6-K 1 k00278e6vk.txt HITACHI, LTD. SECURITIES AND EXCHANGE COMMISSION Washington, DC 20549 FORM 6-K REPORT OF FOREIGN PRIVATE ISSUER PURSUANT TO RULE 13a-16 OR 15d-16 UNDER THE SECURITIES EXCHANGE ACT OF 1934 For the month of October 2002 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 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 October 31, 2002 regarding business results for the first half of the fiscal year ending March 31, 2003. 2. Press release dated October 31, 2002 regarding further structural reforms. SIGNATURES Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized. Hitachi, Ltd. ----------------------------- (Registrant) Date November 8, 2002 By /s/ Kazuo Kumagai ---------------- ------------------------------- Kazuo Kumagai Executive Vice President and Director FOR IMMEDIATE RELEASE Contacts: Japan: U.S.: Takafumi Ichinose Matt Takahashi Hitachi, Ltd. Hitachi America, Ltd. +81-3-3258-2056 +1-650-244-7902 takafumi_ichinose@hdq.hitachi.co.jp masahiro.takahashi@hal.hitachi.com Singapore: U.K.: Yuji Hoshino Kantaro Tanii Hitachi Asia Ltd. Hitachi Europe Ltd. +65-6231-2522 +44-(0)1628-585379 yhoshino@has.hitachi.com.sg kantaro.tanii@hitachi-eu.com Hitachi Announces Consolidated Financial Results for the First Half of Fiscal 2002 Tokyo, October 31, 2002 --- Hitachi, Ltd. (NYSE:HIT / TSE:6501) today announced its consolidated financial results for the first half of fiscal 2002, ended September 30, 2002. During the period under review, although some regions, notably Asia, showed signs of strength, the global economy remained lackluster, set against a backdrop of a slowing U.S. economy and falling stock prices on world exchanges. The Japanese economy echoed the overall economic mood, despite signs of an upturn in production volumes following a period of inventory destocking. As deflation increased debt burdens and squeezed earnings, corporate sentiment toward capital expenditures failed to improve. And, as employment prospects remained dim, consumers too were reluctant to spend. Against this backdrop, net sales were largely the same year on year at 3,916.4 billion yen (US$31,841 million). But Hitachi posted operating income of 61.6 billion yen (US$502 million), reversing an operating loss of 42.1 billion yen (US$342 million) in the previous year's first half, as the Corporate Innovation Initiative (CII), including Procurement Renewal Project, produced results, and structural reforms implemented in the previous fiscal year yielded lower fixed costs. - more - -2- By segment, in Information & Telecommunication Systems, sales of telecommunication-related equipment fell, while demand for storage solutions remained firm. Consequently, segment sales remained consistent year on year at 878.2 billion yen (US$7,140 million). The segment recorded operating income of 42.1 billion yen (US$343 million), up 190% over the same period in fiscal 2001. This result reflects a steady performance in storage solutions and systems integration, as well as benefits from structural reforms, particularly in the telecommunications sector, implemented in the previous fiscal year. In Electronic Devices, sales in display operations were driven higher by rising demand for small and medium-size TFT LCDs, mainly for mobile phones, and large-size TFT LCDs. This outweighed lower sales stemming from Hitachi's withdrawal from CRTs for PC monitors in the previous fiscal year. Semiconductor sales edged up slightly over the fiscal 2001 interim period on strong demand for system LSIs, including LCD drivers and microcomputers for automotive applications. As a result, segment sales were 766.4 billion yen (US$6,231 million), almost the same year on year. The segment recorded an operating loss of 7.9 billion yen (US$64 million), a 65.0 billion yen (US$528 million) improvement over the 72.9 billion yen (US$593 million) operating loss in the first half of fiscal 2001. This turnaround reflected the benefits of structural reforms, including the termination of unprofitable products such as CRTs for PC monitors and the streamlining of certain semiconductor production lines. In Power & Industrial Systems, sales declined 4% overall, to 1,068.1 billion yen (US$8,684 million). This was on account of lower sales for maintenance services for nuclear and thermal power generation plants of Japanese electric power companies, as well as lower sales of air-conditioning equipment, industrial equipment, chemical plants and other products, due to the fall-off in private-sector plant and equipment investment. Operating income dropped 58%, to 11.1 billion yen (US$90 million) due to fewer major projects, notably of power generation equipment and other exports, as well as falling sales revenues from environmental equipment in Japan. In Digital Media & Consumer Products, although sales of mobile phones decreased, sales of optical storage products and plasma TVs increased year on year. In home appliances, overall sales were sluggish due to soft domestic demand. Hitachi Maxell, Ltd. saw audiotape and videotape sales fall, but sales of computer tapes, optical media and rechargeable batteries increased. Overall, segment sales rose 3% year on year, to 597.6 billion yen (US$4,859 million). The segment recorded operating income of 5.7 billion yen (US$47 million), a turnaround from the 6.0 billion yen (US$49 million) operating loss in the same period of the previous fiscal year, even as price competition intensified in a deflationary economic environment. This was partly attributable to the benefits of structural reforms. - more - -3- In High Functional Materials & Components, Hitachi Metals, Ltd. posted lower sales as a result of customers' inventory volume corrections for electronics-related products and other factors, while Hitachi Cable, Ltd. also posted lower sales, with sales of submarine fiber-optic cables declining sharply. Hitachi Chemical Co., Ltd. posted lower sales for housing equipment and environmental facilities, although sales increased for electronics-related materials such as those for semiconductors and LCDs. As a whole, segment sales decreased 2% year on year, to 613.0 billion yen (US$4,984 million). However, the segment posted operating income of 9.0 billion yen (US$74 million), reversing a year-earlier loss of 1.4 billion yen (US$12 million), as it benefited from the results of structural reforms. In Logistics, Services & Others, overseas sales companies achieved higher sales of hard disk drives. However, the sale of Tokyo Monorail Co., Ltd., formerly a subsidiary of Hitachi Transport System, Ltd., in the latter half of the previous fiscal year negatively affected segment sales, leading to a slight decline at 700.6 billion yen (US$5,696 million). Operating income dropped 80%, to 1.4 billion yen (US$12 million). In Financial Services, segment sales increased 4% year on year, to 293.3 billion yen (US$2,385 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. Operating income declined 9%, to 18.6 billion yen (US$152 million). Other income came to 26.7 billion yen (US$217 million), an increase of 9.4 billion yen (US$77 million) compared to the first half of the previous fiscal year, mainly reflecting a net gain on securities. Meanwhile, other deductions were 42.5 billion yen (US$346 million), a 31.1 billion yen (US$253 million) year-on-year decrease, as restructuring charges were not incurred during the period as was in the first half of fiscal 2001 while interest expenses were lower resulting from reductions in debt. As a result, income before income taxes was 45.8 billion yen (US$373 million), and after the recognition of 21.2 billion yen (US$173 million) in income taxes, Hitachi recorded income before minority interests of 24.6 billion yen (US$200 million) and net income was 12.8 billion yen (US$104 million). - more - -4- Financial Position Net cash provided by operating activities was 191.5 billion yen (US$1,557 million), declining 4.8 billion yen year on year, principally due to the payment of special termination benefits under early retirement plans. Efforts were, however, made to use working capital more efficiently, such as by promoting Project C, which reduced the time required to turn over inventory and accounts receivable from 185 days at the end of September 30, 2001, to 160 days at September 30, 2002. Investing activities used net cash of 128.9 billion yen (US$1,048 million), 87.6 billion yen (US$712 million) less year on year, reflecting a decrease in cash used for the purchase of property, plant and equipment as Hitachi made selective capital investments, and cash inflows from the selling of short-term investments and subsidiaries' common stock. Free cash flows remaining after deducting net cash used in investing activities from net cash provided by operating activities amounted to 62.5 billion yen (US$508 million). Financing activities used net cash of 197.8 billion yen (US$1,609 million), compared with net cash provided of 74.1 billion yen (US$603 million) in the same period of the previous fiscal year, reflecting the repayment of short-term borrowings by implementing a new committed credit facility. Cash and cash equivalents as of September 30, 2002 amounted to 875.2 billion yen (US$7,116 million), a reduction of 154.1 billion yen (US$1,253 million) during the interim period. Debt on September 30, 2002 stood at 2,776.9 billion yen (US$22,576 million), 221.3 billion yen (US$1,799 million) less than at March 31, 2002. Capital investment on a completion basis declined 15%, to 375.2 billion yen (US$3,051 million), and depreciation decreased 13%, to 226.2 billion yen (US$1,840 million). All figures were converted at the rate of 123 yen = U.S.$1, the approximate exchange rate on the Tokyo Foreign Exchange Market as of September 30, 2002. - more - -5- Outlook for Fiscal 2002 The world economy seemed to be moving onto a recovery footing, particularly in the U.S. and Asia, at the start of 2002. However, the recovery in the bellwether U.S. economy has slowed, and a string of terrorist attacks in various parts of the world have created a growing sense of instability in the world economy. The Japanese economy, on the other hand, remains mired in recession with no prospects for a full-fledged recovery. Consequently, consumer spending and capital expenditures in Japan are expected to remain depressed, creating an uncertain operating environment for companies. In this climate, Hitachi will bolster its international competitiveness by accelerating the pace of CII, which targets greater efficiency throughout the organization, to quickly improve its operating results. Concurrently, Hitachi will advance bold management and structural reforms. Based on the above factors, Hitachi is projecting the following operating results for fiscal 2002, ending March 31, 2003. The projections assume an exchange rate of 120 yen to the U.S. dollar for the second half of fiscal 2002. Net Sales 8,050 billion yen (US$65,447 million) (year-on-year increase of 1%) Operating income 150 billion yen (US$1,220 million) Income before income taxes 130 billion yen (US$1,057 million) Income before minority interests 61 billion yen (US$496 million) Net income 36 billion yen (US$293 million) 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 -6- 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. - more - - 7 - HITACHI, LTD. AND SUBSIDIARIES CONSOLIDATED FINANCIAL STATEMENTS FOR THE HALF YEAR ENDED SEPTEMBER 30, 2002 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 123 yen = U.S.$1, the approximate exchange rate prevailing on the Tokyo Foreign Exchange Market as of September 30, 2002. 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 half years ended September 30 ----------------------------------------------------------- YEN U.S.DOLLARS (millions) (millions) ------------------------------ (A)/(B) ----------- 2002 (A) 2001 (B) X100 2002 ------------------------------ -------- ----------- 1. Net sales 3,916,491 3,938,121 99 31,841 2. Operating income (loss) 61,688 (42,110) -- 502 3. Income (Loss) before income taxes and minority interests 45,877 (98,541) -- 373 4. Income (Loss) before minority interests 24,610 (116,696) -- 200 5. Net income (loss) 12,852 (110,543) -- 104 6. Net income (loss) per share Basic 3.85 (33.12) -- 0.03 Diluted 3.77 -- -- 0.03 7. Net income (loss) per ADS (representing 10 shares) Basic 39 (331) -- 0.32 Diluted 38 -- -- 0.31

