FORM 6-K
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
REPORT OF FOREIGN PRIVATE ISSUER
PURSUANT TO RULE 13a-16 OR 15d-16 OF
THE SECURITIES EXCHANGE ACT OF 1934
For the month of October 2003
Commission File Number 1-8320
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Hitachi, Ltd.
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(Translation of registrant's name into English)
6, Kanda-Surugadai 4-chome, Chiyoda-ku, Tokyo 101-8010, Japan
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(Address of principal executive offices)
Indicate by check mark whether the registrant files or will file annual reports
under cover of Form 20-F or Form 40-F.
Form 20-F x Form 40-F _________
---------
Indicate by check mark if the registrant is submitting the Form 6-K in paper as
permitted by Regulation S-T Rule 101(b)(1): ________
Indicate by check mark if the registrant is submitting the Form 6-K in paper as
permitted by Regulation S-T Rule 101(b)(7): ________
Indicate by check mark whether by furnishing the information contained in this
Form, the registrant is also thereby furnishing the information to the
Commission pursuant to Rule 12g3-2(b) under the Securities Exchange Act of 1934.
Yes ________ No x
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If "Yes" is marked, indicate below the file number assigned to the registrant in
connection with Rule 12g3-2(b): 82-________
This report on Form 6-K contains the following:
1. Press release dated October 29, 2003 regarding consolidated financial
results for the first half of fiscal 2003.
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the
registrant has duly caused this report to be signed on its behalf by the
undersigned, thereunto duly authorized.
Hitachi, Ltd.
-------------------------------------
(Registrant)
Date November 7, 2003 By /s/ Takashi Hatchoji
------------------------ -------------------------------------
Takashi Hatchoji
Vice President and Executive Officer
FOR IMMEDIATE RELEASE
Hitachi Announces Consolidated Financial Results for the First Half of Fiscal
2003
Tokyo, October 29, 2003 --- Hitachi, Ltd. (NYSE:HIT / TSE:6501) today announced
its consolidated financial results for the first half of fiscal 2003, ended
September 30, 2003.
During the interim period, economic conditions steadily improved in the U.S.,
where the driving force of expansion was personal consumption, and there was a
rapid recovery in Asia following a temporary slowdown due to the effects of the
severe acute respiratory syndrome (SARS) outbreak.
The Japanese economy also showed signs of an upturn, with personal spending
holding firm and private-sector plant and equipment investment rebounding. The
economy, however, was hampered by falling product and service prices as the
deflationary economy persisted.
Against this backdrop, Hitachi's consolidated net sales rose 3%, to 4,041.4
billion yen (US$36,409 million), despite major year-on-year changes in
Information & Telecommunication Systems, Electronic Devices and other segments
due to the effects of ongoing business portfolio realignment across the Hitachi
Group. Operating income dropped 67%, to 20.2 billion yen (US$182 million), but
this was better than forecast.
-2-
By segment, Information & Telecommunication Systems sales rose 20%, to 1,053.2
billion yen (US$9,489 million). Sales for software and services were steady
thanks to increased outsourcing services for financial institutions, and the
hardware sector was bolstered by the inclusion of sales from hard disk drive
(HDD) operations acquired from IBM Corporation and base stations for mobile
phones. The segment saw operating income decrease 87%, to 5.3 billion yen (US$49
million), mainly due to operating losses in HDD operations acquired from IBM
Corporation.
In Electronic Devices, sales declined 21%, to 607.5 billion yen (US$5,473
million). Sales fell sharply in semiconductor operations due to the April 2003
transfer of most of this business to equity-method affiliate Renesas Technology
Corp., a joint venture with Mitsubishi Electric Corporation. In displays, while
sales of small and medium-size TFT LCDs for mobile phones were brisk, sales of
large-size TFT LCDs decreased. The segment recorded operating income of 3.6
billion yen (US$33 million), reversing an operating loss of 7.9 billion yen
(US$71 million) in the same period of the previous fiscal year. This improvement
was attributable to the transfer of semiconductor operations as well as to
strong performances in semiconductor manufacturing equipment and life science
systems, among other areas.
In Power & Industrial Systems, sales were on a par with the previous year's
interim period at 1,073.4 billion yen (US$9,671 million). Hitachi Construction
Machinery Co., Ltd. recorded higher sales, mainly to China and other overseas
markets, and sales of automotive products were markedly higher in line with the
inclusion in consolidated results of the former Unisia JECS Corporation (now
Hitachi Unisia Automotive, Ltd.), which became a subsidiary in October 2002. On
the other hand, sales of power generation equipment continued to languish.
Segment operating income decreased 29%, to 7.9 billion yen (US$71 million),
despite a dramatic improvement in earnings at Hitachi Construction Machinery.
This decline primarily reflected a deterioration in profitability in power
generation equipment and public-works facilities in line with lower sales.
In Digital Media & Consumer Products, segment sales edged down 2%, to 585.4
billion yen (US$5,274 million). Sales of plasma TVs, projection TVs and other
display equipment rose. However, sales of large home appliances declined due to
sluggish domestic demand and falling sales prices as well as the effect of
unseasonable weather in Japan. At Hitachi Maxell, Ltd., optical media sales
remained healthy. Segment operating income dropped 87%, to 0.7 billion yen (US$7
million). This was partly due to the effect of unseasonable weather on room air
conditioners.
-3-
In High Functional Materials & Components, segment sales edged up 1%, to 622.2
billion yen (US$5,605 million). At Hitachi Cable, Ltd., sales in electric
equipment, construction and others were soft, but sales were robust in
information systems and electronic components. At Hitachi Chemical Co., Ltd.,
sales growth was recorded by materials for semiconductors and displays, and
sales were strong for industrial materials such as carbon materials for negative
electrodes for lithium-ion batteries. At Hitachi Metals, Ltd., sales were
lackluster in construction components, plant and equipment, but remained strong
in respect of high-grade metal products and materials and of high-grade casting
components for automobiles. Segment operating income increased 2%, to 9.2
billion yen (US$83 million).
In Logistics, Services & Others, segment sales decreased 13%, to 612.9 billion
yen (US$5,522 million), despite strong sales from the logistics solutions
business at Hitachi Transport System, Ltd. Overseas sales companies saw sales
decline due to the transfer of semiconductors sales operations to the newly
established Renesas Technology, and the transfer of HDD sales operations to
Hitachi Global Storage Technologies. The segment recorded an operating loss of
0.3 billion yen (US$4 million), compared with operating income of 1.4 billion
yen (US$13 million) in the same period of the previous fiscal year.
In Financial Services, low interest rates and a declining volume of automobile
loans to individuals affected results. Segment sales declined 9%, to 267.9
billion yen (US$2,414 million) and segment operating income declined 56%, to 8.1
billion yen (US$74 million).
Other income increased 319%, to 111.9 billion yen (US$1,008 million), despite
lower interest income and dividends received. This increase was mainly
attributable to higher gains on the sale of marketable and investment
securities, notably the sale of shares in affiliate Nitto Denko Corporation.
Meanwhile, other deductions declined 24%, to 41.6 billion yen (US$375 million),
due to an improvement in results from equity-method affiliates.
As a result, Hitachi recorded income before income taxes and minority interests
of 90.5 billion yen (US$815 million), and after 76.1 billion yen (US$686
million) in income taxes, income before minority interests of 14.3 billion yen
(US$129 million). Hitachi recorded net income of 5.3 billion yen (US$49
million), 5% lower than in the same period of the previous fiscal year.
-4-
Financial Position
Operating activities provided net cash of 224.5 billion yen (US$2,023 million),
an increase of 33.0 billion yen (US$297 million) compared with the previous
year. This was primarily the result of decreases in inventories and payables.
Investing activities used net cash of 157.1 billion yen (US$1,416 million), an
increase of 28.2 billion yen (US$254 million) compared with the previous year.
While there were cash inflows from the sale of investments and subsidiaries'
common stock, there was an increase in cash outflows for the purchase of
property, plant and equipment for businesses.
Free cash flows, the sum of cash flows from operating activities and investing
activities, were a positive 67.4 billion yen (US$607 million), an increase of
4.8 billion yen (US$44 million) from the previous year.
Financing activities used net cash of 173.7 billion yen (US$1,565 million), an
improvement of 241.0 billion yen (US$217 million), mainly due to a decrease in
borrowings resulting from the use of a pooling system for Hitachi Group funds.
Cash was used for the purchase of Hitachi's own shares in May 2003.
As a result, cash and cash equivalents as of September 30, 2003 amounted to
709.0 billion yen (US$6,388 million), a reduction of 119.0 billion yen (US$1,073
million) during the interim period.
Debt on September 30, 2003 stood at 2,702.6 billion yen (US$24,348 million),
137.9 billion yen (US$1,243 million) less than at March 31, 2003 as a result of
a decrease in long-term debt due to the repayment of borrowings.
Capital investment on a completion basis rose 2%, to 380.9 billion yen (US$3,432
million), while depreciation decreased 5%, to 213.9 billion yen (US$1,927
million). R&D expenditures amounted to 184.4 billion yen (US$1,662 million), a
decrease of 3% from the previous year, and corresponded to 4.6% of net sales.
