First of all, the financial results highlights. I would like to start off with 1-1.

Revenues decreased 2% year-over-year because of lower revenues in the Power Systems, Construction Machinery and Electronic Systems & Equipment segments. As for operating income, decreased by JPY 8 billion year-over-year because of the declines in the aforementioned segments.

From this period onward, as part of policy of the Mid-term Management Plan, we are disclosing the EBIT, the earnings before interest and taxes, in line with the objectives to achieve the stockholders' equity ratio of manufacturing and service business to 30% by 2015. Therefore, by segment, we will manage according to the numbers close to the bottom line.

Global business will be pursued as part of the growth strategy. By countries, there are differences in terms of regulations, business customs, as well as brand power as well as minority regulations.

And therefore, against the backdrop of working with local partners, global indicators, inclusive of the earnings of the equity method affiliates will be used to manage business. That is the reason why EBIT has been introduced for -- because of the improvement in foreign exchange gains and as well as the improved equity in net loss of affiliated companies, EBIT increased by JPY 6.3 billion year-over-year, and net income bottom line increased by JPY 3.7 billion year-over-year, profitable for 15 consecutive quarters.

And therefore, stable [indiscernible] objective for the Mid-term Management Plan 2012 is met.

As a result, the stockholders' equity ratio for manufacturing, services and others is up 0.4 of a point from March 31, 2013. Our core free cash flows increased by JPY 61.6 billion year-over-year.

Lower capacity utilization, JPY 40 billion, impact of higher raw material prices, JPY 5 billion. This has been improved by the effect of foreign exchange movements, JPY 20 billion, and improvement in terms of cost reduction, inclusive of the Smart Transformation Project.

We have been able to improve more than expected about, as mentioned previously in the first quarter, there is a significant impact of the lower capacity utilization. We have been able to recover somewhat about a decline of JPY 8 billion in the operating income level was registered.

1-6, revenues by market will represent Japan and outside Japan, as well as the regional breakdown is presented. In terms of Japan, JPY 1,087.7 billion, which is 90% year-over-year.

And overall, total was 98%. Outside Japan was a JPY 995.2 billion.

Because of foreign exchange gains, we have been able to achieve 109% year-over-year. In terms of regions, China, as well Asia, is 115%; North America, 106%.

Because of the weakened impact, the overseas revenue ratio increased to 48%.

Let's now look at the balance sheet. As for the balance sheet, 1-7 gives the total outline.

Our total assets was JPY 10,293.6 billion increased by JPY 480 billion, and interest-bearing debt increased by around JPY 430 billion. Stockholders' equity increased by JPY 79.3 billion.

Overall, our stockholders' equity ratio was 21% and debt-to-equity ratio was 0.86x. Now under the 2015 Mid-term Management Plan, we presented the growth strategy and, accordingly, we have divided 1.8 (sic) [1-8] between Manufacturing Services and Others and Financial Services.

Now on the top is the balance sheet for Manufacturing Services and Others. Our total asset was JPY 8,508.7 billion, increased by JPY 180 billion.

Interest-bearing debt increased by JPY 120 billion. This is because bonus payments are made in June and therefore, this a seasonal factor.

As a result, the interest-bearing debt increased. But in terms of stockholders' equity ratio, it was 23.6%, increase or improvement by 0.4 points from March.

Debt-to-equity ratio was 0.5x, a slight increase. But in the second quarter, improvement is expected.

As for Financial Services, on the other hand, I mentioned the growth strategy and the Mid-term Management Plan. As a result of that, [indiscernible] business lease has been sold.

We are also promoting the increasing overseas business and, therefore, accounts receivables, as well as debt is increasing. But Hitachi Capital will maintain the A rating.

And businesses will be developed under these -- this constraint.

Next is the cash flows. Please refer to the manufacturing, services and others cash flows.

Cash from operating activities was JPY 105.9 billion, which is an increase or improvement by JPY 60 billion year-over-year. Our core free cash flows improved by JPY 60 billion.

By achieving positive core free cash flow from second quarter onward, we shall generate source of investment.

1-11. In the first quarter, revenues, operating income and EBIT by Business Group will be presented.

This is also according to the 2015 Mid-term Management Plan. We are aiming to provide One Hitachi solution.

