Edgar Filing: HITACHI LTD

Form 6-K

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 2004

Commission File Number 1-8320

Hitachi, Ltd.

(Translation of registrant’s name into English)

6-6, Marunouchi 1-chome, Chiyoda-ku, Tokyo 100-8280, Japan

(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 × 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 ×

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, 2004 regarding financial results for the first half of fiscal 2004.

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 4, 2004	By	/s/ Takashi Hatchoji
		Takashi Hatchoji
		Senior Vice President and Executive Officer

FOR IMMEDIATE RELEASE

Hitachi Announces Consolidated Financial Results for the First Half of Fiscal 2004

Tokyo, October 29, 2004 — Hitachi, Ltd. (NYSE:HIT / TSE:6501) today announced its consolidated financial results for the first half of fiscal 2004, ended September 30, 2004.

1. Business Results and Financial Position

Note: All figures were converted at the rate of 111 yen to the U.S. dollar, the approximate exchange rate on the Tokyo Foreign Exchange Market as of September 30, 2004.

Business Results

(1) Summary of Fiscal 2004 First Half Consolidated Business Results


Notes:		1. All figures, except for the outlook for fiscal 2004, were converted at the rate of 111 yen to the U.S. dollar, the approximate exchange rate on the Tokyo Foreign Exchange Market as of September 30, 2004.
		2. Segment information and operating income (loss) are presented in accordance with accounting principles generally accepted in Japan.


	The half year ended September 30, 2004
	Billions of yen	Year-over-year % change		Millions of U.S. dollars
Revenues	4,329.9	7	%	39,008
Operating income	127.3	529	%	1,147
Income before income taxes and minority interests	136.0	50	%	1,225
Income before minority interests	67.9	374	%	612
Net income	41.1	664	%	371

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During the interim period, the world economy remained strong, supported by such factors as rising worldwide demand for digital consumer electronics, rising demand for IT-related equipment, particularly in the U.S., and increasing demand in China.

The Japanese economy also remained robust on the strength of improving corporate earnings, particularly from exports, healthy growth in private-sector plant and equipment investment and other factors.

Against this backdrop, Hitachi’s consolidated revenues increased 7% year on year, to 4,329.9 billion yen, most of the business segments posting year-on-year increases. Revenues in High Functional Materials & Components were up, particularly for components and materials for electronics-related products on buoyant conditions in the digital consumer electronics market. The Electronic Devices segment saw strong growth in semiconductor and LCD manufacturing equipment while Digital Media & Consumer Products recorded strong growth in plasma TVs and other products.

Operating income leapt 529%, to 127.3 billion yen as all segments posted year-on-year gains. The Information & Telecommunication Systems segment saw hard disk drive (HDD) operations become profitable, while the High Functional Materials & Components and Electronic Devices segments were other standout performers.

Other income was 36.4 billion yen, down 67% on the same period a year ago. This decrease was due to a decline in gains on the sale of investment securities and other factors. Meanwhile, other deductions declined 33%, to 27.7 billion yen due to income from equity-method affiliates and an exchange gain, as opposed to a loss from equity-method affiliates and an exchange loss in the previous fiscal year, and other factors.

As a result, Hitachi recorded income before income taxes and minority interests of 136.0 billion yen, up 50% year on year. After income taxes of 68.0 billion yen, Hitachi posted income before minority interests of 67.9 billion yen. Net income climbed 664% year on year, to 41.1 billion yen.

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(2) Revenues and Operating Income by Segment

Results by segment were as follows.

[Information & Telecommunication Systems]


	The half year ended September 30, 2004
	Billions of yen	Year-over-year % change		Millions of U.S. dollars
Revenues	1,071.7	2	%	9,655
Operating income	28.9	436	%	261

Information & Telecommunication Systems revenues increased 2%, to 1,071.7 billion yen. Software and services businesses revenues increased as a whole on a solid performance by the outsourcing business in services businesses, despite a decrease in sales of platform software in software businesses due to a fall in demand for mainframes. Hardware businesses sales grew slightly due to growth in HDDs and ATM-related systems for handling new bills and healthy sales from telecommunications networks, which offset lower sales of servers.

The segment posted operating income of 28.9 billion yen, 436% up year on year, as HDD operations moved from last year’s loss into the black and due to other factors.

Note:

HDD operations are conducted by Hitachi Global Storage Technologies (Hitachi GST), which has a December 31 fiscal year-end, different from Hitachi’s March 31 year-end. Operating results for Hitachi GST for the six-month period from January through June 2004 are included in Hitachi’s fiscal 2004 first-half results.

