6-K 1 d6k.txt 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 April 2003 Commission File Number 1-8320 ------ Hitachi, Ltd. ------------ (Translation of registrant's name into English) 6, Kanda-Surugadai 4-chome, Chiyoda-ku, Tokyo 101-8010, 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- ---------- This report on Form 6-K contains the following: 1. Press release dated April 7, 2003 regarding extraordinary gains and losses on an unconsolidated basis in the fiscal year ended March 2003. 2. Press release dated April 28, 2003 regarding financial results for the fiscal year ended March 31, 2003. 3. Press release dated April 28, 2003 regarding acquisition of its own shares. 4. Press release dated April 28, 2003 regarding proposal to the General Meeting of Shareholders for the authorization of the acquisition of its own shares. 5. Press release dated April 28, 2003 regarding grant of incentive stock options. 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 May 23, 2003 By /s/ Kazuo Kumagai ------------------- ----------------------------------- Kazuo Kumagai Executive Vice President and Director FOR IMMEDIATE RELEASE Contacts: Machiko Ikenoya Yoshiaki Segawa Hitachi, Ltd. Hitachi, Ltd. +81-3-3258-2056 +81-3-3258-2056 machiko_ikenoya@hdq.hitachi.co.jp yoshiaki_segawa@hdq.hitachi.co.jp Hitachi to Post Extraordinary Gains/Losses on Unconsolidated Basis in Fiscal Year Ended March 2003 Tokyo, April 7, 2003 --- Hitachi, Ltd. (TSE : 6501 / NYSE : HIT) today announced that it plans to post extraordinary items relating to the sale of real estate and the sale and impairment of securities on an unconsolidated basis for the fiscal year ended March 31, 2003. 1. Extraordinary Gain on Sale of Real Estate As previously announced, Hitachi sold certain properties in its Head Office complex on March 31, 2003 to Nippon Sogo Fund Co., Ltd. as part of moves to concentrate head office functions in a smaller number of locations. As a result of this sale and sales of idle and unproductive real estate holdings, Hitachi will record an extraordinary gain of approximately 46.6 billion yen. 2. Extraordinary Gain on Sale of Securities Hitachi will record an approximate 41.3 billion yen of extraordinary gain on the sale of affiliated company shares and investments in securities. Of this amount, approximately 16.0 billion yen relates to the sale of affiliated company shares and 25.3 billion yen relates to the sale of investments in securities. 3. Extraordinary Loss on Impairment of Securities Hitachi will record an extraordinary loss of approximately 55.3 billion yen on the impairment of affiliated company shares and investments in securities. Of this amount, approximately 35.5 billion yen relates to the impairment of affiliated company shares and 19.8 billion yen relates to the impairment of investments in securities. - 2 - About Hitachi, Ltd. Hitachi, Ltd., headquartered in Tokyo, Japan, is a leading global electronics company, with approximately 320,000 employees worldwide. Fiscal 2001 (ended March 31, 2002) consolidated sales totaled 7,994 billion yen ($60.1 billion). The company offers a wide range of systems, products and services in market sectors, including information systems, electronic devices, power and industrial systems, consumer products, materials and financial services. For more information on Hitachi, please visit the company's Web site at http://global.hitachi.com. Cautionary Statement -------------------- This document contains forward-looking statements which reflect management's current views with respect to certain future events and financial performance. Words such as "anticipate," "believe," "expect," "estimate," "intend," "plan," "project" and similar expressions which indicate future events and trends 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 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 products and to market products that incorporate new technology on a timely and cost-effective basis and achieve market acceptance; 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 access to liquidity or long-term financing, particularly in the context of restrictions on availability of credit 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; Hitachi's dependence on alliances with other corporations in designing or developing certain products; and the market prices of equity securities in Japan, declines in which may result in write-downs of equity securities Hitachi holds. These factors listed above are not exclusive and are in addition to other factors that are stated or indicated elsewhere in this document, or in other materials published by the Company. # # # FOR IMMEDIATE RELEASE Contacts: Japan: U.S.: Machiko Ikenoya Matt Takahashi Hitachi, Ltd. Hitachi America, Ltd. +81-3-3258-2056 +1-650-244-7902 machiko_ikenoya@hdq.hitachi.co.jp masahiro.takahashi@hal.hitachi.com China: U.K.: Yuji Hoshino Kantaro Tanii Hitachi (China) Investment, Ltd. Hitachi Europe Ltd. +86-10-6590-8111 ext.2399 +44-1628-585379 y_hoshino@hitachi.com.cn kantaro.tanii@hitachi-eu.com Hitachi Announces Consolidated Financial Results for Fiscal 2002 Tokyo, April 28, 2003 --- Hitachi, Ltd. (NYSE:HIT / TSE:6501) today announced its consolidated financial results for fiscal 2002, the year ended March 31, 2003. During the year, the world economy achieved only a modest recovery. While the U.S. and Asia appeared to be moving onto a recovery footing, uncertainty grew in the second half of the year as the key U.S. economy slowed, the Iraq war started and share prices fell. The Japanese economy showed some positive signs with personal spending holding its ground and private-sector plant and equipment investment showing signs of recovery. However, export growth, which had been a source of strength for the Japanese economy, stalled due to the weakness of the global economic recovery. And with structural issues, notably problem loans, still to be addressed in Japan, the economy failed to stage a broad-based recovery. Against this backdrop, net sales edged up 2% to 8,191.7 billion yen (US$68,265 million). Hitachi posted operating income of 152.9 billion yen (US$1,275 million), reversing an operating loss of 117.4 billion yen (US$978 million) in the previous fiscal year. This improvement was mainly due to lower fixed costs brought about by the structural reforms implemented in the previous fiscal year, as well as to the results of the Corporate Innovation Initiative (CII), including the Procurement Renewal Project. - 2 - By segment, Information & Telecommunication Systems sales rose 4%, to 1,899.6 billion yen (US$15,830 million) despite difficult market conditions characterized by a slow recovery in worldwide IT demand. Underpinning sales was increased sales for RAID systems and hard disk drives as well as for systems integration services such as for e-government-related projects in Japan. The segment recorded operating income of 110.5 billion yen (US$921 million), up 209% year on year due to several factors. One was the benefits of structural reforms that have been implemented since fiscal 2001, primarily in the telecommunication equipment sector. Another was increased earnings from RAID systems and systems integration services. In Electronic Devices, sales were up markedly in semiconductors on solid demand for system LSIs, including LCD drivers and microcontrollers for automotive applications as well as multi-purpose semiconductors. This strength offset sluggish system memory and DRAM sales. In displays, overall sales were largely unchanged. Small and medium-size TFT LCDs used in mobile phones recorded significantly higher sales. But this growth was negated by the absence of sales from CRTs for PC monitors, a business that Hitachi terminated in fiscal 2001, and by lower sales of large-size TFT LCDs due to falling sales prices. Semiconductor manufacturing equipment sales were sluggish as demand failed to recover fully. Nevertheless, segment sales as a whole were 1,570.0 billion yen (US$13,084 million), 6% higher year on year. While the segment recorded an operating loss of 23.2 billion yen (US$194 million), this was a 140.3 billion yen (US$1,170 million) improvement from the 163.6 billion yen (US$1,364 million) loss recorded in fiscal 2001. This turnaround reflected structural reforms that included the termination of unprofitable products such as CRTs for PC monitors and the streamlining of certain semiconductor production lines. In Power & Industrial Systems, sales from maintenance services for nuclear and thermal power generation plants of Japanese electric power companies declined. And sales of air-conditioning, industrial and other equipment declined because of the fall-off in private-sector plant and equipment investment in Japan. Nevertheless, segment sales rose 1%, to 2,297.0 billion yen (US$19,142 million) on sharply higher sales in automotive equipment operations in line with the inclusion in consolidated results of the former Unisia JECS Corporation (now Hitachi Unisia Automotive, Ltd.), which became a wholly owned subsidiary in October 2002, and brisk demand for construction machinery in China and other overseas markets. The segment saw operating income decrease 3%, to 53.2 billion yen (US$444 million) despite a significant improvement in profitability in construction machinery operations. Dragging down earnings was a decline in profitability in certain major projects, such as power generation equipment in overseas markets, as well as falling earnings from environmental equipment in Japan. In Digital Media & Consumer Products, segment sales rose 3%, to 1,205.5 billion yen (US$10,046 million). Sales of optical storage products and plasma TVs grew, but sales of large home appliances were lackluster, the result of falling sales prices in Japan, and mobile phone sales also dropped. At Hitachi Maxell, Ltd., sales were largely on a par with fiscal 2001 levels as growth in rechargeable battery sales, notably lithium-ion batteries used in mobile phones, and recordable DVDs was offset by falling audiotape and videotape sales. The segment recorded operating income of 6.2 billion yen (US$52 million), a 20.8 billion yen (US$174 million) turnaround from the 14.6 billion yen (US$122 million) operating loss posted in fiscal 2001. This reflected an improvement in profitability in rechargeable batteries at Hitachi Maxell and the benefits of structural reforms. Hampering further gains were falling sales prices, mainly of home appliances, and delays in developing new mobile phone models. - 3 - In High Functional Materials & Components, segment sales were basically flat year on year at 1,248.5 billion yen (US$10,405 million). Hitachi Cable, Ltd. saw sales drop year on year as sluggish sales in wires and cables operations, particularly submarine fiber-optic cables, outweighed growth in sales in Japan, mainly from information network-related products. At Hitachi Metals, Ltd. sales were on a par with fiscal 2001. Strong demand for automobile- and electronics-related products was negated by lower sales of construction components, plant and equipment. Hitachi Chemical Co., Ltd. recorded higher sales on growth in electronics-related materials for applications such as