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Hitachi Ltd – ‘6-K’ for 8/24/06

On:  Thursday, 8/24/06, at 6:37am ET   ·   For:  8/24/06   ·   Accession #:  1193125-6-178799   ·   File #:  1-08320

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"Press release dated July 31, 2006 regarding consolidated financial results for the first quarter of fiscal 2006

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  Form 6-K  
Table of Contents

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 July 2006

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      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    

If “Yes” is marked, indicate below the file number assigned to the registrant in connection with Rule 12g3-2(b): 82-            

 



Table of Contents

This report on Form 6-K contains the following:

 

1.    Press release dated July 31, 2006 regarding consolidated financial results for the first quarter of fiscal 2006.


Table of Contents

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: August 24, 2006

   By  

/s/ Takashi Hatchoji


        

Takashi Hatchoji

Executive Vice President and Executive Officer


Table of Contents

FOR IMMEDIATE RELEASE

Hitachi Announces Consolidated Financial Results

for the First Quarter of Fiscal 2006

Tokyo, July 31, 2006 — Hitachi, Ltd. (NYSE:HIT / TSE:6501) today announced its consolidated financial results for the first quarter of fiscal 2006, ended June 30, 2006.

 

    Notes:    1.    All figures, except for the outlook for the first half of fiscal 2006, were converted at the rate of 115 yen to the U.S. dollar, the approximate exchange rate on the Tokyo Foreign Exchange Market as of June 30, 2006.
         2.    Segment information and operating income (loss) are presented in accordance with financial reporting principles and practices generally accepted in Japan.

Business Results

(1) Summary of Fiscal 2006 First Quarter Consolidated Business Results

 

 

     Three months ended June 30, 2006

 
     Billions
of yen


    Year-over-year
% change


   

Millions of

U.S. dollars


 

Revenues

   2,247.0     10 %   19,539  

Operating income

   17.1     —       149  

Income before income taxes and minority interests

   11.9     146 %   104  

Loss before minority interests

   (5.6 )   —       (49 )

Net loss

   (22.0 )   —       (192 )

During the first quarter, the U.S. economy remained firm, supported by healthy consumer spending due to favorable job and wage environments, and continued strength in capital investments. This was despite the impact of surging prices for crude oil and other raw materials. Asian economies grew strongly due to a high growth rate in China and other factors. European economies staged a solid recovery. As a whole, therefore, the world economy was steady during the first quarter.


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- 2 -

 

In Japan, economic conditions were firm as improving corporate earnings and a stronger job and wage environment, as well as other factors, fueled growth in plant and equipment investment and consumer spending.

Under these circumstances during the first quarter, Hitachi strengthened its social and industrial infrastructure business by transferring parts of its Industrial Systems Group to Hitachi Plant Engineering & Construction Co., Ltd. At the same time, Hitachi Kiden Kogyo, Ltd. and Hitachi Industries Co., Ltd. were merged into Hitachi Plant Engineering & Construction to form Hitachi Plant Technologies, Ltd. Furthermore, Hitachi Air Conditioning Systems Co., Ltd. and Hitachi Home & Life Solutions, Inc. were merged to form Hitachi Appliances, Inc., thereby strengthening the air conditioning and home appliance business.

Hitachi’s consolidated revenues rose 10%, to 2,247.0 billion yen. Revenues were higher year on year in the Information & Telecommunication Systems segment on growth in sales of storage products; the Digital Media & Consumer Products segment due to growth in sales of flat-panel TVs and other factors; and the High Functional Materials & Components segment, mainly from growth in sales of components and materials for the electronics-related field.

Operating income rose 15.8 billion yen, to 17.1 billion yen. Earnings improved in the Information & Telecommunication Systems, the Electronic Devices, Power & Industrial Systems and High Functional Materials & Components segments mainly by expanding each business and promoting cost reductions.

Due to foreign currency exchange gain and loss and other factors, other income declined 33%, to 9.1 billion yen and other deductions increased 42%, to 14.3 billion yen.

As a result, Hitachi recorded income before income taxes and minority interests of 11.9 billion yen, up 146% year on year. After income taxes of 17.5 billion yen, Hitachi posted a loss before minority interests of 5.6 billion yen. Hitachi also posted a net loss of 22.0 billion yen, 2.0 billion yen less than a year earlier.


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- 3 -

 

(2) Revenues and Operating Income (Loss) by Segment

Results by segment were as follows.

[Information & Telecommunication Systems]

 

     Three months ended June 30, 2006

 
    

Billions of

yen


   

Year-over-year

% change


   

Millions of

U.S. dollars


 

Revenues

   501.8     11 %   4,364  

Operating loss

   (6.5 )   —       (57 )

Information & Telecommunication Systems revenues rose 11%, to 501.8 billion yen. Software and services revenues were higher than the corresponding quarter of the previous fiscal year due to firm growth in software sales and strong sales in services, particularly in the outsourcing business. Hardware revenues also rose on growth in storage products.