All figures, except for the outlook for fiscal 2003, were converted at the rate
of 111 yen = U.S.$1, the approximate exchange rate on the Tokyo Foreign Exchange
Market as of September 30, 2003.
Outlook for Fiscal 2003
The recovery in the world economy is expected to become even more evident based
on a number of factors: expectations for moderate growth in the key U.S. economy
driven by higher personal spending; recovery in Asia on the back of the U.S.
upswing; and the view that European economies have bottomed out.
-5-
The Japanese economy, while benefiting from the continuation of strong exports
to the U.S. and Asia as well as increasing private-sector plant and equipment
investment, is expected to remain difficult. With more work to do in regards to
deregulation and measures to tackle other structural economic issues, such as
the disposal of problem loans, there are no immediate expectations for a
dramatic improvement in the job market or wage levels. And the significant
changes in foreign exchange rates that have recently occurred continue to impact
corporate earnings. These and other factors are creating an unpredictable
operating environment.
Under these circumstances, Hitachi will push ahead with efforts to create new
businesses and strengthen key business domains by capturing synergies in
resource use across the Hitachi Group, guided by "i.e. HITACHI Plan II." The
company will also focus on structural reforms to concentrate more resources on
highly profitable businesses and on measures to improve its financial position.
Projections for fiscal 2003, as given below, assume an exchange rate of 110 yen
to the U.S. dollar.
--------------------------------------------------------------------------
Net sales 8,350.0 billion yen (year-on-year increase of 2%)
(US$75,909 million)
--------------------------------------------------------------------------
Operating income 170.0 billion yen (year-on-year increase of 11%)
(US$1,545 million)
--------------------------------------------------------------------------
Income before
income taxes and 225.0 billion yen (year-on-year increase of 132%)
minority interests (US$2,045 million)
--------------------------------------------------------------------------
Income before 45.0 billion yen (year-on-year increase of 2%)
minority interests (US$409 million)
--------------------------------------------------------------------------
Net income 10.0 billion yen (year-on-year decrease of 64%)
(US$91 million)
--------------------------------------------------------------------------
-6-
Management Policy
Basic Management Policy and Strategy
Amid intensifying competition in world markets and the economic slump in Japan,
Hitachi is reviewing and reshaping its business portfolio from the perspective
of raising the efficiency of operations and with the aim of achieving further
growth. This process will be consistent with Hitachi's basic management policy,
which is to increase shareholder value by raising the return on capital and
increasing market capitalization.
In line with this basic policy, in January 2003, Hitachi unveiled a new
medium-term management plan, "i.e. HITACHI Plan II," which runs through fiscal
2005 (ending in March 2006). This three-year period is positioned as a key
juncture for focusing on highly profitable businesses. Hitachi will create
growth and new businesses in key fields where it can leverage the group's
technological strengths and know-how. During this period, Hitachi will also
enact major reforms of the company's operating framework. Hitachi plans to exit
unprofitable businesses and push through restructuring measures that go beyond
the corporate group. Hitachi will use FIV* (Future Inspiration Value) to make
decisions on whether to exit, strengthen or incubate specific businesses.
* FIV is Hitachi's economic value-added evaluation index in which the cost of
capital is deducted from after-tax operating profit. After-tax operating profit
must exceed the cost of capital to achieve positive FIV.
The "i.e. HITACHI Plan II" targets two primary business domains--"New Era
Lifeline Support Solutions," which further fuse and enhance information systems
services and social infrastructure systems, and "Global Products Incorporating
Advanced Technology," where Hitachi aims to achieve strong growth in global
markets by focusing on technologies as well as high-performance hardware and
software that incorporate knowledge from several disciplines. In this way,
Hitachi will establish a highly profitable earnings structure and advance to a
new stage of growth.
The "i.e. HITACHI Plan II" will transform Hitachi's earnings structure so that
it can achieve positive FIV in fiscal 2005. This mandates an operating margin of
at least 5% and ROE of at least 8%, which will be achieved by implementing a
variety of measures. Furthermore, Hitachi has set the goal of maintaining a
single-A grade long-term credit rating by strengthening its financial position.
In deciding on individual investments, Hitachi's policy is to use FIV to select
investments that will contribute to maximizing shareholder value. Combined with
further efforts to reduce assets, including accounts receivables and
inventories, Hitachi aims to raise the return on assets.
Positioning its brand as an important asset underpinning the company's
competitiveness in an era of consolidated group management, Hitachi is promoting
brand management to enhance brand equity.
-7-
Corporate Governance
(1) Basic Stance and Initiatives Regarding Corporate Governance
Hitachi is working to reinforce corporate governance to establish an executive
system that facilitates speedy businesses operations and a high degree of
transparency. In June 2003, Hitachi adopted the Committee System to ensure the
effective supervision of management and promote faster decision-making by
demarcating responsibilities for management oversight and those for the
execution of business operations. The Board of Directors focuses on decisions
involving basic management policies and management supervision while entrusting
to executive officers most of its authority to make decisions with respect to
Hitachi's business affairs. The Board of Directors has 13 members, 4 of whom are
from outside Hitachi. Three directors serve concurrently as executive officers.
The Chairman of the Board does not serve concurrently as an executive officer.
Within the Board of Directors three committees have been established--the
Nominating Committee, Audit Committee and Compensation Committee--with outside
directors accounting for the majority of members of each committee. Hitachi has
also set up a Group Management Committee on its own volition; this committee
gives the Board of Directors advice on and monitors management of the group as a
whole. Hitachi's 18 publicly-held group companies have also adopted the
Committee System with the similar aim of speeding up operations and improving
management efficiency by increasingly managing the group in a uniform way.
Additionally, to ensure strict observance of laws and regulations, Hitachi
established a Compliance Division as a specialist body reporting directly to the
president. Besides running educational programs on legal compliance and
conducting related audits, the Compliance Division receives, investigates and
responds to internal complaints. Accompanying these initiatives, Hitachi has
established the Advisory Board, an oversight body comprising members from
outside the company, including attorneys. Another aspect of Hitachi's compliance
system is that audit fees and non-audit services provided by independent
auditors require the pre-approval of the Audit Committee.
(2) Personal, financial and trading relationships between Hitachi and outside
directors and other beneficial relationships
Hitachi has continuous business transactions with Asahi Glass Co., Ltd., the
chairman of the board of which is Hitachi outside director Hiromichi Seya, and
Nippon Steel Corporation, the chairman of the board of which is Hitachi outside
director Akira Chihaya.
Policy on the Distribution of Earnings
Hitachi sets dividends by taking into consideration a range of factors,
including its financial condition, results of operations and payout ratio. This
policy is motivated by the desire to ensure the availability of sufficient
internal funds for making investments in R&D and plant and equipment that are
essential for maintaining competitiveness and improving profitability based on
medium- and long-term plans, as well as to ensure the stable growth of
dividends. Moreover, Hitachi has adopted a flexible stance toward the
acquisition of its own shares, taking business plans, financial condition,
market conditions and other factors into consideration in this respect.
-8-
Cautionary Statement
Certain statements contained in this document may constitute forward-looking
statements which reflect management's current views with respect to certain
future events and financial performance based on certain assumptions and include
any statement that does not directly relate to any historical or current fact.
Words such as "anticipate," "believe," "expect," "estimate," "intend," "plan,"
"project" and similar expressions which indicate future events and trends may
identify forward-looking statements. Actual results may differ materially from
those projected or implied in the forward-looking statements and from historical
trends. Further, certain forward-looking statements are based upon assumptions
of future events which may not prove to be accurate.
Factors that could cause actual results to differ materially from those
projected or implied in any forward-looking statements and from historical
trends include, but are not limited to:
- rapid technological change, particularly in the Information &
Telecommunication Systems segment and Electronic Devices 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;
- fluctuations in product demand and industry capacity, particularly in the
Information & Telecommunication Systems segment, Electronic Devices
segment and Digital Media & Consumer Products segment;
- increasing commoditization of information technology products, and
intensifying price competition in the market for such products;
- 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 access, or access on favorable
terms, liquidity or long-term financing, particularly in the context of
limited credit availability currently prevailing in Japan;
- 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 economic conditions and the regulatory and trade environment of
Hitachi's major markets, particularly, the United States, Japan and
elsewhere in Asia, including, without limitation, continued stagnation or
deterioration of the Japanese economy, or direct or indirect restriction
by other nations of imports;
- uncertainty as to Hitachi's access to, or protection for, certain
intellectual property rights, particularly those related to electronics
and data processing technologies;
- 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; 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.
These factors listed above are not exclusive and are in addition to other
factors that are stated or indicated elsewhere in this report, or in other
materials published by the Company.
-9-
HITACHI, LTD. AND SUBSIDIARIES
CONSOLIDATED FINANCIAL STATEMENTS
FOR THE HALF YEAR ENDED SEPTEMBER 30, 2003
The consolidated financial statements presented herein are expressed in yen and,
solely for the convenience of the reader, have been translated into United
States dollars at the rate of 111 yen = U.S.$1, the approximate exchange rate
prevailing on the Tokyo Foreign Exchange Market as of September 30, 2003.
SUMMARY
In millions of yen and U.S. dollars, except Net income per share (6) and Net
income per American Depositary Share (7).