According to this policy, we are disclosing information for 6 groups and Financial Services.

As for the 10 segment, the conventional segments, please refer to the following pages and Business Group explanation is also given for your reference. Infrastructure Systems.

Our revenues was JPY 710 billion, increased by 1%. EBIT was JPY 4.9 billion.

Because of the decline in the profit of Hitachi High-Technologies, a decline of JPY 1.4 billion year-on-year. In terms of information, total negation system includes Hitachi Transport System, which is JPY 530 billion revenue and JPY 3.8 billion EBIT.

For Hitachi transport system, we had decline in profit that is the reason why it was a negative by JPY 1.6 billion. Our Power Systems JPY 155.5 billion in terms of revenue, 82%.

EBIT was of minus JPY 4.1 billion, decline of JPY 6.1 billion year-over-year. This is because of the emergency power source, our business has run its course and you can have that shut down leading to a decline in preventive maintenance.

The Construction Machinery, JPY 178.5 billion, 90%. EBIT was JPY 6.1 billion and declined by JPY 4.6 billion.

We had business increase in China. However, binding equipment decline was seen in Asia, as well as Oceania.

Next page, I would like to talk about high function materials and components at JPY 367.6 billion in terms of revenue, 97% year-over-year. EBIT was up JPY 26.5 billion, increase by JPY 5.6 billion.

This is because the business structure reform in Hitachi Cable, as well as auto and smartphones being strong has led to this result. Our Automotive system at JPY 207.8 billion, 101%; EBIT was 9.8 billion plus JPY 1.6 billion increased revenue and earnings.

The China as well as U.S. market have recovered.

For Financial Services, revenues Automotive Systems was 86%, EBIT was increased by JPY 1.7 billion, increase of revenue and decline in earnings. This is because we have been able to reduce the low-profit domestic business and the increase overseas business and we have enjoyed the advantage of the weak yen.

Now 1-13 onward are the 10 segment conventional businesses classification. Now according to the conventional releases, we saw EBIT negative only in Power Systems, where Nuclear Power business has been slow.

Now in terms of the -- for Social Infrastructure & Industrial Systems, High Functional Materials & Components segments, we saw year-on-year increase in terms of EBIT.

Next is 2-1. Outlook for the first half of fiscal 2013.

The projections for the second quarter of fiscal 2013 assume an exchange rate of JPY 95 to the U.S. dollar and JPY 125 to the euro.

Revenue forecast is JPY 4.4 trillion, up JPY 50 billion. Operating income, JPY 145 billion, plus JPY 15 billion.

EBIT, JPY 120 billion, up JPY 25 billion, which we did not show last time. Bottom line is JPY 15 billion, up JPY 5 billion.

This is the forecast for the first half.

Next is 2-3, outlook for the first half of fiscal 2013 by Business Group, 6 groups and Financial Services. Infrastructure Systems, revenues up 3% or JPY 50 billion, EBIT plus JPY 4 billion; growth of the Elevator/Escalator business in China and foreign exchange gain are included.

Information & Telecommunication Systems revenue up 2% or JPY 20 billion; EBIT is down by JPY 6 billion to JPY 35 billion. This is due to Hitachi Transport System and countermeasures to ensure the performance for large loss-making projects.

Power Systems incorporated yen depreciation benefit. Construction Machinery was revised upward due to the equity and net earnings of affiliates.

2-4. High Functional Materials & Components included the recovery for Automotive sector.

EBIT is up JPY 9 billion from previous forecast, no change in Automotive Systems, and Financial Services is revised upward, thanks to the expansion of overseas business, which brings us to this total at the bottom.

2-5, 2-6 are the outlook for the first half of fiscal 2013 by traditional 10 business segments. Forecast is revised upward in 8 segments, including High Functional Materials & Components, Power Systems and Social Infrastructure & Industrial Systems.

Information & Telecommunication Systems is revised downward by JPY 6 billion.

Next is 3-1, 3 months progress with 2015 Mid-term Management Plan. Global expansion of Social Innovation Business.

In Vietnam, we won turnkey order for urban railway line 1 in Ho Chi Minh City. And as was reported the other day, in the U.K., we received the indication for additional order for Intercity Express Programme, 270 rail carriages.