semiconductors and LCDs, and industrial materials despite falling demand for housing equipment and environmental facilities. The segment posted operating income of 18.3 billion yen (US$153 million), a 40.3 billion yen (US$336 million) improvement from the 22.0 billion yen (US$184 million) operating loss in fiscal 2001, as earnings benefited from the results of structural reforms. In Logistics, Services & Others, segment sales rose 1%, to 1,449.5 billion yen (US$12,080 million) on higher sales of hard disk drives at overseas sales companies. Growth in segment sales was held back by the sale of Tokyo Monorail Co., Ltd., formerly a subsidiary of Hitachi Transport System, Ltd., in the second half of the previous fiscal year. Segment operating income climbed 218%, to 10.3 billion yen (US$86 million). In Financial Services, segment sales increased 2%, to 579.2 billion yen (US$4,827 million). This increase was partly attributable to the boost given by Hitachi Capital Corporation's acquisition of Sekisui Leasing Co., Ltd. in the second half of the previous fiscal year. Hampering further growth was a lackluster performance in core financial services. Segment operating income decreased 68%, to 12.0 billion yen (US$101 million) for two main reasons. One was lower earnings in the leasing business because of falling interest rates. The other reason was one-time charges taken to strengthen the balance sheet, such as providing for pension reforms. Other income came to 46.7 billion yen (US$389 million), up 10.6 billion yen (US$89 million), reflecting gains on the sale of real estate and other items. Meanwhile, other deductions decreased 401.8 billion yen (US$3,349 million), to 102.8 billion yen (US$857 million) as restructuring charges were not incurred during the year, as they were in fiscal 2001, and because of lower interest expenses resulting from reductions in debt. As a result, income before income taxes was 96.8 billion yen (US$807 million), and after 52.6 billion yen (US$439 million) in income taxes, Hitachi recorded income before minority interests of 44.1 billion yen (US$368 million) and net income of 27.8 billion yen (US$232 million). Financial Position Net cash provided by operating activities was 646.5 billion yen (US$5,388 million), an increase of 163.6 billion yen (US$1,364 million) year on year. This was the result of efforts to use working capital more efficiently, such as by promoting Project C, which reduced the time required to turn over inventory and accounts receivable. Investing activities used net cash of 619.2 billion yen (US$5,161 million), 346.4 billion yen (US$2,887 million) more than in fiscal 2001. Hitachi used less cash for the purchase of property, plant and equipment as it made selective capital investments, and cash inflows were generated by sales of short-term investments and subsidiaries' common stock. However, cash was used for the acquisition of IBM's hard disk drive operations. - 4 - Free cash flows remaining after deducting net cash used in investing activities from net cash provided by operating activities amounted to 27.2 billion yen (US$227 million), 182.7 billion yen (US$1,523 million) less year on year. Financing activities used net cash of 207.1 billion yen (US$1,726 million), 370.9 billion yen (US$3,091 million) less than cash used in fiscal 2001. Due to the establishment of a new credit facility, cash was used for the repayment of short-term borrowings. Cash and cash equivalents as of March 31, 2003 amounted to 828.1 billion yen (US$6,901 million), 201.2 billion yen (US$1,677 million) less than at March 31, 2002. Debt on March 31, 2003 stood at 2,840.5 billion yen (US$23,672 million), 157.6 billion yen (US$1,314 million) less than a year ago. Capital investment on a completion basis declined 8%, to 787.4 billion yen (US$6,562 million), and depreciation decreased 9%, to 480.2 billion yen (US$4,002 million). The Company spent 377.1 billion yen (US$3,143 million) on research and development, a decrease of 9% from the preceding year. R&D expenditures as a percentage of net sales were 4.6%. All figures were converted at the rate of 120 yen = U.S.$1, the approximate exchange rate on the Tokyo Foreign Exchange Market as of March 31, 2003. Dividend Hitachi will recommend a year-end dividend of 3 yen per common share to the annual general meeting of shareholders in June 2003. No year-end dividend was declared in fiscal 2001. Total dividends for fiscal 2002, including the interim dividend of 3 yen per common share paid in December 2002, will thus be 6 yen per common share, compared with 3 yen per common share for fiscal 2001. Outlook for Fiscal 2003 With uncertainty growing for a combination of reasons, including the U.S. economic downturn, the need to pay for the post-war restoration in Iraq, and the economic impact of SARS (Severe Acute Respiratory Syndrome), a full-scale recovery in the world economy appears to be unlikely. In Japan, continuing sluggishness in consumer spending and private-sector plant and equipment investment is creating an uncertain operating environment. In this climate, Hitachi will build a highly profitable earnings structure by pushing ahead with efforts to create new businesses and reinforce mainstay ones by capturing synergies across the group. Hitachi will also seek to strengthen its balance sheet. These and other actions will be guided by the "i.e. HITACHI Plan II", the company's new medium-term management plan. Based on the above factors, Hitachi is projecting the following operating results for fiscal 2003, ending March 31, 2004. The projections assume an exchange rate of 120 yen to the U.S. dollar. - 5 - Net sales 8,000 billion yen (US$66,667 million) (year-on-year decrease of 2%) Operating income 170 billion yen (US$1,417 million) (year-on-year increase of 11%) Income before income taxes 110 billion yen (US$917 million) (year-on-year increase of 14%) Income before minority interests 30 billion yen (US$250 million) (year-on-year decrease of 32%) Net income 5 billion yen (US$42 million) (year-on-year decrease of 82%) Management Policy 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 its market capitalization. Based on this basic policy, in November 1999 Hitachi launched "i.e. HITACHI Plan," a medium-term management plan that was aimed at transforming Hitachi into a "best solutions partner" capable of delivering business solutions to customers. In this vein, Hitachi has supplied information systems services and social infrastructure systems rooted in IT and knowledge. It has also been supplying the key hardware, software and high functional materials and components required by these services and systems. And Hitachi launched structural reforms designed to transform Hitachi into a global supplier capable of providing total solutions in these targeted fields. Building on this basic approach, 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 enacting major reforms of the company's operating framework and focusing on highly profitable businesses. Hitachi will reshape its business portfolio by creating growth and new businesses in key fields where it can leverage the group's technological strengths and know-how. Portfolio realignment also calls for Hitachi to exit certain businesses that currently account for approximately 20% of Hitachi's net sales. 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. - 6 - While it is assumed that net sales will remain at around the present level, 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 those 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. Hitachi is also working to reinforce corporate governance to establish an executive system that facilitates the speedy and accurate operation of businesses and a high degree of transparency. To this end, Hitachi has reduced the number of directors and vested considerable authority in business groups. At the same time, it has implemented other reforms such as establishing the Advisory Board to bring in advice from outside experts on management issues. And in June 2003, Hitachi will adopt the Committee System, which will ensure the effective supervision of management and promote faster decision-making. Hitachi also plans to appoint four outside directors as part of this move. Hitachi's 18 publicly-held group companies will also alter their corporate governance structure by adopting the Committee System. Under this new governance structure, Hitachi directors and executive officers will be represented on the boards of group companies as outside directors and certain group companies' directors will be represented on Hitachi's Board of Directors. This will produce a group-wide framework with a stronger sense of unity. Moreover, Hitachi established a Compliance Division to ensure strict observance of laws and regulations. Hitachi views enhancement of the long-term and overall interests of shareholders as an important management objective. To achieve this, Hitachi must make investments in R&D and plant and equipment to maintain its competitiveness and improve profitability. Dividends are therefore decided based on medium- to long-term business plans and the need to ensure the availability of sufficient internal funds for reinvestment and the stable growth of dividends. Hitachi's financial condition and results of operations are also taken into consideration. Cautionary Statement -------------------- This document contains forward-looking statements which reflect management's current views with respect to certain future events and financial performance. Words such as "anticipate," "believe," "expect," "estimate," "intend," "plan," "project" and similar expressions which indicate future events and trends 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. - 7 - Factors that could cause actual results to differ materially from those projected or implied in any forward-looking statements 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 products and to market products that incorporate new technology on a timely and cost-effective basis and achieve market acceptance; 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 access to liquidity or long-term financing, particularly in the context of restrictions on availability of credit 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 or other East Asian economies, 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; Hitachi's dependence on alliances with other corporations in designing or developing certain products; and the market prices of equity securities in Japan, declines in which may result in write-downs of equity securities Hitachi holds. These factors listed above are not exclusive and are in addition to other factors that are stated or indicated elsewhere in this document, or in other materials published by the Company. -8- HITACHI, LTD. AND SUBSIDIARIES CONSOLIDATED FINANCIAL STATEMENTS FOR THE YEAR ENDED MARCH 31, 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 120 yen = U.S.$1, the approximate exchange rate prevailing on the Tokyo Foreign Exchange Market as of March 31, 2003. SUMMARY In millions of yen and U.S. dollars, except Net income (loss) per share (6) and Net income (loss) per American Depositary Share (7).