-------------------------------------------------------------------------------------
The half years ended September 30
----------------------------------------------------
YEN (A)/(B) U.S.DOLLARS
(millions) X100 (millions)
----------------------------------------------------------- -----------------
2003 (A) 2002 (B) (%) 2003
-------------------------------------------------------------------------------------
1. Net sales 4,041,407 3,916,491 103 36,409
-------------------------------------------------------------------------------------
2. Operating income 20,239 61,688 33 182
-------------------------------------------------------------------------------------
3. Income before income
taxes and minority
interests 90,503 33,467 270 815
-------------------------------------------------------------------------------------
4. Income before minority
interests 14,324 17,386 82 129
-------------------------------------------------------------------------------------
5. Net income 5,384 5,666 95 49
-------------------------------------------------------------------------------------
6. Net income per share
Basic 1.63 1.70 96 0.01
Diluted 1.59 1.62 98 0.01
-------------------------------------------------------------------------------------
7. Net income per ADS
(representing 10 shares)
Basic 16 17 94 0.14
Diluted 16 16 100 0.14
-------------------------------------------------------------------------------------
Notes: 1. Figures for the half year ended September 30, 2002 have been restated
due to the adoption of EITF Issue No. 03-2, "Accounting for the
Transfer to the Japanese Government of the Substitutional Portion of
Employee Pension Fund Liabilities" (Emerging Issues Task Force (EITF),
January 2003).
2. Segment Information and operating income are presented in accordance
with financial reporting principles and practices generally accepted
in Japan. 3. The figures are for 967 consolidated subsidiaries and 165
equity-method affiliates.
3. The figures are for 967 consolidated subsidiaries and 165 equity-
method affiliates.
-10-
CONSOLIDATED STATEMENTS OF INCOME
-------------------------------------------------------------------------------------------------------------
The half years ended September 30
-------------------------------------------------------------------------------------------------------------
YEN (A)/(B) U.S. DOLLARS
(millions) X100 (millions)
------------------------------ (%) -----------------
2003 (A) 2002 (B) 2003
---------------------------------------------------------------
Net sales 4,041,407 3,916,491 103 36,409
-------------------------------------------------------------------------------------------------------------
Cost of sales 3,157,976 2,969,558 106 28,450
-------------------------------------------------------------------------------------------------------------
Selling, general and
administrative expenses 863,192 885,245 98 7,777
-------------------------------------------------------------------------------------------------------------
Operating income 20,239 61,688 33 182
-------------------------------------------------------------------------------------------------------------
Other income 111,934 26,712 419 1,008
(Interest and dividends) 10,534 10,981 96 95
(Other) 101,400 15,731 645 914
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Other deductions 41,670 54,933 76 375
(Interest charges) 16,318 17,803 92 147
(Other) 25,352 37,130 68 228
-------------------------------------------------------------------------------------------------------------
Income before income taxes
and minority interests 90,503 33,467 270 815
-------------------------------------------------------------------------------------------------------------
Income taxes 76,179 16,081 474 686
-------------------------------------------------------------------------------------------------------------
Income before
minority interests 14,324 17,386 82 129
-------------------------------------------------------------------------------------------------------------
Minority interests 8,940 11,720 76 81
-------------------------------------------------------------------------------------------------------------
Net income 5,384 5,666 95 49
-------------------------------------------------------------------------------------------------------------
-11-
CONSOLIDATED BALANCE SHEETS
-----------------------------------------------------------------------------------------------------------------------------------
YEN U.S.DOLLARS
(millions) (A)/(B) (millions)
------------------------------------------- X100 -----------------------
As of Sept. 30, As of March 31, (%) As of Sept. 30,
2003 (A) 2003 (B) 2003
------------------------------------------------------------------------------------------------------------------------------------
Assets 9,884,473 10,179,389 97 89,049
------------------------------------------------------------------------------------------------------------------------------------
Current assets 5,132,368 5,193,465 99 46,238
Cash and cash equivalents 709,084 828,171 86 6,388
Short-term investments 254,178 186,972 136 2,290
Trade receivables
Notes 153,017 153,587 100 1,379
Accounts 1,828,942 1,903,640 96 16,477
Investment in leases 455,485 437,076 104 4,103
Inventories 1,187,133 1,187,529 100 10,695
Other current assets 544,529 496,490 110 4,906
------------------------------------------------------------------------------------------------------------------------------------
Investments and advances 877,763 726,442 121 7,908
------------------------------------------------------------------------------------------------------------------------------------
Property, plant and equipment 2,339,046 2,601,050 90 21,072
------------------------------------------------------------------------------------------------------------------------------------
Other assets 1,535,296 1,658,432 93 13,831
------------------------------------------------------------------------------------------------------------------------------------
------------------------------------------------------------------------------------------------------------------------------------
Liabilities and stockholders' equity 9,884,473 10,179,389 97 89,049
------------------------------------------------------------------------------------------------------------------------------------
Current liabilities 3,933,087 4,005,228 98 35,433
Short-term debt and current installments
of long-term debt 1,357,156 1,328,446 102 12,227
Trade payables
Notes 62,569 71,934 87 564
Accounts 1,072,833 1,140,130 94 9,665
Advances received 251,287 252,861 99 2,264
Other current liabilities 1,189,242 1,211,857 98 10,714
------------------------------------------------------------------------------------------------------------------------------------
Noncurrent liabilities 3,375,729 3,569,371 95 30,412
Long-term debt 1,345,461 1,512,152 89 12,121
Retirement and severance benefits 1,909,242 1,932,646 99 17,200
Other liabilities 121,026 124,573 97 1,090
------------------------------------------------------------------------------------------------------------------------------------
Minority interests 750,142 751,578 100 6,758
------------------------------------------------------------------------------------------------------------------------------------
Stockholders' equity 1,825,515 1,853,212 99 16,446
Common stock 282,032 282,032 100 2,541
Capital surplus 549,548 562,214 98 4,951
Legal reserve and retained earnings 1,760,817 1,766,338 100 15,863
Accumulated other comprehensive
income (loss) (734,958) (755,525) - (6,621)
(Foreign currency translation adjustments) (70,754) (60,948) - (637)
(Minimum pension liability adjustments) (691,794) (698,916) - (6,232)
(Net unrealized holding gain on
available-for-sale securities) 28,536 4,874 585 257
(Cash flow hedges) (946) (535) - (9)
Treasury stock (31,924) (1,847) - (288)
------------------------------------------------------------------------------------------------------------------------------------
- 12 -
CONSOLIDATED STATEMENTS OF STOCKHOLDERS' EQUITY
YEN U.S. DOLLARS
(millions) (millions)
------------------------------------ -------------------
The half year ended The year ended The half year ended
Sept. 30, 2003 March 31, 2003 Sept. 30, 2003
-------------- -------------- --------------
Common stock
Balance at beginning of period 282,032 282,032 2,541
-------------- -------------- --------------
Conversion of convertible debentures 0 0 0
-------------- -------------- --------------
Balance at end of period 282,032 282,032 2,541
============== ============== ==============
Capital surplus
Balance at beginning of period 562,214 527,010 5,065
-------------- -------------- --------------
Conversion of convertible debentures 937 370 8
(Decrease) increase arising from issuance of
subsidiaries' common stock, divestiture and other (13,603) 34,834 (123)
-------------- -------------- --------------
Balance at end of period 549,548 562,214 4,951
============== ============== ==============
Legal reserve
Balance at beginning of period 111,309 110,751 1,003
-------------- -------------- --------------
Transfers (to) from retained earnings (2,693) 554 (24)
Transfers (to) from minority interests arising from
conversion of subsidiaries' convertible debentures and other (205) 4 (2)
Balance at end of period 108,411 111,309 977
============== ============== ==============
Retained earnings
Balance at beginning of period 1,655,029 1,643,248 14,910
-------------- -------------- --------------
Net income 5,384 27,867 49
Cash dividends (10,095) (10,013) (91)
Transfers from (to) legal reserve 2,693 (554) 24
Transfers to minority interests arising from
conversion of subsidiaries' convertible debentures (1,189) (291) (11)
Transfers from (to) minority interests arising from
change in ownership interest in subsidiaries' common stock
and other 584 (5,228) 5
-------------- -------------- --------------
Balance at end of period 1,652,406 1,655,029 14,887
============== ============== ==============
Legal reserve and retained earnings 1,760,817 1,766,338 15,863
============== ============== ==============
Accumulated other comprehensive loss
Foreign currency translation adjustments
Balance at beginning of period (60,948) (38,012) (549)
-------------- -------------- --------------
Current-period change (9,806) (22,936) (88)
-------------- -------------- --------------
Balance at end of period (70,754) (60,948) (637)
============== ============== ==============
Minimum pension liability adjustments
Balance at beginning of period (698,916) (260,100) (6,297)
-------------- -------------- --------------
Current-period change 7,122 (438,816) 64
-------------- -------------- --------------
Balance at end of period (691,794) (698,916) (6,232)
============== ============== ==============
Net unrealized holding gain on
available-for-sale securities
Balance at beginning of period 4,874 39,997 44
-------------- -------------- --------------
Changes in unrealized holding gain 23,662 (35,123) 213
-------------- -------------- --------------
Balance at end of period 28,536 4,874 257
============== ============== ==============
Cash flow hedges
Balance at beginning of period (535) (369) (5)
-------------- -------------- --------------
Changes in the fair value of derivative financial
instruments (411) (166) (4)
-------------- -------------- --------------
Balance at end of period (946) (535) (9)
============== ============== ==============
Accumulated other comprehensive loss (734,958) (755,525) (6,621)
============== ============== ==============
Treasury stock
Balance at beginning of period (1,847) (333) (17)
Current-period increase (30,077) (1,514) (271)
-------------- -------------- --------------
Balance at end of period (31,924) (1,847) (288)
============== ============== ==============
