Hitachi Announces Consolidated Financial Results For the Third Quarter ended December 31, 2007

Hitachi, Ltd. (NYSE:HIT) (TOKYO:6501) today announced its consolidated financial results for the third quarter of fiscal 2007, ended December 31, 2007. Notes:   1.   All figures, except for the outlook for fiscal 2007, were converted at the rate of 114 Yen to the U.S. dollar, the approximate exchange rate on the Tokyo Foreign Exchange Market as of December 28, 2007. 2. Segment information and operating income (loss) are presented in accordance with financial reporting principles and practices generally accepted in Japan.   Summary                   In millions of yen and U.S. dollars, except Net income (loss) per share (6) and Net income (loss) per American Depositary Share (7).   Three months ended December 31 Nine months ended December 31 Yen(millions) (B)/(A)X100 (%) U.S. $(millions) Yen(millions) (D)/(C)X100 (%) U.S. $(millions)   2006 (A) 2007 (B)   2007 2006 (C) 2007 (D)   2007 1. Revenues 2,488,345 2,707,104 109 23,747 7,259,249 7,987,589 110 70,067 2. Operating income 61,555 77,873 127 683 81,412 199,541 245 1,750 3. Income before income taxes and minority interests 62,610 80,129 128 703 88,423 216,188 244 1,896 4. Income (loss) before minority interests 26,309 43,480 165 381 (8,405) 79,420 - 697 5. Net income (loss) 1,259 12,501 993 110 (76,827) (559) - (5) 6. Net income (loss) per share Basic 0.38 3.76 989 0.03 (23.05) (0.17) - (0.00) Diluted 0.37 3.67 992 0.03 (23.07) (0.40) - (0.00) 7. Net income (loss) per ADS (representing 10 shares) Basic 4 38 950 0.33 (230) (2) - (0.02) Diluted 4 37 925 0.32 (231) (4) - (0.04) Notes: 1.   The Company’s consolidated financial statements are prepared based on U.S. GAAPs. 2. Segment Information and operating income (loss) are presented in accordance with financial reporting principles and practices generally accepted Notes: 2. in Japan. 3. The figures are for 911 consolidated subsidiaries, including Variable Interest Entities, and 167 equity-method affiliates. 4. Consolidated quarterly figures are unaudited.   1. Business Results (1) Business Environment for the Nine Months Ended December 31, 2007 During the nine months to December 31, 2007, the world economy remained firm, driven by strong economies in the European Union (EU) and China. This was despite soaring crude oil prices and disruptions caused by fallout from the subprime loan problem in the latter half of the period. The U.S. economy experienced slower growth due to sluggish housing investment. The EU economy remained strong on the back of stable growth in the U.K., France, and Germany. The Chinese economy sustained a high rate of growth, centered on exports as well as capital expenditures and housing investment. Other Asian economies were also generally strong. The Japanese economy continued to grow, albeit moderately, driven by capital investment and exports. (2) Summary of the Nine-month and Three-month Consolidated Business Results Ended December 31, 2007 (Nine-Month Results)     Nine months ended December 31, 2007 Billions ofyen   Year-over-year% change   Millions ofU.S. dollars Revenues 7,987.5   10 % 70,067   Operating income 199.5   145 % 1,750   Income before income taxes and minority interests 216.1   144 % 1,896   Income before minority interests 79.4   -   697   Net loss (0.5 ) -   (5 ) (Third-Quarter Results)     Three months ended December 31, 2007 Billions ofyen   Year-over-year% change   Millions ofU.S. dollars Revenues 2,707.1 9 % 23,747 Operating income 77.8 27 % 683 Income before income taxes and minority interests 80.1 28 % 703 Income before minority interests 43.4 65 % 381 Net income 12.5 893 % 110 Hitachi’s consolidated revenues for the first nine months of fiscal 2007 were 7,987.5 billion yen, up 10% year on year. Revenues were higher year on year in the Information & Telecommunication Systems segment on growth in system integration and other areas. The Power & Industrial Systems segment also recorded higher revenues, mainly on growth in power systems, automotive systems, construction machinery and other areas. Other segments to see revenues rise included High Functional Materials & Components and other. Consolidated operating income soared 145%, to 199.5 billion yen, due to much higher earnings in the Power & Industrial Systems segment, as well as growth in the Information & Telecommunication Systems and High Functional Materials & Components segments and other. Other income increased 45%, to 75.9 billion yen, reflecting improvement in business results at equity-method affiliates. Other deductions increased 30% year on year, to 59.3 billion yen. As a result, for the nine months to December 31, 2007, Hitachi recorded income before income taxes and minority interests of 216.1 billion yen, up 144% year on year. After income taxes of 136.7 billion yen, Hitachi posted income before minority interests of 79.4 billion yen, an 87.8 billion yen improvement year on year. Hitachi recorded a net loss of 0.5 billion yen, but was 76.2 billion yen better than the result in the same period of fiscal 2006. For the third quarter alone, the three-month period to December 31, 2007, Hitachi recorded consolidated revenues of 2,707.1 billion yen, 9% higher year on year, due to growth in the Information & Telecommunication Systems, Power & Industrial Systems and other segments. For the same period, Hitachi recorded operating income of 77.8 billion yen, up 27%, and net income of 12.5 billion yen, up 893%. (3) Revenues and Operating Income (Loss) by Segment Results by segment were as follows. [Information & Telecommunication Systems] (Nine-Month Results)     Nine months ended December 31, 2007 Billions of yen   Year-over-year% change   Millions ofU.S. dollars Revenues 1,881.7 9 % 16,507 Operating income 26.7 31 % 234 (Third-Quarter Results)     Three