[Electronic Devices]


	The half year ended September 30, 2004
	Billions of yen	Year-over-year % change		Millions of U.S. dollars
Revenues	692.0	14	%	6,235
Operating income	30.0	718	%	271

In the Electronic Devices segment, revenues rose 14%, to 692.0 billion yen, the result of strong sales at Hitachi High-Technologies Corporation, particularly of semiconductor and LCD manufacturing equipment. This was also the result of higher sales of displays due to growth in sales of small and medium-size TFT LCDs for mobile phones and large LCDs for flat-panel TVs.

The segment posted a 718% year-on-year increase in operating income, to 30.0 billion yen, reflecting higher earnings at Hitachi High-Technologies, particularly from semiconductor and LCD manufacturing equipment, and improved earnings from the display business.

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[Power & Industrial Systems]


	The half year ended September 30, 2004
	Billions of yen	Year-over-year % change		Millions of U.S. dollars
Revenues	1,120.8	4	%	10,098
Operating income	10.0	27	%	91

Power & Industrial Systems revenues rose 4%, to 1,120.8 billion yen. This increase was attributable to robust sales of industrial machinery thanks to recovering private-sector plant and equipment investment, higher sales at Hitachi Construction Machinery Co., Ltd., mainly outside Japan, and the effect of newly consolidating a subsidiary that manufactures and sells elevators and escalators in China, which was previously accounted for using equity method, offsetting lower sales of power generation equipments.

The segment posted a 27% increase in operating income, to 10.0 billion yen, on higher earnings at Hitachi Construction Machinery and healthy earnings from industrial machinery.

[Digital Media & Consumer Products]


	The half year ended September 30, 2004
	Billions of yen	Year-over-year % change		Millions of U.S. dollars
Revenues	646.1	10	%	5,821
Operating income	10.6	—		95

In Digital Media & Consumer Products, revenues increased 10%, to 646.1 billion yen, on growth in sales of plasma TVs and LCD projectors and healthy sales of room air-conditioners, washing machines and other mainstay home appliances.

The segment recorded operating income of 10.6 billion yen. This reflected improved profitability in home appliances and growth in projection TVs and LCD projectors, among other factors.

Note:

The optical disk drive business is conducted by Hitachi-LG Data Storage, Inc. (HLDS), which has a December 31 fiscal year-end. The operating results for HLDS for the six-month period from January through June 2004 are included in Hitachi’s fiscal 2004 first-half results.

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[High Functional Materials & Components]


	The half year ended September 30, 2004
	Billions of yen	Year-over-year % change		Millions of U.S. dollars
Revenues	740.4	19	%	6,671
Operating income	40.3	337	%	363

In High Functional Materials & Components, revenues rose 19%, to 740.4 billion yen as Hitachi Chemical Co., Ltd., Hitachi Metals, Ltd. and Hitachi Cable, Ltd. reported strong sales, particularly for electronics-related products. The increase also reflected the effect of consolidating NEOMAX Co., Ltd., formerly Sumitomo Special Metals Co., Ltd., from April 2004.

Segment operating income jumped 337%, to 40.3 billion yen due to strong electronics-related product sales and other factors.

[Logistics, Services & Others]


	The half year ended September 30, 2004
	Billions of yen	Year-over-year % change		Millions of U.S. dollars
Revenues	610.3	0	%	5,498
Operating income	7.5	—		68

In Logistics, Services & Others, revenues were nearly the same as a year earlier at 610.3 billion yen. While Hitachi Transport System, Ltd. and Hitachi Mobile Co., Ltd. posted healthy sales, segment revenues were affected by the transfer of semiconductor sales operations at overseas sales companies to Renesas Technology Corp. and other factors.

The segment posted operating income of 7.5 billion yen after recording an operating loss of 0.3 billion yen in the same period a year earlier.

[Financial Services]


	The half year ended September 30, 2004
	Billions of yen	Year-over-year % change		Millions of U.S. dollars
Revenues	270.7	1	%	2,439
Operating income	9.9	22	%	90

In Financial Services, revenues edged up 1%, to 270.7 billion yen due to strong growth at Hitachi Capital Corporation, particularly in other financial services.

Operating income increased 22%, to 9.9 billion yen.

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(3) Revenues by Market


	The half year ended September 30, 2004
	Billions of yen	Year-over-year % change		Millions of U.S. dollars
Japan	2,709.2	3	%	24,408

Overseas	1,620.6	15	%	14,600
Asia	694.3	25	%	6,255
North America	442.5	3	%	3,987
Europe	346.2	14	%	3,119
Other Areas	137.5	15	%	1,239

Revenues in both Japan and overseas surpassed the same period in the previous fiscal year due to factors such as rising demand for digital consumer electronics and IT-related equipment in the U.S.

Revenues in Japan rose 3%, to 2,709.2 billion yen. Sales growth was recorded by components and materials for electronics-related products, particularly digital consumer electronics, semiconductor and LCD manufacturing equipment and plasma TVs, among other products.