The segment posted an operating loss of 6.5 billion yen, an improvement of 16.6 billion yen from the same term of the previous year. Earnings improved in software and services year on year, mainly reflecting improved project management in services. Furthermore, hardware earnings were much improved year on year due to a narrower loss in hard disk drive (HDD) operations, strong sales in disk array subsystems, and 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. Hitachi’s results for the first quarter of fiscal 2006 include operating results of Hitachi GST for the period from January through March 2006.

[Electronic Devices]

 

     Three months ended June 30, 2006

    

Billions of

yen


  

Year-over-year

% change


   

Millions of

U.S. dollars


Revenues

   303.9    11 %   2,643

Operating income

   9.8    108 %   86

Electronic Devices revenues increased 11%, to 303.9 billion yen. This was mainly due to higher sales at Hitachi High-Technologies Corporation and growth in sales of small and medium-sized LCDs in the display business.

Operating income climbed 108%, to 9.8 billion yen, mainly due to improved earnings in the display business.


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- 4 -

 

[Power & Industrial Systems]

 

     Three months ended June 30, 2006

    

Billions of

yen


  

Year-over-year

% change


   

Millions of

U.S. dollars


Revenues

   603.4    3 %   5,248

Operating income

   10.9    21 %   96

Power & Industrial Systems revenues rose 3%, to 603.4 billion yen, mainly due to increased sales at Hitachi Construction Machinery Co., Ltd. and other factors, despite the effect of merging Hitachi Air Conditioning Systems Co., Ltd. and Hitachi Home & Life Solutions, Inc. in April 2006.

The segment posted 21% increase in operating income, to 10.9 billion yen due to strong earnings at Hitachi Construction Machinery and other factors.

 

Note:    On April 1, 2006, Hitachi Air Conditioning Systems Co., Ltd. (Power & Industrial Systems segment) and Hitachi Home & Life Solutions, Inc. (Digital Media & Consumer Products segment) were merged to form Hitachi Appliances, Inc. The new company belongs to the Digital Media & Consumer Products segment.

[Digital Media & Consumer Products]

 

     Three months ended June 30, 2006

 
    

Billions of

yen


   

Year-over-year

% change


   

Millions of

U.S. dollars


 

Revenues

   370.8     25 %   3,225  

Operating loss

   (16.1 )   —       (140 )

Digital Media & Consumer Products segment revenues climbed 25%, to 370.8 billion yen, mainly due to strong sales growth in plasma and other flat-panel TVs and the effect of the formation of Hitachi Appliances, Inc. by merging Hitachi Air Conditioning Systems Co., Ltd. and Hitachi Home & Life Solutions, Inc. in April this year.

However, the segment posted an operating loss of 16.1 billion yen, 7.9 billion yen more than a year earlier. This wider loss reflected increased investments for marketing digital media products such as plasma TVs, as well as the impact of falling prices for home appliances, among other factors.


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- 5 -

 

[High Functional Materials & Components]

 

     Three months ended June 30, 2006

    

Billions of

yen


  

Year-over-year

% change


   

Millions of

U.S. dollars


Revenues

   420.0    14 %   3,652

Operating income

   28.3    27 %   246

Segment revenues rose 14%, to 420.0 billion yen on the back of strong sales at Hitachi Chemical Co., Ltd. and Hitachi Metals, Ltd., principally of components and materials in the electronics-related field. Hitachi Cable, Ltd. also recorded sales growth.

Operating income climbed 27%, to 28.3 billion yen, mainly due to higher sales and the benefits of cost-cutting.

[Logistics, Services & Others]

 

     Three months ended June 30, 2006

    

Billions of

yen


  

Year-over-year

% change


   

Millions of

U.S. dollars


Revenues

   304.3    12 %   2,646

Operating income

   1.1    (29 )%   10

Segment revenues rose 12%, to 304.3 billion yen on healthy growth in sales at Hitachi Transport System, Ltd., mostly in the third-party logistics solutions business, and sales growth at overseas general trading companies.

The segment posted operating income of 1.1 billion yen, 29% down year on year, mainly due to lower earnings at domestic services companies.

[Financial Services]

 

     Three months ended June 30, 2006

    

Billions of

yen


  

Year-over-year

% change


   

Millions of

U.S. dollars


Revenues

   123.1    (4 )%   1,071

Operating income

   5.8    (6 )%   50

Revenues declined 4%, to 123.1 billion yen due to flat revenues at Hitachi Capital Corporation.

Segment operating income declined 6%, to 5.8 billion yen.