months ended December 31, 2007 Billions of yen   Year-over-year% change   Millions ofU.S. dollars Revenues 627.2 8 % 5,502 Operating income 14.2 120 % 125 For the first nine months of fiscal 2007, the Information & Telecommunication Systems segment recorded revenues of 1,881.7 billion yen, up 9% year on year. Software and services posted firm revenue growth in software sales as well as strong growth in services, particularly in the outsourcing business and solutions for financial institutions. Hardware revenues also rose, the result of higher sales of disk array subsystems, ATMs, and HDDs, among other products. Segment operating income climbed 31% year on year, to 26.7 billion yen. Earnings in software and services rose sharply due to solid earnings in software as well as higher earnings in services stemming from the success of stronger project management initiatives. Hardware, however, recorded a loss despite improved earnings in telecommunications and certain other areas. The loss reflected a year-on-year decline in HDDs. For the three months ended December 31, 2007, the segment recorded revenues of 627.2 billion yen, up 8% year on year. It also saw operating income rise of 120%, to 14.2 billion yen, as hardware returned to profitability on improved HDD earnings and software and services delivered firm earnings growth. Note:   HDD operations are conducted by Hitachi Global Storage Technologies (Hitachi GST), which has a December 31 fiscal year-end, different from Hitachi's March 31 year-end. Hitachi's results for the third quarter ended December 31, 2007 include operating results of Hitachi GST for the period from July through September 2007.   [Electronic Devices] (Nine-Month Results)     Nine months ended December 31, 2007 Billions of yen   Year-over-year% change   Millions ofU.S. dollars Revenues 939.5 ( 1 %) 8,242 Operating income 36.0 ( 9 %) 316 (Third-Quarter Results)     Three months ended December 31, 2007 Billions of yen   Year-over-year% change   Millions ofU.S. dollars Revenues 296.2 ( 3 %) 2,599 Operating income 10.2 ( 33 %) 90 Electronic Devices revenues for the first nine months of fiscal 2007 were 939.5 billion yen, almost the same as the previous fiscal year period. Whereas the display business recorded lower year-on-year sales as Hitachi focused on small and medium-sized LCDs, sales at Hitachi High-Technologies Corporation were almost unchanged. Operating income declined 9% year on year, to 36.0 billion yen, reflecting the October 2006 sale of some operations of a semiconductor-related subsidiary and other factors. However, the display business saw earnings improve. For the third quarter alone, the segment posted revenues of 296.2 billion yen, down 3% year on year. Third-quarter operating income declined 33% year on year, to 10.2 billion yen, mainly the result of lower earnings at Hitachi High-Technologies as sales of LCD-related manufacturing equipment and certain other products declined. [Power & Industrial Systems] (Nine-Month Results)     Nine months ended December 31, 2007 Billions of yen   Year-over-year% change   Millions ofU.S. dollars Revenues 2,427.9 24 % 21,298 Operating income 97.0 -   851 (Third-Quarter Results)     Three months ended December 31, 2007 Billions of yen   Year-over-year% change   Millions ofU.S. dollars Revenues 829.6 23 % 7,277 Operating income 33.3 21 % 293 This segment’s revenues rose 24%, to 2,427.9 billion yen the first nine months of fiscal 2007. One factor was sharp growth in sales in the power systems business due to higher sales of nuclear power plant equipment in Japan, and of coal-fired thermal power plant equipment overseas with a lower environmental impact. The overall segment revenue growth also reflected growth in railcars and systems, strong sales of elevators and escalators and industrial equipment, and robust revenues at Hitachi Construction Machinery Co., Ltd. Growth in automotive systems, due in part to Clarion Co., Ltd. becoming a consolidated subsidiary in December 2006, also lifted overall segment performance. Nine-month segment operating income was 97.0 billion yen, a 114.6 billion yen improvement over the same period in fiscal 2006. There was a large improvement in earnings for the power systems business. In addition, automotive systems, elevators and escalators and Hitachi Construction Machinery maintained strong earnings. For the three-month period ended December 31, 2007, the segment recorded revenues of 829.6 billion yen, 23% higher year on year. Operating income for this three-month period was 33.3 billion yen, a rise of 21% over the corresponding period of fiscal 2006. [Digital Media & Consumer Products] (Nine-Month Results)     Nine months ended December 31, 2007 Billions of yen   Year-over-year% change   Millions ofU.S. dollars Revenues 1,139.5   1 % 9,996   Operating loss (65.8 ) -   (578 ) (Third-Quarter Results)     Three months ended December 31, 2007 Billions of yen   Year-over-year% change   Millions ofU.S. dollars Revenues 411.5   11 % 3,610   Operating loss (15.0 ) -   (132 ) This segment’s revenues for the first nine months of fiscal 2007 were 1,139.5 billion yen, largely unchanged from the same period in fiscal 2006. While home appliances saw sales rise and optical disk drive also maintained strong growth, the flat revenues were due to such factors as contraction in the projection TV business resulting from the shift to flat-panel TVs. The segment saw its operating loss widen by 12.3 billion yen year on year, to 65.8 billion yen, due mainly to the effect on earnings in the flat-panel TV business of lower-than-expected sales and lower prices, among other factors. On a positive note, progress with business structural reforms resulted in fewer unprofitable products, and air conditioners recorded higher earnings. LCD projectors also continued to post strong