11,226,735 110 112,267
----------------------------------------------------------------------
The years ended March 31
-------------------------------------
U.S.
Yen (B)/(A) Dollars
(millions) X100 (millions)
----------------- -----------
2007 (A) 2008 (B) (%) 2008
----------------------------------------------------------------------
Japan 212,316 299,632 141 2,996
80% 77%
------------------------------------------------------
Asia (3,664) 33,020 - 330
(1%) 8%
------------------------------------------------------
North America 25,310 23,087 91 231
9% 6%
------------------------------------------------------
Operating Europe 23,312 21,575 93 216
income (loss) 9% 6%
------------------------------------------------------
Other Areas 8,647 13,394 155 134
3% 3%
------------------------------------------------------
Subtotal 265,921 390,708 147 3,907
100% 100%
------------------------------------------------------
Eliminations & (83,409) (45,192) - (452)
Corporate items
------------------------------------------------------
Total 182,512 345,516 189 3,455
----------------------------------------------------------------------
(3) Revenues by Market
----------------------------------------------------------------------
The years ended March 31
-----------------------------------------
U.S.
Yen (B)/(A) Dollars
(millions) X100 (millions)
--------------------- -----------
2007 (A) 2008 (B) (%) 2008
----------------------------------------------------------------------
Japan 6,093,627 6,484,496
59% 58% 106 64,845
----------------------------------------------------------------------
Asia 1,859,664 2,167,171
18% 19% 117 21,672
--------------------------------------------------------------------
North America 1,057,389 1,023,713
10% 9% 97 10,237
--------------------------------------------------------------------
Europe 869,022 1,073,877
9% 10% 124 10,739
--------------------------------------------------------------------
Other Areas 368,201 477,478
4% 4% 130 4,775
--------------------------------------------------------------------
Outside Japan 4,154,276 4,742,239
41% 42% 114 47,422
----------------------------------------------------------------------
Total 10,247,903 11,226,735
100% 100% 110 112,267
----------------------------------------------------------------------
Per Share Information
----------------------------------------------------------------------
----------------------------------------------------------------------
The years ended March 31
---------------------------------------------
2007 2008 2008
----------------------------------------------------------------------
(Yen) (Yen) (U.S.Dollars)
Stockholders' equity per
share 734.66 652.95 6.53
Net income (loss) per
share
Basic (9.84) (17.48) (0.17)
Diluted (9.87) (17.77) (0.18)
----------------------------------------------------------------------
The reconciliations of the numbers and the amounts used in the basic
and diluted net income (loss) per share computations are as follows:
----------------------------------------------------------------------
The years ended March 31
---------------------------------------------
2007 2008 2008
----------------------------------------------------------------------
(Number of (Number of
shares) shares)
Weighted average number
of shares on
which basic net income
(loss) per share is
calculated 3,331,918,803 3,324,562,767
Effect of dilutive
securities:
Stock options 158,778 122,257
-------------- --------------
Number of shares on
which diluted net
income (loss)
per share is calculated 3,332,077,581 3,324,685,024
----------------------------------------------------------------------
(Millions of (Millions of (Millions of
yen) yen) U.S. dollars)
Net income (loss)
applicable to common
stockholders (32,799) (58,125) (581)
Effect of dilutive
securities:
Other (92) (948) (9)
-------------- -------------- --------------
Net income (loss) on
which diluted net
income (loss)
per share is calculated (32,891) (59,073) (591)
----------------------------------------------------------------------
Unconsolidated Financial Statements Summary
----------------------------------------------------------------------
Income Statements
----------------------------------------------------------------------
The year ended March 31
------------------------------------------
Yen (B)/(A) U.S.
