Date and Time:	February 2, 2009 (Monday) 17:00-17:45
Place:	Conference Call
Participantst:	Masaru Okazaki, Executive Vice-President & Executive Officer, Representative Executive Officer (Group-Executive, Business Support Group) Shinya Inasaka, General Manager, Accounting Division, Business Support Group Shoichi Kogure, General Manager, Administration Dept., Human Resources & Administration Group Takuya Akiyama,   Group Manager, Corporate Communication Section, Administration Dept., Human Resources & Administration Group
Agenda:	Introduction (Mr. Okazaki) Business Results for the Cumulative Third Quarter of Fiscal 2009, March 31, 2009 (Mr. Inasaka) Questions and Answers

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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 February 2, 2009, 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:

*Each brand name that appears here is the trademark or registered trademark of their respective owners.

1. Overview of Consolidated Results for the Third Quarter of Fiscal 2009

On January 23, 2009, Hitachi Cable announced its revision to forecasts of full-year business performance for fiscal 2009. Having completed our compilation of business results for the cumulative third quarter of fiscal 2009, we are presenting an explanation of those results today. Regarding the forecasts of full-year business performance for fiscal 2009, there have been no changes to the forecast figures that were publically announced on January 23.

1-1. Profit and Loss Statement

In the cumulative third quarter of fiscal 2009 (April 1, 2008, through December 31, 2008), net sales were 402,546 million yen, operating income was a loss of 7,025 million yen, ordinary income was a loss of 9,020 million yen, income before taxes and other adjustments was a loss of 13,314 million yen, and net income was a loss of 30,975 million yen.

(1)Net Sales

Net sales amounted to 402,546 million yen, approximately 18.8 billion yen below the level in the cumulative third quarter of fiscal 2008 (April 1, 2007, through December 31, 2007). The factors causing the change were as follows.
With respect to factors positively affecting net sales, the inclusion of additional companies within the scope of consolidation had the effect of increasing net sales by approximately 11.5 billion yen. Specifically, this figure is the rise resulting from M&A transactions and other measures that led to the addition of several consolidated subsidiaries—Hitachi Cable Film Device, Ltd. (chip on film (COF) for LCDs); Hitachi Cable Florida, Inc. (automotive brake hoses); Hitachi Cable Austria GmbH (probe cables for ultrasound diagnostic equipment); and Sosey Co., Ltd. (rubber rollers for office automation equipment).
Regarding factors that negatively affected net sales, copper price fluctuations had the effect of reducing net sales by approximately 5.5 billion yen, and currency exchange rate fluctuations had the effect of lowering net sales by approximately 14 billion yen. Net increase/other reduced net sales by approximately 10.8 billion yen.

Factors Accounting for Changes in Sales

(billions of yen) (Amounts less than 100 million yen have been rounded off.)

Impact of the copper price fluctuations	-5.5
Impact of inclusion of additional Group companies within the scope of consolidation	+11.5
Impact of foreign exchange rates (118 yen/$ => 104 yen/$)	-14.0
Net increase/other	-10.8
Total	-18.8

(2)Operating Income

We recorded an operating loss of 7,025 million yen, which is approximately 24 billion yen below the level of operating income in the.cumulative third quarter of fiscal 2008.
Factors decreasing operating income included an approximately 3.3 billion yen decrease due to the drop in net sales and an approximately 8.3 billion yen decrease due to revaluation losses on inventory assets associated with the sharp drop in copper prices. The impact of including additional Group companies within the scope of consolidation reduced operating income by approximately 2.8 billion yen, and most of this impact reflected the losses of Hitachi Cable Film Device, Ltd., which manufactures COF items for LCDs. In addition, there was a roughly 2.2 billion yen decrease due to the exchange rate trend of yen appreciation.
Moreover, the impact of a rise in fixed costs decreased operating income by roughly 4.6 billion yen. Of this, about 1.1 billion yen was attributable to growth in personnel costs and about 3.5 billion yen was attributable to the impact of growth in depreciation expense. Of the impact of higher personnel costs, about 1 billion yen stemmed from a rise in the amortization of the actuarial loss associated with the insufficient accumulation of pension funds. Of the impact of growth in depreciation expense, the portion attributable to the change in usable lives of fixed assets that accompanied a recent tax reform measure was about 2.1 billion yen.
Other factors had the effect of reducing operating income by approximately 2.8 billion yen. These factors included revaluation loss on inventory assets other than copper inventories, which amounted to about 0.9 billion yen, and the amortization of goodwill related with four companies associated with M&A transactions undertaken since the latter half of the previous fiscal year, which amounted to about 0.7 billion yen. In addition, the impact of drops in selling prices reduced operating income by approximately 4 billion yen, although we were able to roughly offset this drop through cost reductions and other measures.