earnings. For the third quarter alone, the segment recorded revenues of 411.5 billion yen, up 11% year on year, on growth in sales of home appliances, optical disk drive, flat-panel TVs and other products. The segment also saw the operating loss improve by 4.0 billion yen, to 15.0 billion yen, owing to fewer unprofitable products and an improvement in home appliances and growth in optical disk drive. Note:   Optical disk drive operations are conducted by Hitachi-LG Data Storage, Inc (HLDS), which has a December 31 fiscal year-end, different from Hitachi's March 31 year-end. Hitachi's results for the third quarter ended December 31, 2007 include operating results of HLDS for the period from July through September 2007   [High Functional Materials & Components] (Nine-Month Results)     Nine months ended December 31, 2007 Billions of yen   Year-over-year% change   Millions ofU.S. dollars Revenues 1,416.1 6 % 12,422 Operating income 105.6 6 % 926 (Third-Quarter Results)     Three months ended December 31, 2007 Billions of yen   Year-over-year% change   Millions ofU.S. dollars Revenues 482.5 3 % 4,233 Operating income 40.9 13 % 359 For the first nine months of fiscal 2007, the segment recorded revenues of 1,416.1 billion yen, 6% higher year on year. One factor was higher sales at Hitachi Metals, Ltd., principally in automotive-related products, IT equipment-related and digital electronics-related products such as for LCDs. Another factor was strong sales growth at Hitachi Chemical Co., Ltd., mainly in the semiconductor-related and automotive-related fields. Furthermore, Hitachi Cable, Ltd. posted increased sales, mainly due to higher sales of wires and cables as well as submarine optical fiber cables. Segment operating income rose 6%, to 105.6 billion yen, due to higher earnings at Hitachi Metals, Hitachi Chemical and Hitachi Cable. For the third quarter alone, segment revenues rose 3% year on year, to 482.5 billion yen, and operating income was 13% up, to 40.9 billion yen. [Logistics, Services & Others] (Nine-Month Results)     Nine months ended December 31, 2007 Billions of yen   Year-over-year% change   Millions ofU.S. dollars Revenues 950.9 1 % 8,341 Operating income 16.6 47 % 146 (Third-Quarter Results)     Three months ended December 31, 2007 Billions of yen   Year-over-year% change   Millions ofU.S. dollars Revenues 332.1 1 % 2,914 Operating income 5.8 78 % 51 For the first nine months of fiscal 2007, segment revenues were 950.9 billion yen, almost the same as for the corresponding period of fiscal 2006. Although sales rose at Hitachi Transport System, Ltd., due to expansion in the third-party logistics business and large orders, certain overseas sales subsidiaries recorded lower sales. However, the segment posted a 47% year-on-year increase in operating income, to 16.6 billion yen, the result of strong earnings at Hitachi Transport System and other factors. Third-quarter segment revenues were 332.1 billion yen, almost the same as the third quarter of fiscal 2006, while operating income jumped 78%, to 5.8 billion yen. [Financial Services] (Nine-Month Results)     Nine months ended December 31, 2007 Billions of yen   Year-over-year% change   Millions ofU.S. dollars Revenues 329.5 ( 16 %) 2,890 Operating income 18.3 ( 17 %) 161 (Third-Quarter Results)     Three months ended December 31, 2007 Billions of yen   Year-over-year% change   Millions ofU.S. dollars Revenues 107.1 ( 18%) 940 Operating income 5.4 ( 14%) 48 For the first nine months of fiscal 2007, this segment generated revenues of 329.5 billion yen, 16% lower year on year. Segment operating income for the same nine-month period was down 17% year on year, at 18.3 billion yen. For the three months ended December 31, 2007, segment revenues were 107.1 billion yen, down 18%, and operating income was 5.4 billion yen, down 14%. (4) Revenues by Market (Nine-Month Results)     Nine months ended December 31, 2007 Billions of yen   Compositionratio   Year-over-year% change   Millions ofU.S. dollars Japan 4,505.1 56 % 6 % 39,519 Overseas 3,482.3 44 % 15 % 30,547 Asia 1,574.7 20 % 15 % 13,814 North America 771.7 10 % ( 3 %) 6,770 Europe 795.7 10 % 33 % 6,980 Other Areas 340.1 4 % 33 % 2,984 (Third-Quarter Results)     Three months ended December 31, 2007 Billions of yen   Compositionratio   Year-over-year% change   Millions ofU.S. dollars Japan 1,509.7 56 % 6 % 13,243 Overseas 1,197.4 44 % 12 % 10,504 Asia 546.5 20 % 14 % 4,794 North America 251.6 9 % (10 %) 2,207 Europe 288.7 11 % 31 % 2,533 Other Areas 110.5 4 % 21 % 970 For the first nine months of fiscal 2007, revenues in Japan rose 6% year on year, to 4,505.1 billion yen. Overseas revenues during the same period rose 15%, to 3,482.3 billion yen on growth in Europe and Asia, mainly China. As a result, the ratio of overseas revenues to consolidated revenues rose 2 percentage points to 44%, the highest level ever for Hitachi. For the three months to December 31, 2007, revenues in Japan rose 6%, to 1,509.7 billion yen, and overseas revenues rose 12%, to 1,197.4 billion yen. (5) Capital Investment, Depreciation and R&D Expenditures For the first nine months of fiscal 2007, capital investment on a completion basis, excluding leasing assets, rose 8%, to 377.1 billion yen, mainly due to investments in power systems, construction machinery and HDD-related areas. Depreciation, excluding leasing assets, increased 24% year on year, to 317.3 billion yen. R&D expenditures, which were used to advance development primarily in HDDs, environmentally friendly power systems and automotive systems-related areas, rose 2% year on year, to 310.6 billion yen, and corresponded to 3.9% of consolidated revenues. For the three months to December 31, 2007, capital investment on a completion basis, excluding leasing assets, declined 7%, to 102.1 billion yen. For the same