Overseas revenues increased 15%, to 1,620.6 billion yen due to growth in sales of electronics components and materials for electronics-related products and in sales at Hitachi Construction Machinery, fueled by rising demand for digital consumer electronics, increasing demand for IT-related equipment in the U.S. and increasing demand in China.

(4) Capital Investment, Depreciation and R&D Expenditures

Capital investment on a completion basis, excluding leasing assets, increased 19%, to 171.6 billion yen. Depreciation, excluding leasing assets, declined 5%, to 152.2 billion yen. R&D expenditures increased 3%, to 189.1 billion yen, and corresponded to 4.4% of revenues.

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Financial Position

(1) Cash Flows


	The half year ended September 30, 2004
	Billions of yen		Year-over-year Change		Millions of U.S. dollars
Cash flows from operating activities	157.6		(66.9	)	1,421
Cash flows from investing activities	(200.7	)	(43.6	)	(1,809	)

Free cash flows	(43.1	)	(110.5	)	(388	)

Cash flows from financing activities	(111.2	)	62.5		(1,002	)

Operating activities provided net cash of 157.6 billion yen, 66.9 billion yen less than in the previous period. This reflected factors such as an increase in inventories due to a projected sales increase in the second half of fiscal 2004.

Investing activities used net cash of 200.7 billion yen, 43.6 billion yen more than in the previous period. This was the result of an increase in capital investments for Hitachi’s key business and decrease in sales of affiliates’ common stock compared with the previous period.

Free cash flows, the sum of cash flows from operating and investing activities, were an outflow of 43.1 billion yen, 110.5 billion yen lower than a year earlier.

Financing activities used net cash of 111.2 billion yen, 62.5 billion yen less than in the previous period due to factors such as a decrease in debt.

Cash and cash equivalents as of September 30, 2004 amounted to 619.0 billion yen, a decrease of 145.3 billion yen during the interim period.

(2) Financial Position


	As of September 30, 2004
	Billions of Yen		Change from March 31, 2004		Millions of U.S. dollars
Total assets	9,636.8		46.5		86,819
Total liabilities	6,542.4		(80.9	)	58,941
Debts	2,465.8		(31.7	)	22,215
Minority interests	874.3		75.5		7,877
Stockholders’ equity	2,220.0		51.9		20,001

Stockholders’ equity ratio	23.0	%	0.4 point increase		—
D/E ratio (including minority interests)	0.80 times		0.04 point increase		—

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Total assets at September 30, 2004 increased 46.5 billion yen, to 9,636.8 billion yen, compared with March 31, 2004, due to factors such as the effect of consolidating NEOMAX and a China-based elevator and escalator manufacturing and sales company. Debt decreased 31.7 billion yen, to 2,465.8 billion yen. Stockholders’ equity increased 51.9 billion yen, to 2,220.0 billion yen due to increasing net income and other factors. As a consequence, the stockholders’ equity ratio improved by 0.4 of a percentage point to 23.0%. The debt-to-equity ratio (including minority interests) was also improved by 0.04 points to 0.80 times.

Outlook for Fiscal 2004


	Fiscal 2004, ending March 31, 2005
	Billions of yen	Year-over-year % change		Millions of U.S. dollars
Revenues	8,900.0	3	%	84,761
Operating income	300.0	62	%	2,857
Income before income taxes and minority interests	300.0	27	%	2,857
Income before minority interests	150.0	290	%	1,428
Net income	100.0	530	%	952

Note: Estimates for fiscal 2004 assume a rate of 105 yen to the U.S. dollar.

In terms of trends in the world economy, Hitachi expects Asian economies to remain healthy, supported by demand in China, and European economies are expected to continue their modest recovery. However, the U.S. economy is expected to slow slightly due to the surge in crude oil and raw materials prices and as the effects of tax cuts, low interest rates and other government policies wear off. Furthermore, while slow growth in inventories indicates that a sudden drop in demand is unlikely in the market for electronics-related products, there is a risk of a slowdown in the latter half of the fiscal year. Therefore, Hitachi believes it will be necessary to keep a close eye on market trends going forward.

The Japanese economy is expected to slow, albeit moderately, as a possible slowdown in demand for digital consumer electronics and plant and equipment investment, such as in electronic components, may stymie the recovery in employment and wage levels.

Under these circumstances, Hitachi will push ahead with efforts to create new businesses and strengthen targeted businesses 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.

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Projections for fiscal 2004, as given above, have been revised from those issued with fiscal 2003 results released on April 28, 2004.