- more - - 8 - CONSOLIDATED STATEMENTS OF INCOME

The half years ended September 30 ---------------------------------------------------------- YEN U.S. DOLLARS (millions) (millions) ------------------------------ (A)/(B) ------------ 2002 (A) 2001 (B) X100 2002 ------------- ------------ ------- ------------ Net sales 3,916,491 3,938,121 99 31,841 Cost of sales 2,969,558 3,016,343 98 24,143 Selling, general and administrative expenses 885,245 963,888 92 7,197 Operating income (loss) 61,688 (42,110) -- 502 Other income 26,712 17,246 155 217 (Interest and dividends) 10,981 17,246 64 89 (Other) 15,731 -- -- 128 Other deductions 42,523 73,677 58 346 (Interest charges) 17,803 25,900 69 145 (Other) 24,720 47,777 52 201 Income (Loss) before income taxes and minority interests 45,877 (98,541) -- 373 Income taxes 21,267 18,155 117 173 Income (Loss) before minority interests 24,610 (116,696) -- 200 Minority interests 11,758 (6,153) -- 96 Net income (loss) 12,852 (110,543) -- 104

- more - - 9 - CONSOLIDATED BALANCE SHEETS

YEN U.S.DOLLARS (millions) (millions) --------------------------------------- ---------------- As of Sept. 30, As of March 31, (A)/(B) As of Sept. 30, 2002 (A) 2002 (B) X100 2002 ----------------------------------------------------------------------------------------------------------- ---------------- Assets 9,360,312 9,915,654 94 76,100 --------- --------- --- ------ Current assets 4,991,308 5,507,535 91 40,580 Cash and cash equivalents 875,212 1,029,374 85 7,116 Short-term investments 160,862 178,933 90 1,308 Trade receivables Notes 184,194 204,855 90 1,498 Accounts 1,666,468 1,895,150 88 13,549 Investment in leases 459,526 527,432 87 3,736 Inventories 1,193,242 1,214,399 98 9,701 Other current assets 451,804 457,392 99 3,673 --------- --------- --- ------ Investments and advances 773,211 834,907 93 6,286 --------- --------- --- ------ Property, plant and equipment 2,448,810 2,514,424 97 19,909 --------- --------- --- ------ Other assets 1,146,983 1,058,788 108 9,325 --------- --------- --- ------ Liabilities and stockholders' equity 9,360,312 9,915,654 94 76,100 --------- --------- --- ------ Current liabilities 3,649,636 3,885,265 94 29,672 Short-term debt and current installments of long-term debt 1,235,091 1,199,921 103 10,041 Trade payables Notes 77,979 92,799 84 634 Accounts 970,253 991,037 98 7,888 Advances received 293,623 334,172 88 2,387 Other current liabilities 1,072,690 1,267,336 85 8,721 --------- --------- --- ------ Noncurrent liabilities 2,617,237 2,927,421 89 21,278 Long-term debt 1,541,809 1,798,303 86 12,535 Retirement and severance benefits 1,000,985 1,049,054 95 8,138 Other liabilities 74,443 80,064 93 605 --------- --------- --- ------ Minority interests 802,071 798,744 100 6,521 --------- --------- --- ------ Stockholders' equity 2,291,368 2,304,224 99 18,629 Common stock 282,032 282,032 100 2,293 Capital surplus 530,460 527,010 101 4,313 Legal reserve and retained earnings 1,761,907 1,753,999 100 14,324 Accumulated other comprehensive income (loss) (282,322) (258,484) - (2,295) (Foreign currency translation adjustments) (56,624) (38,012) - (460) (Minimum pension liability adjustments) (243,059) (260,100) - (1,976) (Net unrealized holding gain on available-for-sale securities) 17,621 39,997 44 143 (Cash flow hedges) (260) (369) - (2) Treasury stock (709) (333) - (6)