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- 6 -

 

(3) Revenues by Market

 

     Three months ended June 30, 2006

    

Billions of

Yen


  

Year-over-year

% change


   

Millions of

U.S. dollars


Japan

   1,265.8    2 %   11,008
    
  

 

Overseas

   981.1    21 %   8,532

Asia

   430.1    23 %   3,740

North America

   274.3    24 %   2,385

Europe

   196.4    14 %   1,708

Other Areas

   80.2    20 %   698

Revenues in Japan were 1,265.8 billion yen, 2% higher than in the first quarter of the previous fiscal year.

Overseas revenues rose 21%, to 981.1 billion yen, due to year-on-year growth in sales in Europe, in addition to steep growth in revenues in Asia, particularly in China, and North America.

As a result, the ratio of overseas revenues to consolidated revenues rose 4 percentage points year on year to 44%.

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

Capital investment on a completion basis, excluding leasing assets, rose 31%, to 102.8 billion yen, mainly due to investments in HDDs, plasma display panels, automotive-related parts and other products. Depreciation, excluding leasing assets, increased 5%, to 85.7 billion yen. R&D expenditures, which are primarily used to strengthen frontier and basic research, and upgrade development capabilities in HDDs, automotive-, displays- and digital media-related fields, increased 3%, to 95.7 billion yen, and corresponded to 4.3% of revenues.

Financial Position

(1) Financial Position

 

     As of June 30, 2006

    

Billions of

yen


   

Change from

March 31, 2006


   

Millions of

U.S. dollars


Total assets

   9,984.0     (37.1 )   86,818

Total liabilities

   6,495.2     18.6     56,481

Interest-bearing debt

   2,529.9     110.9     22,000

Minority interests

   1,033.6     (3.1 )   8,988

Stockholders’ equity

   2,455.1     (52.6 )   21,349
    

 

 

Stockholders’ equity ratio

   24.6 %   0.4 point deterioration     —  

D/E ratio (including minority interests)

   0.73 times     0.05 point deterioration     —  
    

 

 


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- 7 -

 

Total assets as of June 30, 2006 were 9,984.0 billion yen, largely the same as at March 31, 2006. Interest-bearing debt increased 110.9 billion yen, to 2,529.9 billion yen as of June 30, 2006. Stockholders’ equity decreased 52.6 billion yen, to 2,455.1 billion yen caused by the net loss in the first quarter. As a result of these changes, the stockholders’ equity ratio declined by 0.4 of a percentage point to 24.6%. The debt-to-equity ratio (including minority interests) deteriorated 0.05 of a point to 0.73 times due to the decrease in stockholders’ equity and increase in interest-bearing debt.

(2) Cash Flows

 

     Three months ended June 30, 2006

 
    

Billions of

yen


   

Year-over-year

change


   

Millions of

U.S. dollars


 

Cash flows from operating activities

   (39.8 )   15.8     (347 )

Cash flows from investing activities

   (191.3 )   (73.0 )   (1,664 )
    

 

 

Free cash flows

   (231.2 )   (57.2 )   (2,011 )
    

 

 

Cash flows from financing activities

   63.6     (6.0 )   553  
    

 

 

Operating activities used net cash of 39.8 billion yen, 15.8 billion yen less than in the first quarter of the previous fiscal year.

Investing activities used net cash of 191.3 billion yen, 73.0 billion yen more than the first quarter of the previous fiscal year. This was mainly due to an increase in capital investment, particularly in businesses targeted for growth.

Free cash flows, the sum of cash flows from operating and investing activities, were an outflow of 231.2 billion yen, 57.2 billion yen more than the first quarter of the previous fiscal year.

Financing activities provided net cash of 63.6 billion yen, 6.0 billion yen less than the first quarter of the previous fiscal year.

The net result of the above items was a 169.5 billion yen decrease in cash and cash equivalents to 488.6 billion yen.


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Outlook for the First Half of Fiscal 2006

The first half of fiscal 2006 ending September 30, 2006

 

    

Billions of

yen


   

Year-over-year

% change


   

Millions of

U.S. dollars


 

Revenues

   4,590.0     4 %   41,727  

Operating income

   50.0     (36 )%   455  

Income before income taxes and minority interests

   60.0     (27 )%   545  

Income before minority interests

   20.0     (6 )%   182  

Net loss

   (10.0 )   —       (91 )

Regarding the outlook for the global economy, the Hitachi Group expects the U.S. to experience a gentle economic slowdown, owing to weaker growth in housing investment and consumer spending due to the effect of interest rate rises thus far. Although Asian economies are expected to remain strong, supported by domestic demand in China, there are concerns of a deceleration in the pace of economic recovery in Europe due to the slowdown of the U.S. economy.

Overall, therefore, the global economy is expected to experience a slight slowdown in the second half of fiscal 2006.