(millions) X100 Dollars
(%) (millions)
--------------------- ----------
2007(A) 2008(B) 2008
----------------------------------------------------------------------
Revenues 2,785,115 2,807,269 101 28,073
----------------------------------------------------------------------
Cost of sales 2,277,213 2,337,897 103 23,379
----------------------------------------------------------------------
Gross Profit 507,901 469,371 92 4,694
----------------------------------------------------------------------
Selling, general and
administrative expenses 574,187 543,488 95 5,435
----------------------------------------------------------------------
Operating income (loss) (66,285) (74,116) - (741)
----------------------------------------------------------------------
Other income 99,546 87,501 88 875
----------------------------------------------------------------------
Other deductions 70,478 59,372 84 594
----------------------------------------------------------------------
Ordinary income (loss) (37,217) (45,987) - (460)
----------------------------------------------------------------------
Extraordinary gain 56,803 84,154 148 842
----------------------------------------------------------------------
Extraordinary loss 176,579 118,573 67 1,186
----------------------------------------------------------------------
Income (loss) before
income taxes (156,992) (80,406) - (804)
----------------------------------------------------------------------
Current income taxes (14,375) (21,642) 151 (216)
----------------------------------------------------------------------
Deferred income taxes 35,432 69,099 195 691
----------------------------------------------------------------------
Net income (loss) (178,049) (127,863) - (1,279)
----------------------------------------------------------------------
Basic EPS (yen and dollars) (53.44) (38.46) - (0.38)
----------------------------------------------------------------------
Balance Sheets
----------------------------------------------------------------------
Yen U.S.
(millions) Dollars
(B)-(A) (millions)
--------------------- ----------
As of As of As of
March 31, March 31, March 31,
2007(A) 2008 (B) 2008
----------------------------------------------------------------------
Current assets 1,927,116 1,655,690 (271,426) 16,557
----------------------------------------------------------------------
(Quick assets) 1,525,965 1,357,921 (168,044) 13,579
----------------------------------------------------------------------
(Inventories) 277,449 230,727 (46,722) 2,307
----------------------------------------------------------------------
(Deferred tax assets) 123,700 67,041 (56,658) 670
----------------------------------------------------------------------
Fixed assets 1,946,785 2,004,278 57,493 20,043
----------------------------------------------------------------------
(Investments) 1,395,682 1,482,055 86,373 14,821
----------------------------------------------------------------------
(Deferred tax assets) 23,127 38,716 15,589 387
----------------------------------------------------------------------
(Others) 527,976 483,506 (44,469) 4,835
----------------------------------------------------------------------
Total assets 3,873,901 3,659,968 (213,933) 36,600
----------------------------------------------------------------------
----------------------------------------------------------------------
Current liabilities 1,931,985 1,910,360 (21,624) 19,104
----------------------------------------------------------------------
Fixed liabilities 755,220 752,540 (2,679) 7,525
----------------------------------------------------------------------
(Debentures) 290,000 285,000 (5,000) 2,850
----------------------------------------------------------------------
(Long-term loans) 291,088 275,533 (15,555) 2,755
----------------------------------------------------------------------
(Others) 174,132 192,007 17,875 1,920
----------------------------------------------------------------------
Total liabilities 2,687,206 2,662,901 (24,304) 26,629
----------------------------------------------------------------------
Net assets 1,186,695 997,066 (189,628) 9,971
----------------------------------------------------------------------
Liabilities and net assets 3,873,901 3,659,968 (213,933) 36,600
----------------------------------------------------------------------
Supplementary Information for the Year ended March 31, 2008
1. Summary
(1) Consolidated Basis
(Billions of yen)
----------------------------------------------------------------------
Fiscal 2006 Fiscal 2007
---------------- ------------------
(A)/
(A) FY2005 (B) (B)/(A)
----------------------------------------------------------------------
Revenues 10,247.9 108% 11,226.7 110%
----------------------------------------------------------------------
C/U(Note 1)(%) 368 - 400 -
----------------------------------------------------------------------
Operating income 182.5 71% 345.5 189%
