Date:	Tuesday, February 19, 2002, 17:40-18:15
Venue:	Hitachi Cable Headquarters
Participants:	Senior Executive Managing Director: Ken Kubota Board Director and Group-Executive, Finance Group: Masaru Okazaki General Manager, Administration Dept., Human Resources & Administration Group: Shinichiro Suzumura Manager, Corporate Communication Section, Administration Dept, Human Resources & Administration Group: Hikaru Koakutsu
Agenda:	Greetings from Mr. Kubota Explanation of Forecast Revisions for Performance and Dividends by Mr. Okazaki Questions and Answers

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The information contained herein is a summary, and is not meant to be a word-for-word transcript of the actual briefing. What follows is a discussion regarding performance forecast revisions and subsequent questions and answers.

Safe Harbor Statement

The figures contained herein, excepting actual performance figures, are based on assumptions by management that were judged to be valid at the time these materials were created. Actual performance may be very different from these forecasts and targets. Reasons for any differences include:

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1. Revisions to Performance Forecasts

1.1: Revisions to Non-consolidated Performance Forecasts

Unit Net sales Operating income Ordinary income Net income Previous forecast (A) million yen 280,000 500 1,500 1,000 Revised forecast (B) million yen 265,000 -4,300 -3,000 -200 (B)-(A) million yen -15,000 -4,800 -4,500 -1,200 (B)/(A)x100 % -5 - - - (Reference) Results for first half of fiscal 2002 million yen 144,018 307 1,150 895 Results for fiscal 2001 million yen 330,426 18,764 19,385 7,110

At the announcement of Hitachi Cable's performance results for first half of the fiscal 2002, the Company forecast for the fiscal 2002 that net sales would be 280.0 billion yen, operating income would be 0.5 billion yen, and that there would be little to no revenue for the latter half of the fiscal 2002. In addition, it was forecast that ordinary income for the fiscal year would be 1.5 billion yen and net income would be 1.0 billion yen. However, the business environment has been considerably worse than expected, forcing revisions to the above forecasts. At this time, the Company forecasts that net sales for the fiscal 2002 will be 265.0 billion yen, operating income will be -4.3 billion yen, ordinary income will be -3.0 billion yen, and net income will be -0.2 billion yen. Operating income will be some 4.8 billion yen lower than previously forecast, primarily due to the poor performance of the Company's semiconductor-related business.

1.2: Revisions to Consolidated Performance Forecasts

Unit Net sales Operating income Ordinary income Net income Previous forecast (A) million yen 350,000 3,000 2,000 1,000 Revised forecast (B) million yen 340,000 -2,400 -4,200 -1,500 (B)-(A) million yen -10,000 -5,400 -6,200 -2,500 (B)/(A)x100 % -3 - - - (Reference) Results for first half of fiscal 2002 million yen 181,754 2,294 1,748 828 Results for fiscal 2001 million yen 410,394 27,177 25,604 8,443

When Hitachi Cable's interim performance results were announced, consolidated performance would outstrip non-consolidated performance as overseas performance was better across-the-board than domestic performance. Therefore, consolidated operating income was approximately 2.0 billion yen higher than non-consolidated operating income. However, overseas performance for the latter half of this fiscal year is now expected to be poor.

The consolidated forecasts at the time the Company announced its first half of fiscal 2002 called for net sales for the fiscal year of 350.0 billion yen, operating income of 3.0 billion yen, ordinary income of 2.0 billion yen, and net income of 1.0 billion yen. However, performance by both domestic and overseas consolidated subsidiaries continues to be sluggish, meaning that performance forecasts must be revised downward. At this time, it is forecast that net sales for the fiscal 2002 will be 340.0 billion yen, operating income will be -2.4 billion yen, ordinary income will be -4.2 billion yen, and net income will be -1.5 billion yen.

1.3: Reasons for Forecast Revisions
The U.S. IT market continues to be down while the Japanese economy is caught in a deflationary spiral. Because of this, demand for Information Systems and Electronic Components products will continue to be weak for longer than was expected while orders for other products will also remain at low levels. Hitachi Cable has initiated such emergency measures as reducing materials procurement and personnel costs to secure revenue and improve financial health, but the larger-than-expected drop in orders and sales has had a significant negative effect on performance. As a result, the Company forecasts that its consolidated and non-consolidated performance for this period will fall below expectations.The U.S. IT market continues to be down while the Japanese economy is caught in a deflationary spiral. Because of this, demand for Information Systems and Electronic Components products will continue to be weak for longer than was expected while orders for other products will also remain at low levels. Hitachi Cable has initiated such emergency measures as reducing materials procurement and personnel costs to secure revenue and improve financial health, but the larger-than-expected drop in orders and sales has had a significant negative effect on performance. As a result, the Company forecasts that its consolidated and non-consolidated performance for this period will fall below expectations.