Total stockholders' equity 1,825,515 1,853,212 16,446
============== ============== ==============
-13-
CONSOLIDATED STATEMENTS OF CASH FLOWS
---------------------------------------------------------------------------------------------------------
The half years ended September 30
------------------------------------
YEN U.S. DOLLARS
(millions) (millions)
------------------------------------
2003 2002 2003
---------------------------------------------------------------------------------------------------------
Cash flows from operating activities
Net income 5,384 5,666 49
Adjustments to reconcile net income to net cash
provided by operating activities
Depreciation 213,916 226,280 1,927
Deferred income taxes 5,052 (41,478) 46
Loss on disposal of rental assets and other property 5,712 4,306 51
Decrease in receivables 79,253 183,658 714
(Increase) Decrease in inventories (106,587) (8,394) (960)
Increase (Decrease) in payables (37,821) (25,911) (341)
Other 59,684 (152,624) 538
-------------------------------------------------------------------------------------------------------
Net cash provided by operating activities 224,593 191,503 2,023
Cash flows from investing activities
(Increase) decrease in short-term investments (68,614) 17,591 (618)
Capital expenditures (145,310) (155,148) (1,309)
Purchase of rental assets, net (213,515) (186,496) (1,924)
(Purchase) sale of investments
and subsidiaries' common stock, net 117,400 55,989 1,058
Collection of investment in leases 197,485 209,869 1,779
Other (44,625) (70,764) (402)
-------------------------------------------------------------------------------------------------------
Net cash used in investing activities (157,179) (128,959) (1,416)
Cash flows from financing activities
Decrease in interest-bearing debt (127,413) (191,907) (1,148)
Dividends paid to stockholders (10,111) (82) (91)
Dividends paid to minority stockholders of subsidiaries (6,791) (6,956) (61)
Other (29,435) 1,088 (265)
-------------------------------------------------------------------------------------------------------
Net cash provided by (used in) financing activities (173,750) (197,857) (1,565)
Effect of exchange rate changes on cash and cash equivalents (12,751) (18,849) (115)
--------------------------------------
Net decrease in cash and cash equivalents (119,087) (154,162) (1,073)
Cash and cash equivalents at beginning of year 828,171 1,029,374 7,461
--------------------------------------
Cash and cash equivalents at end of year 709,084 875,212 6,388
======================================
---------------------------------------------------------------------------------------------------------
-14-
SEGMENT INFORMATION
(1)INDUSTRY SEGMENTS
-----------------------------------------------------------------------------------------------------------
The half years ended September 30
-------------------------------------------------
YEN (A)/(B) U.S. DOLLARS
(millions) X100 (millions)
------------------------- ------------
2003 (A) 2002 (B) (%) 2003
-----------------------------------------------------------------------------------------------------------
Information & Telecommunication 1,053,279 878,230 120 9,489
Systems 22% 18%
----------------------------------------------------------------------------------------
Electronic Devices 607,529 766,417 79 5,473
13% 16%
----------------------------------------------------------------------------------------
Power & Industrial Systems 1,073,439 1,068,101 100 9,671
22% 22%
----------------------------------------------------------------------------------------
Digital Media & Consumer 585,411 597,689 98 5,274
Products 12% 12%
----------------------------------------------------------------------------------------
Sales High Functional Materials 622,206 613,061 101 5,605
& Components 13% 12%
----------------------------------------------------------------------------------------
Logistics, Services & Others 612,969 700,613 87 5,522
13% 14%
----------------------------------------------------------------------------------------
Financial Services 267,923 293,321 91 2,414
5% 6%
----------------------------------------------------------------------------------------
Subtotal 4,822,756 4,917,432 98 43,448
100% 100%
----------------------------------------------------------------------------------------
Eliminations & Corporate items (781,349) (1,000,941) - (7,039)
----------------------------------------------------------------------------------------
Total 4,041,407 3,916,491 103 36,409
===========================================================================================================
Information & Telecommunication 5,399 42,167 13 49
Systems 15% 53%
----------------------------------------------------------------------------------------
Electronic Devices 3,675 (7,918) - 33
11% -
----------------------------------------------------------------------------------------
Power & Industrial Systems 7,935 11,111 71 71
23% 14%
----------------------------------------------------------------------------------------
Digital Media & Consumer 728 5,747 13 7
Products 2% 7%
----------------------------------------------------------------------------------------
Operating High Functional Materials 9,233 9,042 102 83
income (loss) & Components 26% 11%
----------------------------------------------------------------------------------------
Logistics, Services & Others (397) 1,457 - (4)
- 2%
----------------------------------------------------------------------------------------
Financial Services 8,195 18,653 44 74
24% 23%
----------------------------------------------------------------------------------------
Subtotal 34,768 80,259 43 313
100% 100%
----------------------------------------------------------------------------------------
Eliminations & Corporate items (14,529) (18,571) - (131)
----------------------------------------------------------------------------------------
Total 20,239 61,688 33 182
-----------------------------------------------------------------------------------------------------------
Note: Net sales by industry segment include intersegment transactions.
-15-
(2)GEOGRAPHIC SEGMENTS
----------------------------------------------------------------------------------------------------------
The half years ended September 30
-----------------------------------------------------
YEN (A)/(B) U.S. DOLLARS
(millions) X100 (millions)
------------------------------ ------------
2003 (A) 2002 (B) (%) 2003
----------------------------------------------------------------------------------------------------------
Outside 2,964,920 3,003,621 99 26,711
customer sales 64% 65%
-----------------------------------------------------------------------------
Japan Intersegment 413,478 501,040 83 3,725
transactions 9% 11%
-----------------------------------------------------------------------------
Total 3,378,398 3,504,661 96 30,436
73% 76%
---------------------------------------------------------------------------------------
Outside 455,943 312,220 146 4,108
customer sales 10% 7%
-----------------------------------------------------------------------------
Asia Intersegment 144,482 168,355 86 1,302
transactions 3% 3%
-----------------------------------------------------------------------------
Total 600,425 480,575 125 5,409
13% 10%
---------------------------------------------------------------------------------------
Outside 399,425 394,660 101 3,598
customer sales 9% 9%
-----------------------------------------------------------------------------
North Intersegment 12,890 19,434 66 116
America transactions 0% 0%
-----------------------------------------------------------------------------
Total 412,315 414,094 100 3,715
Sales 9% 9%
---------------------------------------------------------------------------------------
Outside 182,461 177,056 103 1,644
customer sales 4% 4%
-----------------------------------------------------------------------------
Europe Intersegment 19,622 12,281 160 177
transactions 0% 0%
-----------------------------------------------------------------------------
Total 202,083 189,337 107 1,821
4% 4%
---------------------------------------------------------------------------------------
Outside 38,658 28,934 134 348
customer sales 1% 1%
-----------------------------------------------------------------------------
Other Intersegment 1,155 1,323 87 10
Areas transactions 0% 0%
-----------------------------------------------------------------------------
Total 39,813 30,257 132 359
1% 1%
---------------------------------------------------------------------------------------
Subtotal 4,633,034 4,618,924 100 41,739
100% 100%
---------------------------------------------------------------------------------------
Eliminations (591,627) (702,433) - (5,330)
---------------------------------------------------------------------------------------
Total 4,041,407 3,916,491 103 36,409
----------------------------------------------------------------------------------------------------------
-16-
----------------------------------------------------------------------------------------------------------
The half years ended September 30
---------------------------------------------------
YEN (A)/(B) U.S. DOLLARS
(millions) X100 (millions)
---------------------------- -------------
2003 (A) 2002 (B) (%) 2003
----------------------------------------------------------------------------------------------------------
Japan 37,208 65,775 57 335
79% 78%
---------------------------------------------------------------------------------------
Asia (513) 7,740 - (5)
- 9%
---------------------------------------------------------------------------------------
North America 1,714 3,037 56 15
4% 4%
---------------------------------------------------------------------------------------
Operating Europe 7,188 6,442 112 65
income (loss) 15% 8%
---------------------------------------------------------------------------------------
Other Areas 1,368 748 183 12
3% 1%
---------------------------------------------------------------------------------------
Subtotal 46,965 83,742 56 423
100% 100%
---------------------------------------------------------------------------------------
Eliminations & Corporate items (26,726) (22,054) - (241)
---------------------------------------------------------------------------------------
Total 20,239 61,688 33 182
==========================================================================================================
(3)SALES BY MARKET
----------------------------------------------------------------------------------------------------------
The half years ended September 30
---------------------------------------------------
YEN (A)/(B) U.S. DOLLARS
(millions) X100 (millions)
--------------------------- ------------
2003 (A) 2002 (B) (%) 2003
----------------------------------------------------------------------------------------------------------
Japan 2,636,362 2,633,108 100 23,751
65% 67%
----------------------------------------------------------------------------------------------------------
Asia 553,783 498,594 111 4,989
14% 13%
---------------------------------------------------------------------------------------
North America 428,218 426,980 100 3,858
11% 11%
---------------------------------------------------------------------------------------
Europe 303,458 262,185 116 2,734
7% 7%
---------------------------------------------------------------------------------------
Other Areas 119,586 95,624 125 1,077
3% 2%
---------------------------------------------------------------------------------------
Outside Japan 1,405,045 1,283,383 109 12,658
35% 33%
----------------------------------------------------------------------------------------------------------
Total 4,041,407 3,916,491 103 36,409
100% 100%
----------------------------------------------------------------------------------------------------------
# # #
HITACHI, LTD.