----------------------------------------------------------------------
Income before income taxes and
minority interests 202.3 74% 324.7 161%
----------------------------------------------------------------------
Income before minority interests 39.5 33% 52.6 133%
----------------------------------------------------------------------
Income before minority
interests/(Stockholders' 1.1 - 1.6 -
equity + Minority
interests)(%)
----------------------------------------------------------------------
Net income (loss) (32.7) - (58.1) -
----------------------------------------------------------------------
C/U (Note 1)(%) - - - -
--------------------------------------------------------------
ROE(%) (1.3) - (2.5) -
----------------------------------------------------------------------
Dividend payout ratio (%) - - - -
----------------------------------------------------------------------
Average exchange rate (yen /
U.S.$) 117 - 114 -
----------------------------------------------------------------------
Net interest and dividends (5.8) - (4.9) -
----------------------------------------------------------------------
Notes:1.C/U:Consolidated basis / Unconsolidated basis
2.1st half of FY 2008 / 1st half of FY 2007
Supplementary Information for the Year ended March 31, 2008
1. Summary
(1) Consolidated Basis
(Billions of yen)
----------------------------------------------------------------------
Fiscal 2008 (Forecast)
-------------------------------
1st
half
of Note
FY2008 2 (C) (C)/(B)
----------------------------------------------------------------------
Revenues 5,330.0 101% 11,100.0 99%
----------------------------------------------------------------------
C/U(Note 1)(%) - - - -
----------------------------------------------------------------------
Operating income 125.0 103% 380.0 110%
----------------------------------------------------------------------
Income before income taxes and
minority interests 103.0 76% 330.0 102%
----------------------------------------------------------------------
Income before minority interests 60.0 167% 150.0 285%
----------------------------------------------------------------------
Income before minority
interests/(Stockholders' - - - -
equity + Minority
interests)(%)
----------------------------------------------------------------------
Net income (loss) 14.0 - 40.0 -
----------------------------------------------------------------------
C/U (Note 1)(%) - - - -
--------------------------------------------------------
ROE(%) - - - -
----------------------------------------------------------------------
Dividend payout ratio (%) - - - -
----------------------------------------------------------------------
Average exchange rate (yen / U.S.$) 100 - 100 -
----------------------------------------------------------------------
Net interest and dividends - - - -
----------------------------------------------------------------------
Notes:1.C/U:Consolidated basis / Unconsolidated basis
2.1st half of FY 2008 / 1st half of FY 2007
----------------------------------------------------------------------
As of As of
March March
31, 31,
2007 2008
----------------------------------------------------------------------
Cash & cash equivalents, Short-term
investments (Billions of yen) 651.8 622.2
----------------------------------------------------------------------
Interest-bearing debt (Billions of yen) 2,687.4 2,531.5
----------------------------------------------------------------------
Number of employees 384,444 389,752
----------------------------------------------------------------------
Japan 250,767 251,702
---------------------------------------------------------------------
Overseas 133,677 138,050
----------------------------------------------------------------------
Number of consolidated subsidiaries
(Including Variable Interest Entities) 934 910
----------------------------------------------------------------------
Japan 450 418
---------------------------------------------------------------------
Overseas 484 492
----------------------------------------------------------------------
(2) Unconsolidated Basis
(Billions of yen)
----------------------------------------------------------------------
Fiscal 2006 Fiscal 2007
-------------- -----------------
(A)/
FY
(A) 2005 (B) (B)/(A)
----------------------------------------------------------------------
Revenues 2,785.1 103% 2,807.2 101%
----------------------------------------------------------------------
Operating income (loss) (66.2) - (74.1) -
----------------------------------------------------------------------
Ordinary income (loss) (37.2) - (45.9) -
----------------------------------------------------------------------
Net income (loss) (178.0) - (127.8) -
----------------------------------------------------------------------
Average exchange rate (yen / U.S.$) 117 - 114 -
----------------------------------------------------------------------
----------------------------------------------------------------------