2. Revision to Dividend Forecast

Interim dividend Year-end dividend Annual dividend Previous Forecast (October 29, 2001) 5.0 yen per share 5.0 yen per share 10.0 yen per share Revised Forecast 5.0 yen per share 2.50 yen per share 7.50 yen per share Results for fiscal 2001 5.0 yen per share 5.0 yen per share 10.0 yen per share

The current forecast for losses is the first such forecast for Hitachi Cable since it was spun off from Hitachi, Ltd., in 1956. This performance forecast means that the yearly dividend forecast must also be revised downward, from the expected 10 per share to 7.5 per share.


3. Supplement to Performance Forecast Revisions

3.1: Forecast Fiscal 2002 Net Sales and Operating Income by Segment

(Unit=billion yen)

As of Oct. 29, 2001 Reduced fixed cost Forecast for fiscal year First half performance Second half forecast Forecast for fiscal year Net sales (A) Operating income (B) Net sales Operating income Net sales Operating income Net sales(C) (C/A) Operating income(D) (D/B) Wires and Cables 153.6 4.3 82.9 3.7 68.6 -0.5 151.5 (99%) 3.2 (74%) Information Systems and Electronic Components 92.1 -3.0 46.6 -2.4 39.4 -4.2 86.0 (93%) -6.6 (-%) Copper Products 48.0 0.5 24.1 0.2 22.8 0.1 46.9 (98%) 0.3 (60%) Electric Equipment, Construction, and Others 78.0 1.2 39.0 0.6 37.3 0.0 76.3 (98%) 0.6 (50%) Eliminated (21.7) (0.0) (11.0) (0.0) (9.8) (0.0) (20.8) (0.0) Total 350.0 3.0 181.7 2.2 158.3 -4.6 340.0 (97%) -2.4 (-%)

The Company built the assumption that demand for submarine fiber-optic cables would decrease dramatically during the second half of the fiscal year in its Wires and Cables segment performance forecasts, and so expected that operating income for second half of fiscal 2002 would be approximately 0.6 billion yen. However, electronic wires for personal computers, etc., has declined more than expected, so the forecast operating income must be revised downward to -0.5 billion yen.

The Information Systems & Electronic Components segment has seen worse than expected performance in such areas as compound semiconductors and construction of mobile phone base stations. Therefore, the Company forecasts that second half net sales will be 39.4 billion yen and operating income will be -4.2 billion yen. Moreover, the Company forecasts an operating loss of 6.6 billion yen for the fiscal year as a whole.

Forecasts for the Copper Products and Electric Equipment, Construction, and Others segments will also see a slight downward revision.

As a result, the Company forecasts an overall operating loss for the second half of the fiscal 2002 of 4.6 billion yen.

3.2: Capital Investment and Depreciation in Fiscal 2002

(1) Capital Investment

(Unit=billion yen)

As of Oct. 29, 2001 Revised forecast Forecast for fiscal year First half performance Second half forecast Forecast for fiscal year Non-Consolidated 29.0 15.0 10.2 25.2 Consolidated Subsidiaries 6.0 3.3 2.7 6.0 Totals 35.0 18.8 12.9 31.2

The Company initially forecast capital investment of 35.0 billion yen. However, the business environment and company performance were worse than expected, prompting the Company to limit capital investment. Therefore, the Company now expects capital investment to be 31.2 billion yen.

(2) Depreciation

(Unit=billion yen)

As of Oct. 29, 2001 Revised forecast Forecast for fiscal year First half performance Second half forecast Forecast for fiscal year Non-Consolidated 19.0 9.4 9.4 18.8 Consolidated Subsidiaries 5.5 2.8 2.7 5.5 Totals 24.5 12.2 12.1 24.3

It was initially announced that depreciation for the fiscal year as a whole was expected to be 24.5 billion yen on a consolidated base. However, the forecast will now be revised slightly downward to 24.3 billion yen.

