Date and Time:	October 28, 2011 (Friday) 15:00-15:45
Place:	Conference Call
Participants:	Mitsuaki Nishiyama,   CFO, and Executive Officer, Group-Executive of Finance Group Tatsuhiro Kumazawa,   General Manager of Accounting Dept., Finance Group Shoichi Kogure,   General Manager of Administration Dept., Human Resources & Administration Div., Business Support Group
Agenda:	1. Explanation of Medium-term Management Plan (Mr. Takahashi) 2. Questions and Answers

materials

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The information provided herein is only an overview and not a word-for-word transcription of the briefing. The following is a summary of the explanations and of the question-and-answer session that followed.

Notes:

Forecasts of numerical performance contained herein (excluding actual accounting figures) were made as of Oct 28, 2011, and the Company's management has calculated such forecasts based on assumptions and suppositions judged to be sound. Accordingly, actual results may differ greatly from targets and forecasts.

Among the factors influencing results, the most important are as follows:

*1	Each brand name that appears here is the trademark or registered trademark of their respective owners.
*2	This document is an English translation of a document prepared in Japanese. In the event of any discrepancies between the content of the Japanese and English documents, the content of the Japanese document shall take precedence.

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1. Outline of Financial Report for the Second Quarter of the Fiscal 2012, Ending March 31, 2012

The following is a summary explanation of Hitachi Cable's financial results for the second quarter of the fiscal 2012, ending March 31, 2012.

1-1. Consolidated Statement of Profit and Loss

In the cumulative second quarter of current fiscal year (April 1, 2011, through September 30, 2011), Hitachi Cable recorded 210,434 million yen in consolidated net sales, an increase of approximately 2.9 billion yen, or 1.4%, from the level in the cumulative second quarter of the previous fiscal year (April 1, 2010, through September 30, 2010). While yen appreciation also had an impact on the level of net sales, the impact of rising copper prices had the effect of increasing net sales by approximately 12.0 billion yen. On a real basis defined as excluding the impact of copper price fluctuations, net sales were approximately 4% below the level in the cumulative second quarter of the previous fiscal year.
Operating income totaled 1,356 million yen, a decrease of approximately 0.6 billion yen from the level in the cumulative second quarter of the previous fiscal year. Despite considerable negative impact from such factors as yen appreciation and copper price fluctuations, decreases in fixed costs and in the cost of sales enabled us to generate operating income.
Non-operating income and loss amounted to a loss of approximately 1.1 billion yen, owing to the recording of investment loss by equity method.
Ordinary income totaled 296 million yen, approximately 0.6 billion yen below the level in the cumulative second quarter of the previous fiscal year.
Extraordinary income and extraordinary loss items amounted to a loss of approximately 8.5 billion yen. In addition to impairment losses on fixed assets associated with business restructuring measures, we recorded provisions to reserves in view of the risk of being required by the European Commission (EC) to pay a surcharge in connection with international cartel behavior in the high-voltage power cable market.
As a result, net income for the cumulative second quarter was a loss of 9,056 million yen, approximately 9.9 billion yen below the level in the cumulative second quarter of the previous fiscal year.
Compared with the performance forecast figures announced at the time Hitachi Cable announced its Renewed Plan "BRIDGE" medium-term management plan (September 9, 2011), despite the impact of such unpredictable negative factors as copper price fluctuations, the Company was able to realize fixed cost reductions and other measures that supported the level of operating income at approximately 0.1 billion yen below the projected figure. Thus, operating income performance was roughly in line with the forecast. While the actual extraordinary loss was approximately 1.0 billion yen less than the forecast figure, we anticipate that the extraordinary loss for the fiscal 2012 as a whole will be roughly equivalent to the forecast figure.

1-2. Major Factors Contributing to Change in Operating Income (Change from first half of the fiscal 2012, ending March 2012)

Factors contributing to a decrease in operating income included an approximately 1.7 billion yen decrease due to the net reduction in sales and an approximately 0.9 billion yen decrease due to exchange rate fluctuations. Changes in copper prices had the effect of reducing operating income by approximately 1.1 billion yen, reflecting a sharp drop in copper prices at the end of the second quarter of fiscal 2012, ending March 2012 (July 1, 2011, through September 30, 2011), which was accompanied by a write-down of copper inventories based on the lower-of-cost-or-market method. In addition, changes in selling prices, etc., had the effect of reducing operating income by approximately 1.7 billion yen.
Factors contributing to an increase in operating income included an approximately 1.2 billion yen increase due to cost and procurement cost reduction as well as an approximately 3.6 billion yen increase due to reduction in fixed costs.
These factors enabled us to generate 1.4 billion yen in operating income in the cumulative second quarter under review, but we were not able to attain the 1.9 billion yen in operating income recorded in the cumulative second quarter of the previous fiscal year.