The years ended March 31 ----------------------------------------- YEN U.S. DOLLARS (millions) (A)/(B) (millions) ------------------- X100 ------------ 2003 (A) 2002 (B) (%) 2003 --------- --------- ------- ------------ 1. Net sales 8,191,752 7,993,784 102 68,265 2. Operating income (loss) 152,967 (117,415) - 1,275 3. Income (loss) before income taxes and minority interests 96,828 (586,072) - 807 4. Income (loss) before minority interests 44,166 (514,958) - 368 5. Net income (loss) 27,867 (483,837) - 232 6. Net income (loss) per share Basic 8.31 (144.95) - 0.07 Diluted 8.19 - - 0.07 7. Net income (loss) per ADS (representing 10 shares) Basic 83 (1,450) - 0.69 Diluted 82 - - 0.68

Notes: 1. Segment Information and operating income (loss) are presented in accordance with financial reporting principles and practices generally accepted in Japan. 2. The figures are for 1,112 consolidated subsidiaries and 119 equity-method affiliates. -9- CONSOLIDATED STATEMENTS OF INCOME

The years ended March 31 - --------------------------------------- U.S. YEN DOLLARS (millions) (A)/(B) (millions) ------------------- X100 ---------- 2003 (A) 2002 (B) (%) 2003 --------- --------- ------- ---------- Net sales 8,191,752 7,993,784 102 68,265 --------- --------- --- ------ Cost of sales 6,240,493 6,184,396 101 52,004 --------- --------- --- ------ Selling, general and administrative expenses 1,798,292 1,926,803 93 14,986 --------- --------- --- ------ Operating income (loss) 152,967 (117,415) - 1,275 --------- --------- --- ------ Other income 46,737 36,039 130 389 (Interest and dividends) 23,079 28,615 81 192 (Other) 23,658 7,424 319 197 --------- --------- --- ------ Other deductions 102,876 504,696 20 857 (Interest charges) 34,338 45,830 75 286 (Other) 68,538 458,866 15 571 --------- --------- --- ------ Income (loss) before income taxes and minority interests 96,828 (586,072) - 807 --------- --------- --- ------ Income taxes 52,662 (71,114) - 439 --------- --------- --- ------ Income (loss) before minority interests 44,166 (514,958) - 368 --------- --------- --- ------ Minority interests 16,299 (31,121) - 136 --------- --------- --- ------ Net income (loss) 27,867 (483,837) - 232 --------- --------- --- ------

-10- CONSOLIDATED BALANCE SHEETS

U.S. DOLLARS YEN (millions) (millions) --------------------- ---------- As of As of (A)/(B) As of March 31, March 31, X100 March 31, 2003 (A) 2002 (B) (%) 2003 ---------- --------- ------- ---------- Assets 10,179,389 9,915,654 103 84,828 ---------- --------- --- ------ Current assets 5,193,465 5,507,535 94 43,279 Cash and cash equivalents 828,171 1,029,374 80 6,901 Short-term investments 186,972 178,933 104 1,558 Trade receivables Notes 153,587 204,855 75 1,280 Accounts 1,903,640 1,895,150 100 15,864 Investment in leases 437,076 527,432 83 3,642 Inventories 1,187,529 1,214,399 98 9,896 Other current assets 496,490 457,392 109 4,137 ---------- --------- --- ------ Investments and advances 726,442 834,907 87 6,054 ---------- --------- --- ------ Property, plant and equipment 2,601,050 2,514,424 103 21,675 ---------- --------- --- ------ Other assets 1,658,432 1,058,788 157 13,820 ---------- --------- --- ------ Liabilities and Stockholders' equity 10,179,389 9,915,654 103 84,828 ---------- --------- --- ------ Current liabilities 4,005,228 3,885,265 103 33,377 Short-term debt and current installments of long-term debt 1,328,446 1,199,921 111 11,070 Trade payables Notes 71,934 92,799 78 599 Accounts 1,140,130 991,037 115 9,501 Advances received 252,861 334,172 76 2,107 Other current liabilities 1,211,857 1,267,336 96 10,099 ---------- --------- --- ------ Noncurrent liabilities 3,569,371 2,927,421 122 29,745 Long-term debt 1,512,152 1,798,303 84 12,601 Retirement and severance benefits 1,932,646 1,049,054 184 16,105 Other liabilities 124,573 80,064 156 1,038 ---------- --------- --- ------ Minority interests 751,578 798,744 94 6,263 ---------- --------- --- ------ Stockholders' equity 1,853,212 2,304,224 80 15,443 Common stock 282,032 282,032 100 2,350 Capital surplus 562,214 527,010 107 4,685 Legal reserve and retained earnings 1,766,338 1,753,999 101 14,719 Accumulated other comprehensive income (loss) (755,525) (258,484) - (6,296) (Foreign currency translation adjustments) (60,948) (38,012) - (508) (Minimum pension liability adjustments) (698,916) (260,100) - (5,824) (Net unrealized holding gain on available-for-sale securities) 4,874 39,997 12 41 (Cash flow hedges) (535) (369) - (4) Treasury stock (1,847) (333) - (15) ---------- --------- --- ------

-11- CONSOLIDATED STATEMENTS OF STOCKHOLDERS' EQUITY

YEN U.S. DOLLARS (millions) (millions) ---------------------------- -------------- The year ended The year ended The year ended March 31, 2003 March 31, 2002 March 31, 2003 -------------- -------------- -------------- Common stock Balance at beginning of year 282,032 281,754 2,350 --------- --------- ------ Conversion of convertible debentures 0 278 0 --------- --------- ------ Balance at end of year 282,032 282,032 2,350 ========= ========= ====== Capital surplus Balance at beginning of year 527,010 501,243 4,392 --------- --------- ------ Conversion of convertible debentures 370 359 3 Increase arising from issuance of common stock and other 34,834 25,408 290 --------- --------- ------ Balance at end of year 562,214 527,010 4,685 ========= ========= ====== Legal reserve Balance at beginning of year 110,751 109,815 923 --------- --------- ------ Transfers from retained earnings 554 978 5 Transfers from (to) minority interests arising from conversion of subsidiaries' convertible debentures and other 4 (42) 0 Balance at end of year 111,309 110,751 928 ========= ========= ====== Retained earnings Balance at beginning of year 1,643,248 2,157,136 13,694 --------- --------- ------ Net income (loss) 27,867 (483,837) 232 Cash dividends (10,013) (28,373) (83) Transfers to legal reserve (554) (978) (5) Transfers to minority interests arising from conversion of subsidiaries' convertible debentures (291) (64) (2) Transfers to minority interests arising from change in ownership interest in subsidiaries' common stock and other (5,228) (636) (44) --------- --------- ------ Balance at end of year 1,655,029 1,643,248 13,792 ========= ========= ====== Legal reserve and retained earnings 1,766,338 1,753,999 14,719 ========= ========= ====== Accumulated other comprehensive income (loss) Foreign currency translation adjustments Balance at beginning of year (38,012) (57,647) (317) --------- --------- ------ Current-period change (22,936) 19,635 (191) --------- --------- ------ Balance at end of year (60,948) (38,012) (508) ========= ========= ====== Minimum pension liability adjustments Balance at beginning of year (260,100) (182,936) (2,168) --------- --------- ------ Current-period change (438,816) (77,164) (3,657) --------- --------- ------ Balance at end of year (698,916) (260,100) (5,824) ========= ========= ====== Net unrealized holding gain on available-for-sale securities Balance at beginning of year 39,997 51,041 333 --------- --------- ------ Changes in unrealized holding gain (35,123) (11,044) (293) --------- --------- ------ Balance at end of year 4,874 39,997 41 ========= ========= ====== Cash flow hedges Balance at beginning of year (369) 1,096 (3) --------- --------- ------ Changes in the fair value of derivative financial instruments (166) (1,465) (1) --------- --------- ------ Balance at end of year (535) (369) (4) ========= ========= ====== Accumulated other comprehensive income (loss) (755,525) (258,484) (6,296) ========= ========= ====== Treasury stock Balance at beginning of year (333) - (3) Current-period increase (1,514) (333) (13) --------- --------- ------ Balance at end of year (1,847) (333) (15) ========= ========= ====== Total stockholders' equity 1,853,212 2,304,224 15,443 ========= ========= ======