As of March As of March 31,
31, 2007 2008
----------------------------------------------------------------------
Cash & cash equivalents, Short-term
investments (Billions of yen) 177.8 122.2
----------------------------------------------------------------------
Interest-bearing debt (Billions of
yen) 797.6 700.8
----------------------------------------------------------------------
Number of employees 41,016 40,223
----------------------------------------------------------------------
2. Consolidated Revenues by Industry Segment
(Billions of yen)
----------------------------------------------------------------------
Fiscal 2006 Fiscal 2007
--------------- ------------------
(A)/
FY
(A) 2005 (B) (B)/(A)
----------------------------------------------------------------------
Information & Telecommunication
Systems 2,472.2 105% 2,761.1 112%
----------------------------------------------------------------------
Electronic Devices 1,287.4 107% 1,293.5 100%
----------------------------------------------------------------------
Power & Industrial Systems 3,022.2 108% 3,568.1 118%
----------------------------------------------------------------------
Digital Media & Consumer Products 1,506.0 115% 1,504.6 100%
----------------------------------------------------------------------
High Functional Materials
& Components 1,794.5 112% 1,875.0 104%
----------------------------------------------------------------------
Logistics, Services & Others 1,213.5 100% 1,271.4 105%
----------------------------------------------------------------------
Financial Services 500.0 97% 445.4 89%
----------------------------------------------------------------------
Eliminations & Corporate items (1,548.2) - (1,492.6) -
----------------------------------------------------------------------
Total 10,247.9 108% 11,226.7 110%
----------------------------------------------------------------------
Note:1. 1st half of FY 2008 / 1st half of FY 2007
2. Consolidated Revenues by Industry Segment
(Billions of yen)
----------------------------------------------------------------------
Fiscal 2008 (Forecast)
---------------------------------
1st half
of Note
FY2008 1 (C) (C)/(B)
----------------------------------------------------------------------
Information & Telecommunication
Systems 1,260.0 100% 2,620.0 95%
----------------------------------------------------------------------
Electronic Devices 615.0 96% 1,260.0 97%
----------------------------------------------------------------------
Power & Industrial Systems 1,750.0 109% 3,700.0 104%
----------------------------------------------------------------------
Digital Media & Consumer Products 725.0 100% 1,520.0 101%
----------------------------------------------------------------------
High Functional Materials
& Components 918.0 98% 1,870.0 100%
----------------------------------------------------------------------
Logistics, Services & Others 545.0 88% 1,130.0 89%
----------------------------------------------------------------------
Financial Services 200.0 90% 410.0 92%
----------------------------------------------------------------------
Eliminations & Corporate items (683.0) - (1,410.0) -
----------------------------------------------------------------------
Total 5,330.0 101% 11,100.0 99%
----------------------------------------------------------------------
Note:1. 1st half of FY 2008 / 1st half of FY 2007
3. Consolidated Operating Income (Loss) by Industry Segment
(Billions of yen)
----------------------------------------------------------------------
Fiscal 2006 Fiscal 2007
------------ ----------------
(A)/
FY
(A) 2005 (B) (B)/(A)
----------------------------------------------------------------------
Information & Telecommunication
Systems 60.3 71% 116.1 192%
----------------------------------------------------------------------
Electronic Devices 45.7 224% 54.0 118%
----------------------------------------------------------------------
Power & Industrial Systems 36.3 39% 138.4 380%
----------------------------------------------------------------------
Digital Media & Consumer Products (58.4) - (109.9) -
----------------------------------------------------------------------
High Functional Materials
& Components 132.3 120% 141.0 107%
----------------------------------------------------------------------
Logistics, Services & Others 20.2 104% 27.8 138%
----------------------------------------------------------------------
Financial Services 23.5 67% 25.4 108%
----------------------------------------------------------------------
Eliminations & Corporate items (77.7) - (47.5) -
----------------------------------------------------------------------
Total 182.5 71% 345.5 189%
----------------------------------------------------------------------
Note:1. 1st half of FY 2008 / 1st half of FY 2007
3. Consolidated Operating Income (Loss) by Industry Segment
(Billions of yen)
----------------------------------------------------------------------
