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Weare Up to
the Challenge
Annual Report 2009
Year ended March 31, 2009

Table of contents

  • Page 1
    Annual Report 2009 Year ended March 31, 2009 We are Up to the Challenge

  • Page 2
    ...฀limitation,฀contract฀terms฀and฀conditions฀and฀labor฀relations uncertainty฀as฀to฀Hitachi's฀access฀to,฀or฀ability฀to฀protect,฀certain฀intellectual฀property฀rights,฀particularly฀those฀related฀to฀electronics฀and฀data฀processing฀technologies...

  • Page 3
    ... Hit a c hi G r oup's w ide r a nge of busine sses , t e c hnologie s a nd e xp e r t ise to ge n e r a t e o p t i m a l v a l u e f o r t h e div e r se issue s a mong c ust ome r s a nd soc ie t y a t la r ge. Hitachi, Ltd. Annual Report 2009 1

  • Page 4
    ... certain other businesses, including impairment losses relating to fixed assets. Higher net equity in losses of the affiliated semiconductor company and the write-off of deferred tax assets were among other factors that also brought about this bottom-line result. 2 Hitachi, Ltd. Annual Report 2009

  • Page 5
    ... systems and power and industrial systems, transforming into a truly global company, and expanding environmental businesses. Achieving these goals should create a more stable profit base and lead to further growth. In short, the Hitachi Group is seeking to create a new business model...

  • Page 6
    ... require further technological advances as well as the establishment and enhancement of infrastructure fused with information and telecommunication systems, power systems, environmental, industrial and transportation systems, and social and urban systems. And we 4 Hitachi, Ltd. Annual Report 2009

  • Page 7
    ... telecommunication systems and power and industrial systems; transforming into a truly global company; and expanding environmental businesses. The goal is to build a more stable profit structure. conditions and develop more locally based operations. Expanding Environmental Businesses We also plan...

  • Page 8
    ... research divisions that support these businesses. In specific terms, we will look at developing the eco-friendly green data center business, railway information systems business and smart grid-related businesses, among other areas. By promoting these businesses, Hitachi will drive the 21st century...

  • Page 9
    ... Technology Corp. and NEC Electronics Corporation. To accelerate these moves with an even stronger resolve, at the end of July 2009 we announced plans to convert five publicly listed companies into wholly owned subsidiaries. The five companies are Hitachi Information Systems, Ltd., Hitachi Software...

  • Page 10
    .... Enhance Group Consolidated Management Hitachi, Ltd. (Business Holding Company) Group Corporate Management support functions: Structural reforms, Optimized allocation of Group resources Use of common Group resources: R&D, Sales, Human Resource, Manufacturing Technologies Procurements, IT and...

  • Page 11
    ... can is of the utmost importance. To improve our financial strength, we must restore our earnings power. We plan to do this by focusing more on the Social Innovation Business, and quickly improving the profitability and undertaking fundamental reviews of loss-making businesses. First, though, we are...

  • Page 12
    ... of yen) ¥10,000 11% 10% Electronic Devices Digital Media & Consumer Products Revenues Operating Loss ¥1,261,501 ¥(105,563) Revenues ¥1,151,066 ¥27,322 Operating Income 29% Power & Industrial Systems Revenues Operating Income ¥3,310,544 ¥24,245 10 Hitachi, Ltd. Annual Report 2009

  • Page 13
    ... exchange rate prevailing on the Tokyo Foreign Exchange Market as of March 31, 2009. See note 3 of the accompanying notes to consolidated financial statements. 3. In order to be consistent with financial reporting principles and practices generally accepted in Japan, operating income (loss...

  • Page 14
    ...฀Services •฀Software •฀Hard฀Disk฀Drives •฀Disk฀Array฀Subsystems •฀Servers •฀Mainframes •฀Telecommunications฀Equipment •฀ATMs 2.5-inch Hard Disk Drive by Hitachi Global Storage Technologies Data Center (Unification Control Center) Hitachi's unification control...

  • Page 15
    ...as in mobile phone base stations for the Japanese market. In contrast, storage product sales dropped for both HDDs and disk array subsystems due mainly to a stronger yen. Server operations also recorded lower sales because of decreased sales of blade servers and mainframes in line with deterioration...