- more - - 10 - CONSOLIDATED STATEMENTS OF STOCKHOLDERS' EQUITY

YEN U.S. DOLLARS (millions) (millions) --------------------------------------------- ------------------- The half year ended The year ended The half year ended Sept. 30, 2002 March 31, 2002 Sept. 30, 2002 --------------------------------------------- ------------------- Common stock Balance at beginning of year 282,032 281,754 2,293 ----------- ----------- ---------- Conversion of convertible debentures 0 278 0 ----------- ----------- ---------- Balance at end of year 282,032 282,032 2,293 =========== =========== ========== Capital surplus Balance at beginning of year 527,010 501,243 4,285 ----------- ----------- ---------- Conversion of convertible debentures 652 359 5 Increase arising from issuance of subsidiaries' common stock and other 2,798 25,408 23 ----------- ----------- ---------- Balance at end of year 530,460 527,010 4,313 =========== =========== ========== Legal reserve Balance at beginning of year 110,751 109,815 900 ----------- ----------- ---------- Transfers from retained earnings 203 978 2 Transfers from (to) minority interests arising from conversion of subsidiaries' convertible debentures and other 6 (42) 0 ----------- ----------- ---------- Balance at end of year 110,960 110,751 902 =========== =========== ========== Retained earnings Balance at beginning of year 1,643,248 2,157,136 13,360 ----------- ----------- ---------- Net income (loss) 12,852 (483,837) 104 Cash dividends 0 (28,373) 0 Transfers to legal reserve (203) (978) (2) Transfers to minority interests arising from conversion of subsidiaries' convertible debentures (263) (64) (2) Transfers to minority interests arising from issuance of subsidiaries' common stock and other (4,687) (636) (38) ----------- ----------- ---------- Balance at end of year 1,650,947 1,643,248 13,422 =========== =========== ========== Legal reserve and retained earnings 1,761,907 1,753,999 14,324 =========== =========== ========== Accumulated other comprehensive income (loss) Foreign currency translation adjustments Balance at beginning of year (38,012) (57,647) (309) ----------- ----------- ---------- Current-period change (18,612) 19,635 (151) ----------- ----------- ---------- Balance at end of year (56,624) (38,012) (460) =========== =========== ========== Minimum pension liability adjustments Balance at beginning of year (260,100) (182,936) (2,115) ----------- ----------- ---------- Current-period change 17,041 (77,164) 139 ----------- ----------- ---------- Balance at end of year (243,059) (260,100) (1,976) =========== =========== ========== Net unrealized holding gain on available-for-sale securities Balance at beginning of year 39,997 51,041 325 ----------- ----------- ---------- Changes in unrealized holding gain (22,376) (11,044) (182) ----------- ----------- ---------- Balance at end of year 17,621 39,997 143 =========== =========== ========== Cash flow hedges Balance at beginning of year (369) 1,096 (3) ----------- ----------- ---------- Changes in the fair value of derivative financial instruments 109 (1,465) 1 ----------- ----------- ---------- Balance at end of year (260) (369) (2) =========== =========== ========== Accumulated other comprehensive income (loss) (282,322) (258,484) (2,295) =========== =========== ========== Treasury stock Balance at beginning of year (333) -- (3) ----------- ----------- ---------- Current-period increase (376) (333) (3) ----------- ----------- ---------- Balance at end of year (709) (333) (6) =========== =========== ========== Total stockholders' equity 2,291,368 2,304,224 18,629 =========== =========== ==========

- more - - 11 - CONSOLIDATED STATEMENTS OF CASH FLOWS

The half years ended September 30 ------------------------------------------------- YEN U.S. DOLLARS (millions) (millions) ------------------------------ ------------- 2002 2001 2002 ---------- ----------- -------- Cash flows from operating activities Net income (loss) 12,852 (110,543) 104 Adjustments to reconcile net income (loss) to net cash provided by operating activities Depreciation 226,280 258,714 1,840 Deferred income taxes (36,292) (39,015) (295) Loss on disposal of rental assets and other property 4,306 11,451 35 Decrease in receivables 183,658 397,185 1,493 (Increase) Decrease in inventories (8,394) 54,629 (68) Decrease in payables (25,911) (273,874) (211) Other (164,996) (102,224) (1,341) ---------- ----------- -------- Net cash provided by operating activities 191,503 196,323 1,557 Cash flows from investing activities Decrease in short-term investments 17,591 53,128 143 Capital expenditures (155,148) (226,980) (1,261) Purchase of rental assets, net (186,496) (201,690) (1,516) (Purchase) Sale of investments and subsidiaries' common stock, net 55,989 (46,353) 455 Collection of investment in leases 209,869 232,447 1,706 Other (70,764) (27,126) (575) ---------- ----------- -------- Net cash used in investing activities (128,959) (216,574) (1,048) Cash flows from financing activities Increase (Decrease) in interest-bearing debt (191,907) 58,700 (1,560) Dividends paid to stockholders (82) (18,289) (1) Dividends paid to minority stockholders of subsidiaries (6,956) (7,358) (57) Other 1,088 41,076 9 ---------- ----------- -------- Net cash provided by (used in) financing activities (197,857) 74,129 (1,609) Effect of exchange rate changes on cash and cash equivalents (18,849) (3,883) (153) ---------- ----------- -------- Net increase (decrease) in cash and cash equivalents (154,162) 49,995 (1,253) Cash and cash equivalents at beginning of year 1,029,374 1,381,603 8,369 ---------- ----------- -------- Cash and cash equivalents at end of year 875,212 1,431,598 7,116 ========== =========== ========

- more - - 12 - SEGMENT INFORMATION (1)INDUSTRY SEGMENTS

The half years ended September 30 ----------------------------------------------------------- YEN U.S. DOLLARS (millions) (millions) ------------------------------- (A)/(B) ------------ 2002 (A) 2001 (B) X100 2002 -------- -------- ------- ---- Sales Information & Telecommunication 878,230 873,312 101 7,140 Systems 18% 18% Electronic Devices 766,417 765,090 100 6,231 16% 15% Power & Industrial Systems 1,068,101 1,117,375 96 8,684 22% 22% Digital Media & Consumer 597,689 582,493 103 4,859 Products 12% 12% High Functional Materials 613,061 628,175 98 4,984 & Components 12% 13% Logistics, Services & Others 700,613 707,766 99 5,696 14% 14% Financial Services 293,321 281,102 104 2,385 6% 6% Subtotal 4,917,432 4,955,313 99 39,979 100% 100% Eliminations & Corporate items (1,000,941) (1,017,192) -- (8,138) Total 3,916,491 3,938,121 99 31,841 Operating income (loss) Information & Telecommunication 42,167 14,558 290 343 Systems Electronic Devices (7,918) (72,918) -- (64) Power & Industrial Systems 11,111 26,736 42 90 Digital Media & Consumer 5,747 (6,022) -- 47 Products High Functional Materials 9,042 (1,475) -- 74 & Components Logistics, Services & Others 1,457 7,372 20 12 Financial Services 18,653 20,403 91 152 Subtotal 80,259 (11,346) -- 653 Eliminations & Corporate items (18,571) (30,764) -- (151) Total 61,688 (42,110) -- 502

Note: Net sales by industry segment include intersegment transactions. - more - - 13 - (2) GEOGRAPHIC SEGMENTS

The half years ended September 30 ------------------------------------------------------------- YEN U.S. DOLLARS (millions) (millions) ------------------------------- (A)/(B) ---------------- 2002(A) 2001 (B) X100 2002 ---------------------------------------- ---------------- Sales Japan Outside 3,003,621 3,050,225 98 24,420 customer sales 65% 66% Intersegment 501,040 444,492 113 4,073 transactions 11% 10% Total 3,504,661 3,494,717 100 28,493 76% 76% Asia Outside 312,220 292,640 107 2,538 customer sales 7% 6% Intersegment 168,355 184,263 91 1,369 transactions 3% 4% Total 480,575 476,903 101 3,907 10% 10% North America Outside 394,660 392,181 101 3,209 customer sales 9% 8% Intersegment 19,434 23,714 82 158 transactions 0% 1% Total 414,094 415,895 100 3,367 9% 9% Europe Outside 177,056 176,216 100 1,439 customer sales 4% 4% Intersegment 12,281 17,191 71 100 transactions 0% 0% Total 189,337 193,407 98 1,539 4% 4% Other Areas Outside 28,934 26,859 108 235 customer sales 1% 1% Intersegment 1,323 1,033 128 11 transactions 0% 0% Total 30,257 27,892 108 246 1% 1% Subtotal 4,618,924 4,608,814 100 37,552 100% 100% Eliminations (702,433) (670,693) -- (5,711) Total 3,916,491 3,938,121 99 31,841