Fiscal 2008 (Forecast)
-----------------------------
1st
half
of
FY Note
2008 1 (C) (C)/(B)
----------------------------------------------------------------------
Information & Telecommunication
Systems 51.0 409% 150.0 129%
----------------------------------------------------------------------
Electronic Devices 21.0 81% 43.0 80%
----------------------------------------------------------------------
Power & Industrial Systems 48.0 75% 140.0 101%
----------------------------------------------------------------------
Digital Media & Consumer Products (30.0) - (35.0) -
----------------------------------------------------------------------
High Functional Materials
& Components 64.0 99% 141.0 100%
----------------------------------------------------------------------
Logistics, Services & Others 10.0 93% 22.0 79%
----------------------------------------------------------------------
Financial Services 9.0 69% 22.0 86%
----------------------------------------------------------------------
Eliminations & Corporate items (48.0) - (103.0) -
----------------------------------------------------------------------
Total 125.0 103% 380.0 110%
----------------------------------------------------------------------
Note:1. 1st half of FY 2008 / 1st half of FY 2007
4. Consolidated Overseas Revenues by Industry Segment
(Billions of yen)
----------------------------------------------------------------------
Fiscal 2006 Fiscal 2007 Fiscal 2008
(Forecast)
------------- --------------- ---------------
(A)/
FY
(A) 2005 (B) (B)/(A) (C) (C)/(B)
----------------------------------------------------------------------
Information &
Telecommunication
Systems 913.8 117% 980.6 107%
------------------------------------------------------
Electronic Devices 457.0 102% 498.8 109%
------------------------------------------------------
Power & Industrial
Systems 1,114.0 120% 1,455.4 131%
------------------------------------------------------
Digital Media & Consumer
Products 575.3 106% 626.1 109%
------------------------------------------------------
High Functional
Materials
& Components 599.6 117% 657.6 110%
------------------------------------------------------
Logistics, Services &
Others 436.7 116% 460.6 105%
------------------------------------------------------
Financial Services 57.5 121% 62.7 109%
----------------------------------------------------------------------
Total 4,154.2 114% 4,742.2 114% 4,800.0 101%
----------------------------------------------------------------------
5. Overseas Production (Total Revenues of Overseas Manufacturing
Subsidiaries)
(Billions of yen)
----------------------------------------------------------------------
Fiscal 2006 Fiscal 2007
------------- ---------------
(A)/
FY
(A) 2005 (B) (B)/(A)
----------------------------------------------------------------------
Overseas production 2,295.1 123% 2,659.1 116%
----------------------------------------------------------------------
Percentage of revenues 22% - 24% -
---------------------------------------------------------------------
Percentage of overseas revenues 55% - 54% -
----------------------------------------------------------------------
6. Consolidated Capital Investment by Industry Segment (Completion
basis, including leasing assets)
(Billions of yen)
----------------------------------------------------------------------
Fiscal 2006 Fiscal 2007 Fiscal 2008
(Forecast)
-------------- --------------- --------------
(A)/
FY
(A) 2005 (B) (B)/(A) (C) (C)/(B)
----------------------------------------------------------------------
Information &
Telecommunication
Systems 155.6 126% 103.5 67%
-------------------------------------------------------
Electronic Devices 34.6 97% 26.4 76%
-------------------------------------------------------
Power & Industrial
Systems 151.9 142% 163.0 107%
-------------------------------------------------------
Digital Media & Consumer
Products 83.1 216% 91.6 110%
-------------------------------------------------------
High Functional
Materials
& Components 91.8 109% 106.6 116%
-------------------------------------------------------
Logistics, Services &
Others 28.2 117% 38.5 136%
-------------------------------------------------------
Financial Services 554.8 97% 495.3 89%
-------------------------------------------------------
Eliminations & Corporate
items (51.8) - (56.2) -
----------------------------------------------------------------------
Total 1,048.5 110% 969.0 92% 950.0 98%
----------------------------------------------------------------------
Internal use Assets 522.9 132% 512.4 98% 500.0 98%
---------------------------------------------------------------------
Leasing Assets 525.5 94% 456.6 87% 450.0 99%
----------------------------------------------------------------------
7. Consolidated Depreciation by Industry Segment
(Billions of yen)
----------------------------------------------------------------------
Fiscal 2006 Fiscal 2007 Fiscal 2008
(Forecast)