period, depreciation, excluding leasing assets, increased 22%, to 113.3 billion yen. R&D expenditures were largely unchanged year on year, at 101.7 billion yen. 2. Financial Position (1) Financial Position       As of December 31, 2007     Billions of yen   Change fromDecember 31, 2007   Millions ofU.S. dollars Total assets 10,898.6   159.9   95,603 Total liabilities 7,327.1   172.1   64,273 Interest-bearing debt 2,814.9   152.2   24,693 Minority interests 1,166.6   11.1   10,234 Stockholders’ equity 2,404.9   (23.3 ) 21,096 Stockholders’ equity ratio 22.1 % 0.5 point decrease - D/E ratio (including minority interests) 0.79 times 0.05 point increase - Total assets as of December 31, 2007 were 10,898.6 billion yen, up 159.9 billion yen from September 30, 2007. Interest-bearing debt increased 152.2 billion yen over the same period, to 2,814.9 billion yen due to an increase in working capital and other factors. Stockholders’ equity decreased 23.3 billion yen, to 2,404.9 billion yen. As a result of these changes, the stockholders’ equity ratio decreased 0.5 of a point to 22.1%. The debt-to-equity ratio (including minority interests) increased 0.05 of a point to 0.79 times. (2) Cash Flows (Nine-Month Results)     Nine months ended December 31, 2007 Billions of yen   Year-over-yearchange   Millions ofU.S. dollars Cash flows from operating activities 403.0   275.6   3,535   Cash flows from investing activities (595.2 ) 9.6   (5,222 ) Free cash flows (192.2 ) 285.3   (1,687 ) Cash flows from financing activities 110.9   (304.4 ) 973   (Third-Quarter Results)     Three months ended December 31, 2007 Billions of yen   Year-over-yearchange   Millions ofU.S. dollars Cash flows from operating activities 24.4   74.5   214   Cash flows from investing activities (170.3 ) 126.8   (1,494 ) Free cash flows (145.9 ) 201.4   (1,280 ) Cash flows from financing activities 141.5   (151.8 ) 1,241   For the first nine months of fiscal 2007, operating activities provided net cash of 403.0 billion yen, an increase of 275.6 billion yen year on year, reflecting the growth in operating income. During the same period, investing activities used net cash of 595.2 billion yen, an improvement of 9.6 billion yen year on year. This was the result of the strict selection of capital expenditures and other factors, despite the increased use of cash such as for the purchase of shares in GE-Hitachi Nuclear Energy Holdings LLC, which was established in June 2007. Free cash flows, the sum of cash flows from operating and investing activities, were an outflow of 192.2 billion yen, 285.3 billion yen less than the same period of fiscal 2006. Financing activities provided net cash of 110.9 billion yen, the result of increased borrowing to provide working capital. The net result of the above changes was a decrease of 83.7 billion yen in cash and cash equivalents during the nine-month period under review to 534.1 billion yen. 3. Consolidated Business Forecast for Fiscal 2007         Year ending March 31, 2008     Previous forecast (A)(Billions of yen)   Revised forecast (B)(Billions of yen)   (B)-(A) (Billions of yen)   (B) Year-over -year % change   (B) Millions Of U.S. dollars Revenues 10,500.0 10,800.0 300.0   5 % 102,857 Operating income 290.0 300.0 10.0   64 % 2,857 Income before income taxes and minority interests 300.0 310.0 10.0   53 % 2,952 Income before minority interests 130.0 110.0 (20.0 ) 178 % 1,048 Net income 40.0 10.0 (30.0 ) -   95 Note:   Previous forecast figures are those announced on October 31, 2007, for fiscal 2007. In terms of the outlook for the global economy, although Asian, especially China, and European economies are expected to continue growing at a healthy rate, surging crude oil prices, volatility in the foreign exchange market, and worldwide stock market weakness sparked by the subprime loan problem are clouding the outlook. Regarding the Japanese economy, there is increasing uncertainty about the future, despite positive factors such as continued strong exports to China and the rest of Asia, and a moderate recovery in capital expenditures, in part due to the switch to systems and equipment with a lower environmental impact. The economic outlook is being clouded by soaring prices for crude oil and raw materials, intensifying price-based competition, sluggish consumer spending and other factors. Under these circumstances, Hitachi has revised the forecasts it announced on October 31, 2007 for fiscal 2007, as above. The revisions reflect a solid performance due to growth in the Information & Telecommunication Systems, Power & Industrial Systems, High Functional Materials & Components and other segments. But the revisions also reflect the fact that Hitachi is studying initiatives to improve performance in the flat-panel TV business, which is part of the Digital Media & Consumer Products segment. Regarding the flat-panel TV business, in a bid to quickly improve results, Hitachi is already implementing a business strategy designed to accelerate the creation of a stable profit structure. In addition to this, Hitachi is implementing new initiatives to strengthen this business. Projections assume an exchange rate of 105 yen to the U.S. Dollar and 155 yen to the euro for the fourth quarter of fiscal 2007. 