- more - - 14 -

The half years ended September 30 ------------------------------------------------------------- YEN U.S. DOLLARS (millions) (millions) ---------------------------- (A)/(B) --------------- 2002(A) 2001 (B) X100 2002 ----------------------------------------- --------------- Operating income (loss) Japan 65,775 (12,100) -- 535 78% -- Asia 7,740 (2,389) -- 63 9% -- North America 3,037 (15,096) -- 25 4% -- Europe 6,442 2,101 307 52 8% -- Other Areas 748 831 90 6 1% -- Subtotal 83,742 (26,653) -- 681 100% -- Eliminations & Corporate items (22,054) (15,457) -- (179) Total 61,688 (42,110) -- 502

(3)SALES BY MARKET

The half years ended September 30 ------------------------------------------------------------- YEN U.S. DOLLARS (millions) (millions) ----------------------------- (A)/(B) ------------ 2002(A) 2001 (B) X100 2002 ----------------------------------------- ------------ Japan 2,633,108 2,700,418 98 21,407 67% 69% Asia 498,594 431,526 116 4,054 13% 11% North America 426,980 450,872 95 3,471 11% 11% Europe 262,185 256,943 102 2,132 7% 7% Other Areas 95,624 98,362 97 777 2% 2% Outside Japan 1,283,383 1,237,703 104 10,434 33% 31% Total 3,916,491 3,938,121 99 31,841 100% 100%

# # # October 31,2002 Hitachi, Ltd. Supplementary information for the first half of fiscal 2002,ended September 30, 2002 (Consolidated basis) 1. Summary

(Billions of yen) ------------------------------------------------------------------------------------------------------------------------ 1st half of fiscal 2001 1st half of fiscal 2002 Fiscal 2002(Forecast) --------------------------- ------------------------ --------------------- (A) (A)/1st half (C)/ of FY 2000 (B) (B)/(A) (C) FY2001 ------------------------------------------------------------------------------------------------------------------------ Net sales 3,938.1 98% 3,916.4 99% 8,050.0 101% C/U * 221% -- 258% -- 262% -- Operating income (loss) (42.1) -- 61.6 -- 150.0 -- Income (loss) before income taxes (98.5) -- 45.8 -- 130.0 -- and minority interests Income (loss) before minority interests (116.6) -- 24.6 -- 61.0 -- Net income (loss) (110.5) -- 12.8 -- 36.0 -- C/U * -- -- 65% -- 171% -- Average exchange rate 122 -- 122 -- 120 ** -- (yen / U.S.$) Net interest and dividends (8.6) -- (6.8) -- (15.0) --

*Consolidated basis/Unconsolidated basis **Assumed exchange rate for 2nd half of fiscal 2002

---------------------------------------------------------------------------------------------------------------------- As of March 31, 2002 As of September 30, 2002 ---------------------------------------------------------------------------------------------------------------------- Cash & cash equivalents, Short-term 1,208.3 1,036.0 investments (Billions of yen) Interest-bearing debt 2,998.2 2,776.9 (Billions of yen) Number of employees 321,517 318,418 Japan 256,823 251,584 Overseas 64,694 66,834 Number of consolidated subsidiaries 1,066 1,069 Japan 712 706 Overseas 354 363

1

2. Sales by industry segment (Billions of yen) ------------------------------------------------------------------------------------------------------------------------------------ 1st half of fiscal 2001 1st half of fiscal 2002 Fiscal 2002(Forecast) ------------------------------- ------------------------ --------------------- (A)/1st half (C)/ (A) of FY 2000 (B) (B)/(A) (C) FY2001 ------- ------------- -------- -------- ------- --------- Information & Telecommunication Systems 873.3 105% 878.2 101% 1,865.0 102% Electronic Devices 765.0 76% 766.4 100% 1,555.0 105% Power & Industrial Systems 1,117.3 106% 1,068.1 96% 2,255.0 99% Digital Media & Consumer Products 582.4 115% 597.6 103% 1,225.0 105% High Functional Materials & Components 628.1 88% 613.0 98% 1,270.0 102% Logistics, Services & Others 707.7 91% 700.6 99% 1,395.0 97% Financial Services 281.1 98% 293.3 104% 585.0 103% Eliminations & Corporate items (1,017.1) -- (1,000.9) -- (2,100.0) -- Total 3,938.1 98% 3,916.4 99% 8,050.0 101%

3. Operating income (loss) by industry segment (Billions of yen) ------------------------------------------------------------------------------------------------------------------------------------ 1st half of fiscal 2001 1st half of fiscal 2002 Fiscal 2002(Forecast) ------------------------------- ------------------------ --------------------- (A)/1st half (C)/ (A) of FY 2000 (B) (B)/(A) (C) FY2001 ------- ------------- -------- -------- ------- --------- Information & Telecommunication Systems 14.5 118% 42.1 290% 88.0 246% Electronic Devices (72.9) -- (7.9) -- (16.0) -- Power & Industrial Systems 26.7 146% 11.1 42% 49.0 89% Digital Media & Consumer Products (6.0) -- 5.7 -- 14.0 -- High Functional Materials & Components (1.4) -- 9.0 -- 13.0 -- Logistics, Services & Others 7.3 148% 1.4 20% 7.0 215% Financial Services 20.4 81% 18.6 91% 31.0 83% Eliminations & Corporate items (30.7) -- (18.5) -- (36.0) -- Total (42.1) -- 61.6 -- 150.0 --

4. Overseas sales by industry segment (Billions of yen) ----------------------------------------------------------------------------------------------------------------------------------- 1st half of fiscal 2001 1st half of fiscal 2002 Fiscal 2002(Forecast) ------------------------------- ------------------------ --------------------- (A)/1st half (C)/ (A) of FY 2000 (B) (B)/(A) (C) FY2001 ------- ------------- -------- -------- ------- --------- Information & Telecommunication Systems 119.3 130% 128.9 108% Electronic Devices 264.6 79% 263.1 99% Power & Industrial Systems 190.4 99% 194.1 102% Digital Media & Consumer Products 235.8 148% 246.0 104% High Functional Materials & Components 169.9 91% 155.5 92% Logistics, Services & Others 238.7 82% 277.0 116% Financial Services 18.6 103% 18.5 99% Eliminations & Corporate items 0 -- 0 -- Total 1,237.7 97% 1,283.3 104% 2,580.0 101%

2

5. Overseas production (Total sales of overseas manufacturing subsidiaries) (Billions of yen) -------------------------------------------------------------------------------------------------------- 1st half of fiscal 2001 1st half of fiscal 2002 ------------------------------- ------------------------ (A)/1st half (A) of FY 2000 (B) (B)/(A) ------- ------------- -------- -------- Overseas production 567.9 95% 499.7 88% Percentage of net sales 14% -- 13% -- Percentage of overseas sales 46% -- 39% --