Factors Accounting for Changes: Operating Income

(billions of yen) (Amounts less than 100 million yen have been rounded off.)

Profit change from sales decrease	-3.3
Revaluation losses on inventory assets due to sharp drop in copper prices	-8.3
Impact of inclusion of additional Group companies within the scope of consolidation	-2.8
Impact of foreign exchange rates (118 yen/US$1 => 104 yen/US$1)	-2.2
Rise in fixed costs	-4.6
Other factors	-2.8
Total	-24.0

(3) Ordinary Income (Loss)

Amounting to a loss of 9,020 million yen, the ordinary loss was roughly 26.7 billion yen below the level in the cumulative third quarter of fiscal 2008.
Factors decreasing ordinary income included a roughly 24 billion yen decrease due to the decrease in operating income and a roughly 3.1 billion yen decrease due to the decrease in investment income by equity method.

Factors Accounting for Changes: Ordinary Income

(billions of yen) (Amounts less than 100 million yen have been rounded off.)

Factors accounting for changes in operating income	-24.0
Decrease in investment income by equity method	-3.1
Other factors	+0.4
Total	-26.7

(4) Extraordinary Income and Extraordinary Loss

Our extraordinary income and loss items amounted to a loss of 4,389 million yen. This figure includes approximately 3.2 billion yen in impairment losses and approximately 0.8 billion yen in the loss on the retirement of fixed assets. Most of the impairment losses were recorded by Hitachi Cable Film Device, Ltd.,which manufactures COF items for LCDs.

Analysis of Extraordinary Income and Extraordinary Loss

(billions of yen) (Amounts less than 100 million yen have been rounded off.)

Impairment losses	-3.2
Loss on retirement of fixed assets	-0.8

(5) Income Taxes and Minority Interests

Income taxes and minority interests amounted to a loss of approximately 17.7 billion yen. Of this figure, approximately 15.4 billion yen was attributable to our elimination of deferred tax assets during the third quarter of fiscal 2009. About 14.8 billion of this 15.4 billion yen relates to the parent company, and the remainder is associated with other Group companies.

Analysis of Income Taxes and Minority Interests

(billions of yen) (Amounts less than 100 million yen have been rounded off.)

Elimination of deferred tax assets	-15.4
Other factors	-2.3
Total	-17.7

1-2. Balance Sheets

Total assets amounted to 346,228 million yen, representing a decrease of approximately 23.9 billion yen from March 31, 2008.

(1) Current Assets

Current assets totaled 182,892 million yen, representing a decrease of about 19.2 billion yen from March 31, 2008. This reflected the impact of a decrease in trade receivables, which had the effect of reducing current assets approximately 14.9 billion yen, and the impact of a decrease in inventories, which had the effect of reducing current assets approximately 3.8 billion yen. The associated drop in working capital was due to the sharp fall in copper prices and the decrease in net sales.

Factors Accounting for Changes: Current Assets

(billions of yen) (Amounts less than 100 million yen have been rounded off.)

Trade receivables	-14.9
Inventories	-3.8

(2) Liabilities

Liabilities amounted to 186,136 million yen, representing an increase of approximately 16.9 billion yen from March 31, 2008. Although a drop in trade payables associated with the decrease in net sales reduced liabilities about 14.9 billion yen, a rise in interest-bearing debt due to the recording of losses boosted liabilities by roughly 23.4 billion yen.

Factors Accounting for Changes: Liabilities

(billions of yen) (Amounts less than 100 million yen have been rounded off.)