-12- CONSOLIDATED STATEMENTS OF CASH FLOWS

The years ended March 31 --------------------------------- YEN U.S. DOLLARS (millions) (millions) -------------------- ------------ 2003 2002 2003 --------- --------- ------------ Cash flows from operating activities Net income (loss) 27,867 (483,837) 232 Adjustments to reconcile net income (loss) to net cash provided by operating activities Depreciation 480,274 529,418 4,002 Deferred income taxes (35,526) (182,072) (296) (Gain) loss on disposal of rental assets and other property (14,064) 59,687 (117) Decrease in receivables 2,280 450,904 19 Decrease in inventories 7,994 261,229 67 Increase (decrease) in payables 96,777 (271,698) 806 Other 80,916 119,235 674 --------- --------- ------ Net cash provided by operating activities 646,518 482,866 5,388 Cash flows from investing activities (Increase) decrease in short-term investments (8,162) 253,236 (68) Capital expenditures (323,825) (429,835) (2,699) Purchase of rental assets, net (411,452) (411,519) (3,429) Purchase of investments and subsidiaries' common stock, net (95,074) (74,173) (792) Collection of investment in leases 411,522 469,108 3,429 Other (192,294) (79,688) (1,602) --------- --------- ------ Net cash used in investing activities (619,285) (272,871) (5,161) Cash flows from financing activities Decrease in interest-bearing debt (184,447) (578,526) (1,537) Dividends paid to stockholders (9,973) (28,318) (83) Dividends paid to minority stockholders of subsidiaries (13,108) (13,401) (109) Other 358 42,133 3 --------- --------- ------ Net cash used in financing activities (207,170) (578,112) (1,726) Effect of exchange rate changes on cash and cash equivalents (21,266) 15,888 (177) --------- --------- ------ Net decrease in cash and cash equivalents (201,203) (352,229) (1,677) Cash and cash equivalents at beginning of year 1,029,374 1,381,603 8,578 --------- --------- ------ Cash and cash equivalents at end of year 828,171 1,029,374 6,901 ========= ========= ======

-13- SEGMENT INFORMATION (1) INDUSTRY SEGMENTS

The years ended March 31 ------------------------------------------- YEN U.S. DOLLARS (millions) (A)/(B) (millions) ---------------------- X100 ------------ 2003 (A) 2002 (B) (%) 2003 ---------- ---------- ------- ------------ Information & Telecommunication 1,899,651 1,829,661 104 15,830 Systems 19% 18% ---------- ---------- --- ------- Electronic Devices 1,570,069 1,487,200 106 13,084 15% 15% ---------- ---------- --- ------- Power & Industrial Systems 2,297,068 2,266,895 101 19,142 22% 23% ---------- ---------- --- ------- Digital Media & Consumer 1,205,551 1,170,744 103 10,046 Products 12% 12% ---------- ---------- --- ------- Sales High Functional Materials 1,248,550 1,250,248 100 10,405 & Components 12% 12% ---------- ---------- --- ------- Logistics, Services & Others 1,449,594 1,430,825 101 12,080 14% 14% ---------- ---------- --- ------- Financial Services 579,267 567,138 102 4,827 6% 6% ---------- ---------- --- ------- Subtotal 10,249,750 10,002,711 102 85,415 100% 100% ---------- ---------- --- ------- Eliminations & Corporate items (2,057,998) (2,008,927) - (17,150) ---------- ---------- --- ------- Total 8,191,752 7,993,784 102 68,265 ========== ========== === ======= Information & Telecommunication 110,523 35,757 309 921 Systems - - ---------- ---------- --- ------- Electronic Devices (23,242) (163,633) - (194) - - ---------- ---------- --- ------- Power & Industrial Systems 53,253 55,004 97 444 - - ---------- ---------- --- ------- Digital Media & Consumer 6,204 (14,675) - 52 Products - - ---------- ---------- --- ------- Operating High Functional Materials 18,301 (22,024) - 153 income (loss) & Components - - ---------- ---------- --- ------- Logistics, Services & Others 10,352 3,257 318 86 - - ---------- ---------- --- ------- Financial Services 12,067 37,403 32 101 - - ---------- ---------- --- ------- Subtotal 187,458 (68,911) - 1,562 - - ---------- ---------- --- ------- Eliminations & Corporate items (34,491) (48,504) - (287) ---------- ---------- --- ------- Total 152,967 (117,415) - 1,275 ---------- ---------- --- -------

Note: Net sales by industry segment include intersegment transactions. -14- (2) GEOGRAPHIC SEGMENTS

The years ended March 31 ------------------------------------------- YEN U.S. DOLLARS (millions) (A)/(B) (millions) ---------------------- X100 ------------ 2003 (A) 2002 (B) (%) 2003 ---------- ---------- ------- ------------ Japan Outside 6,290,654 6,134,554 103 52,422 customer sales 65% 66% ---------- ---------- --- ------- Intersegment 1,026,916 892,562 115 8,558 transactions 11% 10% ---------- ---------- --- ------- Total 7,317,570 7,027,116 104 60,980 76% 76% ---------- ---------- --- ------- Asia Outside 651,228 607,041 107 5,427 customer sales 7% 6% ---------- ---------- --- ------- Intersegment 351,006 349,337 100 2,925 transactions 3% 4% ---------- ---------- --- ------- Total 1,002,234 956,378 105 8,352 10% 10% ---------- ---------- --- ------- North Outside 802,582 830,959 97 6,688 America customer sales 8% 9% ---------- ---------- --- ------- Intersegment 38,753 45,382 85 323 transactions 1% 0% ---------- ---------- --- ------- Sales Total 841,335 876,341 96 7,011 9% 9% ---------- ---------- --- ------- Europe Outside 379,615 364,840 104 3,163 customer sales 4% 4% ---------- ---------- --- ------- Intersegment 28,382 32,268 88 237 transactions 0% 0% ---------- ---------- --- ------- Total 407,997 397,108 103 3,400 4% 4% ---------- ---------- --- ------- Other Outside 67,673 56,390 120 564 Areas customer sales 1% 1% ---------- ---------- --- ------- Intersegment 2,645 2,359 112 22 transactions 0% 0% ---------- ---------- --- ------- Total 70,318 58,749 120 586 1% 1% ---------- ---------- --- ------- Subtotal 9,639,454 9,315,692 103 80,329 100% 100% ---------- ---------- --- ------- Eliminations & Corporate items (1,447,702) (1,321,908) - (12,064) ---------- ---------- --- ------- Total 8,191,752 7,993,784 102 68,265 ---------- ---------- --- -------

-15-

The years ended March 31 -------------------------------------- YEN U.S. DOLLARS (millions) (A)/(B) (millions) ----------------- X100 ------------ 2003 (A) 2002 (B) (%) 2003 -------- -------- ------- ------------ Japan 155,684 (70,420) - 1,297 82% - ------- -------- --- ----- Asia 18,357 (5,090) - 153 10% - ------- -------- --- ----- North America 6,336 (21,053) - 53 3% - ------- -------- --- ----- Operating Europe 6,720 4,007 168 56 income (loss) 4% - ------- -------- --- ----- Other Areas 2,097 1,842 114 17 1% - ------- -------- --- ----- Subtotal 189,194 (90,714) - 1,577 100% - ------- -------- --- ----- Eliminations & Corporate items (36,227) (26,701) - (302) ------- -------- --- ----- Total 152,967 (117,415) - 1,275 ------- -------- --- -----

(3) SALES BY MARKET

The years ended March 31 ---------------------------------------- YEN U.S. DOLLARS (millions) (A)/(B) (millions) ------------------- X100 ------------ 2003 (A) 2002 (B) (%) 2003 --------- --------- ------- ------------ Japan 5,546,543 5,444,662 102 46,221 68% 68% --------- --------- --- ------ Asia 1,017,439 896,050 114 8,479 12% 11% --------- --------- --- ------ North America 890,684 930,629 96 7,422 11% 12% --------- --------- --- ------ Europe 537,029 513,310 105 4,475 7% 6% --------- --------- --- ------ Other Areas 200,057 209,133 96 1,667 2% 3% --------- --------- --- ------ Outside Japan 2,645,209 2,549,122 104 22,043 32% 32% --------- --------- --- ------ Total 8,191,752 7,993,784 102 68,265 100% 100% --------- --------- --- ------