And as explained in the Mid-term Management Plan, we are expanding solution businesses utilizing capabilities of Financial Services, including energy-saving solutions and global factoring.

In group structural reforms, we concluded the definitive agreement to integrate Thermal Power Generation System business with Mitsubishi Heavy Industries on June 11, and this is progressing steadily.

3-2 is the progress in Hitachi Smart Transformation Project. In production costs, we are promoting growing global SCM reforms in 5 advanced companies, and we formulated the plan to review operations and build an IT platform at 3 companies.

We are building a shared PSI system for mass production-type businesses, and reinforcing system for supporting expanded applications of modular design. In direct material costs, we are expanding centralized purchasing, targeting a 34% centralized purchasing ratio in fiscal 2013.

In indirect costs, we are promoting BPO globally based on the results in Japan and step up global development of shared services and plan to begin applying this in Europe and Asia and India in October 2013. And we are promoting group structural reforms, formulating the plan to eliminate the redundant structures and strength in governance, which is scheduled from fiscal 2014.

That concludes my presentation. We would now like to take questions.

Thank you very much for the exploration today. I have 3 questions.

Now first question is as follows. Although we appreciate the new segment information, I would like to ask you a question regarding the deviation between the plan and the actual for the first quarter by segment.

For the first quarter, starting from the largest number, the most significant is High Functional Materials & Components, JPY 9.5 billion; social Infrastructure & Industrial Systems, JPY 5 billion; Construction Machinery, plus JPY 3 billion; Automotive Systems, JPY 1 billion; and others, JPY 1.5 billion; Financial Services, JPY 1.5 billion. And Information & Telecommunication Systems as well as Power Systems were a negative JPY 1 billion negative each.

Is this operating income basis or EBIT basis?

Operating income basis.

My second question is regarding the Information & Telecommunication Systems. In the first quarter, there was a slight downside.

And you have revised downward the plan for the first half. It seems that domestic revenues are declining significantly.

The domestic revenues are not increasing. In the context of the unprofitable business and that you mentioned earlier, please elaborate the reasons.

Furthermore, should we expect the change in the full year outlook?

Regarding the Information & Telecommunication Systems projects, we are trying to implement measures to ensure performance from 6 months ago, and this cost is increasing beyond our expectations. It is likely to increase in the first half.

In terms of revenues, if you look at the Information & Telecommunication Systems for the first half, there was an upside of JPY 20 billion in the segment. This is because of the weak yen advantage seen in the storage and solutions, and also the increase in the ATM business for China.

In other words, there is increase in the hardware business. But in terms of services, the revenue is not growing in Japan.

However, according to the current outlook, orders received are increasing beyond our expectations and, therefore, we expect that increase will be seen in the third quarter and the fourth quarter.

I have a supplementary question. In the first quarter last year for Information & Telecommunication Systems, there was about JPY 10 billion in terms of unprofitable business.

For this year, our profit, it seems that there is hardly any improvement and the difference is about JPY 8 billion. How should we interpret this?

Compared to last year, major unprofitable projects amount is not decreasing. It should have decreased but it did not.

It isn't as if the number of projects are increasing. We must complete the measures to ensure performance but these have not been completed on time.

We are exerting efforts to implement these measures.

In terms of the outlook going forward, will this run its course during the first half?

It is likely to continue into the third quarter on the back of cost reductions, as well as the advantage gained for the strong -- for the weak yen, we would like to capture the hardware ATM business services.

I have 3 questions, somewhat similar to the previous one. Was there an upside of JPY 20 billion in operating profit in the first quarter on the corporate basis?

Yes, JPY 20 billion.

Eliminations in corporate items was minimal in the first quarter against your full year forecast of JPY 30 billion.

You mean no negative figure?

Yes. JPY 30 billion divided by 4 is JPY 8 billion so it seems small.

It is in line with our plan.

Then the effect of Smart Transformation Project will be in the second half?

Smart Transformation Project-related effect is in line with the internal forecast in the first quarter. We achieved the cost reduction of JPY 2 billion in the first quarter as planned.

My second question is on Power Systems. Just for clarification, Thermal Power Generation business will be integrated with Mitsubishi Heavy Industries in the fourth quarter, so maybe it's okay.