6. Capital investment by industry segment (Completion basis, including leasing assets) (Billions of yen) ---------------------------------------------------------------------------------------------------------------------------------- Fiscal 2001 1st half of fiscal 2002 Fiscal 2002(Forecast) ------------------------------- ------------------------ --------------------- (A)/FY (B)/1st half (A) 2000 (B) of FY 2001 (C) (C)/(A) ------- ------------- -------- ---------- ------- --------- Information & Telecommunication Systems 89.7 100% 36.7 75% Electronic Devices 114.6 51% 42.9 66% Power & Industrial Systems 74.5 99% 30.1 94% Digital Media & Consumer Products 38.6 85% 18.2 96% High Functional Materials & Components 80.2 74% 31.6 72% Logistics, Services & Others 40.1 133% 15.5 72% Financial Services 472.1 101% 219.8 92% Eliminations & Corporate items (53.8) -- (20.0) -- Total 856.2 88% 375.2 85% 770.0 90% Internal use assets 414.1 77% 161.5 74% 330.0 80% Leasing assets 442.1 103% 213.7 96% 440.0 100%

7. Depreciation by industry segment (Billions of yen) ----------------------------------------------------------------------------------------------------------------------------------- Fiscal 2001 1st half of fiscal 2002 Fiscal 2002(Forecast) ------------------------------- ------------------------ --------------------- (A)/FY (B)/1st half (A) 2000 (B) of FY 2001 (C) (C)/(A) ------- ------------- -------- ------------ ------- --------- Information & Telecommunication Systems 69.2 110% 29.7 82% Electronic Devices 162.1 108% 55.2 76% Power & Industrial Systems 62.9 98% 31.0 100% Digital Media & Consumer Products 44.0 99% 19.8 95% High Functional Materials & Components 81.8 99% 36.8 93% Logistics, Services & Others 36.3 104% 15.9 86% Financial Services 69.3 111% 35.5 94% Corporate items 3.5 87% 2.0 114% Total 529.4 105% 226.2 87% 480.0 91% Internal use assets 450.1 103% 186.1 87% 385.0 86% Leasing assets 79.2 115% 40.1 92% 95.0 120%

3 8. R&D expenditure by industry segment

(Billions of yen) -------------------------------------------------------------------------------- Fiscal 2001 1st half of fiscal 2002 Fiscal 2002(Forecast) ------------------------- ------------------------ ---------------------- (B)/1st half (A) (A)/FY 2000 (B) of FY 2001 (C) (C)/(A) ------ ----------- ------ ------------- ------ -------- Information & Telecommunication Systems 136.7 89% 63.4 89% Electronic Devices 116.7 91% 52.8 89% Power & Industrial Systems 63.7 96% 29.8 93% Digital Media & Consumer Products 37.5 101% 16.9 89% High Functional Materials & Components 47.5 108% 20.9 87% Logistics, Services & Others 11.9 224% 4.9 75% Financial Services 1.2 147% 0.7 117% Total 415.4 95% 189.6 89% 380.0 91% Percentage of net sales 5.2% -- 4.8% -- 4.7% --

9. Balance sheets by financial and non-financial services

(Billions of yen) -------------------------------------------------------------------------------------------------------------- As of March As of September Assets 31, 2002 30, 2002 -------------------------------------------------------------------------------------------------------------- Manufacturing, Services and Others Cash and cash equivalents 850.9 750.4 Short-term investments 158.3 150.4 Trade receivables 1,719.6 1,514.7 Inventories 1,198.4 1,182.2 Investments and advances 835.4 726.6 Property, plant and equipment 2,212.5 2,152.8 Other assets 1,572.2 1,601.5 ------- ------- Total 8,547.7 8,079.0 ------- ------- Financial Services Cash and cash equivalents 178.3 124.7 Trade receivables 609.8 527.2 Investment in leases 646.5 579.1 Property, plant and equipment 320.9 312.7 Other assets 358.6 376.7 ------- ------- Total 2,114.3 1,920.5 ------- ------- Eliminations (746.5) (639.2) ------- ------- Assets 9,915.6 9,360.3 ------- -------

As of March As of September Liabilities and stockholders' equity 31, 2002 30, 2002 ------------------------------------------------------------------------------------------------------------- Manufacturing, Services and Others Short-term debt 951.7 999.0 Trade payables 1,018.3 974.3 Long-term debt 1,026.4 889.8 Other liabilities 2,658.2 2,336.2 ------- ------- Total 5,654.7 5,199.5 ------- ------- Financial Services Short-term debt 586.6 515.4 Trade payables 243.1 234.8 Long-term debt 903.0 772.7 Other liabilities 126.7 141.1 ------- ------- Total 1,859.5 1,664.1 ------- ------- Eliminations (701.6) (596.8) ------- ------- Liabilities 6,812.6 6,266.8 ------- ------- Minority interests 798.7 802.0 ------- ------- Stockholders' equity 2,304.2 2,291.3 ------- ------- Liabilities and stockholders' equity 9,915.6 9,360.3 ------- -------

4 10. Statements of operating results by financial and non-financial services

(Billions of yen) 1st half of 1st half of fiscal 2001 fiscal 2002 ----------- ----------- Manufacturing, Services Sales 3,804.3 3,756.0 and Others Cost of sales and selling, general and administrative expenses 3,851.3 3,714.0 Operating income (loss) (47.0) 42.0 Financial Services Sales 281.1 293.3 Cost of sales and selling, general and administrative expenses 260.6 274.6 Operating income (loss) 20.4 18.6 Eliminations Sales (147.3) (132.9) Cost of sales and selling, general and administrative expenses (131.8) (133.8) Operating income (loss) (15.4) 0.9 Total Sales 3,938.1 3,916.4 Cost of sales and selling, general and administrative expenses 3,980.2 3,854.8 Operating income (loss) (42.1) 61.6

Note: Figures in tables 5, 9 and 10 represent unaudited financial information prepared by the Company for the purpose of this supplementary information. 5 October 31, 2002 Hitachi, Ltd. Supplementary Information on Information & Telecommunication Systems 1. Sales and Operating income (loss) by product sector

(Upper rows are percentage changes from preceding year; billions of yen) ------------------------------------------------------------------------------------------- Fiscal 2001 Fiscal 2002 ------------------------------ ------------------------------- 1st half 2nd half Total 1st half 2nd half* Total * --------- -------- ------- -------- --------- -------- Sales 105% 100% 102% 101% 103% 102% 873.3 956.3 1,829.6 878.2 986.8 1,865.0 Software & Services 125% 110% 116% 100% 103% 102% 452.7 508.1 960.8 453.4 524.8 978.2 Hardware 89% 90% 89% 101% 103% 102% 420.6 448.2 868.8 424.8 462.0 886.8 Operating income 119% 57% 73% 290% 218% 246% 14.5 21.1 35.7 42.1 45.9 88.0 Software & Services 371% 172% 215% 186% 120% 144% 16.7 28.2 45.0 31.1 33.7 64.8 Hardware - - - - - - (2.2) (7.1) (9.3) 11.0 12.2 23.2

*Forecast 2. Sales by product sector

(billions of yen) ----------------------------------------------------------------------------------------------------------- Fiscal 2001 Fiscal 2002 ------------------------------- -------------------------------- 1st half 2nd half Total 1st half 2nd half * Total * -------- -------- ----- -------- ---------- ------- Information & 873.3 956.3 1,829.6 878.2 986.8 1,865.0 Telecommunication Software & Services 452.7 508.1 960.8 453.4 524.8 978.2 Software 88.1 103.4 191.5 91.6 Services 364.6 404.7 769.3 361.8 Hardware 420.6 448.2 868.8 424.8 462.0 886.8 Servers 64.7 52.7 117.4 60.1 PCs 56.7 69.1 125.8 71.6 Storage 135.0 162.8 297.8 165.5 Telecommunication 80.9 72.0 152.9 47.2 Others 83.3 91.6 174.9 80.4