# # # April 28, 2003 Hitachi, Ltd. Supplementary information for fiscal 2002, ended March 31, 2003 (Consolidated basis) 1. Summary (Billions of yen) Fiscal 2001 Fiscal 2002 Fiscal 2003 (Forecast) --------------- ---------------- ------------------------------------- (A)/ 1st half of (A) FY2000 (B) (B)/(A) FY 2003 Note 2 (C) (C)/(B) ------- ------ ------- ------- ----------- ------ ------- ------- Net sales 7,993.7 95% 8,191.7 102% 3,850.0 98% 8,000.0 98% C/U (Note 1) 227% - 263% - 353% - 343% - ------- --- ------- ---- ------- --- ------- ---- Operating income (loss) (117.4) - 152.9 - 15.0 24% 170.0 111% ------- --- ------- ---- ------- --- ------- ---- Income (loss) before income taxes and minority interests (586.0) - 96.8 - 0 - 110.0 114% ------- --- ------- ---- ------- --- ------- ---- Income (loss) before minority interests (514.9) - 44.1 - (17.0) - 30.0 68% Income before minority interests/(Stockholders' equity + Minority interests) (15.2%) - 1.5% - - - - - ------- --- ------- ---- ------- --- ------- ---- Net income (loss) (483.8) - 27.8 - (30.0) - 5.0 18% C/U (Note 1) - - 99% - - - 25% - ROE (18.7%) - 1.3% - - - - - ------- --- ------- ---- ------- --- ------- ---- Average exchange rate (yen/U.S.$) 126 - 121 - 120 - 120 - ------- --- ------- ---- ------- --- ------- ---- Net interest and dividends (17.2) - (11.2) - (6.0) - (14.0) - ------- --- ------- ---- ------- --- ------- ---- Notes : 1. C/U : Consolidated basis/Unconsolidated basis 2. 1st half of FY 2003/ 1st half of FY 2002

As of March 31, 2002 As of March 31, 2003 -------------------- -------------------- Cash & cash equivalents, Short-term investments (Billions of yen) 1,208.3 1,015.1 ------- ------- Interest-bearing debt (Billions of yen) 2,998.2 2,840.5 ------- ------- Number of employees 321,517 339,572 Japan 256,823 256,085 Overseas 64,694 83,487 ------- ------- Number of consolidated subsidiaries 1,066 1,112 Japan 712 708 Overseas 354 404 ------- -------