4. Others (1) Changes in significant subsidiaries during the period None (2) Use of simplified accounting procedures None (3) Change in accounting policies from the most recent consolidated fiscal year None Cautionary Statement Certain statements found in this document may constitute "forward-looking statements” as defined in the U.S. Private Securities Litigation Reform Act of 1995. Such "forward-looking statements” reflect management’s current views with respect to certain future events and financial performance and include any statement that does not directly relate to any historical or current fact. Words such as "anticipate,” "believe,” "expect,” "estimate,” "forecast,” "intend,” "plan,” "project” and similar expressions which indicate future events and trends may identify "forward-looking statements.” Such statements are based on currently available information and are subject to various risks and uncertainties that could cause actual results to differ materially from those projected or implied in the "forward-looking statements” and from historical trends. Certain "forward-looking statements” are based upon current assumptions of future events which may not prove to be accurate. Undue reliance should not be placed on "forward-looking statements,” as such statements speak only as of the date of this document. Factors that could cause actual results to differ materially from those projected or implied in any "forward-looking statement” and from historical trends include, but are not limited to: increasing commoditization of information technology products, and intensifying price competition in the markets for such products, particularly in the Information & Telecommunication Systems segment, Electronic Devices segment and Digital Media & Consumer Products segment; fluctuations in product demand and industry capacity, particularly in the Information & Telecommunication Systems segment, Electronic Devices segment and Digital Media & Consumer Products segment; uncertainty as to Hitachi’s ability to continue to develop and market products that incorporate new technology on a timely and cost-effective basis and to achieve market acceptance for such products; rapid technological change, particularly in the Information & Telecommunication Systems segment, Electronic Devices segment and Digital Media & Consumer Products segment; fluctuations in rates of exchange for the yen and other currencies in which Hitachi makes significant sales or in which Hitachi’s assets and liabilities are denominated, particularly between the yen and the U.S. dollar; uncertainty as to Hitachi’s ability to implement measures to reduce the potential negative impact of fluctuations in product demand and/or exchange rates; general socio-economic and political conditions and the regulatory and trade environment of Hitachi’s major markets, particularly the United States, Japan and elsewhere in Asia, including, without limitation, a return to stagnation or deterioration of the Japanese economy, or direct or indirect restrictions by other nations on imports; uncertainty as to Hitachi’s access to, or ability to protect, certain intellectual property rights, particularly those related to electronics and data processing technologies; uncertainty as to the results of litigation and legal proceedings of which the Company, its subsidiaries or its equity method affiliates have become or may become parties; the possibility of incurring expenses resulting from any defects in products or services of Hitachi; uncertainty as to the success of restructuring efforts to improve management efficiency and to strengthen competitiveness; uncertainty as to the success of alliances upon which Hitachi depends, some of which Hitachi may not control, with other corporations in the design and development of certain key products; uncertainty as to Hitachi’s ability to access, or access on favorable terms, liquidity or long-term financing; and uncertainty as to general market price levels for equity securities in Japan, declines in which may require Hitachi to write down equity securities it holds. The factors listed above are not all-inclusive and are in addition to other factors contained in Hitachi’s periodic filings with the U.S. Securities and Exchange Commission and in order materials published by Hitachi. Consolidated Statements of Operations (Unaudited)           Three months ended December 31 Yen (millions) (B)/(A) X100 (%) U.S. Dollars (millions)   2006 (A) 2007 (B) 2007 Revenues 2,488,345 2,707,104 109 23,747 Cost of sales 1,953,534 2,121,604 109 18,611 Selling, general and administrative expenses 473,256 507,627 107 4,453 Operating income 61,555 77,873 127 683 Other income 14,306 17,222 120 151 (Interest and dividends) 8,742 7,362 84 65 (Other) 5,564 9,860 177 86 Other deductions 13,251 14,966 113 131 (Interest charges) 10,331 10,614 103 93 (Other) 2,920 4,352 149 38 Income before income taxes and minority interests 62,610 80,129 128 703 Income taxes 36,301 36,649 101 321 Income before minority interests 26,309 43,480 165 381 Minority interests 25,050 30,979 124 272 Net income 1,259 12,501 993 110 Consolidated Statements of Operations (Unaudited)           Nine months ended December 31 Yen (millions) (D)/(C) X100 (%) U.S. Dollars (millions)   2006 (C) 2007 (D) 2007   Revenues 7,259,249   7,987,589   110 70,067   Cost of sales 5,752,579   6,233,667   108 54,681   Selling, general and administrative expenses 1,425,258   1,554,381   109 13,635   Operating income 81,412   199,541   245 1,750   Other income 52,496 75,963 145 666 (Interest and dividends) 22,991 26,187 114 230 (Other) 29,505   49,776   169 437   Other deductions 45,485 59,316 130 520 (Interest charges) 27,569 31,599 115 277 (Other) 17,916   27,717   155 243   Income before income taxes and minority interests 88,423   216,188   244 1,896   Income taxes 96,828   136,768   141 1,200   Income (loss) before minority interests (8,405 ) 79,420   - 697   Minority interests 68,422   79,979   117 702   Net income (loss) (76,827 ) (559 ) - (5 ) Consolidated Balance Sheets (Unaudited)           Yen (millions) U.S. Dollars (millions) As of Sep. 30,   As of Dec. 31,   As of Mar. 31, As of Dec. 31,   2007 (A) 2007 (B) (B)-(A) 2007 2007 Assets 10,738,735 10,898,686 159,951 10,644,259 95,603 Current assets 5,363,384 5,610,133 246,749 5,434,135 49,212 Cash and cash equivalents 545,028 534,152 (10,876) 617,866 4,686 Short-term