UNCONSOLIDATED FINANCIAL STATEMENTS
FOR THE HALF YEAR ENDED SEPTEMBER 30, 2003
(111yen = U.S.$1)
October 29, 2003
YEN U.S. DOLLARS
INCOME STATEMENTS (millions) (millions)
-------------------
(The half years ended Sept. 30) 2003(A) 2002(B) (A)/(B)x100 2003
Net sales 1,128,203 1,515,655 74% 10,164
Cost of sales 905,113 1,231,453 73% 8,154
S.G.A. expenses 230,082 283,926 81% 2,073
Operating income (loss) (6,992) 275 - (63)
-----------------------
Other income 40,873 23,823 172% 368
Other deductions 23,842 26,509 90% 215
Ordinary income (loss) 10,038 (2,411) - 90
-----------------------
Extraordinary gain 8,450 32,957 26% 76
Extraordinary loss 4,939 - - 45
Income before income taxes 13,549 30,546 44% 122
--------------------------
Current income taxes (52,567) 1,661 - (474)
Deferred income taxes 46,850 9,116 514% 422
Net income 19,266 19,767 97% 174
----------
Basic EPS (yen and dollars) 5.82 5.92 98% 0.05
Diluted EPS (yen and dollars) - - - -
BALANCE SHEETS 2003/9/30(A) 2003/3/31(B) (A)/(B)x100 2003/9/30
----------------
Current assets 1,681,987 1,921,651 88% 15,153
(Quick assets) 1,293,059 1,509,346 86% 11,649
(Inventories) 307,960 326,611 94% 2,774
(Deferred tax assets) 80,967 85,693 94% 729
Fixed assets 1,879,918 1,903,377 99% 16,936
(Investments) 1,256,413 1,078,032 117% 11,319
(Deferred tax assets) 180,041 249,036 72% 1,622
(Others) 443,463 576,309 77% 3,995
Total assets 3,561,906 3,825,029 93% 32,089
--------------
Current liabilities 1,712,126 1,819,074 94% 15,425
Fixed liabilities 483,676 631,990 77% 4,357
(Debentures) 280,000 418,471 67% 2,523
(Long-term loans) 23,488 23,548 100% 212
(Others) 180,188 189,971 95% 1,623
Total liabilities 2,195,803 2,451,065 90% 19,782
-------------------
Stockholders' equity 1,366,102 1,373,964 99% 12,307
----------------------
Liabilities and stockholders' equity 3,561,906 3,825,029 93% 32,089
--------------------------------------
FORECAST FOR THE YEAR ENDING MARCH 31, 2004
-------------------------------------------
Net sales Ordinary income Net income
Millions of Yen 2,400,000 20,000 40,000
Millions of U.S. dollars 21,053 175 351
Cautionary Statement
Certain statements contained in this document may constitute forward-looking
statements which reflect management's current views with respect to certain
future events and financial performance based on certain assumptions and include
any statement that does not directly relate to any historical or current fact.
Words such as "anticipate," "believe," "expect," "estimate," "intend," "plan,"
"project" and similar expressions which indicate future events and trends may
identify forward-looking statements. Actual results may differ materially from
those projected or implied in the forward-looking statements and from historical
trends. Further, certain forward-looking statements are based upon assumptions
of future events which may not prove to be accurate.
Factors that could cause actual results to differ materially from those
projected or implied in any forward-looking statements and from historical
trends include, but are not limited to:
- rapid technological change, particularly in the Information &
Telecommunication Systems segment and Electronic Devices segment;
- uncertainty as to Hitachi's ability to continue to develop and to market
products that incorporate new technology on a timely and cost-effective
basis and to achieve market acceptance for such products;
- fluctuations in product demand and industry capacity, particularly in the
Information & Telecommunication Systems segment, Electronic Devices segment
and Digital Media & Consumer Products segment;
- increasing commoditization of information technology products, and
intensifying price competition in the market for such products;
- 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 access, or access on favorable terms,
liquidity or long-term financing, particularly in the context of limited
credit availability currently prevailing in Japan;
- 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 economic conditions and the regulatory and trade environment of
Hitachi's major markets, particularly, the United States, Japan and
elsewhere in Asia, including, without limitation, continued stagnation or
deterioration of the Japanese economy, or direct or indirect restriction by
other nations of imports;
- uncertainty as to Hitachi's access to, or protection for, certain
intellectual property rights, particularly those related to electronics and
data processing technologies;
- uncertainty as to the success of alliances upon which Hitachi's depends,
some of which Hitachi may not control, with other corporations in the design
and development of certain key products; 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.
These factors listed above are not exclusive and are in addition to other
factors that are stated or indicated elsewhere in this report, or in other
materials published by the Company.
# # #
October 29, 2003
Hitachi, Ltd.
Supplementary information for the first half of fiscal 2003,
ended September 30, 2003
(Consolidated basis)
1. Summary (Billions of yen)
-----------------------------------------------------------------------------------------------------------------------------------
1st half of fiscal 2002 1st half of fiscal 2003 Fiscal 2003(Forecast)
--------------------------- ----------------------- ----------------------
(A) (A)/1st half of (B) (B)/(A) (C) (C)/
FY 2001 FY2002
-----------------------------------------------------------------------------------------------------------------------------------
Net sales 3,916.4 99% 4,041.4 103% 8,350.0 102%
--------------------------------------------------------------------------------------------------------------------------------
C/U * 258% - 358% - 348% -
-----------------------------------------------------------------------------------------------------------------------------------
Operating income 61.6 - 20.2 33% 170.0 111%
-----------------------------------------------------------------------------------------------------------------------------------
Income before income taxes
and minority interests 33.4 - 90.5 270% 225.0 232%
-----------------------------------------------------------------------------------------------------------------------------------
Income before minority interests 17.3 - 14.3 82% 45.0 102%
-----------------------------------------------------------------------------------------------------------------------------------
Net income 5.6 - 5.3 95% 10.0 36%
--------------------------------------------------------------------------------------------------------------------------------
C/U * 65% - 28% - 25% -
-----------------------------------------------------------------------------------------------------------------------------------
Average exchange rate 122 - 118 - 110** -
(yen / U.S.$)
-----------------------------------------------------------------------------------------------------------------------------------
Net interest and dividends (6.8) - (5.7) - - -
-----------------------------------------------------------------------------------------------------------------------------------
*Consolidated basis/Unconsolidated basis
**Assumed exchange rate for 2nd half of fiscal 2003
-----------------------------------------------------------------------------------------------------
As of March 31, 2003 As of September 30, 2003
-----------------------------------------------------------------------------------------------------
Cash & cash equivalents, Short-term
investments (Billions of yen) 1,015.1 963.2
-----------------------------------------------------------------------------------------------------
Interest-bearing debt
(Billions of yen) 2,840.5 2,702.6
-----------------------------------------------------------------------------------------------------
Number of employees 339,572 326,500
-----------------------------------------------------------------------------------------------------
Japan 256,085 243,476
--------------------------------------------------------------------------------------------------
Overseas 83,487 83,024
-----------------------------------------------------------------------------------------------------
Number of consolidated subsidiaries 1,112 967
-----------------------------------------------------------------------------------------------------
Japan 708 560
--------------------------------------------------------------------------------------------------
Overseas 404 407
-----------------------------------------------------------------------------------------------------
- 2 -
2. Sales by industry segment (Billions of yen)
-----------------------------------------------------------------------------------------------------------------------------------
1st half of fiscal 2002 1st half of fiscal 2003 Fiscal 2003(Forecast)
--------------------------- ----------------------- ----------------------
(A) (A)/1st half of (B) (B)/(A) (C) (C)/
FY 2001 FY2002
-----------------------------------------------------------------------------------------------------------------------------------
Information & Telecommunication Systems 878.2 101% 1,053.2 120% 2,240.0 118%
-----------------------------------------------------------------------------------------------------------------------------------
Electronic Devices 766.4 100% 607.5 79% 1,240.0 79%
-----------------------------------------------------------------------------------------------------------------------------------
Power & Industrial Systems 1,068.1 96% 1,073.4 100% 2,250.0 98%
-----------------------------------------------------------------------------------------------------------------------------------
Digital Media & Consumer Products 597.6 103% 585.4 98% 1,210.0 100%
-----------------------------------------------------------------------------------------------------------------------------------
High Functional Materials & Components 613.0 98% 622.2 101% 1,270.0 102%
-----------------------------------------------------------------------------------------------------------------------------------
Logistics, Services & Others 700.6 99% 612.9 87% 1,210.0 83%
-----------------------------------------------------------------------------------------------------------------------------------
Financial Services 293.3 104% 267.9 91% 530.0 91%
-----------------------------------------------------------------------------------------------------------------------------------
Eliminations & Corporate items (1,000.9) - (781.3) - (1,600.0) -
-----------------------------------------------------------------------------------------------------------------------------------
Total 3,916.4 99% 4,041.4 103% 8,350.0 102%
-----------------------------------------------------------------------------------------------------------------------------------
3. Operating income (loss) by industry segment (Billions of yen)
-----------------------------------------------------------------------------------------------------------------------------------
1st half of fiscal 2002 1st half of fiscal 2003 Fiscal 2003(Forecast)
--------------------------- ----------------------- ----------------------
(A) (A)/1st half of (B) (B)/(A) (C) (C)/
FY 2001 FY2002
-----------------------------------------------------------------------------------------------------------------------------------
Information & Telecommunication Systems 42.1 290% 5.3 13% 68.0 62%