*Forecast Notes: Figures for servers include supercomputers, general-purpose computers and UNIX servers. Figures for PCs include PC servers and client PCs. Figures for storage include disk array, subsystem, and Hard Disk Drives. - more - - 2 - 3. SAN/NAS Storage Solutions

(Upper rows are percentage changes from preceding year; billions of yen) ------------------------------------------------------------------------ Fiscal 2001 Fiscal 2002 --------------------------- ------------------------------- 1st half 2nd half Total 1st half 2nd half * Total * -------- -------- ----- -------- ---------- ------- Sales 120% 93% 104% 108% 100% 104% 120.0 130.0 250.0 130.0 130.0 260.0

*Forecast 4. Shipment for main products, in number of units : unconsolidated basis

Fiscal 2001 Fiscal 2002 ------------------------------- ------------------------------ 1st half 2nd half Total 1st half 2nd half* Total* -------- -------- ----- -------- --------- ------ General-purpose computers 172 140 312 140 160 300 UNIX servers 1,500 1,200 2,700 1,300 1,400 2,700 PCs & PC servers 300,000 350,000 650,000 280,000 350,000 630,000 Large-capacity disk array subsystems 6,600 8,600 15,200 13,600 15,200 28,800 Middle-capacity disk array subsystems 1,300 1,600 2,900 1,600 2,100 3,700 Hard Disk Drives 2,600,000 3,700,000 6,300,000 4,000,000 4,900,000 8,900,000

*Forecast Notes: Figures for General-purpose computers are based on the number of instruction processors. Figures for General-purpose computers, PCs & PC servers do not include export models. Figures for disk array subsystems are based on the number of terabytes. - ### - October 31, 2002 Hitachi, Ltd. Supplementary information on Semiconductors & Displays 1. Semiconductors

Sales and Operating income (Upper rows are percentage changes from preceding year; billions of yen) -------------------------------------------------------------------------------------------------------------------- Fiscal 2001 Fiscal 2002 ---------------------------------------- ----------------------------------------- 1st half 2nd half Total 1st half 2nd half* Total* -------- -------- ----- -------- --------- ------ Sales 64% 58% 61% 104% 120% 111% 267.4 239.5 506.9 277.4 287.6 565.0 ----- ----- ------ ----- ----- ----- Operating income (loss) (57.9) (75.5) (133.5) (14.4) (13.6) (28.0) ----- ----- ------ ----- ----- -----

*Forecast Sales by products

Fiscal 2001 Fiscal 2002* ----------- ------------ DRAM 8% 7% System Memory 10% 9% System LSI 54% 56% Multi-Purpose Semiconductor 28% 28%

*Forecast Semiconductor Capital Investment

(Billions of yen) ---------------------------------------------------------------------------------------------------------------------- Fiscal 2001 Fiscal 2002* ----------------------------- ---------------------------- Naka Operation 1.0 1.5 Takasaki Operation 1.0 3.0 Koufu Operation 1.0 1.0 Other 2.5 1.0 Parent subtotal 5.5 6.5 (1st half:3.5, 2nd half:2.0) (1st half:2.5, 2nd half:4.0) TTI** 0.5 1.5 Other 12.5 11.5 Domestic subsidiaries 13.0 13.0 HNS*** 0.5 1.5 Other 3.0 3.0 Overseas subsidiaries 3.5 4.5 Subsidiaries subtotal 16.5 17.5 Hitachi consolidated total 22.0 24.0 (1st half:16.0, 2nd half:6.0) (1st half:13.0, 2nd half:11.0)

*Forecast **Trecenti Technologies, Inc. ***Hitachi Nippon Steel Semiconductor Singapore Pte. Ltd.

Microprocessor/microcontroller sales (Billions of yen; % change from preceding year) ---------------------------------------------------------------------------------------- Fiscal 2001 Fiscal 2002* -------------------- -------------------- 170 71% 220 129% --- -- --- ---

*Forecast -more-

DRAM & Flash Memory production quantity (pieces/month) ---------------------------------------------------------------------------- March 2002 Fiscal 2002 ---------- ----------------------------- First Quarter 550,000 64MDRAM 2 million Second Quarter 600,000 Third Quarter 600,000* Fourth Quarter 600,000* First Quarter 2million 256MDRAM 1.2 million Second Quarter 2million Third Quarter 2million* Fourth Quarter 2million* First Quarter 600,000 256M Flash Memory 550,000 Second Quarter 600,000 Third Quarter 500,000* Fourth Quarter 400,000* ----------- -------------- ---------

*Forecast 2. Displays

Sales and Operating income (Upper rows are percentage changes from preceding year; billions of yen) ------------------------------------------------------------------------------------------------------------ Fiscal 2001 Fiscal 2002 ----------------------------------- ------------------------------------ 1st half 2nd half Total 1st half 2nd half* Total* -------- -------- ----- ------- --------- ------ Sales 58% 84% 69% 109% 112% 110% 92.0 102.9 195.0 100.0 115.0 215.0 Operating income - - - - - - (loss) (26.2) (21.0) (47.2) (1.3) (3.2) (4.5) ----- ----- ----- ---- ---- ----

*Forecast

Sales of Major Products (Billions of yen; % change from preceding year) -------------------------------------------------------------------------------- Fiscal 2001 Fiscal 2002 * ------------------- ------------------- LCDs 128.0 84% 180.0 141% Color display tubes 18.0 31% 0.0 0% Color picture tubes 19.0 86% 1.5 8% Projection tubes 20.0 100% 28.0 140%

*Forecast

LCD Sales (Billions of yen; % change from preceding year) ---------------------------------------------------------------------------------------------------------------- Fiscal 2001 Fiscal 2002 ---------------------------------------- ---------------------------------------- 1st half 2nd half Total 1st half 2nd half* Total* -------- -------- ---------------- -------- --------- --------------- Large size LCDs 43.0 66.0 109.0 81% 58.0 71.0 129.0 118% Medium & small size LCDs 5.0 14.0 19.0 106% 22.0 29.0 51.0 268% Total 48.0 80.0 128.0 84% 80.0 100.0 180.0 141%

*Forecast

LCD Capital Investment (Billions of yen; % change from preceding year) ----------------------------------------------------------------------------------------------- Fiscal 2001 Fiscal 2002 --------------------------------------------- ----------------------------------------------- 1st half 2nd half Total 1st half 2nd half* Total* -------- -------- -------------- -------- --------- ---------------- 6.0 3.7 9.7 18% 26.8 0.9 27.7 286% --- --- --- -- ---- --- ---- ---

*Forecast ### HITACHI, LTD. UNCONSOLIDATED FINANCIAL STATEMENTS FOR THE HALF YEAR ENDED SEPTEMBER 30, 2002 (123YEN = U.S.$1) October 31, 2002

yen U.S. Dollars INCOME STATEMENTS (millions) (millions) ------------------------------- --------------------------------- ------------ (THE HALF YEARS ENDED SEPT. 30) 2002(A) 2001(B) (A)/(B)X100 2002 --------- --------- ----------- ------------ Net sales 1,515,655 1,778,746 85% 12,322 Cost of sales 1,231,453 1,455,483 85% 10,012 S.G.A. expenses 283,926 351,616 81% 2,308 Operating income (loss) 275 (28,353) -- 2 ----------------------- --------- --------- ---------- ------ Other income 23,823 27,101 88% 194 Other deductions 26,509 45,437 58% 216 Ordinary income (loss) (2,411) (46,689) -- (20) ---------------------- --------- --------- ---------- ------ Extraordinary gain 32,957 3,775 873% 268 Extraordinary loss -- -- -- -- Income before income taxes (loss) 30,546 (42,914) -- 248 --------------------------------- --------- --------- ---------- ------ Current income taxes 1,661 2,064 81% 14 Deferred income taxes 9,116 (15,968) -- 74 Net income (loss) 19,767 (29,010) -- 161 ----------------- --------- --------- ---------- ------ Basic EPS (yen and dollars) 5.92 (8.69) -- 0.05 Diluted EPS (yen and dollars) -- -- -- --