2. Management Policy

Basic Management Policy and Strategy

Amid intensifying competition in world markets, Hitachi aims to step up its development by delivering competitive products and services imbuing higher value for customers. By taking full advantage of the diverse resources of the Hitachi Group while at the same time reviewing and restructuring businesses, Hitachi will bolster its competitiveness. This process will be consistent with Hitachi’s basic management policy, which is to increase shareholder value by meeting the expectations of customers, employees, shareholders and other stakeholders.

In line with this basic policy, in January 2003, Hitachi unveiled a medium-term management plan, “i.e.HITACHI Plan II,” which runs through fiscal 2005 (ending in March 2006). This plan targets two primary business domains that are the focus of the Hitachi Group—“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. Various measures are being pursued for growth in both these fields.

In April 2004, Hitachi established the Hitachi Group Headquarters to accelerate group management in a manner best suited to Hitachi in two main ways: bolster the individual businesses of Hitachi Group companies, and give full play to the collective strengths of the Hitachi Group by encouraging greater inter-group collaboration. The Hitachi Group Headquarters will spearhead redoubled efforts to implement measures aimed at raising the corporate value of the Hitachi Group.

To enhance competitiveness in global markets in Hitachi’s various business fields toward achieving the goals of “i.e.HITACHI Plan II,” Hitachi is improving its productivity by strengthening its production ability, and pushing ahead with efforts to cut costs. Business structural reforms are also being implemented. In specific terms, Hitachi will examine and implement suitable measures to create growth and new businesses in key fields that leverage the group’s technological strengths and know-how; restructure the group with the aim of more effectively utilizing the group’s resources; and exit unprofitable businesses and push through restructuring measures that go beyond the Hitachi Group.

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FIV* (Future Inspiration Value), a benchmark based on the estimated cost of capital, is used to make decisions on actions for strengthening businesses. In deciding on individual investments, Hitachi uses FIV to select investments that will contribute to maximizing shareholder value. Combined with a powerful drive to reduce assets, including trade receivables and inventories, Hitachi aims to raise the return on assets. Through these and other actions, Hitachi has set the goal of maintaining a single-A grade long-term credit rating by increasing asset efficiency and strengthening its financial position.

The “i.e.HITACHI Plan II” will transform Hitachi’s earnings structure into a highly profitable one so that it can achieve positive FIV in fiscal 2005. At present, Hitachi has set the goals of generating consolidated operating income in excess of 400 billion yen and of achieving a debt-equity ratio (including minority interests) of 0.8 times in fiscal 2005. Hitachi is also expecting revenues in the order of 9 trillion yen in fiscal 2005.

(*) 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.

3. Corporate Governance

Hitachi is working to reinforce corporate governance to establish an executive system that facilitates speedy business 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 determines basic management policies and supervises executive officers in the performance of their duties while entrusting to executive officers considerable authority to make decisions with respect to Hitachi’s business affairs. As of September 30, 2004, the Board of Directors had 14 members, 4 of whom were from outside Hitachi. Three directors served concurrently as executive officers. The Chairman of the Board does not serve concurrently as an executive officer.

Within the Board of Directors, three statutory committees have been established—the Nominating Committee, Audit Committee and Compensation Committee—with outside directors accounting for the majority of members of each committee. The Nominating Committee has the authority to decide on proposals submitted to the General Meeting of Shareholders for the appointment and dismissal of directors. The Audit Committee audits the performance of directors and executive officers and has the authority to decide on proposals submitted to the General Meeting of Shareholders for the appointment and dismissal of independent auditors. The Compensation Committee has the authority to set remuneration for individual directors and executive officers. Hitachi also established a dedicated organization to support the Board of Directors and its committees, including the Audit Committee. The Hitachi employees who staff this organization do not take orders from any executive officers. At the same time, Corporate Auditing and Legal and Corporate Communications employees perform certain administrative functions for the Board of Directors and its committees.

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Executive officers execute Hitachi’s business affairs and decide on matters pertaining to the same in accordance with the division of duties stipulated by resolutions of the Board of Directors. Important matters affecting the company as a whole are examined at the Senior Executive Committee, whose members are key executive officers, to reach decisions after taking into account a range of perspectives. The executive officers report their decisions to members of the Audit Committee.

Regarding risk management, each division implements countermeasures, such as the formulation of rules and guidelines. At the same time, where it is necessary to respond to new risks that arise, executive officers are assigned responsibility for quickly dealing with them. Furthermore, to ensure greater efficiency in the execution of day-to-day operations and compliance, internal audits are conducted to monitor business operations so that improvements can be made. Moreover, to ensure strict legal compliance, Hitachi has various committees and a whistle-blower system.

Regarding the reliability of financial reports, the Audit Committee monitors the independent auditors, and receives the audit plans of the independent auditors in advance to ensure that these auditors are not influenced by executive officers. Moreover, the prior approval of the Audit Committee is required with respect to the remuneration of the independent auditors and non-audit work.