-----------------------------------------------------------------------------------------------------------------------------------
Electronic Devices (7.9) - 3.6 - 22.0 -
-----------------------------------------------------------------------------------------------------------------------------------
Power & Industrial Systems 11.1 42% 7.9 71% 45.0 85%
-----------------------------------------------------------------------------------------------------------------------------------
Digital Media & Consumer Products 5.7 - 0.7 13% 9.0 145%
-----------------------------------------------------------------------------------------------------------------------------------
High Functional Materials & Components 9.0 - 9.2 102% 35.0 191%
-----------------------------------------------------------------------------------------------------------------------------------
Logistics, Services & Others 1.4 20% (0.3) - 6.0 58%
-----------------------------------------------------------------------------------------------------------------------------------
Financial Services 18.6 91% 8.1 44% 18.0 149%
-----------------------------------------------------------------------------------------------------------------------------------
Eliminations & Corporate items (18.5) - (14.5) - (33.0) -
-----------------------------------------------------------------------------------------------------------------------------------
Total 61.6 - 20.2 33% 170.0 111%
-----------------------------------------------------------------------------------------------------------------------------------
4. Overseas sales by industry segment (Billions of yen)
-----------------------------------------------------------------------------------------------------------------------------------
1st half of fiscal 2002 1st half of fiscal 2003 Fiscal 2003(Forecast)
--------------------------- ----------------------- ----------------------
(A) (A)/1st half of (B) (B)/(A) (C) (C)/
FY 2001 FY2002
-----------------------------------------------------------------------------------------------------------------------------------
Information & Telecommunication Systems 128.9 108% 306.7 238%
--------------------------------------------------------------------------------------------------------
Electronic Devices 263.1 99% 231.6 88%
--------------------------------------------------------------------------------------------------------
Power & Industrial Systems 194.1 102% 235.6 121%
--------------------------------------------------------------------------------------------------------
Digital Media & Consumer Products 246.0 104% 237.5 97%
--------------------------------------------------------------------------------------------------------
High Functional Materials & Components 155.5 92% 160.5 103%
--------------------------------------------------------------------------------------------------------
Logistics, Services & Others 277.0 116% 213.5 77%
--------------------------------------------------------------------------------------------------------
Financial Services 18.5 99% 19.3 105%
--------------------------------------------------------------------------------------------------------
Eliminations & Corporate items 0 - 0 -
-----------------------------------------------------------------------------------------------------------------------------------
Total 1,283.3 104% 1,405.0 109% 2,880.0 109%
-----------------------------------------------------------------------------------------------------------------------------------
- 3 -
5. Overseas production (Total sales of overseas manufacturing subsidiaries) (Billions of yen)
----------------------------------------------------------------------------------------------------------
1st half of fiscal 2002 1st half of fiscal 2003
------------------------- --------------------------
(A) (A)/1st half of (B) (B)/(A)
FY 2001
----------------------------------------------------------------------------------------------------------
Overseas production 499.7 88% 694.9 139%
----------------------------------------------------------------------------------------------------------
Percentage of net sales 13% - 17% -
-------------------------------------------------------------------------------------------------------
Percentage of overseas sales 39% - 49% -
----------------------------------------------------------------------------------------------------------
6. Capital investment by industry segment (Completion basis, including leasing assets) (Billions of yen)
----------------------------------------------------------------------------------------------------------------------------------
Fiscal 2002 1st half of fiscal 2003 Fiscal 2003(Forecast)
--------------------- ----------------------- ----------------------
(A) (A)/ FY (B) (B)/1st half of (C) (C)/ (A)
2001 FY 2002
----------------------------------------------------------------------------------------------------------------------------------
Information & Telecommunication Systems 72.7 81% 37.7 102%
----------------------------------------------------------------------------------------------------------
Electronic Devices 91.2 80% 23.0 54%
----------------------------------------------------------------------------------------------------------
Power & Industrial Systems 70.7 95% 32.1 107%
----------------------------------------------------------------------------------------------------------
Digital Media & Consumer Products 35.1 91% 16.3 90%
----------------------------------------------------------------------------------------------------------
High Functional Materials & Components 60.6 76% 31.4 99%
----------------------------------------------------------------------------------------------------------
Logistics, Services & Others 30.8 77% 14.3 92%
----------------------------------------------------------------------------------------------------------
Financial Services 467.6 99% 239.5 109%
----------------------------------------------------------------------------------------------------------
Eliminations & Corporate items (41.6) - (13.7) -
-----------------------------------------------------------------------------------------------------------------------------------
Total 787.4 92% 380.9 102% 780.0 99%
-----------------------------------------------------------------------------------------------------------------------------------
Internal use assets 328.4 79% 144.3 89% 300.0 91%
--------------------------------------------------------------------------------------------------------------------------------
Leasing assets 459.0 104% 236.6 111% 480.0 105%
-----------------------------------------------------------------------------------------------------------------------------------
7. Depreciation by industry segment (Billions of yen)
-----------------------------------------------------------------------------------------------------------------------------------
Fiscal 2002 1st half of fiscal 2003 Fiscal 2003(Forecast)
------------------- ----------------------- -----------------------
(A) (A)/ FY (B) (B)/1st half of (C) (C)/ (A)
2001 FY 2002
-----------------------------------------------------------------------------------------------------------------------------------
Information & Telecommunication Systems 59.1 85% 38.3 129%
------------------------------------------------------------------------------------------------------
Electronic Devices 112.7 70% 24.7 45%
------------------------------------------------------------------------------------------------------
Power & Industrial Systems 70.1 111% 36.1 117%
------------------------------------------------------------------------------------------------------
Digital Media & Consumer Products 40.8 93% 19.0 96%
------------------------------------------------------------------------------------------------------
High Functional Materials & Components 73.0 89% 33.2 90%
------------------------------------------------------------------------------------------------------
Logistics, Services & Others 28.8 79% 13.5 85%
------------------------------------------------------------------------------------------------------
Financial Services 91.5 132% 47.0 132%
------------------------------------------------------------------------------------------------------
Corporate items 3.8 - 1.8 90%
-----------------------------------------------------------------------------------------------------------------------------------
Total 480.2 91% 213.9 95% 440.0 92%
-----------------------------------------------------------------------------------------------------------------------------------
Internal use assets 378.2 84% 160.6 86% 325.0 86%
--------------------------------------------------------------------------------------------------------------------------------
Leasing assets 102.0 129% 53.2 133% 115.0 113%
-----------------------------------------------------------------------------------------------------------------------------------
- 4 -
8. R&D expenditure by industry segment (Billions of yen)
-----------------------------------------------------------------------------------------------------------------------------------
Fiscal 2002 1st half of fiscal 2003 Fiscal 2003(Forecast)
--------------------- ----------------------- ----------------------
(A) (A)/ FY (B) (B)/1st half of (C) (C)/ (A)
2001 FY 2002
-----------------------------------------------------------------------------------------------------------------------------------
Information & Telecommunication Systems 121.3 89% 84.9 134%
----------------------------------------------------------------------------------------------------------
Electronic Devices 105.5 90% 20.0 38%
----------------------------------------------------------------------------------------------------------
Power & Industrial Systems 64.6 101% 33.5 113%
----------------------------------------------------------------------------------------------------------
Digital Media & Consumer Products 33.8 90% 16.7 99%
----------------------------------------------------------------------------------------------------------
High Functional Materials & Components 41.7 88% 21.6 103%
----------------------------------------------------------------------------------------------------------
Logistics, Services & Others 8.5 71% 6.4 131%
----------------------------------------------------------------------------------------------------------
Financial Services 1.4 117% 0.9 130%
-----------------------------------------------------------------------------------------------------------------------------------
Total 377.1 91% 184.4 97% 380.0 101%
-----------------------------------------------------------------------------------------------------------------------------------
Percentage of net sales 4.6% - 4.6% - 4.6% -
-----------------------------------------------------------------------------------------------------------------------------------
9. Balance sheets by financial and non-financial services (Billions of yen)
-----------------------------------------------------------------------------------------------------------------------------------
Assets As of As of As of As of
March September Liabilities and stockholders' equity March September
31,2003 30,2003 31,2003 30,2003
-------------------------------------------------------------- -------------------------------------------------------------------
Manufacturing, Services and Others Manufacturing, Services and Others