-2- 2. Sales by industry segment (Billions of yen) Fiscal 2001 Fiscal 2002 Fiscal 2003 (Forecast) -------------------- ---------------- --------------------- (A) (A)/FY 2000 (B) (B)/(A) (C) (C)/(B) -------- ----------- -------- ------- -------- ------- Information & Telecommunication Systems 1,829.6 102% 1,899.6 104% 2,200.0 116% Electronic Devices 1,487.2 74% 1,570.0 106% 1,215.0 77% Power & Industrial Systems 2,266.8 98% 2,297.0 101% 2,215.0 96% Digital Media & Consumer Products 1,170.7 111% 1,205.5 103% 1,250.0 104% High Functional Materials & Components 1,250.2 85% 1,248.5 100% 1,220.0 98% Logistics, Services & Others 1,430.8 89% 1,449.5 101% 1,250.0 86% Financial Services 567.1 96% 579.2 102% 565.0 98% Eliminations & Corporate items (2,008.9) - (2,057.9) - (1,915.0) - Total 7,993.7 95% 8,191.7 102% 8,000.0 98% 3. Operating income (loss) by industry segment (Billions of yen) Fiscal 2001 Fiscal 2002 Fiscal 2003 (Forecast) -------------------- ---------------- --------------------- (A) (A)/FY 2000 (B) (B)/(A) (C) (C)/(B) -------- ----------- -------- ------- -------- ------- Information & Telecommunication Systems 35.7 73% 110.5 309% 62.0 56% Electronic Devices (163.6) - (23.2) - 15.0 - Power & Industrial Systems 55.0 71% 53.2 97% 65.0 122% Digital Media & Consumer Products (14.6) - 6.2 - 5.0 81% High Functional Materials & Components (22.0) - 18.3 - 30.0 164% Logistics, Services & Others 3.2 39% 10.3 318% 10.0 97% Financial Services 37.4 85% 12.0 32% 20.0 166% Eliminations & Corporate items (48.5) - (34.4) - (37.0) - Total (117.4) - 152.9 - 170.0 111% -3- 4. Overseas sales by industry segment (Billions of yen) Fiscal 2001 Fiscal 2002 Fiscal 2003 (Forecast) ---------------------------- ----------------- ---------------------- (A) (A)/FY 2000 (B) (B)/(A) (C) (C)/(B) ------- ----------- ------- ------- ------- -------- Information & Telecommunication Systems 245.1 109% 273.0 111% Electronic Devices 496.0 73% 542.0 109% Power & Industrial Systems 397.4 102% 411.9 104% Digital Media & Consumer Products 528.8 165% 486.8 92% High Functional Materials & Components 331.0 88% 311.5 94% Logistics, Services & Others 510.9 86% 582.4 114% Financial Services 39.5 112% 37.4 95% Corporate items 0 - 0 - Total 2,549.1 97% 2,645.2 104% 2,940.0 111% 5. Overseas production (Total sales of overseas manufacturing subsidiaries) (Billions of yen) Fiscal 2001 Fiscal 2002 ---------------------------- ----------------- (A) (A)/FY 2000 (B) (B)/(A) ------- ----------- ------- ------- Overseas production 1,090.1 84% 1,033.8 95% Percentage of net sales 14% - 13% - Percentage of overseas sales 43% - 39% - -4- 6. Capital investment by industry segment (Completion basis, including leasing assets) (Billions of yen) Fiscal 2001 Fiscal 2002 Fiscal 2003 (Forecast) ------------------ -------------- ------------------- (A) (A)/FY 2000 (B) (B)/(A) (C) (C)/(B) ----- ----------- ----- ------- ----- -------- Information & Telecommunication Systems 89.7 100% 72.7 81% Electronic Devices 114.6 51% 91.2 80% Power & Industrial Systems 74.5 99% 70.7 95% Digital Media & Consumer Products 38.6 85% 35.1 91% High Functional Materials & Components 80.2 74% 60.6 76% Logistics, Services & Others 40.1 133% 30.8 77% Financial Services 472.1 101% 467.6 99% Eliminations & Corporate items (53.8) - (41.6) - Total 856.2 88% 787.4 92% 810.0 103% Leasing Assets 442.1 103% 459.0 104% 460.0 100% Other 414.1 77% 328.4 79% 350.0 107% 7. Depreciation by industry segment (Billions of yen) Fiscal 2001 Fiscal 2002 Fiscal 2003 (Forecast) ------------------ -------------- ------------------- (A) (A)/FY 2000 (B) (B)/(A) (C) (C)/(B) ----- ----------- ----- ------- ----- -------- Information & Telecommunication Systems 69.2 110% 59.1 85% Electronic Devices 162.1 108% 112.7 70% Power & Industrial Systems 62.9 98% 70.1 111% Digital Media & Consumer Products 44.0 99% 40.8 93% High Functional Materials & Components 81.8 99% 73.0 89% Logistics, Services & Others 36.3 104% 28.8 79% Financial Services 69.3 111% 91.5 132% Corporate Items 3.5 - 3.8 - Total 529.4 105% 480.2 91% 480.0 100% Leasing Assets 79.2 115% 102.0 129% 125.0 122% Other 450.1 103% 378.2 84% 355.0 94% -5- 8. R&D expenditure by industry segment (Billions of yen) Fiscal 2001 Fiscal 2002 Fiscal 2003 (Forecast) ----------------- -------------- ---------------------- (A) (A)/FY 2000 (B) (B)/(A) (C) (C)/(B) ----- ----------- ----- -------- --------- ---------- Information & Telecommunication Systems 136.7 89% 121.3 89% Electronic Devices 116.7 91% 105.5 90% Power & Industrial Systems 63.7 96% 64.6 101% Digital Media & Consumer Products 37.5 101% 33.8 90% High Functional Materials & Components 47.5 108% 41.7 88% Logistics, Services & Others 11.9 224% 8.5 71% Financial Services 1.2 147% 1.4 117% Total 415.4 95% 377.1 91% 380.0 101% Percentage of net sales 5.2% - 4.6% - 4.8% - 9. Balance sheets by financial and non-financial services (Billions of yen) Assets As of March 31, 2002 As of March 31, 2003 ------------------------------------ -------------------- -------------------- Manufacturing, Services and Others Cash and cash equivalents 850.9 716.9 Short-term investments 158.3 146.0 Trade receivables 1,719.6 1,746.3 Inventories 1,198.4 1,186.4 Investments and advances 835.4 678.3 Property, plant and equipment 2,212.5 2,308.5 Other assets 1,572.2 2,242.4 Total 8,547.7 9,025.0 Financial Services Cash and cash equivalents 178.3 107.0 Trade receivables 609.8 543.6 Investment in leases 646.5 606.2 Property, plant and equipment 320.9 307.9 Other assets 358.6 367.5 Total 2,114.3 1,932.4 Eliminations (746.5) (778.0) Assets 9,915.6 10,179.3 Liabilities and stockholders' equity As of March 31, 2002 As of March 31, 2003 ------------------------------------ -------------------- -------------------- Manufacturing, Services and Others Short-term debt 951.7 1,095.6 Trade payables 1,018.3 1,148.6 Long-term debt 1,026.4 954.3 Other liabilities 2,658.2 3,421.0 Total 5,654.7 6,619.7 Financial Services Short-term debt 586.6 579.6 Trade payables 243.1 256.0 Long-term debt 903.0 708.1 Other liabilities 126.7 148.1 Total 1,859.5 1,692.0 Eliminations (701.6) (737.1) Liabilities 6,812.6 7,574.5 Minority interests 798.7 751.5 Stockholders' equity 2,304.2 1,853.2 Liabilities and stockholders' equity 9,915.6 10,179.9 -6- 10. Statements of operating results by financial and non-financial services (Billions of yen) Fiscal Fiscal 2001 2002 ------- ------- Manufacturing, Services and Others Sales 7,731.4 7,891.2 ------- ------- Cost of sales 7,868.6 7,750.7 and selling, general and administrative expenses ------- ------- Operating (137.2) 140.5 income (loss) ------- ------- Financial Services Sales 567.1 579.2 ------- ------- Cost of sales 529.7 567.2 and selling, general and administrative expenses ------- ------- Operating 37.4 12.0 income (loss) ------- ------- Eliminations Sales (304.7) (278.7) ------- ------- Cost of sales (287.1) (279.1) and selling, general and administrative expenses ------- ------- Operating (17.5) 0.3 income (loss) ------- ------- Total Sales 7,993.7 8,191.7 ------- ------- Cost of sales 8,111.1 8,038.7 and selling, general and administrative expenses ------- ------- Operating (117.4) 152.9 income (loss) ------- ------- Note: Figures in tables 5, 9 and 10 represent unaudited financial information prepared by the Company for the purpose of this supplementary information. # # # April 28, 2003 Hitachi, Ltd. Supplementary Information on Information & Telecommunication Systems -------------------------------------------------------------------------- 1. Sales and operating income by product sector (Upper rows show comparisons to the previous year; billions of yen) Fiscal 2002 Fiscal 2003 (Forecast) ------------------------- ------------------------- 1st half 2nd half Total 1st half 2nd half Total -------- -------- ------- -------- -------- ------- Sales 101% 107% 104% 117% 115% 116% 878.2 1,021.4 1,899.6 1,030.0 1,170.0 2,200.0 ----- ------- ------- ------- ------- ------- Software & Services 100% 105% 103% 99% 100% 100% 453.4 531.5 984.9 449.0 532.0 981.0 ----- ------- ------- ------- ------- ------- Hardware 101% 109% 105% 137% 130% 133% 424.8 489.9 914.7 581.0 638.0 1,219.0 ----- ------- ------- ------- ------- ------- Operating income 290% 322% 309% 56% 42.1 68.3 110.5 62.0 ----- ------- ------- ------- Software & Services 186% 105% 135% 111% 31.1 29.5 60.6 67.0 ----- ------- ------- ------- Hardware - - - - ----- ------- ------- ------- 11.0 38.9 49.9 (5.0) ----- ------- ------- ------- Note:1. 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. Sales by product sector (Upper rows show comparisons to the previous year; billions of yen) Fiscal 2002 Fiscal 2003 (Forecast) ------------------------- ------------------------- 1st half 2nd half Total 1st half 2nd half Total -------- -------- ------- -------- -------- ------- Information & Telecommunication Systems 101% 107% 104% 117% 115% 116% 878.2 1,021.4 1,899.6 1,030.0 1,170.0 2,200.0 ----- ------- ------- ------- ------- ------- Software & Services 100% 105% 103% 99% 100% 100% 453.4 531.5 984.9 449.0 532.0 981.0 ----- ------- ------- ------- ------- ------- Software 104% 92% 97% 91.6 95.0 186.6 ----- ------- ------- Services 99% 108% 104% 361.8 436.5 798.3 ----- ------- ------- ------- ------- ------- Hardware 101% 109% 105% 137% 130% 133% 424.8 489.9 914.7 581.0 638.0 1,219.0 ----- ------- ------- ------- ------- ------- Storage *2 123% 110% 115% 165.5 178.4 343.9 ----- ------- ------- Servers *3 93% 139% 113% 60.1 73.0 133.1 ----- ------- ------- PCs *4 126% 123% 125% 71.6 85.1 156.7 ----- ------- ------- Telecommunication 58% 90% 73% 47.2 64.9 112.1 ----- ------- ------- Others 97% 97% 97% 80.4 88.5 168.9 ----- ------- ------- Notes: 2. Figures for Storage include disk array subsystems, hard disk drives, etc. 3. Figures for Servers include supercomputers, general-purpose computers, UNIX servers, etc. 4. Figures for PCs include PC servers and client PCs. -2- 3. SAN/NAS Storage Solutions (The upper row shows comparisons to the previous year; billions of yen) Fiscal 2002 Fiscal 2003 (Forecast) ----------------------- ----------------------- 1st half 2nd half Total 1st half 2nd half Total -------- -------- ----- -------- -------- ----- Sales 108% 108% 108% 108% 114% 111% 130.0 140.0 270.0 140.0 160.0 300.0 ----- ----- ----- ----- ----- ----- 4. Shipments of main products

Fiscal 2002 Fiscal 2003 (Forecast) ------------------------- ------------------------- 1st half 2nd half Total 1st half 2nd half Total -------- -------- ------- -------- -------- ------- Large-capacity disk array subsystems *5 11,900 14,300 26,200 19,000 25,000 44,000 ------- ------- ------- ------- ------- ------- Middle-capacity disk array subsystems *5 1,500 2,100 3,600 3,800 5,100 8,900 ------- ------- ------- ------- ------- ------- Hard Disk Drives (million units) *1 *6 4.0 4.6 8.6 40-50 ------- ------- ------- ------------------------- PCs & PC servers *7 280,000 300,000 580,000 300,000 320,000 620,000 ------- ------- ------- ------- ------- -------

Notes: 5. The figures for disk array subsystems represent storage capacity stated in terabyte units. Effective from the fiscal year ending March 31, 2004, Hitachi will report figures in terms of unit shipments to customers. Previously, production units were used as the reporting unit. Figures for the first half of fiscal 2002 have been restated accordingly. 6. The Hard Disk Drives forecast for fiscal 2003 represents HGST's forecast for the period from January 1, 2003 through December 31, 2003. 7. PC figures are in units, for Japan only, on a parent company basis. # # # April 28, 2003 Hitachi, Ltd. Supplementary Information on Semiconductors & Displays --------------------------------------------------------- 1. Semiconductors On April 1, 2003, Hitachi and Mitsubishi Electric Corporation established Renesas Technology Corp., a new semiconductor company that focuses on system LSI operations. Renesas Technology is an equity-method affiliate for both Hitachi and Mitsubishi Electric. Sales and operating loss (The upper row shows comparisons to the previous year; billions of yen) (The upper row shows comparisons to the previous year; billions of yen) Fiscal 2002 ------------------------------------- 1st half 2nd half Total -------- -------- ----- Sales 104% 131% 116% 277.4 312.7 590.2 ----- ----- ----- Operating loss (14.4) (13.1) (27.6) ----- ----- ----- Sales by product

Fiscal 2002 ----------- DRAM 6% System Memory 8% System LSIs 57% Multi-Purpose Semiconductors 29%

Capital Investment (Billions of yen) Fiscal 2002 -------------------------------- Naka Operation 2.5 Takasaki Operation 2.5 Koufu Operation 1.0 Other 0.5 Parent subtotal 6.5 TTI* 1.5 Other 11.5 ---- Domestic subsidiaries 13.0 ---- HNS** 1.5 Other 3.0 --- Overseas subsidiaries 4.5 --- Subsidiaries subtotal 17.5 ---- Consolidated total 24.0 (1st half: 13.0, 2nd half: 11.0) * Trecenti Technologies, Inc. ** Hitachi Nippon Steel Semiconductor Singapore Pte. Ltd. -2- Microprocessor/Microcontroller Sales (Comparison to the previous year; billions of yen)