  • Page 16
    ... Magnet High-Field Open MRI System In 2008, Hitachi Medical Corporation launched on the U.S. market a superconductive magnet High-Field Open Magnetic Resonance Imaging (MRI) system that delivers a high magnetic field and high image quality. The company plans to expand the sales to Japan and Europe...

  • Page 17
    ... in electronic device systems. n฀Hitachi Medical Corporation Sales were higher year over year. Although sales of X-ray systems and some other products in Japan shrank, the company logged strong sales growth in MRI (Magnetic Resonance Imaging) systems in Japan, the U.S. and Europe. Earnings...

  • Page 18
    ... has developed a lithium-ion battery for hybrid vehicles that delivers 4,500 W/kg, the world's highest output* for a battery of this class. This company also offers optimal solutions to customers in the form of battery systems combining batteries and electronic control. *As of May 19, 2009 Millions...

  • Page 19
    ... in Europe, and nuclear power plants in Japan. Earnings improved from the previous fiscal year because of fewer unprofitable projects and better project management. n฀Urban Planning and Development Systems Sales rose year over year due to strong growth in elevators and escalators, mainly...

  • Page 20
    ...Products and Services •฀Optical฀Disk฀Drives •฀Plasma฀TVs •฀LCD฀TVs •฀LCD฀Projectors •฀Mobile฀Phones •฀Room฀Air฀Conditioners •฀Refrigerators •฀Washing฀Machines •฀Information฀Storage฀Media •฀Batteries •฀Air-Conditioning฀Equipment High...

  • Page 21
    ..., refrigerators and washing machines in Japan, centered on highend models, which offset lower room air-conditioner sales overseas. Revenues (Billions of yen) 1,506.0 1,504.6 1,261.5 Operating loss (Billions of yen) (58.4) (109.9) (105.5) Capital investment (Property, plant and equipment...

  • Page 22
    ... helps improve engine fuel economy. Hitachi Cable's Halogen-Free, 150-Degree HeatResistant Harnesses for Hybrid Vehicles Power supply harnesses are used as cables to connect motors, inverters and batteries in hybrid vehicles. This harness employs a proprietary halogen-free material that contains no...

  • Page 23
    ... run-up of materials prices. n฀Hitachi Metals, Ltd. Sales declined year over year. High-grade metal products and materials posted a year-over-year decline, mainly in materials for molds and metal tools and other automotive-related products. In electronics and IT devices, sales also declined, with...

  • Page 24
    ... Products and Services •฀General฀Trading •฀Logistics •฀Property฀Management Segment revenues decreased 14%, to ¥1,089.9 billion (U.S.$11,122 million), the result of lower sales at overseas general trading companies in North America and Europe, although Hitachi Transport System, Ltd...

  • Page 25
    ... auto sales. In the supply and sales services, Hitachi Capital recorded lower new volume in auto leasing and gains on sale of leased assets that were off Hitachi Capital's Multifunctional IC Card Hitachi Capital Corporation provides IC card solutions according to the needs of companies and employees...

  • Page 26
    ... Moreover, the Hitachi Group is concentrating its efforts in R&D to expand the Social Innovation Business. Specifically, the Company will strengthen R&D in nuclear and coal-fired thermal power plants, new energy, "green mobility" (railway, construction machinery and automotive systems), eco-friendly...

  • Page 27
    ... Property Group supports business strategy from an intellectual property (IP) standpoint. Hitachi's fundamental IP policy is "building a world-class patent portfolio" and "strategic IP use." Hitachi is currently pursuing a patent filing plan that calls for the number of overseas patent applications...

  • Page 28
    ...sharing, educating and informing Group employees about global standards. This tool is being used in 22 Hitachi Group companies at present and the results are being utilized as the basis for formulating action plans at each company. In March 2009, Hitachi held a dialogue with stakeholders in New York...

  • Page 29
    ... Group by the end of fiscal 2010. Narashino Division, Hitachi Industrial Equipment Systems Co., Ltd. (Above) The new production building uses high-insulation glass and energysaving equipment. (Right) Solar panels installed on the roof of the production building. Hitachi, Ltd. Annual Report 2009...