The forecast for the Japanese economy is for strong growth due to growth in plant and equipment investment as corporate earnings rise and to increasing consumer spending in an improving job environment. However, economic growth is expected to moderate in the second half of fiscal 2006, due to lower growth in corporate earnings, primarily resulting from a global economic slowdown centered on the U.S. and persistently high prices for crude oil and other raw materials.

Based on this outlook, the Hitachi Group is forecasting the operating results shown above for the first half of fiscal 2006, the same as those announced with fiscal 2005 consolidated financial results on April 27, 2006.

Hitachi is pushing forward with business reforms targeting future business development. For example, Hitachi decided to reorganize the network systems related subsidiaries in October this year. In another move, Hitachi will establish the post of Chief Executive for Asia in August with the aim of expanding business in the Asia region.


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Furthermore, Hitachi will continue efforts to create new businesses and strengthen targeted businesses by maximizing Hitachi’s internal resources, such as R&D and marketing capabilities, personnel, and its funding system. Also, Hitachi is leveraging group-wide synergies to reduce procurement costs, business expenses, IT operational costs and other costs by standardizing and integrating business operations. Hitachi is implementing business restructuring measures to build a high-earnings framework, and reinforce its financial position.

Regarding the HDD, flat-panel TV and LCD businesses, where there are issues concerning profitability, Hitachi is taking wide-ranging countermeasures to quickly improve its development capabilities, cost competitiveness, marketing activities and other areas of its operations. Furthermore, Hitachi will work to become more competitive on a consolidated basis and to establish a more powerful earnings base by driving forward structural reforms that target future business development, such as efforts to expand overseas business.

Projections assume exchange rates of 110 yen to the U.S. dollar and 140 yen to the euro for the second quarter of fiscal 2006.

Since June 2006, damage has been discovered to Hitachi-manufactured steam turbines installed at Hamaoka Nuclear Power Station No. 5, operated by Chubu Electric Power Co., Inc., and Unit 2 of Shika Nuclear Power Station, operated by Hokuriku Electric Power Company. Hitachi is currently focusing all its efforts on ascertaining the cause of and then repairing the damaged parts.


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- 10 -

 

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:

 

  - fluctuations in product demand and industry capacity, particularly in the Information & Telecommunication Systems segment, Electronic Devices segment and Digital Media & Consumer Products segment;

 

  - uncertainty as to Hitachi’s ability to continue to develop and market products that incorporate new technology on a timely and cost-effective basis and to achieve market acceptance for such products;

 

  - rapid technological change, particularly in the Information & Telecommunication Systems segment, Electronic Devices segment and Digital Media & Consumer Products segment;

 

  - increasing commoditization of information technology products, and intensifying price competition in the market for such products, particularly in the Information & Telecommunication Systems segment, Electronic Devices segment and Digital Media & Consumer Products segment;

 

  - fluctuations in rates of exchange for the yen and other currencies in which Hitachi makes significant sales or in which Hitachi’s assets and liabilities are denominated, particularly between the yen and the U.S. dollar;

 

  - uncertainty as to Hitachi’s ability to implement measures to reduce the potential negative impact of fluctuations in product demand and/or exchange rates;

 

  - general socio-economic and political conditions and the regulatory and trade environment of Hitachi’s major markets, particularly, the United States, Japan and elsewhere in Asia, including, without limitation, a return to stagnation or deterioration of the Japanese economy, or direct or indirect 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 results of litigation and legal proceedings of which the Company, its subsidiaries or its equity method affiliates have become or may become parties;

 

  - possibility of incurring expenses resulting from any defects in products or services of Hitachi;

 

  - uncertainty as to the success of restructuring efforts to improve management efficiency and to strengthen competitiveness;

 

  - uncertainty as to the success of alliances upon which Hitachi depends, some of which Hitachi may not control, with other corporations in the design and development of certain key products;

 

  - uncertainty as to Hitachi’s ability to access, or access on favorable terms, liquidity or long-term financing; and

 

  - uncertainty as to general market price levels for equity securities in Japan, declines in which may require Hitachi to write down equity securities it holds.

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


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HITACHI, LTD. AND SUBSIDIARIES

CONSOLIDATED FINANCIAL STATEMENTS

FOR THE FIRST QUARTER ENDED JUNE 30, 2006

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 115 yen = U.S.$1, the approximate exchange rate prevailing on the Tokyo Foreign Exchange Market as of June 30, 2006.

SUMMARY

In millions of yen and U.S. dollars, except Net income (loss) per share (6) and Net income (loss) per American Depositary Share (7).