BALANCE SHEETS 2002/9/30(A) 2002/3/31(B) (A)/(B)X100 2002/9/30 -------------- ------------ ------------ ----------- --------- Current assets 1,848,080 2,124,120 87% 15,025 (Quick assets) 1,372,563 1,618,519 85% 11,159 (Inventories) 383,566 391,118 98% 3,118 (Deferred tax assets) 91,950 114,481 80% 748 Fixed assets 1,777,332 1,799,024 99% 14,450 (Investments) 841,725 810,124 104% 6,843 (Deferred tax assets) 322,892 307,867 105% 2,625 (Others) 612,714 681,033 90% 4,981 Total assets 3,625,413 3,923,144 92% 29,475 ------------ --------- --------- ---------- ------ Current liabilities 1,621,077 1,788,217 91% 13,179 Fixed liabilities 636,355 770,341 83% 5,174 (Debentures) 418,471 511,299 82% 3,402 (Long-term loans) 2,608 2,668 98% 21 (Others) 215,276 256,374 84% 1,750 Total liabilities 2,257,432 2,558,558 88% 18,353 ----------------- --------- --------- ---------- ------ Stockholders' equity 1,367,980 1,364,585 100% 11,122 -------------------- --------- --------- ---------- ------ Liabilities and stockholders' equity 3,625,413 3,923,144 92% 29,475 ------------------------------------ --------- --------- ---------- ------

-more-

FORECAST FOR THE YEAR ENDING MARCH 31, 2003 ------------------------------------------- Net sales Ordinary income Net income ---------- --------------- ---------- Millions of Yen 3,070,000 24,000 21,000 Millions of U.S. dollars 24,959 195 171

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 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. ### October 31,2002 Hitachi, Ltd. Supplementary information for the first half of fiscal 2002, ended September 30, 2002 (Unconsolidated basis)

1. Summary (Billions of yen) ---------------------------------------------------------------------------------------------------------------------------------- 1st half of fiscal 2001 1st half of fiscal 2002 Fiscal 2002 (Forecast) ----------------------------- -------------------------- ---------------------- (A)/1st half of (A) FY00 (B) (B)/(A) (C) (C)/FY01 ------- --------------- ------- ------- ------- -------- Net sales 1,778.7 94% 1,515.6 85% 3,070.0 87% Operating income (loss) (28.3) -- 0.2 -- 28.0 -- Ordinary income (loss) (46.6) -- (2.4) -- 24.0 -- Net income (loss) (29.0) -- 19.7 -- 21.0 -- Dividend payout ratio (%) -- -- 51 -- -- -- Average exchange rate(yen / U.S.$)* 122 -- 123 -- 120* --

*Assumed exchange rate for 2nd half of fiscal 2002

As of March 31, 2002 As of September 30, 2002 As of March 31, 2003 (Forecast) -------------------- ------------------------ ------------------------------- Cash & cash equivalents, Short-term investments 357.6 281.3 -- (Billions of yen) Interest-bearing debt 648.0 599.3 -- (Billions of yen) Number of employees 50,427 47,300 43,900

2. Sales by industry segment (Billions of yen) -------------------------------------------------------------------------------------------------------------------------------- 1st half of fiscal 2001 1st half of fiscal 2002 Fiscal 2002 (Forecast) ----------------------------- ------------------------- ---------------------- (A)/1st half of (A) FY00 (B) (B)/(A) (C) (C)/FY01 ------- --------------- ------- ------- ------- -------- Information & Telecommunication Systems 682.7 103% 670.2 98% Electronic Devices 299.1 65% 277.0 93% Power & Industrial Systems 545.7 108% 477.6 88% Digital Media & Consumer Products 251.0 95% 90.7 36% Total 1,778.7 94% 1,515.6 85% 3,070.0 87%

- 1 -

3. Capital investment (Based on construction starts) (Billions of yen) --------------------------------------------------------------------------------------------------------------------------------- Fiscal 2001 1st half of Fiscal 2002 Fiscal 2002 (Forecast) ------------------- ------------------------ ---------------------- (B)/1st half of (A) (A)/FY00 (B) FY01 (C) (C)/(A) ---- -------- ---- --------------- ---- -------- Information & Telecommunication Systems 18.5 80% 10.0 87% Electronic Devices 15.5 12% 26.0 260% Power & Industrial Systems 22.0 73% 8.0 70% Digital Media & Consumer Products 6.5 72% 1.0 29% Others 13.0 118% 5.0 71% Total 75.5 37% 50.0 115% 87.5 116%

4. Depreciation (note) (Billions of yen) --------------------------------------------------------------------------------------------------------------------------------- Fiscal 2001 1st half of Fiscal 2002 Fiscal 2002 (Forecast) -------------------- ------------------------ ---------------------- (B)/1st half of (A) (A)/FY00 (B) FY01 (C) (C)/(A) ----- -------- ---- --------------- ---- -------- Depreciation 116.7 96% 47.7 76% 85.0 73%

Note: The figures do not include depreciation on leasing assets.

5. R&D expenditures (Billions of yen) ---------------------------------------------------------------------------------------------------------------------------------- Fiscal 2001 1st half of Fiscal 2002 Fiscal 2002 (Forecast) ------------------- ------------------------ ---------------------- (B)/1st half of (A) (A)/FY00 (B) FY01 (C) (C)/(A) ----- -------- ----- --------------- ----- -------- R&D expenditures 275.6 90% 119.5 82% 226.0 82% Percentage of net sales 7.8% -- 7.9% -- 7.4% --