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Questions & Answers

Q.	How do the current sales forecasts of second half of fiscal 2002 for your major products compare with your earlier forecasts?
A.	We forecast that sales of fiber-optic cables would be approximately 14.6 billion yen, but at this stage we have revised this forecast downward by 0.6-0.7 billion yen. We expected a decline in sales of submarine fiber-optic cables, and so forecast sales of approximately 16.6 billion yen. This forecast seems to be correct. We initially expected sales of fiber-optic transceivers to be 5.7 billion yen, but we are now revising that figure downward by approximately 0.4 billion yen. We also expect sales of guided wave products to end up some 0.8 billion yen lower than the 2.9 billion yen originally expected. Sales of such semiconductor packaging materials as leadframes is expected to be even with our original forecast of 18.3 billion yen. On the other hand, sales of compound semiconductors are expected to be more than 1.6 billion yen lower than our original forecast of 13.2 billion yen. Sales of electronic wires were originally expected to be 8.5 billion yen, but they are now forecast to be approximately 7.0 billion yen. Sales of base stations and high frequency products are expected to be 17.7 billion yen rather than the original forecast of 18.7 billion yen.
Q.	How are your cost cutting measures progressing?
A.	During the fiscal year 2002, we had planned to make cuts totaling approximately 7.1 billion yen through cutting personnel costs by 4.3 billion yen as well as lowering materials procurement costs. Thus far things are proceeding according to this plan. We have planned cost reductions of approximately 9.5 billion yen for the coming fiscal year, but, as noted earlier, the Company's performance has been worse than expected. Therefore, we may need to make additional cuts. We are presently examining all costs to see what can be cut further.
Q.	Why is the decline in income larger than the decline in sales?
A.	The fixed cost ratio is very high in areas that have seen a particularly large drop, such as compound semiconductors. A high ratio means that increasing sales makes for increasing income, but decreasing sales makes for a significant decrease in income. In addition, in order to increase orders at a time when demand is contracting, prices need to be lowered. This also has a downward effect on income. We expect average prices on all products to fall by approximately 3% over the course of the fiscal year
Q.	Has there been income from the sale of stock? Or valuation losses?
A.	We forecast that the second half of the fiscal year will see stock valuation losses of approximately 70 million yen. This is not a large loss. Income from the sale of stock was 1.2 billion yen for the first half of the fiscal year, and is expected to be 1.0 billion yen for the second half.
Q.	At the time of the release of your financial report for first half of fiscal 2002, you explained that the demand for your "E businesses" had reached bottom, and that fiscal 2003 would see a strong recovery. However, the circumstances that led you to believe that demand had bottomed out have changed. What will you do now?
A.	We are not particularly optimistic about fiscal 2003. At the very least, we feel that the current difficult conditions will continue during the first half of the coming fiscal year. We are presently making every effort to cut our non-consolidated operating losses by more than 50%. However, since we do not think that sales will increase beyond present levels, the only measure we are left with is more cost cutting. Specifically, we plan overall cuts in personnel costs. We have already eliminated the contracts of part-time and temporary workers. As an emergency cost cutting method for the coming fiscal year, we will cease our common practice of outsourcing software development and handle it internally. We also expect to improve our early retirement and outplacement programs. Finally, we plan a strong program of cutting materials procurement costs. As noted above, we are operating under the assumption that sales for the coming fiscal year will be approximately level with those for the current fiscal year. This assumption forms the base for our cost cutting initiatives. Of course, we are also making maximum efforts to secure orders. Finally, we are working to eradicate missed opportunities and to create a system that ensures a steady revenue stream.
Q.	What performance trends do you see for the third (Oct. - Dec.) and fourth (Jan. - Feb.) quarters of this fiscal year?
A.	Submarine fiber-optic cables made a strong showing during the first half of the current fiscal year. While first half performance is likely to be slightly better than second half performance, the second half of the current fiscal year should see a slight rise in orders. There will not be a significant difference between third quarter and fourth quarter sales in our Information Systems and Electronic Components segment. As for Wires and Cables, the fourth quarter performance should be slightly better than that for the third quarter.
Q.	Are the reasons you are revising sales projections downward entirely external factors? Or are there fields where only Hitachi Cable products are doing poorly?
A.	We feel that the need for revisions is primarily due to external factors. However, I should add a few problems remain as to whether the Company was flexible enough in dealing with the recent difficult business conditions. For example, users of electronic wires are rapidly shifting toward overseas manufacturing. In response to this, we have established manufacturing bases in many countries, starting with China. However, adjustments are still necessary to create a supply system that responds to all customer needs.
Q.	In comparing the revisions to operating income and ordinary income on consolidated and non-consolidated bases, one finds a larger revision for consolidated ordinary income than for non-consolidated ordinary income. Why is that the case?
A.	Dividends from subsidiaries are posted as non-operating income on our non-consolidated balance sheet, and dividends received from our subsidiaries are deleted from our consolidated balance sheet. Therefore, consolidated ordinary income is lower than non-consolidated ordinary income. It is not that our subsidiaries have posted large non-operating losses.
Q.	What are your forecasts for capital investment and depreciation for the coming fiscal year?
A.	We expect to reduce capital investment for the coming fiscal year from 25.2 billion yen on a non-consolidated basis to approximately 10 billion yen. As for depreciation, we will post deprecation costs for suspended capital investments as non-operating expenses. The total will come to approximately 0.2 billion yen for the first half and approximately 1 billion yen for the second half. However, we will not stop depreciation. Our depreciation costs for the coming fiscal year are expected to be 18.0-19.0 billion yen on a non-consolidated basis, level with this year's costs.
	Hitachi Cable, Ltd., expects to announce the release of its fiscal 2002 performance results on Thursday, April 25, 2002.