  • Page 30
    ...on the Board of Directors. In terms of the basic policy for corporate governance of the Hitachi Group, Hitachi, Ltd.'s Standards of Corporate Conduct is positioned as the basis for the Hitachi brand and CSR activities. Underpinned by this basic policy, Hitachi aims to foster shared values throughout...

  • Page 31
    ... Services Agency Internal Auditing Office Monitoring Audit Independent auditors Internal Control Committee Office Certification, Management Assessment Report Hitachi Group HQs (Hitachi Group HQs and Hitachi, Ltd. Business Groups) * CFO: Chief Financial Officer * The New York Stock Exchange...

  • Page 32
    .... Outside Director, Special Advisor, Sumitomo Corporation Outside Director, Lawyer, Partner, Ihara & Motobayashi Advisor, Hitachi Via Mechanics, Ltd. Chairman of the Board, Hitachi Construction Machinery Co., Ltd. Chairman of the Board, Hitachi Metals, Ltd. Representative Executive Officer, Chairman...

  • Page 33
    ... Division, Chairman of the Board of Hitachi Global Storage Technologies, Inc. Corporate Planning & Development, Environmental Strategy, Human Capital, Legal & Corporate Communications, Brand Management and Management Audit, General Manager of Supervisory Office for Business Infrastructure and...

  • Page 34
    We Will Continue to Take Up the Challenge 32 Hitachi, Ltd. Annual Report 2009

  • Page 35
    ...' Equity Consolidated Statements of Cash Flows Notes to Consolidated Financial Statements Management's Report on Internal Control Over Financial Reporting Report of Independent Registered Public Accounting Firm Five-Year Summary 34 36 37 39 40 92 93 96 Hitachi, Ltd. Annual Report 2009 33

  • Page 36
    ... Balance Sheets Hitachi, Ltd. and Subsidiaries March 31, 2009 and 2008 Millions of yen Thousands of U.S. dollars (note 3) 2009 Assets Current assets: Cash and cash equivalents ...Short-term investments (note 4) ... 2009 2008 ¥ 807,926 8,654 ¥ 560,960 61,289 $ 8,244,143 88,306 Trade...

  • Page 37
    Millions of yen Thousands of U.S. dollars (note 3) 2009 Liabilities and Stockholders' Equity Current liabilities: Short-term debt (note 10) ...Current portion of long-term debt (notes 6 and 10) ...Trade payables: Notes ...Accounts ...Accrued expenses (notes 11 and 17) ...Income taxes (note 9) ......

  • Page 38
    ...155,602) (8,113,469) 79,418 $ (8,034,051) ¥ ¥ Net loss per share (note 22): Basic ...Diluted ...See accompanying notes to consolidated financial statements. Yen U.S. dollars (note 3) ¥(236.86) (236.87) ¥(17.48) (17.77) ¥(9.84) (9.87) $(2.42) (2.42) 36 Hitachi, Ltd. Annual Report 2009

  • Page 39
    ...Sales of treasury stock ...Stock exchange for acquisition (note 14) ...Total change in capital surplus ...Balance at end of year ...Legal reserve and retained earnings (note 13): Balance at beginning of year ...Change in legal...7,663 - (1,092) (267,725) ¥ ¥ $ Hitachi, Ltd. Annual Report 2009 37

  • Page 40
    ... ...Sales of treasury stock ...Stock exchange for acquisition ...Total change in total stockholders' equity ...Balance at end of year ...Comprehensive loss (note 15): Net loss ...Other comprehensive income (loss) arising during the year: Foreign currency translation adjustments ...Minimum pension...

  • Page 41
    ...(Increase) decrease in short-term investments ...Capital expenditures ...Purchase of assets to be leased ...Collection of investments in leases ...Proceeds from disposal of rental assets and other property ...Proceeds from sale of investments and subsidiaries' common stock ...Purchase of investments...

  • Page 42
    ...accordance with Statement of Financial Accounting Standards (SFAS) No. 52, "Foreign Currency Translation." Under this standard, the assets and liabilities of the Company's subsidiaries located outside Japan are translated into Japanese yen at the rates of exchange in effect at the balance sheet date...

