Annual Report 2002 Report Hitachi Annual

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Annual Report 2002 Report Hitachi Annual HITACHI ANNUALHITACHI REPORT 2002 ANNUAL REPORT 2002 Year ended March 31, 2002 This annual report was printed on 100% recycled paper. Printed in Japan HIGHLIGHTS OF THE YEAR CORPORATE DATA Hitachi, Ltd. and Subsidiaries (As of March 31, 2002) Years ended March 31, 2002, 2001 and 2000 Millions of Corporate Name Overseas Stock Exchange Listings Millions of yen U.S. dollars 2002 2001 2000 2002 Hitachi, Ltd. Luxembourg, Frankfurt, Amsterdam For the year: (Kabushiki Kaisha Hitachi Seisakusho) Paris and New York stock exchanges Net sales . ¥7,993,784 ¥ 8,416,982 ¥8,001,203 $60,104 Operating income (loss) . (117,415) 342,312 174,364 (883) Principal Office Japanese Stock Exchange Listings Net income (loss) . (483,837) 104,380 16,922 (3,638) 6, Kanda-Surugadai 4-chome, Tokyo, Osaka, Nagoya, Fukuoka Cash dividends declared . 10,013 36,716 20,026 75 Chiyoda-ku, Tokyo 101-8010, Japan and Sapporo stock exchanges At year-end: Founded Independent Auditors Total assets . 9,915,654 11,246,608 9,983,361 74,554 1910 (Incorporated in 1920) KPMG Stockholders’ equity . 2,304,224 2,861,502 2,987,687 17,325 Yen U.S. dollars Number of Employees Internet Address Per share data: 321,517 http://global.hitachi.com Net income: Basic . ¥(144.95) ¥ 31.27 ¥ 5.07 $ (1) Number of Shares Issued For further information, please contact: Diluted . (144.95) 30.32 4.99 (1) Common Stock: 3,338,481,041 shares Investor Relations Net income per ADS (representing 10 shares): Japan Basic . (1,450) 313 51 (11) Number of Shareholders Hitachi, Ltd. Diluted . (1,450) 303 50 (11) 376,206 6, Kanda-Surugadai 4-chome, Cash dividends declared . 3.0 11.0 6.0 – Chiyoda-ku, Tokyo 101-8010, Japan Cash dividends declared per ADS (representing 10 shares) . 30 110 60 – Transfer Agent for the Shares TEL: 03-3258-1111 Stockholders’ equity . 690.28 857.27 895.08 5 TOKYO SECURITIES TRANSFER AGENT E-mail: [email protected] Notes: 1. The consolidated figures in this annual report are expressed in yen and, solely for the convenience of the reader, have been translated into United States dollars at the rate of ¥133=U.S.$1, the approximate exchange rate prevailing on the Tokyo Foreign Exchange Market as of March 29, 2002. See note 2 of the accompanying CO., LTD. notes to consolidated financial statements. 5-1, Marunouchi, 1-chome, Chiyoda-ku, U.S.A. 2. In order to be consistent with financial reporting principles and practices generally accepted in Japan, operating income (loss) is presented as net sales less cost of sales and selling, general and administrative expenses. Under accounting principles generally accepted in the United States of America, restructuring charges, Tokyo, 100-0005, Japan Hitachi America, Ltd. impairment losses and special termination benefits are included as part of operating income (loss). See note 17 to the consolidated financial statements. Tel. +81-3-3212-4601 Hitachi Plaza, 2000 Sierra Point Parkway, Brisbane, California 94005-1835 U.S.A. CONTENTS CAUTIONARY STATEMENT This document contains forward-looking statements which reflect management’s current Depositary and Registrar for TEL: 1-650-244-7902 views with respect to certain future events and financial performance. Words such as American Depositary Receipts E-mail: [email protected] “anticipate,” “believe,” “expect,” “estimate,” “intend,” “plan,” “project” and similar expressions TO OUR SHAREHOLDERS 01 which indicate future events and trends identify forward-looking statements. Actual results (New York Stock Exchange Listed Symbol — HIT) may differ materially from those projected or implied in the forward-looking statements and SEGMENT INFORMATION 12 Citibank, N.A. Europe from historical trends. Further, certain forward-looking statements are based upon assump- REVIEW OF OPERATIONS tions of future events which may not prove to be accurate. 111 Wall Street, 20th Floor Hitachi Europe Ltd. Factors that could cause actual results to differ materially from those projected or implied in INFORMATION & TELECOMMUNICATION SYSTEMS 16 any forward-looking statements include, but are not limited to, rapid technological change, New York, New York 10005, USA Whitebrook Park, Lower Cookham Road, 18 ELECTRONIC DEVICES particularly in the Information & Telecommunication Systems segment and Electronic Maidenhead Berkshire SL6 8YA U.K. POWER & INDUSTRIAL SYSTEMS 20 Devices segment; uncertainty as to Hitachi’s ability to continue to develop products and to DIGITAL MEDIA & CONSUMER PRODUCTS 22 market products that incorporate new technology on a timely and cost-effective basis and Toll-free phone 1-877-CITI-ADR (248-4237) TEL: 44-(0)1628-585379 HIGH FUNCTIONAL MATERIALS & COMPONENTS 24 