Fiscal 2002 ----------- 230 135%

DRAM & Flash Memory Production (Chips per month) Fiscal 2002 - ----------------------------------------------- 1st quarter 2nd quarter 3rd quarter 4th quarter ----------- ----------- ----------- ----------- 64MDRAM 550,000 600,000 600,000 600,000 256MDRAM 2,000,000 2,000,000 2,000,000 1,500,000 256M Flash Memory 600,000 600,000 500,000 400,000 2. Displays Sales and operating income (loss) (The upper row shows comparisons to the previous year; billions of yen) Fiscal 2002 Fiscal 2003 (Forecast) ----------------------- ----------------------- 1st half 2nd half Total 1st half 2nd half Total -------- -------- ----- -------- -------- ----- Sales 109% 92% 100% 120% 137% 128% 100.0 94.7 194.8 120.0 130.0 250.0 ----- ----- ----- ----- ----- ----- Operating income (loss) (1.3) (14.4) (15.7) (10.0) 2.5 (7.5) ----- ----- ----- ----- ----- ----- Sales of major products (Comparison to the previous year; billions of yen) Fiscal 2003 Fiscal 2002 (Forecast) ------------ ----------- LCDs 147.0 115% 210.0 143% ----- --- ----- --- Color picture tubes 1.5 8% 0.0 - ----- --- ----- --- Projection tubes 29.0 145% 32.0 110% ----- --- ----- --- LCD Sales (Comparison to the previous year; billions of yen) Fiscal 2002 Fiscal 2003 (Forecast) --------------------------- --------------------------- 1st half 2nd half Total 1st half 2nd half Total -------- -------- --------- -------- -------- --------- Total 80.0 67.0 147.0 115% 100.0 110.0 210.0 143% Large-size LCDs 58.0 40.0 98.0 90% 50.0 55.0 105.0 107% Medium- & small size LCDs 22.0 27.0 49.0 258% 50.0 55.0 105.0 214% Capital Investment (Comparison to the previous year; billions of yen) Fiscal 2002 Fiscal 2003 (Forecast) -------------------------- ------------------------ 1st half 2nd half Total 1st half 2nd half Total -------- -------- -------- -------- -------- ------ Capital Investment 26.8 1.3 28.1 290% 4.2 0.4 4.6 16% ---- --- ---- --- --- --- --- -- # # # HITACHI, LTD. UNCONSOLIDATED FINANCIAL STATEMENTS FOR THE YEAR ENDED MARCH 31, 2003 (120yen = U.S.$1) April 28, 2003

YEN U.S. DOLLARS (millions) (millions) ------------------------ -------------------- 2003(A) 2002(B) (A)/(B)x100 2003 INCOME STATEMENTS ------------ ------------ ----------- --------- Net sales 3,112,411 3,522,299 88% 25,937 Cost of sales 2,517,608 2,927,426 86% 20,980 S.G.A. expenses 541,061 679,615 80% 4,509 Operating income (loss) 53,741 (84,742) - 448 --------- --------- -------- ------ Other income 51,496 95,016 54% 429 Other deductions 53,223 91,937 58% 444 Ordinary income (loss) 52,014 (81,663) - 433 --------- --------- -------- ------ Extraordinary gain 92,198 10,729 859% 768 Extraordinary loss 63,127 318,887 20% 526 Income before income taxes (loss) 81,085 (389,820) - 676 --------- --------- -------- ------ Current income taxes (17,681) 3,884 - (147) Deferred income taxes 70,477 (141,063) - 587 Net income (loss) 28,289 (252,641) - 236 --------- --------- -------- ------ Basic EPS (yen and dollars) 8.38 (75.69) - 0.07 Diluted EPS (yen and dollars) - - - - 2003/3/31(A) 2002/3/31(B) (A)/(B)x100 2003/3/31 BALANCE SHEETS ------------ ------------ ----------- --------- Current assets 1,921,651 2,124,120 90% 16,014 (Quick assets) 1,509,346 1,618,519 93% 12,578 (Inventories) 326,611 391,118 84% 2,722 (Deferred tax assets) 85,693 114,481 75% 714 Fixed assets 1,903,377 1,799,024 106% 15,861 (Investments) 1,078,032 810,124 133% 8,984 (Deferred tax assets) 249,036 307,867 81% 2,075 (Others) 576,309 681,033 85% 4,803 Total assets 3,825,029 3,923,144 97% 31,875 --------- --------- -------- ------ Current liabilities 1,819,074 1,788,217 102% 15,159 Fixed liabilities 631,990 770,341 82% 5,267 (Debentures) 418,471 511,299 82% 3,487 (Long-term loans) 23,548 2,668 883% 196 (Others) 189,971 256,374 74% 1,583 Total liabilities 2,451,065 2,558,558 96% 20,426 --------- --------- -------- ------ Stockholders' equity 1,373,964 1,364,585 101% 11,450 --------- --------- -------- ------ Liabilities and stockholders' equity 3,825,029 3,923,144 97% 31,875 --------- --------- -------- ------

-2- FORECAST FOR THE YEAR ENDING MARCH 31, 2004 --------------------------------------------

Net sales Ordinary income Net income --------- --------------- ---------- Millions of Yen 2,330,000 30,000 20,000 Millions of U.S. dollars 19,417 250 167

Cautionary Statement This document contains forward-looking statements which reflect management's current views with respect to certain future events and financial performance. Words such as "anticipate," "believe," "expect," "estimate," "intend," "plan," "project" and similar expressions which indicate future events and trends 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 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 products and to market products that incorporate new technology on a timely and cost-effective basis and achieve market acceptance; 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 access to liquidity or long-term financing, particularly in the context of restrictions on availability of credit 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; Hitachi's dependence on alliances with other corporations in designing or developing certain products; and the market prices of equity securities in Japan, declines in which may result in write-downs of equity securities Hitachi holds. These factors listed above are not exclusive and are in addition to other factors that are stated or indicated elsewhere in this document, or in other materials published by the Company. # # # April 28, 2003 Hitachi, Ltd. Supplementary information for fiscal 2002, ended March 31, 2003 (Unconsolidated basis) 1. Summary (Billions of yen) Fiscal 2001 Fiscal 2002 Fiscal 2003 (Forecast) ------------------- -------------- ----------------------------------- 1st half of (A) (A)/ FY2000 (B) (B)/(A) FY 2003 (Note) (C) (C)/(B) ------- ----------- ------- ------- ----------- ------ ------- ------- Net sales 3,522.2 88% 3,112.4 88% 1,090.0 72% 2,330.0 75% Operating income (loss) (84.7) - 53.7 - - - - - Ordinary income (loss) (81.6) - 52.0 - 5.0 - 30.0 58% Net income (loss) (252.6) - 28.2 - 5.0 25% 20.0 71% Dividend payout ratio (%) - - 71.6 - - - - - Average exchange rate (yen/U.S.$) 124 - 121 - 120 - 120 - Note: 1st half of FY 2003 / 1st half of FY 2002

As of March 31, 2002 As of March 31, 2003 -------------------- -------------------- Cash & cash equivalents, Short-term Investments (Billions of yen) 357.6 253.7 ------ ------ Interest-bearing debt (Billions of yen) 648.0 683.3 ------ ------ Number of employees 50,427 44,375 ------ ------

2. Sales by industry segment (Billions of yen) Fiscal 2003 Fiscal 2001 Fiscal 2002 (Forecast) ----------------- -------------- ---------------- (A) (A)/FY2000 (B) (B)/(A) (C) (C)/(B) ------- ---------- ------- ------- ------- ------- Information & Telecommunication Systems 1,408.9 97% 1,440.0 102% ------- -- ------- --- Electronic Devices 523.3 59% 495.6 95% ------- -- ------- --- Power & Industrial Systems 1,092.9 97% 955.4 87% ------- -- ------- --- Digital Media & Consumer Products 497.1 93% 221.3 45% ------- -- ------- --- ------- -- Total 3,522.2 88% 3,112.4 88% 2,330.0 75% ------- -- ------- --- ------- -- -2-