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 regards the repurchase of its shares as an action that can be implemented flexibly to supplement dividends while taking into consideration funding demands of business plans, market conditions and other factors.

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Cautionary Statement

Certain statements found in this document may constitute “forward-looking statements” as defined in the U.S. Private Securities Litigation Reform Act of 1995. Such “forward-looking statements” reflect management’s current views with respect to certain future events and financial performance and include any statement that does not directly relate to any historical or current fact. Words such as “anticipate,” “believe,” “expect,” “estimate,” “forecast,” “intend,” “plan,” “project” and similar expressions which indicate future events and trends may identify “forward-looking statements.” Such statements are based on currently available information and are subject to various risks and uncertainties that could cause actual results to differ materially from those projected or implied in the “forward-looking statements” and from historical trends. Certain “forward-looking statements” are based upon current assumptions of future events which may not prove to be accurate. Undue reliance should not be placed on “forward-looking statements,” as such statements speak only as of the date of this document.

Factors that could cause actual results to differ materially from those projected or implied in any “forward-looking statement” and from historical trends include, but are not limited to:

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;

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, a return to stagnation or deterioration of the Japanese economy, or direct or indirect restriction by other nations on imports;

uncertainty as to Hitachi’s access to, or ability to protect, certain intellectual property rights, particularly those related to electronics and data processing technologies;

uncertainty as to the 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.

The factors listed above are not all-inclusive and are in addition to other factors contained in Hitachi’s periodic filings with the U.S. Securities and Exchange Commission and in other materials published by Hitachi.

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HITACHI, LTD. AND SUBSIDIARIES

CONSOLIDATED FINANCIAL STATEMENTS

FOR THE HALF YEAR ENDED SEPTEMBER 30, 2004

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, 2004.

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 (millions)		(A)/(B) X100 (%)	U.S.DOLLARS (millions)
	2004 (A)	2003 (B)	(A)/(B) X100 (%)	2004
1. Revenues	4,329,935	4,041,407	107	39,008
2. Operating income	127,332	20,239	629	1,147
3. Income before income taxes and minority interests	136,001	90,503	150	1,225
4. Income before minority interests	67,931	14,324	474	612
5. Net income	41,158	5,384	764	371
6. Net income per share Basic Diluted	12.48 12.43	1.63 1.59	766 782	0.11 0.11
7. Net income per ADS (representing 10 shares) Basic Diluted	125 124	16 16	781 775	1.13 1.12


Notes:		1. The Company’s consolidated financial statements are prepared based on U.S. GAAPs.
		2. Segment Information and operating income (loss) are presented in accordance with accounting principles generally accepted in Japan.
		3. The figures are for 988 consolidated subsidiaries, including Variable Interest Entities, and 163 equity-method affiliates.

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CONSOLIDATED STATEMENTS OF OPERATIONS


	The half years ended September 30
	YEN (millions)		(A)/(B) X100 (%)	U.S. DOLLARS (millions)
	2004 (A)	2003 (B)	(A)/(B) X100 (%)	2004
Revenues	4,329,935	4,041,407	107	39,008
Cost of sales	3,324,078	3,157,976	105	29,947
Selling, general and administrative expenses	878,525	863,192	102	7,914
Operating income	127,332	20,239	629	1,147
Other income	36,400	111,934	33	328
(Interest and dividends)	10,135	10,534	96	91
(Other)	26,265	101,400	26	237
Other deductions	27,731	41,670	67	250
(Interest charges)	14,235	16,318	87	128
(Other)	13,496	25,352	53	122
Income before income taxes and minority interests	136,001	90,503	150	1,225
Income taxes	68,070	76,179	89	613
Income before minority interests	67,931	14,324	474	612
Minority interests	26,773	8,940	299	241
Net income	41,158	5,384	764	371

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CONSOLIDATED BALANCE SHEETS


	YEN (millions)				(A)/(B) X100 (%)	U.S.DOLLARS (millions)
	As of Sept. 30, 2004 (A)		As of March 31, 2004 (B)		(A)/(B) X100 (%)	As of Sept. 30, 2004
Assets	9,636,896		9,590,322		100	86,819

Current assets	5,230,513		5,219,942		100	47,122
Cash and cash equivalents	619,049		764,396		81	5,577
Short-term investments	152,321		177,949		86	1,372
Trade receivables
Notes	137,413		142,802		96	1,238
Accounts	1,972,987		2,043,727		97	17,775
Investments in leases	476,313		451,753		105	4,291
Inventories	1,328,587		1,123,406		118	11,969
Other current assets	543,843		515,909		105	4,900