-------------------------------------------------------------- -------------------------------------------------------------------
Cash and cash equivalents 716.9 634.8 Short-term debt 1,095.6 1,070.5
--------------------------------------------------------- --------------------------------------------------------------
Short-term investments 146.0 213.5 Trade payables 1,148.6 1,080.7
--------------------------------------------------------- --------------------------------------------------------------
Trade receivables 1,746.3 1,621.6 Long-term debt 954.3 800.6
--------------------------------------------------------- --------------------------------------------------------------
Inventories 1,186.4 1,184.7 Other liabilities 3,421.0 3,349.5
--------------------------------------------------------- --------------------------------------------------------------
Investments and advances 678.3 828.0 Total 6,619.7 6,301.4
--------------------------------------------------------- -------------------------------------------------------------------
Property, plant and equipment 2,308.5 2,047.7 Financial Services
--------------------------------------------------------- -------------------------------------------------------------------
Other assets 2,242.4 2,144.8 Short-term debt 579.6 639.7
-------------------------------------------------------------- --------------------------------------------------------------
Total 9,025.0 8,675.6 Trade payables 256.0 215.5
-------------------------------------------------------------- --------------------------------------------------------------
Financial Services Long-term debt 708.1 685.8
-------------------------------------------------------------- --------------------------------------------------------------
Cash and cash equivalents 107.0 73.6 Other liabilities 148.1 149.5
--------------------------------------------------------- --------------------------------------------------------------
Trade receivables 543.6 546.3 Total 1,692.0 1,690.6
--------------------------------------------------------- -------------------------------------------------------------------
Investment in leases 606.2 600.9 Eliminations (737.1) (683.2)
--------------------------------------------------------- -------------------------------------------------------------------
Property, plant and equipment 307.9 304.9
---------------------------------------------------------
Other assets 367.5 405.9 Liabilities 7,574.5 7,308.8
-------------------------------------------------------------- -------------------------------------------------------------------
Total 1,932.4 1,931.9 Minority interests 751.5 750.1
-------------------------------------------------------------- -------------------------------------------------------------------
Eliminations (778.0) (723.0) Stockholders' equity 1,853.2 1,825.5
-------------------------------------------------------------- -------------------------------------------------------------------
Assets 10,179.3 9,884.4 Liabilities and stockholders' equity 10,179.3 9,884.4
-----------------------------------------------------------------------------------------------------------------------------------
- 5 -
10. Statements of operating results by financial and non-financial services
(Billions of yen)
------------------------------------------------------------------------------------------------------------
1st half of fiscal 1st half of fiscal
2002 2003
------------------------------------------------------------------------------------------------------------
Sales 3,756.0 3,893.9
----------------------------------------------------------------------------
Manufacturing, Services and Cost of sales and selling, general
Others and administrative expenses 3,714.0 3,881.7
----------------------------------------------------------------------------
Operating income (loss) 42.0 12.2
------------------------------------------------------------------------------------------------------------
Sales 293.3 267.9
----------------------------------------------------------------------------
Financial Services Cost of sales and selling, general
and administrative expenses 274.6 259.7
----------------------------------------------------------------------------
Operating income (loss) 18.6 8.1
------------------------------------------------------------------------------------------------------------
Sales (132.9) (120.5)
----------------------------------------------------------------------------
Eliminations Cost of sales and selling, general
and administrative expenses (133.8) (120.2)
----------------------------------------------------------------------------
Operating income (loss) 0.9 (0.2)
------------------------------------------------------------------------------------------------------------
Sales 3,916.4 4,041.4
----------------------------------------------------------------------------
Total Cost of sales and selling, general
and administrative expenses 3,854.8 4,021.1
----------------------------------------------------------------------------
Operating income (loss) 61.6 20.2
------------------------------------------------------------------------------------------------------------
Note: Figures in tables 5, 9 and 10 represent unaudited financial information
prepared by the Company for the purpose of this supplementary information.
- ### -
October 29, 2003
Hitachi, Ltd.
Supplementary information for the first half of fiscal 2003,
ended September 30, 2003
(Unconsolidated basis)
(Billions of yen)
-----------------------------------------------------------------------------------------------------------
1st half of Fiscal 2002 1st half of fiscal 2003 Fiscal 2003 (Forecast)
------------------------- ----------------------- ----------------------
(A) (A)/1st half of (B) (B)/(A) (C) (C)/FY2002
FY 2001
-----------------------------------------------------------------------------------------------------------
Net sales 1,515.6 85% 1,128.2 74% 2,400.0 77%
-----------------------------------------------------------------------------------------------------------
Operating income (loss) 0.2 - (6.9) - - -
-----------------------------------------------------------------------------------------------------------
Ordinary income (loss) (2.4) - 10.0 - 20.0 38%
-----------------------------------------------------------------------------------------------------------
Net income 19.7 - 19.2 97% 40.0 141%
-----------------------------------------------------------------------------------------------------------
Dividend payout ratio (%) 51 - 52 - - -
-----------------------------------------------------------------------------------------------------------
Average exchange rate 123 - 118 - 110* -
(yen / U.S.$)
-----------------------------------------------------------------------------------------------------------
* Assumed exchange rate for 2nd half of fiscal 2003
--------------------------------------------------------------------------------
As of March 31, 2003 As of September 30, 2003
--------------------------------------------------------------------------------
Cash & cash equivalents,
Short-term investments
(Billions of yen) 253.7 325.1
--------------------------------------------------------------------------------
Interest-bearing debt
(Billions of yen) 683.3 575.9
--------------------------------------------------------------------------------
Number of employees 44,375 37,030
--------------------------------------------------------------------------------
(Billions of yen)
------------------------------------------------------------------------------------------------------------
1st half of Fiscal 2002 1st half of Fiscal 2003 Fiscal 2003 (Forecast)
----------------------- ----------------------- ----------------------
(A) (A)/1st half of (B) (B)/(A) (C) (C)/FY2002
FY 2001
------------------------------------------------------------------------------------------------------------
Capital investment (Based
on construction starts) 50.0 115% 18.0 36% 40.0 52%
------------------------------------------------------------------------------------------------------------
Depreciation * 47.7 76% 24.8 52% 51.0 59%
------------------------------------------------------------------------------------------------------------
R&D expenditures 119.5 82% 71.1 60% 140.2 63%
-------------------------------------------------------------------------------------------------------
Percentage of net sales 7.9% - 6.3% - 5.8% -
------------------------------------------------------------------------------------------------------------
* The figures do not include depreciation on leasing assets.
- ### -
October 29, 2003
Hitachi, Ltd.
Supplementary Information on Information & Telecommunication Systems and
Displays
Notes: 1. Segment information and operating income (loss) are presented in
accordance with financial reporting principles and practices generally
accepted in Japan.
1. Information & Telecommunication Systems
(1) Sales and operating income (loss) by product sector
(upper rows show comparisons to the previous year, billions of yen)
-------------------------------------------------------------------------------------------------------------------
Fiscal 2002 Fiscal 2003
------------------------------------ ------------------------------------------
1st half 2nd half Total 1st half 2nd half Total
(forecast) (forecast)
-------------------------------------------------------------------------------------------------------------------
Sales 101% 107% 104% 120% 116% 118%
--------------------------------------------------------------------------------
878.2 1,021.4 1,899.6 1,053.2 1,186.8 2,240.0
---------------------------------------------------------------------------------------------------------------
Software & Services 100% 105% 103% 101% 103% 102%
--------------------------------------------------------------------------------
453.4 531.5 984.9 459.5 545.5 1,005.0
---------------------------------------------------------------------------------------------------------------
Hardware 101% 109% 105% 140% 131% 135%
--------------------------------------------------------------------------------
424.8 489.9 914.7 593.7 641.3 1,235.0
-------------------------------------------------------------------------------------------------------------------
Operating income (loss) 290% 322% 309% 13% 92% 62%
--------------------------------------------------------------------------------
42.1 68.3 110.5 5.3 62.7 68.0
---------------------------------------------------------------------------------------------------------------
Software & Services 186% 105% 135% 66% 149% 107%
--------------------------------------------------------------------------------
31.1 29.5 60.6 20.6 44.0 64.6
---------------------------------------------------------------------------------------------------------------
Hardware - - - - 48% 7%
--------------------------------------------------------------------------------
11.0 38.9 49.9 (15.3) 18.7 3.4
-------------------------------------------------------------------------------------------------------------------
Notes: 2. On April 1, 2003, all hard disk drive operations were integrated with
Hitachi Global Storage Technologies (HGST), a Hitachi subsidiary which
started operations on January 1, 2003. HGST has a December 31 year-end
and the fiscal 2003 consolidated forecast for Hitachi, Ltd., the year
ending March 31, 2004, includes HGST's business forecast for its
fiscal year ending December 31, 2003.