----------- ------------- -------------
(A)/
FY
(A) 2005 (B) (B)/(A) (C) (C)/(B)
----------------------------------------------------------------------
Information &
Telecommunication
Systems 93.2 113% 111.8 120%
--------------------------------------------------------
Electronic Devices 37.8 83% 36.0 95%
--------------------------------------------------------
Power & Industrial Systems 91.7 115% 117.4 128%
--------------------------------------------------------
Digital Media & Consumer
Products 43.5 107% 59.1 136%
--------------------------------------------------------
High Functional Materials
& Components 65.9 102% 81.0 123%
--------------------------------------------------------
Logistics, Services & Others 23.3 99% 25.0 107%
--------------------------------------------------------
Financial Services 113.8 102% 108.4 95%
--------------------------------------------------------
Eliminations & Corporate items 2.6 100% 2.5 95%
----------------------------------------------------------------------
Total 472.1 105% 541.4 115% 560.0 103%
----------------------------------------------------------------------
Internal use Assets 346.4 105% 417.2 120% 440.0 105%
---------------------------------------------------------------------
Leasing Assets 125.7 104% 124.2 99% 120.0 97%
----------------------------------------------------------------------
8. Consolidated R&D Expenditure by Industry Segment
(Billions of yen)
----------------------------------------------------------------------
Fiscal 2006 Fiscal 2007 Fiscal 2008
(Forecast)
------------ -------------- ---------------------
(A)/
FY
(A) 2005 (B) (B)/(A) (C) (C)/(B)
----------------------------------------------------------------------
Information &
Telecommunication
Systems 157.8 98% 155.2 98%
------------------------------------------------
Electronic Devices 46.0 98% 46.7 102%
------------------------------------------------
Power & Industrial
Systems 95.0 111% 110.4 116%
------------------------------------------------
Digital Media &
Consumer Products 35.8 107% 37.0 103%
------------------------------------------------
High Functional
Materials
& Components 50.1 103% 50.7 101%
------------------------------------------------
Logistics, Services
& Others 2.5 53% 4.6 182%
------------------------------------------------
Financial Services 1.5 90% 1.2 85%
------------------------------------------------
Corporate items 23.4 107% 22.0 94%
----------------------------------------------------------------------
Total 412.5 102% 428.1 104% 435.0 102%
----------------------------------------------------------------------
Percentage of
revenues 4.0% - 3.8% - 3.9% -
----------------------------------------------------------------------
9. Consolidated Balance Sheets by Financial and Non-Financial Services
(Billions of yen)
----------------------------------------------------------------------
As of As of Liabilities As of As of
Assets March March 31, and March March 31,
31, 2007 2008 Stockholders' 31, 2007 2008
equity
----------------------------------------------------------------------
Manufacturing, Services and Others Manufacturing, Services and Others
----------------------------------- ----------------------------------
Cash and cash Short-term
equivalents 575.2 504.1 debt 1,088.2 958.8
---------------------------------- --------------------------------
Short-term Trade
investments 32.0 60.2 payables 1,612.5 1,634.4
---------------------------------- --------------------------------
Trade Long-term
receivables 2,095.2 2,126.4 debt 934.7 950.6
---------------------------------- --------------------------------
Inventories Other
1,450.7 1,441.5 liabilities 2,520.4 2,742.2
---------------------------------- --------------------------------
Investments Total
and advances 906.5 929.5 6,155.9 6,286.2
---------------------------------- ----------------------------------
Property,
plant and
equipment 2,323.3 2,284.3 Financial Services
---------------------------------- ----------------------------------
Other assets Short-term
2,023.5 1,995.2 debt 811.7 762.6
---------------------------------- --------------------------------
Total Trade
9,406.7 9,341.5 payables 335.7 299.2
----------------------------------- --------------------------------
Long-term
Financial Services debt 709.9 618.4
----------------------------------- --------------------------------
Cash and cash Other
equivalents 42.5 56.6 liabilities 292.2 327.7
---------------------------------- --------------------------------
Trade Total
receivables 721.5 709.4 2,149.7 2,008.1
---------------------------------- ----------------------------------
Investments in Eliminations
leases 664.5 621.4 (1,178.0) (1,076.6)
---------------------------------- ----------------------------------
Property,
plant and
equipment 373.7 377.1 Liabilities 7,127.7 7,217.7
----------------------------------
Other assets 639.6 529.3
---------------------------------- ----------------------------------