  • Page 43
    ... than at the end of each quarter period, the Company evaluates an available-for-sale security, a held-to-maturity security and a cost-method investment for possible impairment. Fair value is determined based on quoted market prices, projected discounted cash flows or other valuation techniques as...

  • Page 44
    ... credit loss and others. (h) Inventories Inventories are stated at the lower of cost or market. Cost is determined by the specific identification method for job order inventories and generally by the average cost method for raw materials and other inventories. (i) Property, Plant and Equipment...

  • Page 45
    ... develop certain computer software to be sold where related costs are capitalized after establishment of technological feasibility in accordance with SFAS No. 86, "Accounting for the Costs of Computer Software to Be Sold, Leased, or Otherwise Marketed." The annual amortization of such capitalized...

  • Page 46
    ..., magnetic tapes, high functional materials, cable products, automotive equipment, semiconductor manufacturing equipment, test and measurement equipment, railway vehicles, medical electronic devices, industrial machinery and equipment, elevators and escalators. 44 Hitachi, Ltd. Annual Report 2009

  • Page 47
    ... completed-contract method is applied. Customization of software is considered substantially completed when an acceptance by the customer occurs. Revenue from post contract customer support is amortized over the period of the post contract customer support. Consulting and training services revenues...

  • Page 48
    ... compensation plans. Effective April 1, 2006, the Company adopted the fair value recognition provisions of SFAS No. 123 (revised 2004), "Share-Based Payment," which is a revision of SFAS No. 123, "Accounting for Stock-Based Compensation." This statement requires all share-based payments to employees...

  • Page 49
    ... income or loss. This FSP is effective for interim and annual reporting periods ending after June 15, 2009, with early adoption permitted for periods ending after March 15, 2009. The Company is currently evaluating the effect of adopting this statement on the consolidated financial position and...

  • Page 50
    ...effective for interim and annual reporting periods ending after June 15, 2009 and applied prospectively, with early adoption permitted for periods ending after March 15, 2009. The Company is currently evaluating the effect of adopting this statement on the consolidated financial position and results...

  • Page 51
    ... the approximate exchange rate prevailing on the Tokyo Foreign Exchange Market as of March 31, 2009. This translation should not be construed as a representation that all amounts shown could be converted into U.S. dollars. 4. INVESTMENTS IN SECURITIES AND AFFILIATED COMPANIES Short-term investments...

  • Page 52
    ... holding gains, gross unrealized holding losses and aggregate fair value of available-for-sale securities by the consolidated balance sheets classification as of March 31, 2009 and 2008. Millions of yen ...,439 3,071 86,510 $1,388,326 $369,908 $53,204 $1,705,030 50 Hitachi, Ltd. Annual Report 2009

  • Page 53
    ... consolidated statement of operations. Trading securities consist mainly of investments in trust accounts. The portions of trading gains and losses for the years ended March 31, 2009, 2008 and 2007 that relate to trading securities still held at the balance sheet date were losses of ¥352...

  • Page 54
    ... GE-Hitachi Nuclear Energy Holdings, LLC. Summarized combined financial information relating to affiliated companies, including Renesas Technology Corp. and IPS Alpha Technology, Ltd., accounted for by the equity method is as follows: Millions of yen 2009 2008 Thousands of U.S. dollars 2009 Current...

  • Page 55
    The balances and transactions with affiliated companies accounted for by the equity method are as follows: Millions of yen 2009 2008 Thousands of U.S. dollars 2009 Trade receivables ...Investments in leases ...Trade payables ... ¥99,074 15,977 48,168 ¥137,345 6,903 86,690 $1,010,959 163,031 491...

  • Page 56
    ... as of March 31, 2008: Millions of yen Financing leases Years ending March 31 Operating leases 2009 Financing leases Thousands of U.S. dollars Operating leases 2009 2010 ...2011 ...2012 ...2013 ...2014 ...Thereafter ...Total minimum payments to be received ...Unguaranteed residual values ...Amount...

  • Page 57
    ... Company and certain subsidiaries retain servicing responsibility, and certain of the Company's subsidiaries provide credit facilities to QSPEs in accordance with the service agency business contracts from which temporary payments on behalf of such QSPEs are made. Hitachi, Ltd. Annual Report 2009...