1-3. Breakdown of Net Profit for the Current Quarter

Most of the factors impacting net profit for the current quarter were extraordinary loss factors.
These extraordinary loss factors include an approximately 5.6 billion yen in impairment losses. Impairment loss-related factors included such fixed asset impairment factors as an approximately 3.7 billion yen in the impairment of manufacturing facilities that accompanied the scale-down of package materials business and an approximately 1.7 billion yen in the impairment of manufacturing facilities that accompanied the withdrawal from optical submarine cables business.
In addition, restructuring costs had the effect of reducing net income by approximately 1.5 billion yen. Restructuring cost factors included an approximately 0.7 billion yen in expenses accompanying the withdrawal from business of chips on film (COF) for LCD use and an approximately 0.7 billion yen in manufacturing facility removal expenses, etc., accompanying the withdrawal from optical submarine cables business.
The provision of reserves with respect to the previously mentioned risk of surcharge payments to the EC had the effect of reducing net income by approximately 1.4 billion yen.
Thus, extraordinary loss amounted to approximately 8.5 billion yen.

1-4. Consolidated Balance Sheet

The equity ratio and debt-to-equity ratio, which are principal management performance indicators, deteriorated as a result of the net loss for the quarter under review. The equity ratio decreased 2.9 percentage points from the end of March 2011, to 35.5%, while the debt-to-equity ratio increased 0.15 points from the end of March 2011, to 0.56.

1-5. Consolidated Statement of Cash Flows

Free cash flow amounted to an outflow of approximately 13.8 billion yen, which represents a considerable negative factor.
Cash flows from operating activities amounted to an outflow of approximately 9.2 billion yen, which includes approximately 3.4 billion yen in expenditures associated with recovery from the earthquake disaster. In addition, cash-related restructuring expenses included approximately 0.5 billion yen in special retirement benefit disbursements associated with the withdrawal from COF for LCD use business.

1-6. Operating Income by Reporting Segment

Looking at operating income by reporting segment compared to the cumulative second quarter of the previous fiscal year, one finds an approximately 0.1 billion yen improvement in the profitability of the Industrial Infrastructure Products segment, an approximately 0.6 billion yen decline in the profitability of the Electronic & Automotive Products segment, an approximately 0.3 billion yen deterioration in the profitability of the Information Systems Devices & Materials segment, and an approximately 0.1 billion yen deterioration in the profitability of the Metal Materials & Component Products segment.
Comparing the segment operating income figures with the previous forecast figures announced on September 9, 2011, one finds an approximately 0.7 billion yen shortfall in the profitability of the Industrial Infrastructure Products segment, an approximately 0.1 billion yen surplus in the profitability of the Electronic & Automotive Products segment, an approximately 0.4 billion yen surplus in the profitability of the Information Systems Devices & Materials segment that partially reflected the accelerated execution of certain business projects originally scheduled for the latter half of the current fiscal year, and an approximately 0.9 billion yen shortfall in the profitability of the Metal Materials & Component Products segment.
In addition, the sharp drop in copper prices at the end of the cumulative second quarter of the current fiscal year had the effect of reducing copper inventory values and thereby decreasing consolidated operating income by approximately 1.1 billion yen compared to the cumulative second quarter of the previous fiscal year. This factor was not incorporated into the assumptions for the calculation of performance forecast figures. Looking at individual reporting segments, the impact of this factor had the effect of reducing the operating income of the Industrial Infrastructure Products segment by approximately 0.5 billion yen, reducing the operating income of the Electronic & Automotive Products segment by approximately 0.2 billion yen, and reducing the operating income of the Metal Materials & Component Products segment by approximately 0.4 billion yen.