investments 42,019 50,477 8,458 33,986 443 Trade receivables (Notes and Accounts) 2,305,714 2,334,319 28,605 2,496,015 20,476 Investments in leases 146,001 147,473 1,472 148,456 1,294 Inventories 1,619,904 1,751,880 131,976 1,450,258 15,367 Other current assets 704,718 791,832 87,114 687,554 6,946 Investments and advances 1,163,663 1,140,180 (23,483) 1,049,724 10,002 Property, plant and equipment 2,764,141 2,721,640 (42,501) 2,688,977 23,874 Other assets 1,447,547 1,426,733 (20,814) 1,471,423 12,515             Liabilities, Minority interests and Stockholders' equity 10,738,735 10,898,686 159,951 10,644,259 95,603 Current liabilities 4,713,472 4,886,444 172,972 4,667,544 42,864 Short-term debt and current portion of long-term debt 1,171,572 1,307,082 135,510 1,197,607 11,466 Trade payables (Notes and Accounts) 1,612,868 1,682,857 69,989 1,670,241 14,762 Other current liabilities 1,929,032 1,896,505 (32,527) 1,799,696 16,636 Noncurrent liabilities 2,441,506 2,440,663 (843) 2,460,169 21,409 Long-term debt 1,491,156 1,507,885 16,729 1,489,843 13,227 Other liabilities 950,350 932,778 (17,572) 970,326 8,182 Minority interests 1,155,466 1,166,646 11,180 1,073,749 10,234 Stockholders' equity 2,428,291 2,404,933 (23,358) 2,442,797 21,096 Common stock 282,033 282,033 0 282,033 2,474 Capital surplus 560,615 560,410 (205) 560,796 4,916 Legal reserve and retained earnings 1,686,188 1,687,978 1,790 1,713,757 14,807 Accumulated other comprehensive loss (74,657) (99,430) (24,773) (88,450) (872) (Foreign currency translation adjustments) (10,385) (25,681) (15,296) (20,906) (225) (Pension liability adjustments) (132,621) (127,529) 5,092 (146,329) (1,119) (Net unrealized holding gain on available-for-sale securities) 66,883 53,664 (13,219) 77,883 471 (Cash flow hedges) 1,466 116 (1,350) 902 1 Treasury stock (25,888) (26,058) (170) (25,339) (229) Consolidated Statements of Cash Flows (Unaudited)                     Three months ended December 31 Yen (millions) U.S. Dollars (millions)   2006 2007 2007 Cash flows from operating activities Net income 1,259 12,501 110   Adjustments to reconcile net income to net cash provided by (used in) operating activities   Depreciation 122,824 145,114 1,273 Increase in receivables and inventories (61,975 ) (170,132 ) (1,492 ) Increase (decrease) in payables (68,676 ) 87,772 770 Other (43,592 ) (50,821 ) (446 ) Net cash provided by (used in) operating activities (50,160 ) 24,434 214   Cash flows from investing activities Increase in short-term investments (11,613 ) (8,744 ) (77 ) Purchase of rental assets and other properties, net (202,653 ) (197,736 ) (1,735 ) Sale of investments and subsidiaries' common stock, net (110,700 ) (5,840 ) (51 ) Collection of investments in leases 56,578 70,087 615 Other (28,847 ) (28,117 ) (247 ) Net cash used in investing activities (297,235 ) (170,350 ) (1,494 )   Cash flows from financing activities Increase in interest-bearing debt 313,980 164,891 1,446 Dividends paid to stockholders (9,351 ) (9,996 ) (88 ) Dividends paid to minority stockholders of subsidiaries (8,657 ) (10,081 ) (88 ) Other (2,588 ) (3,306 ) (29 ) Net cash provided by financing activities 293,384 141,508 1,241   Effect of exchange rate changes on cash and cash equivalents 7,199   (6,468 ) (57 ) Net decrease in cash and cash equivalents (46,812 ) (10,876 ) (95 )   Cash and cash equivalents at beginning of period 651,221   545,028   4,781   Cash and cash equivalents at end of period 604,409   534,152   4,686   Consolidated Statements of Cash Flows (Unaudited)         Nine months ended December 31 Yen (millions) U.S. Dollars (millions)   2006 2007 2007 Cash flows from operating activities Net income (loss) (76,827 ) (559 ) (5 )   Adjustments to reconcile net income (loss) to net cash provided by operating activities   Depreciation 350,902 410,910 3,604 Increase in receivables and inventories (157,271 ) (40,077 ) (352 ) Increase (decrease) in payables (6,969 ) 12,707 111 Other 17,509   20,033   176   Net cash provided by operating activities 127,344 403,014 3,535   Cash flows from investing activities (Increase) decrease in short-term investments (4,251 ) 5,328 47 Purchase of rental assets and other properties, net (631,600 ) (605,694 ) (5,313 ) Sale of investments and subsidiaries' common stock, net   (101,955 ) (145,831 ) (1,279 ) Collection of investments in leases 216,190 231,312 2,029 Other (83,306 ) (80,391 ) (705 ) Net cash used in investing activities (604,922 ) (595,276 ) (5,222 )   Cash flows from financing activities Increase in interest-bearing debt 471,762 116,750 1,024 Dividends paid to stockholders (27,603 ) (19,943 ) (175 ) Dividends paid to minority stockholders of subsidiaries (19,008 ) (22,820 ) (200 ) Other (9,718 ) 36,971   324   Net cash provided by financing activities 415,433 110,958 973   Effect of exchange rate changes on cash and cash equivalents 8,299   (2,410 ) (21 ) Net decrease in cash and cash equivalents (53,846 ) (83,714 ) (734 )   Cash and cash equivalents at beginning of period 658,255   617,866   5,420   Cash and cash equivalents at end of period 604,409   534,152   4,686   Segment Information (Unaudited)           Industry Segments Three months ended December 31 Yen   U.S. Dollars (millions) (B)/(A) X100 (%) (millions)     2006 (A) 2007 (B) 2007 Revenues Information & Telecommunication Systems   582,70020% 627,26020% 108   5,502   Electronic Devices 305,91411% 296,25710% 97   2,599   Power & Industrial Systems 676,94424% 829,60127% 123   7,277   Digital Media & Consumer Products   371,73113% 411,52013% 111   3,610   High Functional Materials & Components   468,56416% 482,58016% 103   4,233   Logistics, Services & Others 329,41211% 332,18311% 101   2,914   Financial Services 130,4945% 107,1873% 82   940   Subtotal 2,865,759100% 3,086,588100% 108   27,075   Eliminations & Corporate items (377,414) (379,484) - (3,329)   Total 2,488,345 2,707,104 109 23,747 Operatingincome (loss) Information & Telecommunication Systems   6,4899% 14,25415% 220   125   Electronic Devices 15,35620% 10,21411% 67   90   Power & Industrial Systems 27,70236% 33,39435% 121   293   Digital Media & Consumer Products   (19,075)(25%) (15,026)(16%) -   (132)   High Functional Materials & Components   36,10848% 40,97043% 113   359   Logistics, Services & Others 3,2894% 5,8396% 178   51   Financial Services 6,2828% 5,4176% 86   48   Subtotal 76,151100% 95,062100% 125   834   Eliminations & Corporate items (14,596) (17,189) - (151)   Total 61,555 77,873 127 683 Note: Revenues by industry segment include intersegment transactions. Segment Information (Unaudited)           Industry Segments Nine months ended December 31 Yen   U.S. Dollars (millions) (D)/(C) X100 (%) (millions)     2006 (C) 2007 (D) 2007 Information & Telecom-munication Systems   1,730,51521% 1,881,79921% 109   16,507   Electronic Devices 951,83511% 939,59010% 99   8,242   Power & Industrial Systems 1,957,76023% 2,427,94427% 124   21,298   Digital Media & Consumer Products   1,130,49013% 1,139,55812% 101   9,996   Revenues High Functional Materials & Components   1,338,84716% 1,416,16016% 106   12,422   Logistics, Services & Others 940,39611% 950,90210% 101   8,341   Financial Services 394,1525% 329,5004% 84   2,890   Subtotal 8,443,995100% 9,085,453100% 108   79,697   Eliminations & Corporate items (1,184,746) (1,097,864) - (9,630)   Total 7,259,249 7,987,589 110 70,067 Information & Telecom-munication Systems   20,36217% 26,70912% 131   234   Electronic Devices 39,44432% 36,02815% 91   316   Power & Industrial Systems (17,632)(14%) 97,03541% -   851   Digital Media & Consumer Products   (53,543)(44%) (65,892)(28%) -   (578)   Operatingincome (loss) High Functional Materials & Components   99,99482% 105,60745% 106   926   Logistics, Services & Others 11,2759% 16,6027% 147   146   Financial Services 22,04018% 18,3958% 83   161   Subtotal 121,940100% 234,484100% 192   2,057   Eliminations & Corporate items (40,528) (34,943) - (307)   Total 81,412 199,541 245 1,750 Note: Revenues by industry segment include intersegment transactions. Segment Information (Unaudited)         Revenues by Market Three months ended December 31 Yen   U.S. Dollars (millions) (B)/(A) X100 (%) (millions)   2006 (A) 2007 (B) 2007 Japan 1,420,61557%   1,509,70156%   106     13,243   Asia 478,73119% 546,52120% 114   4,794   North America 278,13211% 251,6069% 90   2,207   Europe 219,8459% 288,74211% 131   2,533   Other Areas 91,0224% 110,5344% 121   970   Outside Japan 1,067,73043% 1,197,40344% 112   10,504   Total 2,488,345100% 2,707,104100% 109   23,747     Revenues by Market                 Nine months ended December 31   Yen   U.S. Dollars (millions) (D)/(C) X100 (%) (millions)   2006 (C) 2007 (D) 2007 Japan 4,240,91958% 4,505,19156% 106   39,519   Asia 1,369,98219% 1,574,76720% 115   13,814   North America 792,39611% 771,77810% 97   6,770   Europe 600,2078% 795,71210% 133   6,980   Other Areas 255,7454% 340,1414% 133   2,984   Outside Japan 3,018,33042% 3,482,39844% 115   30,547   Total 7,259,249100% 7,987,589100% 110   70,067   February 5, 2008 Hitachi, Ltd.   Supplementary Information For the Third Quarter ended December 31, 2007 (Consolidated Basis)               1. Summary   (Billions of yen) Three months ended December 31 Nine months ended December 31 2006 2007 2006 2007 (B)/(A) (D)/(C)     (A) (B) X100(%) (C) (D) X100(%) Average exchange rate (Yen / U.S.$) 118 113 - 116 117 - Capital investment (Completion basis) 239.2 215.4 90 741.9 715.0 96 Internal use assets 110.3 102.1 93 348.7 377.1 108   Leasing assets 128.8 113.3 88 393.2 337.9 86 Depreciation 122.8 145.1 118 350.9 410.9 117 Internal use assets 92.5 113.3 122 256.5 317.3 124   Leasing assets 30.2 31.7 105 94.3 93.5 99 R&D expenditure 101.7 101.7 100 303.5 310.6 102   Percentage of revenues 4.1 3.8 - 4.2 3.9 -       As of March 31, 2007 As of September 30, 2007 As of December 31, 2007 Stockholders’ equity per share (Yen) 734.66 730.41 723.42 Cash & cash equivalents, Short-term investments (Billions of yen) 651.8 587.0 584.6 Interest-bearing debt (Billions of yen) 2,687.4 2,662.7 2,814.9 Number of employees 384,444 389,091 390,577 Japan 250,767 255,845 253,077   Overseas 133,677 133,246 137,500 Number of consolidated subsidiaries 934 920 911 (Including Variable Interest Entities)       Japan 450 429 421   Overseas 484 491 490   2.Overseas revenues by industry segment   (Billions of yen) Three months ended December 31 Nine months ended December 31 2006 2007 2006 2007 (B)/(A) (D)/(C)     (A) (B) X100(%) (C) (D) X100(%) Information & Telecommunication Systems 252.9 262.0 104 663.0 711.1 107 Electronic Devices 113.2 113.8 100 349.5 379.5 109 Power & Industrial Systems 275.3 343.2 125 766.9 1,015.3 132 Digital Media & Consumer Products 135.4 162.3 120 429.8 473.1 110 High Functional Materials & Components 155.1 170.0 110 448.0 499.2 111 Logistics, Services & Others 121.7 130.7 107 322.0 357.2 111 Financial Services 13.8 15.2 110 38.8 46.6 120 Total 1,067.7 1,197.4 112 3,018.3 3,482.3 115 February 5, 2008 Hitachi, Ltd.   Supplementary Information on Information & Telecommunication Systems, Displays and Digital Media   Note: 1. Segment information and operating income are presented in accordance with financial reporting principles and practices generally accepted in Japan.   1. Information & Telecommunication Systems 2 (1) Revenues and Operating Income 3   (Billions of yen)   Three months ended December 31 Nine months ended December 31 2006(A)   2007(B)   (B) / (A) X100 (%) 2006(C)   2007(D)   (D) / (C) X100 (%) Revenues 582.7 627.2 108% 1,730.5 1,881.7 109%   Software & Services 244.7 275.0 112% 781.6 869.8 111%   Software 40.3 42.4 105% 118.7 123.1 104% Services 204.4 232.6 114% 662.9 746.7 113% Hardware 338.0 352.2 104% 948.9 1,011.9 107%   Storage4 209.2 226.5 108% 560.4 628.9 112% Servers5 19.4 19.0 98% 66.7 63.2 95% PCs6 12.8 8.9 70% 49.8 33.9 68% Telecommunication 31.2 29.6 95% 92.7 87.9 95% Others 65.4 68.2 104% 179.3 198.0 110% Operating income 6.4 14.2 220% 20.3 26.7 131% Notes:   2.   