Investments and advances	880,888		908,962		97	7,936

Property, plant and equipment	2,318,042		2,232,862		104	20,883

Other assets	1,207,453		1,228,556		98	10,878

Liabilities and stockholders’ equity	9,636,896		9,590,322		100	86,819

Current liabilities	3,738,087		3,911,054		96	33,676
Short-term debt and current installments of long-term debt	1,044,432		1,183,463		88	9,409
Trade payables
Notes	68,655		67,581		102	619
Accounts	1,177,191		1,220,033		96	10,605
Advances received	263,878		216,544		122	2,377
Other current liabilities	1,183,931		1,223,433		97	10,666

Noncurrent liabilities	2,804,351		2,712,321		103	25,265
Long-term debt	1,421,409		1,314,102		108	12,806
Retirement and severance benefits	1,245,833		1,273,509		98	11,224
Other liabilities	137,109		124,710		110	1,235

Minority interests	874,376		798,816		109	7,877

Stockholders’ equity	2,220,082		2,168,131		102	20,001
Common stock	282,033		282,032		100	2,541
Capital surplus	552,404		551,690		100	4,977
Legal reserve and retained earnings	1,784,664		1,760,435		101	16,078
Accumulated other comprehensive loss	(366,694	)	(393,864	)	—	(3,304	)
(Foreign currency translation adjustments)	(78,338	)	(95,786	)	—	(706	)
(Minimum pension liability adjustments)	(314,060	)	(329,536	)	—	(2,829	)
(Net unrealized holding gain on available-for-sale securities)	26,536		31,499		84	239
(Cash flow hedges)	(832	)	(41	)	—	(8	)
Treasury stock	(32,325	)	(32,162	)	—	(291	)

- 16 -

CONSOLIDATED STATEMENTS OF STOCKHOLDERS’ EQUITY


	YEN (millions)				U.S. DOLLARS (millions)
	The half year ended Sept. 30, 2004		The year ended March 31, 2004		The half year ended Sept. 30, 2004
Common stock
Balance at beginning of period	282,032		282,032		2,541

Conversion of convertible debentures	1		0		0

Balance at end of period	282,033		282,032		2,541

Capital surplus
Balance at beginning of period	551,690		562,214		4,970

Conversion of convertible debentures	536		943		5
Increase (decrease) arising from issuance of subsidiaries’ common stock, divestiture and other	178		(11,467	)	2

Balance at end of period	552,404		551,690		4,977

Legal reserve
Balance at beginning of period	109,163		111,309		984

Transfers from (to) retained earnings	558		(1,849	)	5
Transfers from (to) minority interests arising from conversion of subsidiaries’ convertible debentures and other	14		(297	)	0
Balance at end of period	109,735		109,163		989

Retained earnings
Balance at beginning of period	1,651,272		1,655,029		14,876

Net income	41,158		15,876		371
Cash dividends	(16,490	)	(19,990	)	(149	)
Transfers from (to) legal reserve	(558	)	1,849		(5	)
Transfers to minority interests arising from conversion of subsidiaries’ convertible debentures	(1,187	)	(1,189	)	(11	)
Transfers from (to) minority interests arising from issuance of subsidiaries’ common stock and other	734		(303	)	7

Balance at end of period	1,674,929		1,651,272		15,089

Legal reserve and retained earnings	1,784,664		1,760,435		16,078

Accumulated other comprehensive loss
Foreign currency translation adjustments
Balance at beginning of period	(95,786	)	(60,948	)	(863	)

Current-period change	17,448		(34,838	)	157

Balance at end of period	(78,338	)	(95,786	)	(706	)

Minimum pension liability adjustments
Balance at beginning of period	(329,536	)	(698,916	)	(2,969	)

Current-period change	15,476		369,380		140

Balance at end of period	(314,060	)	(329,536	)	(2,829	)

Net unrealized holding gain on available-for-sale securities
Balance at beginning of period	31,499		4,874		284

Changes in unrealized holding gain	(4,963	)	26,625		(45	)

Balance at end of period	26,536		31,499		239

Cash flow hedges
Balance at beginning of period	(41	)	(535	)	(0	)

Changes in the fair value of derivative financial instruments	(791	)	494		(8	)

Balance at end of period	(832	)	(41	)	(8	)

Accumulated other comprehensive loss	(366,694	)	(393,864	)	(3,304	)

Treasury stock
Balance at beginning of period	(32,162	)	(1,847	)	(290	)
Current-period increase	(163	)	(30,315	)	(1	)

Balance at end of period	(32,325	)	(32,162	)	(291	)