2. Forecast of Business Performance for Fiscal 2012, Ending March 31, 2012

The following is an explanation of our forecast of business performance for the entirety of fiscal 2012, ending March 31, 2012.

2-1. Forecast of Full-Year Business Performance for the Fiscal 2012, Ending March 31, 2012

Hitachi Cable's consolidated performance in the cumulative second quarter of the current fiscal year was generally in line with the forecast figures announced on September 9, 2011. There has been a drop in demand for products centered on those for semiconductor markets and on electronics-related products since early September, however, and it is anticipated that such severe conditions will continue during the third quarter of the current fiscal year (October 1, 2011, through December 31, 2011) and subsequently. Moreover, there is concern that harsh conditions in the overall management environment will persist owing to such factors as the sluggishness of the Japanese economy, the deceleration of overseas economies, and the protraction of the trend of yen appreciation.
In light of this situation, we have made downward adjustments to our forecasts of sales and profitability for the fiscal 2012, ending March 2012 as a whole.
In accordance with our new Renewed Plan "BRIDGE" medium-term management plan, we intend to steadily execute measures to selectively concentrate our business operations and reduce fixed costs through business restructuring programs. Making the harsh assumption that a recovery in demand will require time to eventuate, we plan to avoid dependence on sales expansion while further augmenting our measures to reduce fixed costs and the cost of sales as a means of improving our corporate constitution.

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Questions and Answers

Q.	Could you explain your revised performance forecast for fiscal 2012 with respect to individual reporting segments?
A.	Regarding sales forecasts for the full fiscal year, we see all of our reporting segments as being in relatively harsh situations that will make it difficult for them to attain the forecast figures announced on September 9, 2011. (Please see the "Change from previous forecast" column on the far right-hand side of slide "2-2. Forecast of Sales by Reporting Segment.")

We now expect the Industrial Infrastructure Products segment to record sales corresponding to 98% of the previous forecast level. In particular, we have reduced the Optical Communication Products forecast by 9% because of a delay in post-disaster reconstruction-related demand and an assumption that we cannot anticipate a large amount of demand. The Electronic & Automotive Products segment is expected to record sales corresponding to 94% of the previous forecast level. There has been no change in the forecast for Automotive Components. Regarding Electronic Products, based on our recognition that there has been a large drop in demand for household electric appliances and electronics-related products, we have reduced the sales forecast by 7%. We have also reduced the Magnet Wire Products sales forecast by 7%, despite relatively robust demand for products incorporated in automotive electronics components, because of a drop in demand for products incorporated in ordinary household electric appliances. The Information Systems Devices & Materials segment is expected to record sales corresponding to 94% of the previous forecast level. Recognizing that Wireless Systems operations are in a temporary sales-hiatus period, we have lowered the sales forecast by 3% from the previous fiscal year and by 4% from the previous forecast level. We have lowered our forecast for Compound Semiconductor Products sales by 20% in view of a rapid drop in demand for both high-frequency devices and optical devices since the start of September. The Metal Materials & Component Products segment is expected to record sales corresponding to 94% of the previous forecast level. There is an ongoing decline in personal computer-, household electric appliance-, and mobile phone-related demand for copper strips and lead frames, and we have therefore reduced the sales forecasts for Copper Strips and Lead Frames by 7% and 4%, respectively. We have reduced the forecast for Copper Products sales by 5% in light of a decrease in air conditioner-related demand and other demand that began during the second quarter of the fiscal 2012. With respect to Package Materials, we are anticipating an additional drop in DRAM-related demand. In particular, we are expecting a demand decrease because customer specification changes are causing a shift to wBGA (Ball Grid Array) products from the µBGA products that we have been supplying, and we have therefore reduced our Package Materials sales forecast by 11%. The sales forecast adjustments have entailed the downward adjustment of operating profit forecast figures by 0.2 billion yen in the case of the Industrial Infrastructure Products segment, 1.2 billion yen in the case of the Electronic & Automotive Products segment, 0.7 billion yen in the case of the Information Systems Devices & Materials segment, and 1.7 billion yen in the case of the Metal Materials & Component Products segment. (Please see slide &"2-3. Forecast of Operating Profit/Loss by Reporting Segment.&")