Total Minority
2,442.0 2,294.0 interests 1,073.7 1,142.5
----------------------------------- ----------------------------------
Eliminations Stockholders'
(1,204.5) (1,104.7) equity 2,442.7 2,170.6
----------------------------------- ----------------------------------
Liabilities,
Minority
interests and
Stockholders'
Assets 10,644.2 10,530.8 equity 10,644.2 10,530.8
----------------------------------- ----------------------------------
10. Consolidated Statements of Operations by Financial and Non-
Financial Services
(Billions of yen)
----------------------------------------------------------------------
Fiscal Fiscal
2006 2007
----------------------------------------------------------------------
Revenues 9,954.6 10,973.4
-----------------------------------
Manufacturing, Services and Cost of sales
Others and selling,
general and 9,793.0 10,649.3
administrative
expenses
-----------------------------------
Operating 161.6 324.0
income
----------------------------------------------------------------------
Revenues 500.0 445.4
-----------------------------------
Financial Services Cost of sales
and selling,
general and 476.5 419.9
administrative
expenses
-----------------------------------
Operating 23.5 25.4
income
----------------------------------------------------------------------
Revenues (206.8) (192.1)
-----------------------------------
Eliminations Cost of sales
and selling,
general and (204.2) (188.0)
administrative
expenses
-----------------------------------
Operating (2.6) (4.0)
income
----------------------------------------------------------------------
Revenues 10,247.9 11,226.7
-----------------------------------
Total Cost of sales
and selling,
general and 10,065.3 10,881.2
administrative
expenses
-----------------------------------
Operating 182.5 345.5
income
----------------------------------------------------------------------
Note:Figures in tables 5, 9 and 10 represent unaudited financial
information prepared by the Company
for the purpose of this supplementary information.
Supplementary Information on Information & Telecommunication
Systems,
Displays and Digital Media
Note:(a)Segment information and operating income are presented in
accordance with financial reporting principles and practices
generally accepted in Japan.
1. Information & Telecommunication Systems (b)
(1) Revenues and Operating Income (Loss) (c)
(The upper rows show comparisons to the previous year; billions of
yen)
----------------------------------------------------------------------
Fiscal 2007 Fiscal 2008 (Forecast)
1st 2nd 1st 2nd
half half Total half half Total
----------------------------------------------------------------------
109% 114% 112% 100% 90% 95%
Revenues -----------------------------------------------
1,254.5 1,506.5 2,761.1 1,260.0 1,360.0 2,620.0
----------------------------------------------------------------------
111% 117% 114% 101% 89% 94%
Software & Services -----------------------------------------------
594.8 713.8 1,308.6 598.0 632.0 1,230.0
---------------------------------------------------------------------
103% 123% 113%
Software -----------------------
80.7 92.7 173.4
--------------------------------------------
112% 117% 115%
Services -----------------------
514.1 621.1 1,135.2
--------------------------------------------------------------------
108% 111% 109% 100% 92% 96%
Hardware -----------------------------------------------
659.7 792.7 1,452.4 662.0 728.0 1,390.0
---------------------------------------------------------------------
115% 111% 113%
Storage (d) -----------------------
402.4 466.3 868.7
--------------------------------------------
93% 96% 95%
Servers (e) -----------------------
44.2 44.2 88.4
--------------------------------------------
68% 71% 69%
PCs (f) -----------------------
25.0 23.2 48.2
--------------------------------------------
95% 131% 112%
Telecommunication -----------------------
58.3 75.0 133.3
--------------------------------------------
114% 115% 115%
Others -----------------------
129.8 184.0 313.8
======================================================================
Operating income 90% 223% 192% 409% 96% 129%
(loss) -----------------------------------------------
12.4 103.6 116.1 51.0 99.0 150.0
----------------------------------------------------------------------
136% 124% 128% 93%
Software & Services ----------------------- -------
37.7 69.9 107.6 100.0
--------------------------------------------- -------
- - - 595%
Hardware ----------------------- -------
(25.3) 33.7 8.4 50.0
----------------------------------------------------------------------
Notes:(b)The Hard Disk Drive operations are conducted by Hitachi
Global Storage Technologies (Hitachi GST), which has a
December 31 fiscal year-end, different from Hitachi's March
31 year-end. Hitachi's results for the twelve months ended
March 31, 2008 include the operating results of Hitachi GST
for the twelve months ended December 31, 2007.