But I hear the rumor on possible defects in the steam turbine. Is this something we need to be concerned about?

We are working hard to meet the required specification, so you do not need to be concerned.

In Power Systems, revenue declined but earnings did not drop as much. What is your view on this?

The first half is difficult but you're -- you project a rapid improvement in the second half. How probable is this?

Do you expect Nuclear Power business to contribute? Please explain.

This is the area we tackled first in Smart Transformation Project. So cost-reduction is bearing fruit.

Therefore, we can prevent large losses even without big revenue growth. That said, we want to do more in the first half, and so our internal objective is higher.

But this time, we set this level.

My last question is your view on the earnings going forward. First quarter had an upside of around JPY 20 billion, but the first half upward revision on the operating profit is only JPY 15 billion.

Your first and second half result is usually not well-balanced. The pressure on the second half may be somewhat relaxed with the revision, but JPY 350 billion operating profit is a challenging target from a historical point of view.

How probable is this? Other companies are revising their forecast upward as well.

So please explain your view on the first half and the probability of the second half.

First half saw the effect of the cost reduction, but the improvement in capacity utilization is seen in mass production business, including raw materials and Hitachi-Kokusai Electric, as well as home appliances. The problem is Information & Telecommunication Systems and infrastructure company, where the operating profit was revised downward in the first half.

We have been pursuing reform for some time. But in new countries and regions, commercial practice is different, and we couldn't fully grasp and understand the specification.

So we are taking measures now. And therefore, unfortunately, the JPY 20 billion increase in the first quarter is eaten up in the first half.

In the second half, as you just said, we need to achieve more in the first half, and this is agreed-upon internally. We announced the operating profit forecast of JPY 145 billion, but we need to aim for more.

So you want more savings?

Yes. But the foreign exchange assumption is JPY 95 to the dollar, and our budget is based on this.

The assumption has not been changed. So in terms of the gap from last year, yen is strong in August, and is usually strong again towards the fiscal year-end.

And if this trend remains, we can come closer to this figure in fourth quarter. We always suffer from project-related negatives at the end, and disappoint you.

So we need good, tight control. We are reinforcing our project management in infrastructure company and Information & Telecommunication Systems, taking new measures.

But we cannot yet come up with numbers we are confident in.

Excluding that, Hitachi Metals and others are improving?

Mass production business order is increasing more than we expected. So now we must manage the projects so we do not miss the opportunities.

I have 3 questions. First question is a clarification of what you have referred to earlier regarding the Social Infrastructure & Industrial Systems.

In the first quarter, there was a JPY 5 billion upside. However, for the first half, there has been a downward revision.

What is the reason why you are cautious about the first half even though there was an upside in the first quarter?

Regarding the Social Infrastructure & Industrial Systems vis-à-vis the internal target, it was better by JPY 5 billion but we have revised downward for the first half. That is the nature of your question.

In the Social Infrastructure & Industrial Systems, we have the so-called infrastructure company, as well as the Urban Planning and Development Systems Company. Urban Planning and Development Systems is focused on elevators and escalators.

And this business is strong, extremely strong in China. And there's also advantage of the strong yuan and the weak yen, leading to good performance.

But in terms of Infrastructure business, there is the air conditioner business overseas that is not favorable, which will be reflected in the second quarter. That is the reason why we are forecasting a decline in the first half for the Social Infrastructure & Industrial Systems.

Inclusive of what you have just mentioned, please elaborate the profit and loss for the non-operation side. It is likely that the optical disc business will be subject to a business structure reform.

In terms of the operating income level in the first quarter in the Information & Telecommunication Systems, a loss similar to last year was incurred. In the second quarter, there is difficulty in terms of the overseas air conditioner business and restructuring is expected.

What is the expected level of restructuring expenses? Please elaborate.

Below the operating income line, was not clear previously. That's the reason why we have to look at the profit before tax by segment to show the true picture.

That's the reason why EBIT is disclosed. That will be our focus going forward.

According to the first half forecast, in terms of the additional media and consumer products, we are assuming business structure reform expense of minus JPY 5 billion, including the closing of a plant in midsummer and personnel countermeasures, as well as the selling of the fixed assets and related write-off.

According to the Japanese standard, is it within the operating income level?