Q.	What is your forecast for the operating income of individual reporting segments during the latter half of fiscal 2012?
A.	Compared to the forecast figures announced on September 9, 2011, we are expecting the Industrial Infrastructure Products segment to record lower sales but realize an improvement in profitability, primarily in the Industrial Systems Products and Power & Energy businesses. The profitability of the Electronic & Automotive Products segment is expected to remain in line with the previous forecast in the Automotive Components business but decrease in the Electronic Products business and the Magnet Wire Products business. The profitability of the Information Systems Devices & Materials segment is expected to remain in line with the previous forecast in the Wireless Systems business but decrease considerably in the Compound Semiconductor Products business. The profitability of the Metal Materials & Component Products segment is expected to decrease considerably in the Copper Strips and Lead Frames businesses but remain in line with the previous forecast in the Copper Products and Package Materials businesses.
Q.	Having officially decided to withdraw from domestic copper tubes business, what benefits are you expecting to result from this decision?
A.	Our performance forecasts already take into account just about all of the impact of the withdrawal of our domestic business operations. Demand for copper tubes has further decreased since the announcement of our withdrawal from domestic copper tubes business and we are expecting that the demand will decrease even more than we anticipated at the time we drafted the Renewed Plan "BRIDGE" medium-term management plan, but because we plan to quickly compensate for this by reducing fixed costs, we do not expect that the withdrawal will have a large impact on our consolidated performance. We are expecting the withdrawal to entail approximately 0.6-to-0.7 billion yen in extraordinary losses, which are included within the forecast of a total of 24.0 billion yen in extraordinary losses for fiscal 2012 as a whole.
Q.	What is the outlook for your investment income by equity method for fiscal 2012 as a whole?
A.	We are forecasting that investment income by equity method for fiscal 2012 as a whole will amount to a 1.3 billion yen loss. The main factor behind the growth of investment loss by equity method is our decision to provide for the risk of surcharge payment requirements associated with J-Power Systems Corporation. J-Power Systems is a fifty-fifty joint venture between Hitachi Cable and Sumitomo Electric Industries, Ltd., and each of the parent companies would be responsible for half of any surcharge payments that may eventuate. Hitachi Cable has provided approximately 1.4 billion yen in reserves in light of the risk of such surcharge payments.
Q.	While the sharp drop in copper prices at the end of the second quarter was accompanied by a write-down of your copper inventories based on the lower-of-cost-or-market method, do you expect this kind of situation to recur during the latter half of fiscal 2012?
A.	We are expecting that this kind of situation may occur again during the latter half on a smaller scale. During the first half, the write-down of our copper inventories based on the lower-of-cost-or-market method accompanying the sharp drop in copper prices had the effect of reducing operating income by approximately 1.5 billion yen compared to our forecast. During the latter half, we are anticipating that the negative impact on our operating income forecast will be approximately 0.5 billion yen. As a result, for fiscal 2012 as a whole, we are expecting rapid drops in copper prices to have the effect of reducing operating income by approximately 2.0 billion yen compared to the forecast level. During the first half, the write-down of copper inventories based on the lower-of-cost-or-market method accompanying the sharp drop in copper prices had the effect of reducing operating income by approximately 1.1 billion yen compared with the same period of the previous fiscal year and by approximately 1.5 billion yen compared to the September 9, 2011, forecast. By individual reporting segment, the impact had the effect of reducing operating income below the forecast levels by approximately 0.8 billion yen in the case of the Industrial Infrastructure Products segment, approximately 0.3 billion yen in the case of the Electronic & Automotive Products segment, and approximately 0.6 billion yen in the case of the Metal Materials & Component Products segment. Although this situation had a negative impact on our profitability during the first half of fiscal 2012, we were able to shrink the operating income shortfall compared to the September 9 forecast level to approximately 0.1 billion yen by increasing our fixed cost reduction benefits to approximately 0.6 billion yen above the original target and by implementing other measures.
Q.	How significant is the impact of the flooding in Thailand on trends in demand for automobile- and electronics-related products and on your performance?
A.	The Hitachi Cable Group has four bases in Thailand, but, at present, none of the bases has been directly impacted by the flooding. On the other hand, our customers include companies that have suffered direct damage and component procurement difficulties owing to the flooding that have forced them to suspend or adjust their production operations. Moreover, there are a number of companies supplying components used by the Hitachi Cable Group that have been impacted by the flooding, and we are currently investigating the impact of this on our operations. With respect to the direct impact of flooding on our orders, it appears that there has been a certain amount of impact on automotive component orders as well as on orders for electronic products and electronic wires. Regarding the scale of this impact, in the case that customers' operations were to be suspended for all six months of the latter half of fiscal 2012, we estimate that the impact would have the effect of reducing our consolidated sales by approximately 2.0 billion yen and reducing our consolidated operating income by approximately 0.2 billion yen. Regarding the indirect impact, in the case that the difficulties in procuring components from suppliers and the suspension of customers' operations were to be protracted over the long term, we believe that the impact on our operations would increase somewhat, but since we still have not measured the overall scale of the impact, we have not factored the indirect impact into our current performance forecast.
Q.	Is there concern that the range of businesses impacted by the flooding in Thailand could expand?
A.	Yes, it is possible that the number of affected businesses could increase and that the scope of the impact could expand. Our current assumption regargind the magnitude of direct impact (reducing sales by approximately 2.0 billion yen and operating income by approximately 0.2 billion yen) is based on the assumption of a six-month suspension of operations by customers that the Hitachi Cable Group supplies products to directly and that we can currently identify as being at risk. We are currently investigating the potential impact in the case that the scope of damage were to expand or that additional products were to be impacted. For example, in the case of a Hitachi Cable Group customer that is a hard disk drive manufacturer forced to suspend manufacturing operations, we are investigating the potential impact with respect to semiconductor chips used in hard disk drives and components used in the chips, etc.
Q.	While you have made a downward revision to the forecast for operating income in the whole of fiscal 2012, is this revision likely to impact the forecast for the fiscal 2013, ending March 2013?
A.	We believe there will be some impact on the forecast for fiscal 2013. In view of this, we intend to further accelerate our fixed cost reduction efforts. Moreover, with respect to cost of sales reductions, we inaugurated the VEC (Value Engineering for Customers)/Procurement Division as a new unit on November 1, 2011, and are planning to push ahead with additional cost of sales reduction measures. The new unit is undertaking Companywide measures to reduce the cost of sales through horizontal integration, promote VEC activities, reduce procurement costs, expand overseas procurement, and attain other goals. Baseed on our measures to reduce fixed costs and the cost of sales, we are aiming to increase consolidated operating income to 18 billion yen in fiscal 2013.
Q.	In light of your goal of increasing consolidated operating income to 18.0 billion yen in fiscal 2013, are you making changes to the scale of related efforts?
A.	Fundamentally, we will be advancing with the implementation of our medium-term management plan. Besides the withdrawal from domestic copper tube business which we announced in today's news release and which represents concrete progress we are also moving ahead on schedule regarding the execution of concrete measures for the reorganization of domestic operational structures. (Please see slide " 3-1. Progress in Business Structural Reform I. ")