(c)Figures for each product exclude intra-segment transactions.
(d)Figures for Storage include disk array subsystems, hard disk
drives, etc.
(e)Figures for Servers include general-purpose computers, UNIX
servers, etc.
(f)Figures for PCs include PC servers, client PCs (only
commercial use), etc.
(2) Storage Solutions (except Hard Disk Drives)
(The upper rows show comparisons to the previous year; billions of
yen)
----------------------------------------------------------------------
Fiscal 2008
Fiscal 2007 (Forecast)
1st 2nd 1st 2nd
half half Total half half Total
----------------------------------------------------------------------
107% 101% 104% 95% 104% 100%
Revenues -----------------------------------
174.0 187.0 361.0 165.0 195.0 360.0
----------------------------------------------------------------------
(3) Hard Disk Drives (g)(h)
(The upper rows show comparisons to the previous year)
----------------------------------------------------------------------
Fiscal 2007 Fiscal
2008
----------------------------- --------
1st half 2nd 1st
Period recorded for
consolidated accounting 1st half Total quarter
purposes quarter
----------------------------------------------------------------------
Jan. Jan. Jul. Jan. Jan.
2007 to 2007 2007 2007 2008 to
Shipment Period Mar. to to to Mar.
2007 Jun. Dec. Dec. 2008
2007 2007 2007
----------------------------------------------------------------------
Yen 116% 118% 112% 115% 97%
(billions --------------------------------------
Revenues of yen) 151.0 298.7 354.4 653.1 146.9
--------------------------------------------------
U.S. dollar 113% 114% 114% 114% 112%
(millions --------------------------------------
of dollar) 1,264 2,479 3,084 5,563 1,415
----------------------------------------------------------------------
Yen - - - - -
(billions --------------------------------------
Operating income of yen) (18.0) (38.9) 4.8 (34.1) 6.7
(loss) --------------------------------------------------
U.S. dollar - - - - -
(millions --------------------------------------
of dollar) (150) (323) 42 (281) 65
----------------------------------------------------------------------
133% 134% 123% 128% 108%
--------------------------------------
Shipments (thousand units) (i) 19,500 39,700 49,700 89,500 21,100
----------------------------------------------------------------------
1.8/2.5inch 121% 126% 121% 123% 104%
(j) --------------------------------------
Consumer and 10,100 20,300 26,000 46,300 10,500
Commercial --------------------------------------------------
154% 153% 132% 141% 114%
3.5inch (k) --------------------------------------
7,900 16,500 21,000 37,500 9,000
---------------------------------------------------------------------
130% 119% 110% 114% 119%
--------------------------------------
Servers (l) 1,200 2,300 2,400 4,700 1,400
---------------------------------------------------------------------
92% 83% 41% 62% 56%
--------------------------------------
Emerging (m) 330 670 330 1,000 180
----------------------------------------------------------------------
Notes:(g)Figures include intra-segment transactions.
(h)Hitachi GST's operating currency is U.S. dollar. Yen figures
include yen / dollar conversion fluctuation. Operating
income of 2nd half FY2007 was revised based on closing
account after audit.
(i)Shipment less than 100,000 units have been rounded, with the
exception of Emerging, where shipment less than 10,000 units
have been rounded.
(j)Consumer electronics applications (1.8inch), note-PCs
(2.5inch), etc.
(k)Desktop-PCs, consumer electronics applications (3.5inch),
etc.
(l)Disk array subsystems, servers (3.5inch), etc.
(m)Hand held devices (1inch), automotive (2.5inch), etc.
2. Displays
Revenues and Operating Income (Loss)
(The upper rows show comparisons to the previous year; billions of
yen)
----------------------------------------------------------------------
Fiscal 2007
1st half 2nd half Total
----------------------------------------------------------------------
94% 105% 99%
Revenues -----------------------------------
94.6 103.9 198.5
-----------------------------------
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