- ### - FOR IMMEDIATE RELEASE Contacts: Japan: U.S.: Takafumi Ichinose Matt Takahashi Hitachi, Ltd. Hitachi America, Ltd. +81-3-3258-2056 +1-650-244-7902 takafumi_ichinose@hdq.hitachi.co.jp masahiro.takahashi@hal.hitachi.com Singapore: U.K.: Yuji Hoshino Kantaro Tanii Hitachi Asia Ltd. Hitachi Europe Ltd. +65-6231-2522 +44-(0)1628-585379 yhoshino@has.hitachi.com.sg kantaro.tanii@hitachi-eu.com Hitachi to Pursue Further Structural Reforms Tokyo, October 31, 2002 --- Hitachi, Ltd. (TSE:6501 / NYSE:HIT) today announced that it intends to pursue further structural reforms to increase competitiveness through highly efficient management. Moving forward, Hitachi will allocate more resources to "i.e. Social Systems*," which wed information system services and social infrastructure systems, in a bid to create new businesses that stimulate new demand. Concurrently, Hitachi is to reexamine and reshape its business portfolio using its proprietary value-added evaluation index, FIV** (Future Inspiration Value), as well as advance a new Group management drive to raise efficiency and accelerate its transformation into a highly profitable company. A new medium-term management plan is currently being drawn up based on these policies. Running from the start of next fiscal year through fiscal 2005, the new plan aims to achieve positive FIV as soon as possible. Hitachi is ironing out details of the plan, including concrete action plans for the parent company's business groups and Group companies. * The "i.e." stands for information electronics. ** FIV is a proprietary value-added evaluation index based on economic value added in which the cost of capital is deducted from after-tax operating profit. - more - -2- Direction of Structural Reforms There are no prospects in sight for a full-fledged economic recovery in Japan in the medium term, and competition is intensifying on a global scale. Given this increasingly difficult operating environment, Hitachi believes that there is little expectation of expanding operations and raising its profitability with a portfolio focused on existing businesses. Hitachi has been proceeding with structural reforms based on the "i.e. HITACHI Plan," the Company's current medium-term business plan running through fiscal 2002. Under the plan, the Company has been endeavoring to become a global supplier that offers total solutions in IT- and knowledge-based information systems services and social infrastructure systems, as well as the key hardware, software and highly functional materials and components needed to support these solutions. While adhering to this basic mantra, Hitachi will pour its energies into "i.e. Social Systems" that support new-era lifelines, including information systems, as well as existing infrastructure such as electricity, gas and water supply. This business domain fuses two strategic fields, social infrastructure systems and information system services. More than ever, Hitachi will bring together its wealth of experience and know-how in the former and its cutting-edge technologies and knowledge in the latter. And by also promoting the selection of mainstay businesses and creation of new ones, Hitachi will take maximum advantage of its strengths. Furthermore, to generate high profits, Hitachi will step up the pace of its transformation into a highly efficient group by thoroughly reviewing its businesses. In providing solutions, the Company will enhance its powerful hardware and software lineup, which is a key factor in differentiating Hitachi from competitors. It will also continue to exit fields that are becoming increasingly commoditized, as well as make further advances on the global stage, led by competitive businesses. Full use of FIV will be made in this selection process. Progress as a result of the reforms is to be assessed on a regular basis. The Company will consider revising its medium-term management strategy to take into account the results of this assessment, changes in markets and competitive environments, and the competitiveness of Hitachi itself. This process should ensure that the Company, more than ever, is managed flexibly. - more - -3- Corporate Action Plan for Realizing Structural Reforms 2-1. Reexamining and Realigning the Business Portfolio Accelerating the reexamination and realignment of the Company's business portfolio is crucial to become a highly profitable company. Since 1999, Hitachi has dealt with around 80 businesses through alliances, joint ventures, M&As and internal Group restructuring. Recently, the Company reached agreement with Mitsubishi Electric Corporation on the integration of their respective semiconductor businesses with the view to creating the world's most powerful company in the system LSI field. In hard disk drive operations, which span an expanding range of applications, from PCs, servers and storage equipment to digital consumer electronics, Hitachi has decided to purchase IBM Corporation's hard disk drive operations to enhance its technological edge and expand the scale of its business. Furthermore, as part of the Company's efforts to bolster its automotive products business, a field where modularization and greater use of electronics are two key themes, Hitachi made Unisia JECS Corporation (now Hitachi Unisia Automotive, Ltd.) a subsidiary. Moreover, through separation and other internal Group restructuring, the Company has sped up decision-making and integrated manufacturing, sales and services, as well as consolidated resources in home appliances, industrial components and equipment, display devices, telecommunications infrastructure equipment and printer businesses. Hitachi expects to gradually reap the fruits of these actions. But to quicken its progress toward becoming a highly profitable company, Hitachi is to promote further reexamination and realignment of its business portfolio. - more - -4- In this effort, Hitachi will apply FIV-based investment and exit standards announced in February this year. Essentially, the Company will only invest where a business is expected to deliver positive FIV on a single-year basis within three years and to have positive FIV over five years. Where a business has negative FIV for two consecutive years, it will be placed on a "watch list" and exited or sold if no rebuilding plan is approved or it is decided that FIV will not become positive within two years. 2-2. Creating Businesses That Stimulate New Demand Hitachi wants to open up potential markets by mustering the collective strengths of Hitachi DNA, its technologies. These include cutting-edge technologies like IT, biotechnology and nanotechnology. This drive extends beyond merely meeting emerging needs to targeting the creation of new businesses capable of spurring new demand. Hitachi is formulating specific business strategies for four key "Inspire the Next" domains: "IT-Based Quality Lifestyle Solutions," "Sustainable Environmental Solutions," "Advanced Healthcare Solutions" and "Intelligent Management Solutions." IT-Based Quality Lifestyle Solutions include the hard disk drive business to be acquired from IBM, a step aimed at expanding applications to digital consumer electronics and mobile products; SAN/NAS storage solutions that couple storage management software and other products with Hitachi's highly competitive, world-class disk array subsystems; total security solutions, whereby Hitachi delivers reliable, safe social systems drawing on both physical and network security technologies; plasma and projection TVs, which are set to be information gateways in the ubiquitous information society and are based on industry-leading, high-resolution technologies; and broadband-based train control systems that facilitate ultra-high-speed railways. - more - -5- In Sustainable Environmental Solutions, Hitachi will strengthen various businesses in addition to the energy field, where the Company has a proven track record. Examples include electric power-trains fusing systems technology and core motor, control and other technologies; and lithium ion rechargeable batteries for vehicles, a field where Hitachi is concentrating development resources to help make electric vehicles viable. In Advanced Healthcare Solutions, Hitachi established the Medical Strategy Council in October 2002 to spearhead the formulation of strategy for the Hitachi Group in this domain. The taskforce will consider strategies for beefing up activities in growth fields such as the outsourcing of bio analysis and cutting-edge medical equipment, including proton beam therapy systems and DNA sequencers, in addition to exploring ways to strengthen imaging, noninvasive diagnostics and other existing businesses. Furthermore, the taskforce will examine the development of next-generation technologies, including tissue engineering, surgery-support technologies that apply robotics, and imaging technology for human brain functions using optical topography systems, as well as examine the commercialization of new solutions, such as medical services that include home-based examination solutions for diabetes and nursing care. The taskforce is effectively charged with formulating and executing growth strategies for Hitachi's entire medical business. In the Intelligent Management Solutions field, Hitachi will offer comprehensive IT outsourcing solutions that support the business models of client companies by tapping its wide-ranging business portfolio; urban redevelopment solutions centered on facility management, such as building management, to revitalize cities; and management reform solutions with financial services, whereby Hitachi will couple the Group's expertise in financial services with its experience in developing businesses for a broad range of customers. To make these solutions a reality, the Company will make greater use of system LSIs, which it is enhancing through the integration of operations with Mitsubishi Electric. What's more, Hitachi plans to continue establishing new business models leveraging its technology. One example is Hitachi's "mu-chip," one of the world's smallest RFID IC chips. Already slated for use in steel products management, the "mu-chip" is being considered for use in a wide variety of applications. Meanwhile, resources will be channeled into the creation of new businesses rooted in nanotechnologies. Semiconductor manufacturing equipment that uses scanning electron microscopes is one illustration. - more - -6- 2-3. Working Toward New Group Management While respecting the self-management of Group companies, Hitachi is to promote integrated management of the Hitachi Group. Specifically, Hitachi will manage the Group, comprising about 1,200 subsidiaries and affiliates, in terms of 3 categories: Consolidated Group Management (M), Consolidated Vision and Brand (V), and Consolidated Finances (F). Companies in the Consolidated Group Management category function both strategically and operationally in step with the Hitachi Group. Ties are to be strengthened with the parent company with the aim of capturing greater synergies. This category included the parent company and approximately 60% of the Group's 1,200 subsidiaries and affiliates, and accounted for around 70% of gross sales in fiscal 2001. Consolidated Vision and Brand companies share a common management vision and brand with members of the Hitachi Group, but have a high degree of independence in running their own operations. This category accounted for approximately 40% of the Group companies and generated roughly 30% of sales. Consolidated Finances companies are managed autonomously and consolidated only in financial terms. This category represented only several percent of the total, both in terms of the number of companies and sales. Hitachi's plans call for reducing the number of subsidiaries and affiliates by around 300 over the next 3 years through realignment, integration and other means. 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. # # #