  • Page 58
    ...that the Company and subsidiaries apply to determine which receivables are selected for transfer. Therefore, the blended performance may differ from receivables recorded on the consolidated balance sheets. Hitachi Capital Corporation and certain other financing subsidiaries sold lease receivables to...

  • Page 59
    ... assumptions used in measuring the fair value of the subordinated interests relating to securitizations of lease receivables as of March 31, 2009 and 2008 are as follows: 2009 2008 Weighted average life (in years) ...Expected credit loss ...Discount rate ... 3.3 0.00-0.03% 0.80-1.16% 3.4 0.00...

  • Page 60
    ... assumptions used in measuring the fair value of the subordinated interests relating to securitizations of mortgage loans receivable as of March 31, 2009 are as follows: 2009 Weighted average life (in years) ...Expected credit loss ...Discount rate ...Prepayment rate ... 11.4 0.01% 1.76-2.03% 1.00...

  • Page 61
    ... 2010 ...2011 ...2012 ...2013 ...2014 ... ¥93,628 72,...loss ...Translation adjustment and other ...Balance at end of the year ... ¥159,039 8,859 (24,560) (8,908) ¥134,430 ¥148,431 26,154 (7,448) (8,098) ¥159,039 $1,622,847 90,398 (250,612) (90,898) $1,371,735 Hitachi, Ltd. Annual Report 2009...

  • Page 62
    ...year ended March 31, 2009. The fair value of that reporting unit was estimated using the present value of expected future cash flows and quoted market prices. Impairment losses are included in selling, general and administrative expenses in the consolidated statements of operations. 9. INCOME TAXES...

  • Page 63
    ... ended March 31, 2008 resulted mainly from a decline in profitability in the plasma TV business. An increase in valuation allowance for the year ended March 31, 2007 resulted mainly from provisions recorded for anticipated losses on certain long-term contracts. Hitachi, Ltd. Annual Report 2009 61

  • Page 64
    ... paid on net intercompany profit on assets remaining within the group, which had been deferred in accordance with Accounting Research Bulletin No. 51, "Consolidated Financial Statements," as of March 31, 2009 and 2008 are reflected in the accompanying consolidated balance sheets under the following...

  • Page 65
    ... 13,720 ¥998,822 ¥522,947 149,461 50,612 ¥723,020 $ 6,727,041 3,325,020 140,000 $10,192,061 The weighted average interest rate on short-term debt outstanding as of March 31, 2009 and 2008 was 0.6% and 0.8%, respectively. Hitachi, Ltd. Annual Report 2009 63

  • Page 66
    ...have any distribution of earnings, including the payment of dividends and the issuance of additional capital stock, submitted to them for prior approval and also grant them the right to request additional securities or mortgages on property, plant and equipment. 64 Hitachi, Ltd. Annual Report 2009

  • Page 67
    ... B zero coupon convertible bonds. During the conversion period, the bondholders may exercise the stock acquisition rights anytime after the closing price of the Company's shares at the Tokyo Stock Exchange on at least one trading day is 115 percent or more of the then applicable conversion price...

  • Page 68
    ... 158 requires the Company to recognize the funded status (i.e., the difference between the fair value of plan assets and the projected benefit obligations) of its pension plans in the consolidated balance sheet, with a corresponding adjustment to accumulated other comprehensive income (loss), net of...

  • Page 69
    ... pension plan ...Curtailment ...Foreign currency exchange rate changes ...Benefit obligation at end of year ...Change in plan assets: Fair value of plan assets at beginning of year ...Actual return on plan assets ...Employers' contributions: Cash ...Available-for-sale securities ...Employees' cash...

  • Page 70
    ... March 31, 2009, 2008 and 2007 are as follows: 2009 2008 2007 Discount rate ...Expected long-term return on plan assets ...Rate of compensation increase ... 2.5% 3.4% 2.7% 2.5% 3.1% 2.7% 2.5% 3.0% 2.5% The expected long-term rate of return on plan assets is developed for each asset class, and is...