 

     Three months ended June 30

 
    

YEN

(millions)


    (A)/(B)
X100
(%)


   U.S. DOLLARS
(millions)


 
     2006 (A)

    2005 (B)

       2006

 

1. Revenues

   2,247,003     2,048,745     110    19,539  

2. Operating income

   17,135     1,289     —      149  

3. Income before income taxes and minority interests

   11,950     4,851     246    104  

4. Income (loss) before minority interests

   (5,639 )   (12,809 )   —      (49 )

5. Net income (loss)

   (22,044 )   (24,081 )   —      (192 )

6. Net income (loss) per share

                       

Basic

   (6.61 )   (7.23 )   —      (0.06 )

Diluted

   (6.62 )   (7.23 )   —      (0.06 )

7. Net income (loss) per ADS (representing 10 shares)

                       

Basic

   (66 )   (72 )   —      (0.57 )

Diluted

   (66 )   (72 )   —      (0.57 )

 

Notes:   1.   The Company’s consolidated financial statements are prepared based on U.S. GAAP.
    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 884 consolidated subsidiaries, including Variable Interest Entities, and 162 equity-method affiliates.
    4.   Consolidated quarterly figures are unaudited.


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CONSOLIDATED STATEMENTS OF OPERATIONS (UNAUDITED)

 

     Three months ended June 30

 
  

YEN

(millions)


   

(A)/(B)
X100

(%)


   U.S. DOLLARS
(millions)


 
   2006 (A)

    2005 (B)

       2006

 

Revenues

   2,247,003     2,048,745     110    19,539  

Cost of sales

   1,762,843     1,606,261     110    15,329  

Selling, general and administrative expenses

   467,025     441,195     106    4,061  

Operating income

   17,135     1,289     —      149  

Other income

   9,189     13,686     67    80  

(Interest and dividends)

   7,808     6,954     112    68  

(Other)

   1,381     6,732     21    12  

Other deductions

   14,374     10,124     142    125  

(Interest charges)

   8,233     7,608     108    72  

(Other)

   6,141     2,516     244    53  

Income before income taxes and minority interests

   11,950     4,851     246    104  

Income taxes

   17,589     17,660     100    153  

Income (loss) before minority interests

   (5,639 )   (12,809 )   —      (49 )

Minority interests

   16,405     11,272     146    143  

Net income (loss)

   (22,044 )   (24,081 )   —      (192 )


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CONSOLIDATED BALANCE SHEETS (UNAUDITED)

 

    

YEN

(millions)


    (A)-(B)

   

U.S. DOLLARS

(millions)


 
  

As of June 30,

2006 (A)


   

As of March 31,

2006 (B)


     

As of June 30,

2006


 
        

Assets

   9,984,067     10,021,195     (37,128 )   86,818  
    

 

 

 

Current assets

   5,480,988     5,512,805     (31,817 )   47,661  

Cash and cash equivalents

   488,682     658,255     (169,573 )   4,249  

Short-term investments

   163,939     162,756     1,183     1,426  

Trade receivables (Notes and Accounts)

   2,273,277     2,430,681     (157,404 )   19,768  

Investments in leases

   482,134     451,757     30,377     4,192  

Inventories

   1,466,553     1,262,308     204,245     12,753  

Other current assets

   606,403     547,048     59,355     5,273  
    

 

 

 

Investments and advances

   1,025,834     1,029,673     (3,839 )   8,920  
    

 

 

 

Property, plant and equipment

   2,472,989     2,460,186     12,803     21,504  
    

 

 

 

Other assets

   1,004,256     1,018,531     (14,275 )   8,733  
    

 

 

 

Liabilities and Stockholders’ equity

   9,984,067     10,021,195     (37,128 )   86,818  
    

 

 

 

Current liabilities

   4,147,516     4,121,451     26,065     36,065  

Short-term debt and current portion of long-term debt

   1,101,628     1,000,555     101,073     9,579  

Trade payables (Notes and Accounts)

   1,449,073     1,484,966     (35,893 )   12,601  

Other current liabilities

   1,596,815     1,635,930     (39,115 )   13,885  
    

 

 

 

Noncurrent liabilities

   2,347,777     2,355,164     (7,387 )   20,415  

Long-term debt

   1,428,318     1,418,489     9,829     12,420  

Other liabilities

   919,459     936,675     (17,216 )   7,995  
    

 

 

 

Minority interests

   1,033,643     1,036,807     (3,164 )   8,988  
    

 

 

 

Stockholders’ equity

   2,455,131     2,507,773     (52,642 )   21,349  

Common stock

   282,033     282,033     0     2,452  

Capital surplus

   565,531     561,484     4,047     4,918  

Legal reserve and retained earnings

   1,737,391     1,778,203     (40,812 )   15,108  

Accumulated other comprehensive loss

   (110,800 )   (95,997 )   (14,803 )   (963 )

(Foreign currency translation adjustments)

   (46,634 )   (43,426 )   (3,208 )   (406 )

(Minimum pension liability adjustments)

   (146,161 )   (145,903 )   (258 )   (1,271 )

(Net unrealized holding gain on available-for-sale securities)

   81,420     92,626     (11,206 )   708  

(Cash flow hedges)