Total stockholders’ equity	2,220,082		2,168,131		20,001

- 17 -

CONSOLIDATED STATEMENTS OF CASH FLOWS


	The half years ended September 30
	YEN (millions)				U.S. DOLLARS (millions)
	2004		2003		2004
Cash flows from operating activities
Net income	41,158		5,384		371
Adjustments to reconcile net income to net cash provided by operating activities
Depreciation	206,271		213,916		1,858
Deferred income taxes	8,213		5,052		74
Loss (gain) on disposal of rental assets and other property	(445	)	5,712		(4	)
Decrease in receivables	182,556		79,253		1,645
Increase in inventories	(189,797	)	(106,587	)	(1,710	)
Decrease in payables	(83,972	)	(37,821	)	(756	)
Other	(6,305	)	59,684		(57	)

Net cash provided by operating activities	157,679		224,593		1,421
Cash flows from investing activities
(Increase) decrease in short-term investments	30,141		(68,614	)	271
Capital expenditures	(166,845	)	(145,310	)	(1,503	)
Purchase of rental assets, net	(278,656	)	(213,515	)	(2,510	)
Sale of investments and subsidiaries’ common stock, net	25,222		117,400		227
Collection of investment in leases	214,410		197,485		1,932
Other	(25,062	)	(44,625	)	(226	)

Net cash used in investing activities	(200,790	)	(157,179	)	(1,809	)
Cash flows from financing activities
Decrease in interest-bearing debt	(94,126	)	(127,413	)	(848	)
Dividends paid to stockholders	(16,406	)	(10,111	)	(148	)
Dividends paid to minority stockholders of subsidiaries	(8,135	)	(6,791	)	(73	)
Other	7,429		(29,435	)	67

Net cash used in financing activities	(111,238	)	(173,750	)	(1,002	)
Effect of exchange rate changes on cash and cash equivalents	9,002		(12,751	)	81

Net decrease in cash and cash equivalents	(145,347	)	(119,087	)	(1,309	)
Cash and cash equivalents at beginning of period	764,396		828,171		6,886

Cash and cash equivalents at end of period	619,049		709,084		5,577

- 18 -

SEGMENT INFORMATION

(1) INDUSTRY SEGMENTS


	The half years ended September 30
	YEN (millions)				(A)/(B) X100 (%)	U.S. DOLLARS (millions)
	2004 (A)		2003 (B)		(A)/(B) X100 (%)	2004
Revenues

Information & Telecommunication Systems	1,071,736 21	%	1,053,279 22	%	102	9,655
Electronic Devices	692,078 13	%	607,529 13	%	114	6,235
Power & Industrial Systems	1,120,895 22	%	1,073,439 22	%	104	10,098
Digital Media & Consumer Products	646,112 13	%	585,411 12	%	110	5,821
High Functional Materials & Components	740,423 14	%	622,206 13	%	119	6,671
Logistics, Services & Others	610,317 12	%	612,969 13	%	100	5,498
Financial Services	270,778 5	%	267,923 5	%	101	2,439
Subtotal	5,152,339 100	%	4,822,756 100	%	107	46,417
Eliminations & Corporate items	(822,404	)	(781,349	)	—	(7,409	)

Total	4,329,935		4,041,407		107	39,008

Operating income (loss)

Information & Telecommunication Systems	28,961 21	%	5,399 15	%	536	261
Electronic Devices	30,056 22	%	3,675 11	%	818	271
Power & Industrial Systems	10,088 7	%	7,935 23	%	127	91
Digital Media & Consumer Products	10,618 8	%	728 2	%	—	95
High Functional Materials & Components	40,328 29	%	9,233 26	%	437	363
Logistics, Services & Others	7,528 6	%	(397 (1	) )%	—	68
Financial Services	9,988 7	%	8,195 24	%	122	90
Subtotal	137,567 100	%	34,768 100	%	396	1,239
Eliminations & Corporate items	(10,235	)	(14,529	)	—	(92	)

Total	127,332		20,239		629	1,147

Note: Revenues by industry segment include intersegment transactions.

- 19 -

(2) GEOGRAPHIC SEGMENTS


	The half years ended September 30
	YEN (millions)				(A)/(B) X100 (%)	U.S. DOLLARS (millions)
	2004 (A)		2003 (B)		(A)/(B) X100 (%)	2004
Revenues
Japan
Outside customer sales	3,128,385 62	%	2,964,920 64	%	106	28,183
Intersegment transactions	482,620 10	%	413,478 9	%	117	4,348
Total	3,611,005 72	%	3,378,398 73	%	107	32,531
Asia
Outside customer sales	530,416 10	%	455,943 10	%	116	4,779
Intersegment transactions	193,389 4	%	144,482 3	%	134	1,742
Total	723,805 14	%	600,425 13	%	121	6,521
North America
Outside customer sales	391,422 8	%	399,425 9	%	98	3,526
Intersegment transactions	14,968 0	%	12,890 0	%	116	135
Total	406,390 8	%	412,315 9	%	99	3,661
Europe
Outside customer sales	230,687 5	%	182,461 4	%	126	2,078
Intersegment transactions	10,319 0	%	19,622 0	%	53	93
Total	241,006 5	%	202,083 4	%	119	2,171
Other Areas
Outside customer sales	49,025 1	%	38,658 1	%	127	442
Intersegment transactions	1,882 0	%	1,155 0	%	163	17
Total	50,907 1	%	39,813 1	%	128	459
Subtotal	5,033,113 100	%	4,633,034 100	%	109	45,343
Eliminations	(703,178	)	(591,627	)	—	(6,335	)