Trade payables	-14.9
Interest-bearing debt	+23.4

1-3. Segment Information

(1) Wires and Cables

Sales in this segment during the cumulative third quarter fiscal 2009 totaled 207,580 million yen. This included sales to outside customers of 198,971 million yen, down approximately 1.4 billion yen from the same period of the previous fiscal year.
Operating income was 509 million yen, down approximately 8 billion yen from the same period of the previous fiscal year. This reflected revaluation losses on inventory assets due to the sharp drop in copper prices, which had the effect of reducing the segment's operating income by approximately 4.5 billion yen.

(2) Information and Telecommunications Networking

Sales in this segment during the cumulative third quarter fiscal 2009 amounted to 62,160 million yen. This included sales to outside customers of 57,401 million yen, approximately the same level as that in the same period of the previous fiscal year.
The segment's operating income was 3,408 million yen, slightly lower than the level in the same period of the previous fiscal year.

(3) Sophisticated Materials

Sales in this segment during the nine-month fiscal period were 150,362 million yen. This included sales to outside customers of 143,727 million yen, approximately 5 billion yen lower than in the same period of the previous fiscal year.
The segment recorded an operating loss of 11,555 million yen, a profitability level approximately 15 billion yen lower than that in the same period of the previous fiscal year. Of the operating loss, approximately 3.7 billion was attributable to revaluation losses on inventory assets due to the sharp drop in copper prices. Thus, the decrease in real profitability—defined as excluding the temporary impact of revaluation losses on inventory assets —was somewhat greater than approximately 11 billion yen. Most of the fall in real profitability was due to semiconductor business (compound semiconductors, Tape Automated Bonding (TAB), leadframes, copper strips, etc.).