   575     706     (131 )   5  

Treasury stock

   (19,024 )   (17,950 )   (1,074 )   (165 )


Table of Contents

- 14 -

 

CONSOLIDATED STATEMENTS OF CASH FLOWS (UNAUDITED)

 

     Three months ended June 30

 
  

YEN

(millions)


   

U.S. DOLLARS

(millions)


 
   2006

    2005

    2006

 

Cash flows from operating activities

                  

Net income (loss)

   (22,044 )   (24,081 )   (192 )

Adjustments to reconcile net income (loss) to net cash used in operating activities

                  

Depreciation

   119,275     111,522     1,037  

Decrease in receivables and inventories

   17,362     33,998     151  

Decrease in payables

   (26,057 )   (93,889 )   (227 )

Other

   (128,408 )   (83,275 )   (1,117 )
    

 

 

Net cash used in operating activities

   (39,872 )   (55,725 )   (347 )

Cash flows from investing activities

                  

Increase in short-term investments

   (1,479 )   (32,261 )   (13 )

Purchase of rental assets and other properties, net

   (206,738 )   (173,239 )   (1,798 )

Proceeds from sale of investments and subsidiaries’ common stock, net

   (22,744 )   44,450     (198 )

Collection of investments in leases

   68,999     92,451     600  

Other

   (29,423 )   (49,732 )   (256 )
    

 

 

Net cash used in investing activities

   (191,385 )   (118,331 )   (1,664 )

Cash flows from financing activities

                  

Increase in interest-bearing debt

   97,530     98,768     848  

Dividends paid to stockholders

   (18,325 )   (18,335 )   (159 )

Dividends paid to minority stockholders of subsidiaries

   (9,702 )   (8,019 )   (84 )

Other

   (5,884 )   (2,718 )   (51 )
    

 

 

Net cash provided by financing activities

   63,619     69,696     553  

Effect of exchange rate changes on cash and cash equivalents

   (1,935 )   5,333     (17 )
    

 

 

Net decrease in cash and cash equivalents

   (169,573 )   (99,027 )   (1,475 )

Cash and cash equivalents at beginning of the period

   658,255     708,715     5,724  
    

 

 

Cash and cash equivalents at end of the period

   488,682     609,688     4,249  
    

 

 


Table of Contents

- 15 -

 

SEGMENT INFORMATION (UNAUDITED)

(1) INDUSTRY SEGMENTS

 

     Three months ended June 30

 
    

YEN

(millions)


   

(A)/(B)

X100

(%)


  

U.S. DOLLARS

(millions)


 
       
     2006 (A)

    2005 (B)

       2006

 

Revenues

                       

Information & Telecommunication Systems

   501,882     452,996     111    4,364  
     19 %   19 %           

Electronic Devices

   303,937     273,326     111    2,643  
     11 %   12 %           

Power & Industrial Systems

   603,476     587,935     103    5,248  
     23 %   25 %           

Digital Media & Consumer Products

   370,843     297,236     125    3,225  
     14 %   13 %           

High Functional Materials & Components

   420,024     368,313     114    3,652  
     16 %   15 %           

Logistics, Services & Others

   304,347     271,351     112    2,646  
     12 %   11 %           

Financial Services

   123,157     127,759     96    1,071  
     5 %   5 %           

Subtotal

   2,627,666     2,378,916     110    22,849  
     100 %   100 %           

Eliminations & Corporate items

   (380,663 )   (330,171 )   —      (3,310 )
    

 

 
  

Total

   2,247,003     2,048,745     110    19,539  
    

 

 
  

Operating income (loss)

                       

Information & Telecommunication Systems

   (6,542 )   (23,173 )   —      (57 )
     (20 )%   (184 )%           

Electronic Devices

   9,896     4,757     208    86  
     30 %   38 %           

Power & Industrial Systems

   10,992     9,081     121    96  
     33 %   72 %           

Digital Media & Consumer Products

   (16,101 )   (8,189 )   —      (140 )
     (48 )%   (65 )%           

High Functional Materials & Components

   28,301     22,289     127    246  
     84 %   177 %           

Logistics, Services & Others

   1,175     1,653     71    10  
     4 %   13 %           

Financial Services

   5,803     6,152     94    50  
     17 %   49 %           

Subtotal

   33,524     12,570     267    292  
     100 %   100 %           

Eliminations & Corporate items

   (16,389 )   (11,281 )   —      (143 )
    

 

 
  

Total

   17,135     1,289     —      149  
    

 

 
  

Note: Revenues by industry segment include intersegment transactions.