Regarding the optimization of our domestic personnel structure, as described in today's news release, we are planning to reduce the number of personnel by approximately 650 people through the introduction of systems for early retirements and the provision of career change support. Together with secondings and transfers to external organizations and other measures, we are advancing on schedule toward our objective of reducing the number of domestic personnel by 1,200 people. (Please see slide "3-2. Progress in Business Structural Reform II.")

Because we realize that the Hitachi Cable Group's operating environment has been becoming even harsher since we drafted the Renewed Plan "BRIDGE" medium-term management plan, however, we intend to further augment our fixed cost reduction measures. While we cannot currently describe the scale of those measures in concrete terms, there are many busily operating Hitachi Group plants in the regions near the Hitachi Cable Group's plants in Ibaraki Prefecture, and we intend to adjust our operations in line with shrinking demand by increasing our seconding and transferring of employees to those Hitachi Group plants.

Q.

Regarding your reorganization of overseas bases and other measures, will you be making any changes owing to the impact of the flooding in Thailand and economic deceleration? Will you be adjusting your policy of emphasizing highly profitable businesses with high levels of growth potential?

A.

We do not expect the flooding in Thailand to have an impact on our strategies for consolidating and eliminating business companies in the Southeast Asia region. Moreover, regarding our business positioning, also, we do not believe that there is a need to reevaluate our business positioning as a result of the flooding in Thailand. Going forward, we will be advancing with our business structural reform measures in accordance with our plan.