  • Page 71
    ... 1, 1982 into common stock were accounted for in accordance with the provisions of the Japanese Commercial Code, the former Japanese Company Law, by crediting one-half of the conversion price to each of the common stock accounts and the capital surplus accounts. Hitachi, Ltd. Annual Report 2009 69

  • Page 72
    ...declared with respect to earnings for the periods. 14. TREASURY STOCK The Japanese Company Law (JCL) allows a company to acquire treasury stock upon shareholders' approval to the extent that sufficient distributable funds are available. If the Board of Directors' authority is stated in the articles...

  • Page 73
    ... OTHER COMPREHENSIVE LOSS Accumulated other comprehensive loss, net of related tax effects, displayed in the consolidated statements of stockholders' equity is classified as follows: Millions of yen 2009 2008 2007 Thousands of U.S. dollars 2009 Foreign currency translation adjustments: Balance at...

  • Page 74
    ...2009 Before-tax amount Tax benefit (expense) Net-of-tax amount Other comprehensive loss arising during the year: Foreign currency translation adjustments ...Pension liability adjustments ...Net unrealized holding gain on available-for-sale securities ...Cash...) 72 Hitachi, Ltd. Annual Report 2009

  • Page 75
    ...available-for-sale securities ...Cash flow hedges ...Reclassification adjustments for realized net loss included in net loss: Foreign currency translation adjustments ...Pension liability ...058 ¥ - (17,439) (7,098) (4) (24,541) ¥ 19,532 22,030 7,132 (177) 48,517 Hitachi, Ltd. Annual Report 2009 73

  • Page 76
    ... to stand ready to perform over the term of the guarantees in the event the customer cannot make scheduled payments. The subsidiaries provide certain revolving lines of credit to its credit card holders in accordance with the terms of the credit card business customer service contracts. Furthermore...

  • Page 77
    ... 31, 2009, outstanding commitments for the purchase of property, plant and equipment were approximately ¥55,700 million ($568,367 thousand). It is a common practice in Japan for companies, in the ordinary course of business, to receive promissory notes in the settlement of trade accounts receivable...

  • Page 78
    ... order from the Fair Trade Commission of Japan, but it has not received a surcharge payment order. The Japanese subsidiary accrued the reasonably estimated amount for the loss in relation to the investigation by the Antitrust Division of the U.S. Department of Justice as of March 31, 2009, and paid...

  • Page 79
    ... supplies material for the related semiconductors. The fair value estimates used to determine these losses were based primarily on discounted future cash flows. For the year ended March 31, 2007, the majority of the impairment losses were recorded on long-lived property, plant and equipment located...

  • Page 80
    ...by the employees. An analysis of the accrued special termination benefits for the years ended March 31, 2009, 2008 and 2007 is as follows: Millions of yen 2009 2008 2007 Thousands of U.S. dollars 2009 Balance at beginning of the year ...New charges ...Cash payments ...Foreign currency exchange rate...

  • Page 81
    ...new shares and sale of the investment, the Company's ownership interest of common stock decreased from 67.3% to 43.9% at March 31, 2007 and the remaining investment is accounted for using the equity method. The Company provided a deferred tax liability on this gain. Hitachi, Ltd. Annual Report 2009...

  • Page 82
    ... securities: Stock options ...Number of shares on which diluted net loss per share is calculated ... 3,323,996,973 - 3,323,996,973 3,324,562,767 122,257 3,324,685,024 3,331,918,803 158,778 3,332,077,581 Thousands of U.S. dollars 2009 Millions of yen 2009 2008 2007 Net loss applicable to common...

  • Page 83
    ... debt to fix cash flows from long-term debt denominated in foreign currencies. The hedging relationship between the derivative financial instrument and its hedged item is highly effective in achieving offsetting changes in foreign currency exchange rates. Hitachi, Ltd. Annual Report 2009 81

  • Page 84
    ...). Derivative financial instruments designated as fair value hedges include forward exchange contracts associated with operating transactions, cross currency swap agreements and interest rate swaps associated with financing transactions. Exchange loss for the years ended March 31, 2009 and 2008...