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Questions and Answers

Q.	Regarding the Sophisticated Materials segment, could you explain the changes in profitability for individual SBUs within the segment?
A.	TAB business generated somewhat more than approximately 5 billion yen in losses during the cumulative third quarter fiscal 2009. Our operations in the fields of compound semiconductors, leadframes, auto parts, and copper strips were profitable during the cumulative third quarter fiscal 2008 but operations in each field generated somewhat less than approximately 1 billion yen of loss during the same period of fiscal 2009. These losses and the approximately 3.7 billion yen impact of inventory write-downs associated with the sharp drop in copper prices largely account for the drop from the level of the previous fiscal year. Looking at the entirety of fiscal 2009, we anticipate a continued severe situation. We are forecasting approximately 8 billion yen of loss in TAB operations. Moreover, the situation for business in compound semiconductors, leadframes, auto parts, and copper strips during the fourth quarter (January 1, 2009, through March 31, 2009) is projected to be even harsher than in the third quarter (October 1, 2008, through December 31, 2008), and we are forecasting that our losses in those fields will grow during the fourth quarter. In view of this outlook, we are projecting that the Sophisticated Materials segment?s operating loss for the full fiscal year will amount to approximately 21 billion yen.
Q.	What are your projections regarding revaluation losses on inventory assets for the full fiscal year?
A.	Regarding revaluation losses on inventory assets due to the sharp drop in copper prices, we are projecting that these revaluation losses will have the effect of reducing operating income for the full fiscal year by approximately 10 billion yen. Including the impact on investment losses by equity-method the total impact for the full fiscal year is expected to be approximately 11 billion yen. Regarding revaluation losses on non-copper inventories, mainly inventories of semiconductor products, the impact in the cumulative third quarter fiscal 2009 was approximately 0.9 billion yen, and the impact for the full fiscal year is projected to be roughly 1 billion yen.
Q.	Regarding your plans to restore profitability through additional performance enhancement measures, have there been any changes in your plans?
A.	Currently, we expect approximately 8.0 billion yen of profit enhancement benefits from the concrete performance enhancement measures that we are now implementing. However, because this is not a sufficient level of profit-enhancement benefits to restore our profitability, we are aiming to achieve roughly 8.0 billion yen to 10.0 billion yen in benefits from additional performance enhancement measures that we are now considering. We are aiming to restore our profitability by means of these additional measures.
Q.	If your additional performance enhancement measures augment extraordinary losses during the current fiscal year, is it possible that the figure of net-income before tax and other ajustments in your most recently released performance forecast will deteriorate further?
A.	To a certain extent, our current forecast of extraordinary losses for the full fiscal year takes into account the projected costs of additional performance enhancement measures. At the current stage, we do not anticipate that we will change our net-income before tax and other ajustments forecast due to the implementation of additional performance enhancement measures.
Q.	What is the outlook for your profitability in fiscal 2010 if copper prices and exchange rates do not change from their current levels?
A.	We currently anticipate approximately 2 billion yen of copper revaluation losses during the fourth quarter of fiscal 2009. On a real basis defined as excluding the impact of copper evaluation losses, we are forecasting that we will record an operating loss exceeding approximately 10 billion yen during the fourth quarter. However, this severe performance forecast reflects the incidence of drastic inventory reductions during the fourth quarter; so, we do not anticipate that this situation will continue throughout fiscal 2010. In view of this, we are aiming to restore our profitability based on measures to reduce variable and fixed costs and expenses that have a profit-enhancing effect of roughly 20 billion yen as well as based on expectations of a recovery in demand.
Q.	While you are projecting that the Sophisticated Materials segment's fourth-quarter net sales will drop to half the level of third-quarter sales, why is the projected drop in the segment's operating income relatively small?
A.	We are projecting that the Sophisticated Materials segment's net sales in the fourth quarter will be much lower than in the third quarter, but a portion of this drop reflects the effects of the drop in copper prices. Copper prices have continued to fall, particularly from the start of the third quarter, and they are currently at roughly 350 thousand yen/ton. The impact of the drop in copper prices is expected to be greatest during the fourth quarter. Compared with the first half of fiscal 2009, the impact of the drop in copper prices is expected to be in the range of 10 billion yen to 15 billion yen. Because of this, in the fourth quarter, the impact of the drop in copper prices is projected to be large, but the deterioration of profitability is not expected to be as large as the decrease in sales. Moreover, of the performance enhancement measures we are now implementing, structural reform measures, including those to reduce personnel expenses, are projected to generate approximately 2.5 billion yen of benefits during the fourth quarter, mainly in the Sophisticated Materials segment, and we anticipate that these benefits will slow the rate of increase in the segment's operating loss.
Q.	What is the outlook for your profitable business operations?
A.	In the Wires and Cables segment, we are projecting that the manufacturing volume of industrial cables and electric power cables in the fourth quarter will be roughly 20% to 30% lower than in the third quarter. However, we anticipate that the drop will not be large enough to make the segment unprofitable. In the Information and Telecommunications Networking segment, the situation of the portion of information networks operations focused on items for ordinary companies has become extremely severe, considerably more severe than originally anticipated, and performance has become weak. Regarding operations focused on telecommunications carriers, sales were concentrated in the first half of the fiscal year; so, sales in the second half of the fiscal 2009 are projected to be down roughly 20% compared with the first half. In wireless systems, on the other hand, we are continuing to record robust performance with respect to sales of mobile phone base stations and broadcasting-use antenna systems. Regarding fiscal 2010, we are currently gathering diverse information regarding such situations as the prospective degree of recovery in demand, and we are working to verify this information. Regarding industrial cables and electric power cables, we anticipate a quite large drop during the fourth quarter, and there is a possibility that the low fourth quarter level will continue through the first half of fiscal 2010, but we expect that there will be some degree of recovery during the second half of fiscal 2010. Regarding information networks and wireless systems, we anticipate an increase compared with fiscal 2009. Regarding optical submarine cables, we currently project that demand in fiscal 2010 will be roughly similar to that in fiscal 2009.
Q.	Could you explain the business segment distribution of the profit-enhancement benefits from your performance enhancement measures?
A.	The implementation of our current performance enhancement measures is largely focused on the Sophisticated Materials segment, which has come to be in a particularly severe situation, and we intend to generate a large share of benefits in that segment. Regarding the Wires and Cables segment, because we are anticipating that losses will expand by roughly 20% to 30% during the fourth quarter, we are seeking to build systems that can cope with that situation, and we are moving ahead with the consideration of additional performance enhancement measures.