-2-
(2) Sales by product sector *3 (upper rows show comparisons to the previous
year, billions of yen)
--------------------------------------------------------------------------------------------------------------------
Fiscal 2002 Fiscal 2003
------------------------------------ ------------------------------------------
1st half 2nd half Total 1st half 2nd half Total
(forecast) (forecast)
--------------------------------------------------------------------------------------------------------------------
101% 107% 104% 120% 116% 118%
--------------------------------------------------------------------------------
Information & Telecommunication
Systems 878.2 1,021.4 1,899.6 1,053.2 1,186.8 2,240.0
---------------------------------------------------------------------------------------------------------------
Software & Services 100% 105% 103% 101% 103% 102%
--------------------------------------------------------------------------------
453.4 531.5 984.9 459.5 545.5 1,005.0
------------------------------------------------------------------------------------------------------------
Software 104% 92% 97% 91%
-------------------------------------------------
91.6 95.0 186.6 83.8
-----------------------------------------------------------------------------
Services 99% 108% 104% 104%
-------------------------------------------------
361.8 436.5 798.3 375.7
---------------------------------------------------------------------------------------------------------------
Hardware 101% 109% 105% 140% 131% 135%
--------------------------------------------------------------------------------
424.8 489.9 914.7 593.7 641.3 1,235.0
------------------------------------------------------------------------------------------------------------
Storage*4 123% 110% 115% 176%
-------------------------------------------------
165.5 178.4 343.9 292.1
-----------------------------------------------------------------------------
Servers*5 93% 139% 113% 111%
-------------------------------------------------
60.1 73.0 133.1 67.0
-----------------------------------------------------------------------------
PCs*6 126% 123% 125% 93%
-------------------------------------------------
71.6 85.1 156.7 66.8
-----------------------------------------------------------------------------
Telecommunication 58% 90% 73% 125%
-------------------------------------------------
47.2 64.9 112.1 58.8
-----------------------------------------------------------------------------
Others 97% 97% 97% 136%
-------------------------------------------------
80.4 88.5 168.9 109.0
--------------------------------------------------------------------------------------------------------------------
Notes: 3. Figures for each product exclude intra-segment transactions.
4. Figures for Storage include disk array subsystems, hard disk drives,
etc.
5. Figures for Servers include supercomputers, general-purpose
computers, UNIX servers, etc.
6. Figures for PCs include PC servers and client PCs.
(3) SAN/NAS storage solutions (upper rows show comparisons to the previous year,
billions of yen)
--------------------------------------------------------------------------------------------------------------------
Fiscal 2002 Fiscal 2003
--------------------------------- -----------------------------------------
1st half 2nd half Total 1st half 2nd half Total
(forecast) (forecast)
--------------------------------------------------------------------------------------------------------------------
Sales 108% 108% 108% 98% 109% 104%
-----------------------------------------------------------------------------
130.0 140.0 270.0 128.0 152.0 280.0
--------------------------------------------------------------------------------------------------------------------
(4) Shipments of main products
--------------------------------------------------------------------------------------------------------------------
Fiscal 2002 Fiscal 2003
---------------------------------------- ----------------------------------------
Unit 1st half 2nd half Total 1st half 2nd half Total
(forecast) (forecast)
--------------------------------------------------------------------------------------------------------------------
Large-capacity disk array TB 11,900 14,300 26,200 17,700 20,700 38,400
subsystems*7
--------------------------------------------------------------------------------------------------------------------
Middle-capacity disk array TB 1,500 2,100 3,600 3,900 7,200 11,100
subsystems*7
--------------------------------------------------------------------------------------------------------------------
PCs and PC servers*8 Units 280,000 300,000 580,000 278,000 342,000 620,000
--------------------------------------------------------------------------------------------------------------------
Notes: 7. The figures for disk array subsystems represent storage capacity
stated in terabyte units.
8. PC figures are in units, for Japan only, on a parent company basis.
-3-
(5) Hard disk drives *9 *10
-----------------------------------------------------------------------------------------------------------------
Period recorded for Fiscal 2002
---------------------------------------------------------------------------------
consolidated accounting 1st half 2nd half Total
purposes (Apr. 2002 to Sept. 2002) (Oct. 2002 to Mar. 2003) (Apr. 2002 to Mar. 2003)
(Shipment Period)
-----------------------------------------------------------------------------------------------------------------
Sales (billions of yen) - - 120.0
-----------------------------------------------------------------------------------------------------------------
Shipments 4.0 4.6 8.6
(million units)
------------------------------------------------------------------------------------------------------------
Mobiles 3.5 4.0 7.5
------------------------------------------------------------------------------------------------------------
Servers 0.5 0.6 1.1
------------------------------------------------------------------------------------------------------------
Desktops - - -
------------------------------------------------------------------------------------------------------------
Emerging - - -
---- ------------------------------------------------------------------------------------------------------------
-----------------------------------------------------------------------------------------------------------------
Fiscal 2003
Period recorded for ---------------------------------------------------------------------------------
consolidated accounting 1st half 2nd half (forecast) Total (forecast) *11
purposes (Jan. 2003 to Jun. 2003) (Jul. 2003 to Dec. 2003) (Jan. 2003 to Dec. 2003)
----------
(Shipment Period) Ref*11
-----------------------------------------------------------------------------------------------------------------
Sales (billions of yen) 192.9 219.7 262.1 455.0
-----------------------------------------------------------------------------------------------------------------
Shipments (million units) 16.7 19.1 25.3 42
------------------------------------------------------------------------------------------------------------
Mobiles 9.1 11.2 - -
------------------------------------------------------------------------------------------------------------
Servers 1.2 1.5 - -
------------------------------------------------------------------------------------------------------------
Desktops 6.3 6.3 - -
------------------------------------------------------------------------------------------------------------
Emerging 0.2 0.2 - -
---- ------------------------------------------------------------------------------------------------------------
(Fiscal 2003 2nd Half by Quarter)
---------------------------------------------------------------------------------------
Period recorded for Fiscal 2003 2nd Half
consolidated accounting -------------------------------------------------------
purposes 3rd quarter 4th quarter (forecast)
(Shipment Period) (Jul. 2003 to Sep. 2003)*12 (Oct. 2003 to Dec. 2003)
---------------------------------------------------------------------------------------
Sales (billions of yen) 128.6 133.5
---------------------------------------------------------------------------------------
Shipments (million units) 11.6 13.7
----------------------------------------------------------------------------------
Mobiles 6.6
----------------------------------------------------------------------------------
Servers 0.9
----------------------------------------------------------------------------------
Desktops 3.9
----------------------------------------------------------------------------------
Emerging 0.2
---------------------------------------------------------------------------------------
Notes: 9. Figures include intra-segment transactions.
-4-
10. On December 31, 2002, Hitachi purchased majority ownership in a
company to which IBM Corporation's hard disk drive operations had
been transferred. On January 1, 2003, the company began operating
as Hitachi Global Storage Technologies (HGST). HGST has a December
31 year-end and Hitachi, Ltd. has a March 31 year-end. The
first-half consolidated results include the results of HGST for
the six-month period from January 1, 2003 through June 30, 2003.
Meanwhile, the results of Hitachi, Ltd.'s HDD operations for the
period from January 1, 2003 through March 31, 2003 were included
in Hitachi's consolidated financial results for the year ended
March 31, 2003. On April 1, 2003, Hitachi, Ltd.'s HDD operations
were integrated in HGST.
11. The figures provided for reference purposes represent the combined
sales and shipments of Hitachi, Ltd.'s HDD operations prior to
integration and HGST's operations, and are shown to give an
overall picture of Hitachi's HDD operations for the six-month
period ended June 30, 2003. The forecasts for the full year ending
December 31, 2003 are approximately 480 billion yen in sales and
44 million in unit shipments.
12. Results for HDD operations in the period from July 1, 2003 through
September 30, 2003 will be included in Hitachi's fiscal 2003
third-quarter results.
2. Displays
(1) Sales and operating income (loss) (upper rows show comparisons to the
previous year, billions of yen)
---------------------------------------------------------------------------------------------------------------------
Fiscal 2002 Fiscal 2003
----------------------------------- --------------------------------------------
1st half 2nd half Total 1st half 2nd half Total
(forecast) (forecast)
---------------------------------------------------------------------------------------------------------------------
Sales 109% 92% 100% 119% 155% 136%
---------------------------------------------------------------------------------
100.0 94.7 194.8 118.7 147.0 265.7
---------------------------------------------------------------------------------------------------------------------
Operating income (loss) - - - - - -
---------------------------------------------------------------------------------
(1.3) (14.4) (15.7) (5.0) 5.0 0
---------------------------------------------------------------------------------------------------------------------
(2) LCD sales (upper rows show comparisons to the previous year,
billions of yen)
---------------------------------------------------------------------------------------------------------------------
Fiscal 2002 Fiscal 2003
----------------------------------- -----------------------------------------
1st half 2nd half Total 1st half 2nd half Total
(forecast) (forecast)
---------------------------------------------------------------------------------------------------------------------
Sales 167% 84% 115% 125% 179% 150%
---------------------------------------------------------------------------------
80.0 67.0 147.0 100.0 120.0 220.0
----------------------------------------------------------------------------------------------------------------
Large-size LCDs 135% 61% 90% 95% 140% 113%
---------------------------------------------------------------------------------
58.0 40.0 98.0 55.0 56.0 111.0
----------------------------------------------------------------------------------------------------------------
Small and medium-size LCDs 440% 193% 258% 205% 237% 222%
---------------------------------------------------------------------------------
22.0 27.0 49.0 45.0 64.0 109.0
---------------------------------------------------------------------------------------------------------------------
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