achieve market acceptance; fluctuations in product demand and industry capacity, particu- E-mail: [email protected] E-mail: [email protected] LOGISTICS, SERVICES & OTHERS 26 larly in the Information & Telecommunication Systems segment, Electronic Devices segment and Digital Media & Consumer Products segment; increasing commoditization of information Website: www.citibank.com/adr FINANCIAL SERVICES 27 technology products, and intensifying price competition in the market for such products; Asia BOARD OF DIRECTORS AND CORPORATE AUDITORS 28 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 Hitachi Asia Ltd. FINANCIAL SECTION 29 between the yen and the U.S. dollar; uncertainty as to Hitachi’s access to liquidity or long- 16 Collyer Quay, #20-00 Hitachi Tower, term financing, particularly in the context of restrictions on availability of credit prevailing in FIVE–YEAR SUMMARY 64 Japan; uncertainty as to Hitachi’s ability to implement measures to reduce the potential Singapore 049318 negative impact of fluctuations in product demand and/or exchange rates; general economic CORPORATE DATA 65 conditions and the regulatory and trade environment of Hitachi’s major markets, particularly, TEL: 65-6231-2522 the United States, Japan and elsewhere in Asia, including, without limitation, continued E-mail: [email protected] 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 report, or in other materials published by the Company. HITACHI, LTD. ANNUAL REPORT 2002 65 TO OUR SHAREHOLDERS For three years, your company has been industry experienced its most severe down- implementing a series of bold reforms. With turn ever. The telecommunications equipment these reforms, we set out to clarify manage- market slumped globally. And the tragedy of ment responsibility and accountability, speed September 11 caused major political and up decision making and improve return on economic upheavals worldwide. Faced with investment. Our goal was to craft a more this unprecedented adversity, we felt com- robust earnings structure, one capable of pelled to step up the pace of reform to ensure holding up in a dynamically changing informa- sustainable growth. tion and electronics market. We committed Net sales for fiscal 2001 amounted to ourselves to maximizing returns for share- ¥7,993.7 billion (US$60,104 million), down holders by taking full advantage of our human 5% on the previous year. Net cash provided resources, technologies and financial by operating activities was ¥482.8 billion strength—the keys to our competitive edge. (US$3,631 million) and free cash flow was We believe today, just as strongly as we did ¥209.9 billion (US$1,579 million). Turning to three years ago when we launched “i.e. HI- earnings, Hitachi posted an operating loss of TACHI Plan,” that it was the correct blue- ¥117.4 billion (US$883 million), a loss before print for the structural reforms needed to raise income taxes and minority interests of ¥586.0 our corporate value. billion (US$4,407 million) and a net loss of Unfortunately, in fiscal 2001, ended March ¥483.8 billion (US$3,638 million). Hitachi 31, 2002, we faced challenges of an unprec- booked ¥325.5 billion (US$2,448 million) in edented scale. Negative growth and deflation restructuring charges for withdrawing from persisted in Japan. The U.S. economy slipped unprofitable businesses and integrating into a recessionary mode. The semiconductor production bases. HITACHI, LTD. ANNUAL REPORT 2002 01 TO OUR SHAREHOLDERS We will also redouble efforts to realign the Hitachi Group in order to reshape a portfolio of businesses that will increase our competitiveness. This will enable strategically integrated management functionality and should increase our corporate value, as we will manage strategic components of the Group as an organic whole. During the year, capital investment Innovation Initiative (CII). Specifically, we amounted to ¥856.2 billion (US$6,438 have taken emergency measures to trim fixed million), a decrease of 12%. This reflected costs and are reviewing unprofitable busi- curbs on expenditures in the semiconductor nesses. Our Procurement Renewal field. R&D expenditure was ¥415.4 billion Project, one element of CII, aims to reduce (US$3,124 million). Of this, 33% and 28% materials purchasing costs by 20% during the was accounted for by the information and two-year period ending in March 2003. And telecommunications systems and electronic Project C, another element of CII, will devices fields, respectively. shorten by 25% the number of days it takes At the end of fiscal 2001, Hitachi’s share to turn over inventory plus accounts receivable price on the Tokyo Stock Exchange stood at by March 2003, compared with September ¥928, down 14% from a year ago.
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