  • Page 85
    ... exchange contracts Other deductions ...Â¥ (6,814) $ (69,531) Accounts Other deductions ...Â¥ 5,832 $ 59,510 receivable and accounts payable Other deductions ...(590) (6,020) Short-term investments and shortterm debt Other deductions ...614 6,265 Cross currency Other deductions ...swap agreements...

  • Page 86
    ... statement of operations for the quarter ended March 31, 2009: Gain (loss) recognized in OCI Effective portion of derivatives designated as hedging instruments Derivatives Millions of yen Thousands of U.S. dollars Forward exchange contracts ...Cross currency swap agreements ...Interest rate...

  • Page 87
    ... cash equivalents, Trade receivables, Short-term debt and Trade payables The carrying amount approximates the fair value because of the short maturity of these instruments. Derivative financial instruments The fair values of forward exchange contracts, cross currency swap agreements, interest rate...

  • Page 88
    ... 2008 Estimated fair values Thousands of U.S. dollars 2009 Carrying amounts Estimated fair values Long-term debt ...Derivatives (Effective Portion in Other Current Liabilities): Forward exchange contracts ...Cross currency swap agreements ...Interest rate swaps ...Option contracts ...Derivatives...

  • Page 89
    ... 2 securities include short-term investments and available-for-sale securities such as listed stocks traded over-the-counter, investment funds, debt securities traded over-the-counter, and money market funds. In infrequent circumstances, the significant inputs of fair value for investment securities...

  • Page 90
    ...898 ¥ 26,532 - 123,465 ¥149,997 Thousands of U.S. dollars Fair value hierarchy classification Total Balance Level 1 Level 2 Level 3 Assets: Investments in securities ...Derivatives ...... $1,316,388 $ 118,867 410,704 - $ 529,571 $ 270,735 - 1,259,847 $1,530,582 88 Hitachi, Ltd. Annual Report 2009

  • Page 91
    ... 77% over the average share price of Hitachi Kokusai Electric's common stock traded on the First Section of the Tokyo Stock Exchange for three month period ended January 13, 2009. As a result, the Company purchased 13,406,000 shares, the upper limit for the number of shares in the tender offer...

  • Page 92
    ...approximately 77% over the average share price of Hitachi Koki's common stock traded on the First Section of the Tokyo Stock Exchange for three month period ended January 13, 2009. As a result, the Company purchased 12,473,000 shares, the upper limit for the number of shares in the tender offer, for...

  • Page 93
    ... reported in the accompanying consolidated financial statements as of and for the year ended March 31, 2007. 30. STOCK OPTION PLANS The Company and certain subsidiaries have stock option plans. Under the Company's stock option plans, non-employee directors, executive officers and certain employees...

  • Page 94
    ... financial reporting was effective based on those criteria. The Company's independent registered public accounting firm has issued an audit report on the effectiveness of the Company's internal control over financial reporting. This report appears on page 94. 92 Hitachi, Ltd. Annual Report 2009

  • Page 95
    Report of Independent Registered Public Accounting Firm To the Stockholders and Board of Directors of Hitachi, Ltd.: We have audited the accompanying consolidated balance sheets of Hitachi, Ltd. and subsidiaries (the "Company") as of March 31, 2009 and 2008, and the related consolidated statements...

  • Page 96
    ... with the standards of the Public Company Accounting Oversight Board (United States), the accompanying consolidated balance sheets of Hitachi, Ltd. and subsidiaries as of March 31, 2009 and 2008, and the related consolidated statements of operations, stockholders' equity, and cash flows for each of...

  • Page 97
    Hitachi, Ltd. Annual Report 2009 95

  • Page 98
    ...to investors in comparing the Company's financial results with those of other Japanese companies. Under accounting principles generally accepted in the United States of America, restructuring charges, net gain or loss on sale and disposal of rental assets and other property and impairment losses for...

  • Page 99
    ...Depositary Receipts (New York Stock Exchange Listed Symbol - HIT) Citibank, N.A. Shareholder Services P.O. Box 43077 Providence, Rhode Island 02940-3077 USA Hitachi Europe Ltd. Whitebrook Park, Lower Cookham Road, Maidenhead Berkshire SL6 8YA TEL: +44-1628-585379 E-mail: [email protected]...

  • Page 100
    Printed in Japan