The JPY 5 billion is below the operating income level. As for the operating income level number, for the first half, it would be about 3x what I've already mentioned, which is, in fact, for the full year not so much for the first half.

It will not amount to JPY 10 billion, in fact. If we include the additional media and consumer products and the Hitachi Cable, altogether will amount JPY 7 billion to JPY 8 billion.

Then within the first half, will the Information & Telecommunication Systems incur losses similar to last year and business structural reform expenses of JPY 7 billion to JPY 8 billion and the Social Infrastructure & Industrial Systems are related to overseas business negative are included?

The restructuring is not just limited to additional media and consumer products. It is implement it on a continuous basis.

Therefore, we are assuming JPY 12 billion for the first half in terms of restructuring expenses. That is below the operating income line.

And for the operating income line for additional media at JPY 7 billion to JPY 8 billion. For the first half, it is only the additional media and that will incur in these expenses before the operating income line.

In terms of Information & Telecommunication Systems, the orders received seem to be better. But what about the orders received for other businesses?

3 months have passed driven by Abenomics? Has there been any changes in terms of the orders received?

On a year-on-year basis, nothing is -- significant is apparent. Our budget is formulated in March.

But compared to that period, a significant increase has seen because the impact of Abenomics was not yet significant in the January-to-February period. Compared to this period, it is increasing quite significantly, vis-à-vis the budget for the first half, 3% increase is expected.

First and foremost, we are seeing increases in the mass production business in the recent past. The consumer products, as well as High Functional Materials & Components, which are products close to the final goods, are picking up first.

Furthermore, in Financial Services, IT investment is being resumed. ATM investment is increasing in China, although these businesses are not within Japan.

However, because of the weak yen and the changing mindset of the consumers, are leading to increasing consumer spending domestically. Furthermore, activity is seen in the higher-priced products rather than the lower-priced products.

Therefore, the mindset is definitely different from last year.

I have 3 questions. I understand the revenue is subject of foreign exchange and revenue increased, thanks to foreign exchange.

So what is the revenue decline like without the foreign exchange fluctuation? I am asking you this question because capacity utilization impact was minus JPY 40 billion year-on-year.

So I want to understand the marginal profit ratio. Which segment has low capacity utilization?

Second question. You said that revenue will increase in the second half, third and fourth quarter.

Revenue increase in the second half is also shown in your plan. Which segment will contribute to this?

And which segment will improve the capacity utilization? Third question is on Smart Transformation Project.

It says global supply chain management SCM is promoted in 5 advanced companies. Could you elaborate on the segment and specific activities?

Revenue is 98% year-on-year with foreign exchange factor. Yen depreciation benefit on revenue is JPY 140 billion compared to last year.

And therefore, excluding the foreign exchange, 98% becomes 92% year-on-year. Main segments in terms of capacity utilization decline from the previous year are High Functional Materials & Components segment, Electronic Systems & Equipment segment, centering on Hitachi High-Technologies, Construction Machinery and Power Systems.

These 4 segments are the big factors. To your second question, revenue increases in third and fourth quarter every year, the biggest factor is Information & Telecommunication Systems segment, system solutions.

Japanese manufacturers tend to concentrate their system development in the fourth quarter, which shows that system solutions is not globalized. It is also a result of our order-taking activities.

In Social Infrastructure & Industrial Systems, delivery is in the fourth quarter, so the revenue increases in the fourth quarter. In Construction Machinery, orders are strong in Japan and so revenue is high, but it will increase towards third and fourth quarter.

Now to your third question on global SCM reform, 5 advanced companies are Automotive Systems, Urban Planning and Development Systems Company, Hitachi Construction Machinery, Hitachi Koki and Hitachi Medical Corporation. Monozukuri strategy division is developing the SCM.

The conventional SCM is built based on the factories in Japan, and therefore, as global bases and sales channels expand, inventories and working capital, including account receivables, become slow. And therefore, we are trying to visualize this.

Working capital is reduced to achieve optimal inventory level from sales point of view. This may be common in global companies, but our SCM developed from factories so we are trying to correct it.

Why did you choose these 5 as advanced companies?

First, Automotive Systems. Automotive companies are expanding their bases overseas rapidly, so we are also expanding our automotive parts plants in China, India, Czech Republic and Mexico.