3. Capital investment (Based on construction starts) (Billions of yen) Fiscal 2001 Fiscal 2002 Fiscal 2003 (Forecast) --------------- ------------ ------------------- (A) (A)/FY2000 (B) (B)/(A) (C) (C)/(B) ----- ---------- ----- ------- ------- ------- Information & Telecommunication Systems 18.5 80% 18.5 100% ----- --- ----- ---- Electronic Devices 15.5 12% 31.0 200% ----- --- ----- ---- Power & Industrial Systems 22.0 73% 15.0 68% ----- --- ----- ---- Digital Media & Consumer Products 6.5 72% 1.5 23% ----- --- ----- ---- Other 13.0 118% 11.0 85% ----- --- ----- ---- ----- -- Total 75.5 37% 77.0 102% 40.0 52% ----- --- ----- ---- ----- -- 4. Depreciation (note) (Billions of yen) Fiscal 2001 Fiscal 2002 Fiscal 2003 (Forecast) --------------- ------------ ------------------- (A) (A)/FY2000 (B) (B)/(A) (C) (C)/(B) ----- ---------- ----- ------- ------- ------- Depreciation 116.7 96% 86.7 74% 52.0 60% Note: The figures do not include depreciation on leasing assets. 5. R&D expenditures (Billions of yen) Fiscal 2001 Fiscal 2002 Fiscal 2003 (Forecast) --------------- ------------ ------------------- (A) (A)/FY2000 (B) (B)/(A) (C) (C)/(B) ----- ---------- ----- ------- ------- ------- Total 275.6 90% 223.0 81% 140.0 63% Percentage of net sales 7.8% - 7.2% - 6.0% -

# # # FOR IMMEDIATE RELEASE Contacts: Japan: U.S.: Machiko Ikenoya Matt Takahashi Hitachi, Ltd. Hitachi America, Ltd. +81-3-3258-2056 +1-650-244-7902 machiko_ikenoya@hdq.hitachi.co.jp masahiro.takahashi@hal.hitachi.com China: U.K.: Yuji Hoshino Kantaro Tanii Hitachi (China) Investment Ltd. Hitachi Europe Ltd. +86-10-6590-8111 (ext. 2399) +44-(0)1628-585379 yhoshino@hitachi.com.cn kantaro.tanii@hitachi-eu.com Hitachi to Acquire Its Own Shares Tokyo, April 28, 2003 - Hitachi, Ltd. (NYSE:HIT/TSE:6501) announced that, pursuant to the provisions of Article 210 of the Commercial Code of Japan, it will acquire its own shares as follows: 1. Class of shares to be acquired: Common stock of Hitachi, Ltd. 2. Aggregate number of shares to be acquired: Up to 80 million shares 3. Aggregate acquisition amount: Up to 30 billion yen 4. Period of acquisition: May 1, 2003 through May 30, 2003 5. Method of acquisition: Purchase at Tokyo Stock Exchange Reference Details of the resolution that was approved at the Ordinary General Meeting of Shareholders held on June 26, 2002 are as follows: (1) Class of shares to be acquired: Common stock of Hitachi, Ltd. (2) Aggregate number of shares to be acquired: Up to 300 million shares (3) Aggregate acquisition amount: Up to 300 billion yen (Note) As of April 28, 2003, Hitachi, Ltd has not acquired any of its own shares pursuant to the above resolution. # # # FOR IMMEDIATE RELEASE Contacts: Japan: U.S.: Machiko Ikenoya Matt Takahashi Hitachi, Ltd. Hitachi America, Ltd. +81-3-3258-2056 +1-650-244-7902 machiko_ikenoya@hdq.hitachi.co.jp masahiro.takahashi@hal.hitachi.com China: U.K.: Yuji Hoshino Kantaro Tanii Hitachi (China) Investment Ltd. Hitachi Europe Ltd. +86-10-6590-8111 (ext. 2399) +44-(0)1628-585379 yhoshino@hitachi.com.cn kantaro.tanii@hitachi-eu.com Proposal to the General Meeting of Shareholders for the authorization of the acquisition of its own shares Tokyo, April 28, 2003 - Hitachi, Ltd. (NYSE:HIT/TSE:6501) announced that it will propose the authorization of the acquisition of its own shares to the Ordinary General Meeting of Shareholders to be held on June 25, 2003, for the purpose of implementing flexible capital policy. The proposal is pursuant to the provisions of Article 210 of the Commercial Code of Japan and the Company shall be authorized to acquire shares of its common stock, not exceeding 300 million shares, for the aggregate amount not exceeding 150 billion yen during the period from the close of this Ordinary General Meeting of Shareholders to the close of the next Ordinary General Meeting of Shareholders. # # # FOR IMMEDIATE RELEASE Contacts: Japan: U.S.: Machiko Ikenoya Matt Takahashi Hitachi, Ltd. Hitachi America, Ltd. +81-3-3258-2056 +1-650-244-7902 machiko_ikenoya@hdq.hitachi.co.jp masahiro.takahashi@hal.hitachi.com China: U.K.: Yuji Hoshino Kantaro Tanii Hitachi (China) Investment Ltd. Hitachi Europe Ltd. +86-10-6590-8111 (ext. 2399) +44-(0)1628-585379 yhoshino@hitachi.com.cn kantaro.tanii@hitachi-eu.com Grant of Incentive Stock Options Tokyo, Japan, April 28, 2003 - Hitachi, Ltd. (TSE: 6501, "Company") today announced that, as a measure intended to contribute to the maximization of corporate value by heightening the motivation of directors, executive officers and employees, the Board of Directors of the Company, at the meeting held today, resolved to submit a proposal at the ordinary general meeting of shareholders, to be held on June 25, 2003, regarding the issue of stock acquisition rights for the purpose of granting stock options pursuant to Article 280-20 and Article 280-21 of the Japanese Commercial Code. The details of the proposal are as follows: 1. Qualified persons to be allocated the stock acquisition rights (the "Rights") Directors, executive officers and employees of the Company 2. Class and number of shares to be issued upon exercise of the Rights Not more than 1,500,000 shares of the Company'S common stock (the "Common Stock") in total. In the event that the Company splits or consolidates its Common Stock, the number of shares to be issued upon exercise of the Rights shall be adjusted according to the following formula. Number of shares Number of shares Ratio of stock split or = X after adjustment before adjustment consolidation -2- Any fraction less than one share derived in consequence of adjustment shall be rounded down to the nearest one share. 3. Total number of the Rights to be issued Not more than 1,500 Rights in total. The number of shares to be issued upon exercise of each Right shall be 1,000, which shall be adjusted in accordance with the preceding provision (2. above). 4. Issue price of the Rights No consideration shall be paid. 5. Amount to be paid upon exercise of the Rights The amount to be paid per share upon exercise of the Rights (the "Exercise Price" shall be 1.05 times of the average of the closing price (including indication of any bid or offer) of a Common Stock on the Tokyo Stock Exchange on each of the thirty consecutive trading days commencing on the forty-fifth trading day preceding the issue date (excluding the number of days on which no closing price is quoted), any fraction less than one yen shall be rounded up to the nearest one yen. However, in the event that the price is less than the closing price of the issue date (or if no closing price is quoted on the issue date, the latest closing price before the issue date shall be applied), the Exercise Price shall be 1.05 times of the closing price of the issue date. In the event that the Company issues new shares or reissues its own shares at price less than the market price (excluding the issue of shares resulting from the exercise of the stock acquisition rights) after the issue date, the Exercise Price will be subject to adjustment in accordance with the following formula, and any fraction less than one yen derived in consequence of adjustment shall be rounded up to the nearest one yen. Number + Number X Amount of of new to be shares shares paid per already to be share issued issued ------------------------ Exercise Price after adjustment = Exercise X Market price per share Price before issue before adjustment ------------------------------------ Number of + Number of shares new shares already to be issued issued -3- In the above formula, the number of its own shares shall be excluded from the number of shares already issued. In the case of the reissue of its own shares, "Number of new shares to be issued" means "Number of its own shares to be reissued" and "Market price per share before issue" means "Market price per share before reissue." Upon stock split or consolidation of Common Stocks, the Exercise Price will be subject to adjustment in accordance with the following formula, and any fraction less than one yen derived in consequence of adjustment shall be rounded up to the nearest one yen. Exercise Exercise Price Price 1 after = before X ------------------------------------- adjustment adjustment Ratio of stock split or consolidation 6. Period during which the Rights may be exercised The Rights will be exercisable within a three-year period following one year from the issue date. 7. Conditions for exercise of the Rights 1 In the event a person holding the Rights loses the position of director, executive officer or employee of the Company, such person may exercise the Rights only within the succeeding six months of such event. In the event of the death of the person, the Rights expire immediately. 2 Other terms of exercising the Rights shall be subject to the provisions in granting agreement between the Company and each qualified person. 8. Cancellation of the Rights The Company may cancel the Rights at any time without consideration. 9. Restriction on the transfer of the Rights The approval by the Board of Directors of the Company shall be required for transfer of the Rights. Notes: The issue of the Rights above is subject to the approval by shareholders at the 134th Ordinary General Meeting of Shareholders to be held on June 25, 2003. # # #