Table of Contents

- 16 -

 

(2) REVENUES BY MARKET

 

     Three months ended June 30

    

YEN

(millions)


   

(A)/(B)

X100

(%)


  

U.S. DOLLARS

(millions)


       
     2006 (A)

    2005 (B)

       2006

Japan

   1,265,880     1,239,202     102    11,008
     56 %   60 %         

Asia

   430,137     349,846     123    3,740
     19 %   17 %         

North America

   274,325     220,558     124    2,385
     12 %   11 %         

Europe

   196,424     172,209     114    1,708
     9 %   9 %         

Other Areas

   80,237     66,930     120    698
     4 %   3 %         

Outside Japan

   981,123     809,543     121    8,532
     44 %   40 %         
    

 

 
  

Total

   2,247,003     2,048,745     110    19,539
     100 %   100 %         
    

 

 
  

# # #


Table of Contents

July 31, 2006

Hitachi, Ltd.

Supplementary Information

for the First Quarter ended June 30, 2006

(Consolidated Basis)

1. Summary

 

     (Billions of Yen)  
     Three months ended June 30

 
   2005

    2006

 
   (A)

    (A)/
FY2004


    (B)

    (B)/(A)

 

Average exchange rate (Yen / U.S.$)

   108     —       114     —    

Capital investment (Completion basis)

   217.4     96 %   243.1     112 %

Leasing assets

   138.7     91 %   140.3     101 %

Other

   78.6     109 %   102.8     131 %

Depreciation

   111.5     107 %   119.2     107 %

Leasing assets

   29.8     117 %   33.5     113 %

Other

   81.7     104 %   85.7     105 %

R&D expenditure

   93.0     107 %   95.7     103 %

Percentage of revenues

   4.5 %   —       4.3 %   —    

 

     As of March 31, 2006

   As of June 30, 2006

Stockholders’ equity per share (Yen)

   752.91    736.67

Cash & cash equivalents, Short-term investments (Billions of Yen)

   821.0    652.6

Interest-bearing debt (Billions of Yen)

   2,419.0    2,529.9

Number of employees

   355,879    365,834

Japan

   242,659    247,257

Overseas

   113,220    118,577

Number of consolidated subsidiaries

   932    884

Japan

   476    431

Overseas

   456    453

2. Overseas Revenues by Industry Segment

 

     (Billions of Yen)  
     Three months ended June 30

 
   2005

    2006

 
   (A)

   (A)/
FY2004


    (B)

   (B)/(A)

 

Information & Telecommunication Systems

   166.0    99 %   203.8    123 %

Electronic Devices

   103.5    75 %   110.9    107 %

Power & Industrial Systems

   203.1    128 %   246.8    122 %

Digital Media & Consumer Products

   128.6    100 %   152.1    118 %

High Functional Materials & Components

   114.4    105 %   141.0    123 %

Logistics, Services & Others

   82.5    85 %   113.3    137 %

Financial Services

   11.1    113 %   12.8    115 %

Total

   809.5    100 %   981.1    121 %

# # #


Table of Contents

July 31, 2006

Hitachi, Ltd.

SUPPLEMENTARY INFORMATION ON INFORMATION &

TELECOMMUNICATION SYSTEMS, DISPLAYS AND DIGITAL MEDIA

 

Note: *1.   Segment information and operating income are presented in accordance with financial reporting principles and practices generally accepted in Japan.

1. Information & Telecommunication Systems *2

(1) REVENUES AND OPERATING LOSS *3

 

     (billions of yen)  
     Three months ended June 30

 
     2005

    2006

 
     (A)

    (A) /
FY 2004


    (B)

    (B) /(A)

 

Revenues

   452.9     94 %   501.8     111 %

Software & Services

   190.4     102 %   219.1     115 %

Software

   34.4     95 %   35.6     103 %

Services

   156.0     104 %   183.5     118 %

Hardware

   262.5     89 %   282.7     108 %

Storage *4

   152.9     100 %   177.5     116 %

Servers *5

   16.4     80 %   17.4     106 %

PCs *6

   23.9     80 %   14.2     59 %

Telecommunication

   31.2     89 %   27.9     89 %

Others

   38.1     69 %   45.7     120 %

Operating loss

   (23.1 )   —       (6.5 )   —    

 

Notes:    *2.    The Hard Disk Drive operations are conducted by Hitachi Global Storage Technologies (Hitachi GST), which has a December 31 fiscal year-end, different from Hitachi’s March 31 year-end. Hitachi’s results for the three months ended June 30, 2006 include the operating results of Hitachi GST for the three months ended March 31, 2006.
     *3.    Figures for each product exclude intersegment transactions.
     *4.    Figures for Storage include disk array subsystems, hard disk drives, etc.
     *5.    Figures for Servers include general-purpose computers, UNIX servers, etc.
     *6.    Figures for PCs include PC servers, client PCs (only commercial use from FY2006), etc.