So we chose automotive parts because we can realize this expansion. Urban Planning and Development System is in China and India, and we chose Singapore as the overseas design center.

So for example, components in China will be assembled in Thailand and sold to India and the Middle East. We started this business in Urban Planning and Development System, which can expand rapidly in the global market.

Until now, we only had to look at Japan and China. But now we need to become global, and so we chose Urban Planning and Development System.

Construction Machinery has large coverage already but the large working capital has a big impact. So we decided to conduct SCM more comprehensively to enjoy the benefit.

Hitachi Koki is mass production business and is doing business globally, so inventory level is high. The number of days sales in inventory is high so we will improve that.

And Hitachi Medical Corporation has much inventory overseas as it sells its products overseas. Therefore, we chose the 5 companies that are in mass production business with sizable scale and rapid global expansion.

Once this proves successful, we will move to the next phase.

I have 4 questions. First of all, regarding the Information & Telecommunication Systems, today, there was mention about the unprofitable projects in this segment.

When will the acceptance take place? In terms of orders received for Financial Services, you seem to be bullish.

What was the percentage increase assumed compared to your expectations? Your competitors, especially the specialized manufacturers, are expecting a growth of 10% for Financial Services in terms of the orders received.

So please answer these 2 questions regarding the Information & Telecommunication Systems.

As for the unprofitable projects in Information & Telecommunication Systems, it is unlikely to emerge from third quarter to fourth quarter.

So it will not be carried over to the next fiscal year?

Yes, that is the case. It should be over by now but when we need to develop a system, it seems that we are close to completion but not quite.

That is the reason why we will have acceptance in the third quarter or fourth quarter. Now regarding our strength in the areas for Financial Services, it is indeed growing.

We only have the total number or total information for the Information & Telecommunication Systems. But on a year-on-year basis, the orders are increasing to the level of 107% for the Information & Telecommunication Systems.

Is that on a consolidated basis or domestic?

Consolidated basis.

The second question is about capacity utilization. We are also looking at the results of the listed subsidiaries.

It seems that there are companies that are increasing in revenue but decline in profit. For example, Hitachi Transport System and Hitachi Koki.

And it doesn't sit well for me. According to the Hitachi report, reasons include production adjustment, an increase in cost for launching new products and new projects.

Is it a special factor for the first quarter or will this trend continue for the second quarter, or when will it be improving from the point of view of Hitachi management, please elaborate your views.

Hitachi Transport System is experiencing a decline in profit. In a plant, in Kyushu of Japan, the automotive company has experienced some troubles in terms of their production facilities in May, which is leading to a lack of movement of goods having an impact on the Hitachi Transport System's business.

Therefore, for the first quarter, in terms of the Hitachi Transport System, there was impact because of the fluid movement of automobiles. However, in June and July, the capacity utilization ratio is improving.

And therefore, second quarter will not be like the first quarter. In the case of Hitachi Koki, on the other hand, for European projects, scale is required, making this business rather difficult.

However, in the United States, we are experiencing an increase and therefore, these 2 areas are likely to offset each other. Compared to last fiscal year, the first quarter had a negative impact in terms of capacity utilization by JPY 40 billion.

However, there was improvement by JPY 7 billion. I mentioned earlier that the actual was better than the internal target by JPY 20 billion.

We expected the first quarter to be extremely unfavorable, but capacity utilization is up by JPY 7 billion more than our expectations. The Construction Machinery Domestic business, as well as Hitachi Metals and Hitachi-Kokusai Electric have seen increases.

In terms of Urban Planning and Development System Company, the Elevator business is China is extremely strong, which is likely to continue for 2 to 3 years down the road. And therefore, in terms of the Urban Planning and Development Systems Company business, we should see a further increase in the second quarter, third quarter, as well as fourth quarter.

However, first quarter plan was formulated when we were pessimistic and that is the reason why we were better by JPY 20 billion. So we don't know when this is going to continue.

But we have formulated the budget, assuming that we have continuous increase in the second quarter, third quarter and fourth quarter, and this is in line with the economic activities.

Regarding the Renesas business, when can the deferred tax assets be posted? What does it take on a stand-alone basis for this fiscal year or for the years going forward to post DTA?