Total	4,329,935		4,041,407		107	39,008

- 20 -


	The half years ended September 30
	YEN (millions)				(A)/(B) X100 (%)	U.S. DOLLARS (millions)
	2004 (A)		2003 (B)		(A)/(B) X100 (%)	2004
Operating income (loss)
Japan	106,160 71	%	37,208 79	%	285	956
Asia	25,105 17	%	(513 (1	) )%	—	226
North America	7,548 5	%	1,714 4	%	440	68
Europe	7,858 5	%	7,188 15	%	109	71
Other Areas	2,214 2	%	1,368 3	%	162	20
Subtotal	148,885 100	%	46,965 100	%	317	1,341
Eliminations & Corporate items	(21,553	)	(26,726	)	—	(194	)

Total	127,332		20,239		629	1,147


(3) REVENUES BY MARKET

	The half years ended September 30
	YEN (millions)				(A)/(B) X100 (%)	U.S. DOLLARS (millions)
	2004 (A)		2003 (B)		(A)/(B) X100 (%)	2004
Japan	2,709,295 63	%	2,636,362 65	%	103	24,408
Asia	694,304 16	%	553,783 14	%	125	6,255
North America	442,531 10	%	428,218 11	%	103	3,987
Europe	346,287 8	%	303,458 7	%	114	3,119
Other Areas	137,518 3	%	119,586 3	%	115	1,239
Outside Japan	1,620,640 37	%	1,405,045 35	%	115	14,600

Total	4,329,935 100	%	4,041,407 100	%	107	39,008

# # #

October 29, 2004

HITACHI, LTD.

UNCONSOLIDATED FINANCIAL STATEMENTS

FOR THE HALF YEAR ENDED SEPTEMBER 30, 2004

(111yen = U.S.$1)


	YEN (millions)						U.S. DOLLARS (millions)
INCOME STATEMENTS	2004(A)		2003(B)		(A)/(B)×100		2004
(The half years ended Sept. 30)
Revenues	1,152,807		1,128,203		102	%	10,386
Cost of sales	934,996		905,113		103	%	8,423
S.G.A. expenses	239,560		230,082		104	%	2,158
Operating income (loss)	(21,750	)	(6,992	)	—		(196	)
Other income	53,927		40,873		132	%	486
Other deductions	22,536		23,842		95	%	203
Ordinary income	9,640		10,038		96	%	87
Extraordinary gain	14,472		8,450		171	%	130
Extraordinary loss	—		4,939		—		—
Income before income taxes	24,112		13,549		178	%	217
Current income taxes	(4,159	)	(52,567	)	8	%	(37	)
Deferred income taxes	1,770		46,850		4	%	16
Net income	26,500		19,266		138	%	239
Basic EPS (yen and dollars)	8.04		5.82		138	%	0.07
Diluted EPS (yen and dollars)	—		—		—		—

BALANCE SHEETS	2004/9/30(A)		2004/3/31(B)		(A)/(B)×100		2004/9/30
Current assets	1,686,536		1,909,420		88	%	15,194
(Quick assets)	1,272,358		1,528,119		83	%	11,463
(Inventories)	321,875		294,396		109	%	2,900
(Deferred tax assets)	92,303		86,903		106	%	832
Fixed assets	1,809,651		1,798,964		101	%	16,303
(Investments)	1,249,785		1,231,360		101	%	11,259
(Deferred tax assets)	117,696		123,516		95	%	1,060
(Others)	442,168		444,088		100	%	3,984
Total assets	3,496,188		3,708,385		94	%	31,497

Current liabilities	1,424,311		1,819,420		78	%	12,832
Fixed liabilities	690,670		515,584		134	%	6,222
(Debentures)	280,000		280,000		100	%	2,523
(Long-term loans)	224,368		54,428		412	%	2,021
(Others)	186,302		181,156		103	%	1,678
Total liabilities	2,114,982		2,335,005		91	%	19,054
Stockholders’ equity	1,381,205		1,373,379		101	%	12,443
Liabilities and stockholders’ equity	3,496,188		3,708,385		94	%	31,497

- 2 -

FORECAST FOR THE YEAR ENDING MARCH 31, 2005


	Net sales	Ordinary income	Net income
Millions of Yen	2,570,000	25,000	40,000
Millions of U.S. dollars	23,153	225	360