(2) SAN/NAS STORAGE SOLUTIONS

 

     (billions of yen)  
     Three months ended June 30

 
     2005

    2006

 
     (A)

   (A) /FY
2004


    (B)

   (B) /(A)

 

Revenues

   63.0    102 %   77.0    122 %


Table of Contents

- 2 -

 

(3) HARD DISK DRIVES *7 *8

 

         (The upper rows show comparisons to the previous year)  
         Fiscal 2005

    Fiscal 2006

 

Period recorded for consolidated

accounting purposes

Shipment Period


       1st half

    1st half

 
     1st quarter

    2nd quarter

          1st quarter

    2nd quarter

       
     Jan. 2005 to
Mar. 2005


    Apr. 2005 to
Jun. 2005


    Jan. 2005 to
Jun. 2005


    Jan. 2006 to
Mar. 2006


    Apr. 2006 to
Jun. 2006


    Jan. 2006 to
Jun. 2006


 

Revenues

 

Yen

(billions of yen)

   98 %   108 %   103 %   118 %   108 %   113 %
     110.8     112.4     223.2     130.6     121.7     252.3  
 

U.S. dollar

(millions of dollar)

   100 %   110 %   105 %   106 %   103 %   104 %
     1,053     1,037     2,090     1,115     1,068     2,183  

Operating loss

 

Yen

(billions of yen)

   —       —       —       —       —       —    
     (11.5 )   (12.9 )   (24.4 )   (5.4 )   (12.9 )   (18.4 )
 

U.S. dollar

(millions of dollar)

   —       —       —       —       —       —    
     (109 )   (120 )   (229 )   (46 )   (112 )   (159 )

Shipments (thousand units) *9

       122 %   145 %   133 %   110 %   107 %   108 %
       13,400     13,900     27,300     14,700     14,800     29,600  

Consumer and Commercial

  1.8/2.5inch *10    100 %   110 %   105 %   133 %   119 %   126 %
     6,300     6,500     12,800     8,400     7,700     16,100  
 

3.5inch *11

   124 %   191 %   150 %   119 %   133 %   126 %
     4,300     4,200     8,600     5,100     5,700     10,800  

Servers *12

       78 %   66 %   72 %   128 %   149 %   138 %
       700     700     1,400     900     1,000     1,900  

Emerging *13

       842 %   551 %   654 %   17 %   18 %   18 %
       2,080     2,500     4,580     350     450     810  

 

Notes:    *7.    Figures include intersegment transactions.
     *8.    Hitachi GST’s operating currency is U.S. dollar. Yen figures include yen / dollar conversion fluctuation.
     *9.    Shipment less than 100,000 units have been rounded, with the exception of Emerging, where shipment less than 10,000 units have been rounded.
     *10.    Consumer electronics applications (1.8inch), note-PCs (2.5inch), etc.
     *11.    Desktop-PCs, consumer electronics applications (3.5inch), etc.
     *12.    Disk array subsystems, servers (3.5inch), etc.
     *13.    Hand held devices (1inch), automotive (2.5inch), etc.


Table of Contents

- 3 -

 

2. Displays

(1) REVENUES AND OPERATING LOSS

 

     (billions of yen)  
     Three months ended June 30

 
     2005

    2006

 
     (A)

   

(A) /

FY2004


    (B)

    (B) /(A)

 

Revenues

   47.3     72 %   48.3     102 %

Operating loss

   (4.9 )   —       (3.8 )   —    

(2) LCD REVENUES

 

     (billions of yen)  
     Three months ended June 30

 
     2005

    2006

 
     (A)

   (A) /
FY2004


    (B)

   (B) /(A)

 

Revenues

   40.0    67 %   40.0    100 %

Large-size LCDs

   15.0    55 %      

Small and medium-size LCDs

   25.0    77 %      

3. Digital Media

SHIPMENTS OF MAIN PRODUCTS *14

 

     (thousand units)  
     Three months ended June 30

 
     2005

    2006

 
     (A)

   (A) /
FY2004


    (B)

   (B) /(A)

 

Optical Disk Drives *15

   18,000    113 %   18,000    100 %

Plasma TVs *16

   80    100 %   160    200 %

LCD TVs

   40    200 %   100    250 %

 

Notes:    *14.    Shipment less than 10,000 units have been rounded, with the exception of Optical Disk Drives, where shipment less than 100,000 units have been rounded.
     *15.    The Optical Disk Drive operations are conducted by Hitachi-LG Data Storage, Inc. (HLDS), which has a December 31 fiscal year-end, different from Hitachi’s March 31 year-end. Hitachi’s results for the three months ended June 30, 2006 include the operating results of HLDS for the three months ended March 31, 2006.
     *16.    The sum of plasma TV and plasma monitor shipments.

# # #


Dates Referenced Herein   and   Documents Incorporated by Reference

This ‘6-K’ Filing    Date    Other Filings
9/30/06
Filed on / For Period End:8/24/066-K
7/31/06
6/30/06
4/27/06
4/1/06
3/31/0620-F
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