Your question is regarding when we can start to post the DTA going forward? I believe that we can start to post the DTA from next fiscal year.

In the second quarter, for Renesas, INCJ and other shareholders will provide support, and provide new capital, which will mean that significant write-downs experienced by us, which was by a factor of 4, will convert to free from taxation. Therefore, tax-saving impact will be seen.

The impact for 2013 will begin in terms of lower tax rates.

Are you waiting for the investment to be made by the INCJ or is it because of your circumstances?

Our stake in Renesas will decrease from 30.6% to 7.7%, with investment by the INCJ. It will no longer be an equity method affiliate.

It will convert to general listed company for us. And the taxation criteria include 50% decline and unlikely recovery.

And in our case, it is overwhelmingly unlikely to be subject to recovery. And therefore, it will be tax-free.

On a consolidated taxation basis, tax merit can be enjoyed or rather return of past tax paid will be realized. An impact for taxation for the whole group will start to appear from 2013.

Although it is unlikely that we'll be able to enjoy this for 3 years.

You made an upward revision for the first half but the amount was JPY 15 billion. Maybe it was not necessary to do so according to my view.

But why did you make this upward revision? Is it because you have identified this upward revision to be the minimum line, hoping for an upside to be presented as the management message?

Or is it a natural course of business for Hitachi?

Once a year, we hold the Hitachi IR day in making presentations by the head of each segment and in-house companies because numbers presented internally looking only inward will not suffice and to have finance only explain, the overall numbers will not be sufficient for the management of the company. And that is the reason why once a year, we have the in-house company management gives presentations.

We are conducting a follow-up on a monthly basis, but we believe that this type of heightened attention should not be just once a year. The scrutiny by people like yourselves should not just be limited to us, and therefore, we have identified the minimum level that must be insured, which is shared, not only internally, but it will be reflected as commitment to the outside.

So what we have changed internally will be shared externally. That is the reason why we felt compelled to make this upward revision, even though it's JPY 15 billion.

And this will be considered the minimum line to achieve the higher levels during this period as you have rightly mentioned.

I have 2 questions. How do you see the macroeconomic risks in China?

You said that ATMs and elevators are strong and that elevators will remain firm for another 2 to 3 years. What will be the impact of the macroeconomic slowdown?

You said Construction Machinery is recovering. So could you share with us your view?

When we look at China risk, investment in production facility and investment in livelihood infrastructure should be separated, in my view. In China, it is generally recognized that production facility is facing overcapacity.

So they are switching to rationalization investment and stopping the operation of the inefficient facilities. On the other hand, regarding elevators, the goal of the 12th 5-year plan is to build 39 million units of low-income housing in 3 years.

The demand is high in mid to western part of China. Therefore, we built our fourth plant in Chengdu and increased the capacity to manufacture additional 8,000 or so elevators.

Therefore, demand is demand is strong and will continue. So the capacity is not in excess.

In Construction Machinery, China does not have a demand for mining machinery for iron ore. So orders for large dump trucks is not increasing yet.

The demand for hydraulic excavators for land preparation and urban development is higher. This has bottomed out and is rising.

So it is not production facility-related, so it should not be disrupted all of a sudden.

My second question is on 1-3 waterfall chart on major factors for change in operating income. You said earlier that the unit price decline can be offset with cost reduction under Smart Transformation Project effect.

Price decline is JPY 25 billion; cost reduction and others, JPY 42 billion, of which Smart Transformation is JPY 20 billion. So other cost reduction is JPY 22 billion.

It seems the cost reduction is slightly smaller than the price decline. Could you share with us your observation on the result and the outlook from second quarter onward?

We finally completed the Smart Transformation Project to be able to follow-up on each company and on a quarterly basis from this fiscal year. Price decline and cost reduction and others get mixed up and cannot be followed up.

So we divided them to manage accurately. We plan to absorb the price decline with cost reduction and JPY 42 billion is cost reduction and others, which includes the JPY 3 billion or so rare earth write-down in Hitachi Metals in the first quarter this year, which will not be incurred from the second quarter onward.

Smart Transformation Project effect was JPY 20 billion. The price decline was larger in the first quarter because of the write-down of raw materials.

Any other questions?