The Hard Disk Drive operations are conducted by Hitachi Global Storage Technologies (Hitachi GST), which has a December 31 fiscal year-end, different from Hitachi's March 31 year-end. Hitachi's results for the three months ended December 31, 2007 include the operating results of Hitachi GST for the three months ended September 30, 2007. 3. Figures for each product exclude intra-segment transactions. 4. Figures for Storage include disk array subsystems, hard disk drives, etc. 5. Figures for Servers include general-purpose computers, UNIX servers, etc. 6. Figures for PCs include PC servers, client PCs (only commercial use from FY2006), etc. (2) Storage Solutions (except Hard Disk Drives) (Billions of yen)     Three months ended December 31 Nine months ended December 31 2006(A)   2007(B)   (B) / (A) X100 (%) 2006(C)   2007(D)   (D) / (C) X100 (%) Revenues 93.0 95.0 102% 255.0 269.0 105% (3) Hard Disk Drives 7 8   Period recorded for consolidated accounting purposes   Three months ended December 31 Nine months ended December 31 2006 (A)   2007 (B)   (B) / (A) X100 (%) 2006 (C)   2007 (D)   (D) / (C) X100 (%) Shipment Period Jul.2006 to Sep.2006 Jul.2007 to Sep.2007 Jan.2006 to Sep.2006 Jan.2007 to Sep.2007 Revenues   Yen (billions of yen) 155.0 169.4 109% 407.3 468.1 115% U.S. dollar (millions of dollar) 1,328 1,450 109% 3,511 3,929 112% Operating loss Yen (billions of yen) (14.4) (6.8) - (32.8) (45.7) 4.5) - U.S. dollar (millions of dollar) (124) (58) - (282) (381) - Shipments (thousand units)9 19,900 24,300 122% 49,500 64,100 130%   Consumer and Comm-ercial 1.8/2.5 inch10 11,100 12,700 114% 27,200 33,000 121% 3.5 inch11 7,200 10,400 144% 18,000 26,900 149% Servers12 1,100 1,000 95% 3,000 3,300 111% Emerging13 450 180 40% 1,260 850 68% Period recorded for consolidated accounting purposes   Three months ended March 31   Twelve months ended March 31 2006 (A) (Jan. 2007 to Mar. 2007)   2007 (B) (Jan. 2008 to Mar. 2008)   (B) / (A) X100 (%) 2006 (C) (Apr. 2006 to Mar. 2007)   2007(D) (Apr. 2007 to Mar. 2008)   (D) / (C) X100 (%) Shipment Period Oct.2006 to Dec.2006 Oct.2007 to Dec.2007 Jan.2006 to Dec.2006 Jan.2007 to Dec.2007 Revenues   Yen (billions of yen) 160.8 185.0 115% 568.1 653.1 115% U.S. dollar (millions of dollar) 1,365 1,634 120% 4,877 5,563 114% Opera-ting income (loss) Yen (billions of yen) (11.0) 11.1 - (43.7) (34.6) - U.S. dollar (millions of dollar) (93) 95 - (375) (286) - Shipments (thousand units)9 20,500 25,400 124% 70,000 89,500 128%   Con-sumer and Comm-ercial 1.8/2.5 inch10 10,400 13,300 127% 37,700 46,300 123% 3.5 inch11 8,600 10,600 123% 26,600 37,500 141% Servers12 1,200 1,400 123% 4,100 4,700 114% Emerging13 340 150 43% 1,600 1,000 62% Notes:   7.   Figures include intra-segment transactions. 8. Hitachi GST's operating currency is U.S. dollar. Yen figures include yen / dollar conversion fluctuation. 9. Shipment less than 100,000 units have been rounded, with the exception of Emerging, where shipment less than 10,000 units have been rounded. 10. Consumer electronics applications (1.8inch), note-PCs (2.5inch), etc. 11. Desktop-PCs, consumer electronics applications (3.5inch), etc. 12. Disk array subsystems, servers (3.5inch), etc. 13. Hand held devices (1inch), automotive (2.5inch), etc. 2. Displays Revenues and Operating Income (Loss)   (Billions of yen)       Three months ended December 31 Nine months ended December 31 2006(A)   2007(B)   (B) / (A) X100 (%) 2006(C)   2007(D)   (D) / (C) X100 (%) Revenues 47.1 49.7 105% 148.2 144.3 97%   LCD 44.0 47.0 107% 130.0 133.0 102% Operating income (loss) 0.6 (0.1) - (3.7) (1.8) - 3. Digital Media   Shipments of Main Products 14 (Thousand units)     Three months ended December 31 Nine months ended December 31 2006(A)   2007(B)   (B) / (A) X100 (%) 2006(C)   2007(D)   (D) / (C) X100 (%) Optical Disk Drives15 18,000 25,000 139% 54,000 65,000 120% Plasma TVs16 250 280 112% 570 690 121% LCD TVs 180 270 150% 380 570 150% Notes:   14.   Shipment less than 10,000 units have been rounded, with the exception of Optical Disk Drives, where shipment less than 100,000 units have been rounded. 15. The Optical Disk Drive operations are conducted by Hitachi-LG Data Storage, Inc. (HLDS), which has a December 31 fiscal year-end, different from Hitachi's March 31 year-end. Hitachi's results for the three months ended December 31, 2007 include the operating results of HLDS for the three months ended September 30, 2007. 16. The sum of plasma TV and plasma monitor shipments. 4. Revision of the Forecast for Fiscal 2007   Based on the financial results for the third quarter of fiscal 2007 ended December 31, 2007, Hitachi revised the forecast of revenues, operating income (loss) and shipments for fiscal 2007 ending March 31, 2008, that was announced with the First Half of Fiscal 2007 consolidated financial results on October 31, 2007.     (1) Information & Telecommunication Systems   (Billions of yen)     Previous forecast (A) Revised forecast (B)   (B) - (A) Revenues 2,490.0 2,640.0 150.0   Software & Services 1,150.0 1,230.0 80.0 Hardware 1,340.0 1,410.0 70.0 Operating income (loss) 83.0 97.0 14.0   Software & Services 90.0 98.0 8.0 Hardware (7.0) (1.0) 6.0 (2) Displays   (Billions of yen)     Previous forecast (A) Revised forecast (B)   (B) - (A) Revenues 200.0 200.0 0   LCD 176.0 185.0 9.0 (3) Digital Media   Shipments of Main Products 14 (Thousand units)   Previous forecast (A)   Revised forecast (B)   (B) - (A) Optical Disk Drives15 91,000 89,500 (1,500) Plasma TVs16 1,200 900 (300)