We would now like to start the meeting of financial results of the year ended March 31, 2014, for Hitachi Ltd. Let me introduce the presenters.

First of all, Toyoaki Nakamura, Executive Vice President and Executive Officer and CFO; and Mitsuyoshi Toyoshima, General Manager, Financial Strategy Division; Ken Mizoguchi, Executive General Manager, Corporate Brand and Communications Division.

Mr. Nakamura, please?

Now I would like to give the explanation referring to the PowerPoint presentation. Please refer to Page 4.

This is the highlight of the fiscal 2013 results. Higashihara-san has already mentioned that the revenues was JPY 9,616.2 billion, which is up by 6% and up 2% compared to the previous forecast.

Operating income, JPY 532.8 billion, up 26% year-on-year and -- plus JPY 110.7 billion, up JPY 22.8 billion compared to the previous forecast.

Now earnings before interest and taxes, EBIT, was JPY 580.1 billion, up 62% year-on-year, plus JPY 222.1 billion and up JPY 120.1 billion compared to the previous forecast. This is due to the gain following the integration of the thermal power generation systems business, and EBIT achieved the highest ever.

In terms of the bottom line, net income, JPY 264.9 billion, up 51% year-on-year, plus JPY 89.6 billion, up JPY 49.9 billion compared to THE previous forecast. Stockholders' equity ratio was 27.4%, up 4.2%, and core free cash flow, JPY 22.4 billion.

The free cash flow, black ink, of JPY 104.9 billion, up JPY 79.8 billion year-on-year.

Next, I would like to talk about Page 6, against the fiscal year 2012, JPY 422 billion. And the impact of integrating the thermal power business was minus JPY 13 billion, lower sales prices, as well as investment in business development, a negative, and impact of cost increase in large projects, a negative factor.

So those have been overcome by the higher capacity utilization from the second half, effect of foreign exchange movements and cost reduction. And that was an improvement of JPY 110.7 billion to achieve JPY 532.8 billion.

The Smart Transformation Project impact was JPY 110 billion.

Please move on to Page 9. I would like to talk about the revenues by market.

Japan was JPY 5,303.4 billion, 55%. And also, Japan was -- Japan year-over-year was 99%; outside Japan, 117%.

Because of the depreciation of yen, double-digit growth has been achieved for both areas. But if we adjust for foreign exchanges, it is 99%.

Therefore, there is more improvement to be made. In terms of outside Japan, it's accounting for 45%, as a result of this.

Moving on to the balance sheet. In terms of manufacturing services and others, the total assets was JPY 9,067.9 billion, which is an increase of JPY 743.4 billion, with the correction of the strong yen, JPY 330 billion and the valuation increase for securities is about JPY 120 billion, a total of JPY 450 billion is the impact of -- coming out of deflation, which has been reflected in the balance sheet.

As a result, inclusive of the P&L improvement, the stockholders' equity ratio is 27.4%, 4.2 points increase, and D/E ratio is 0.40x, a 0.07 points decrease has been achieved. Now we are being able to maintain the target of 0.5% -- lower than 0.5%.

And in terms of the asset impact of JPY 70 billion from foreign exchange [ph] and the Nippon business lease has been sold, JPY 20 [ph] billion, and JPY 130 billion in terms of impact there is also included.

And based on the growth strategy, we have been implementing policies. As a result, that has increased significantly.

Stockholders' equity ratio was 7.3%. D/E ratio is approximately 5.35x.

However, in terms of D/E ratio, if we include the off balance, it will be 6.85, and this is in line with the target of 7x.

Next, in terms of cash flow, I would like to explain Page 12 in terms of manufacturing services. Please look at the middle table.

In terms of cash flow from operating income is JPY 498.6 billion. In the fourth quarter, there have been receivables concentrated decrease of JPY 4.8 billion.

In terms of cash flow from investing activities, negative JPY 393.6 billion. Western Digital stock sale has resulted in decrease of JPY 84.7 billion.

Free cash flow is black ink, and it is improving by approximately JPY 80 billion.

Now moving on Page 17. I'd like to talk about the performance regarding business segments.

Now in terms of our operating income segments, if you look at Page 17 and 18, we are in black ink. Now compared to previous term, from the Electronic Systems & Equipment, the 5 divisions to follow.

We have been able to increase the profit for the Power Systems, as well as Social Infrastructure & Industrial Systems has recorded lower profit. In terms of target -- forecast, we have improved by JPY 22.8 billion.

Power Systems, Social Infrastructure, as well as our Construction Machinery were impacted. Otherwise, we have posted increase.

In terms of the Electronic Systems & Equipment and below, in the 7 segments, in terms of our profit margin, we have seen an improvement as a result. So overall, 5.5% has been achieved.

In 1990, we have been at 6.5%, so this is exceeding 5% mark for the first time in 23 years. We will aim for higher level for next fiscal year.

Next, I would like to talk about the Hitachi Smart Transformation Project. Please refer to Page 20.

I would just like to highlight the areas where we made improvement. In terms of production cost improvement, global SMC (sic) [SCM] reforms were implemented.

18 targeted manufacturing business entities were have -- had this applied, and most of the designs had been applied to 8 of the 17 targeted manufacturing business entities.

In terms of our direct material costs, we have expanded centralized purchasing globally. We have enhanced the functions of these areas, and 6,000 entities have been registered.

Global supplier database has been utilized to reduce costs. In terms of the indirect costs, global logistics reforms is underway.

Furthermore, the sourcing center in China has been utilized. These are areas of our focus.

JPY 9.4 trillion, revenue, 98% year-on-year; operating income, JPY 560 billion. And the Maxell and the thermal power Integration, all these declining factors are now absorbed, and our minimum target is to achieve record-high operating income for 2 years in a row.

6% will be the first time in 24 years. And so compared to the past, our structure has been dramatically changing.

Now in the last Mid-term Management Plan, the bottom line was JPY 230 billion. This gain from the integration of the thermal power business will be gone.

And so without that, JPY 230 billion in the last Mid-term Management Plan was to stably achieve JPY 200 billion, and so this JPY 230 billion match -- meets that goal.

Now if you could turn to Page 27 and 28, this is by-segment figures. As you see here, for the second time, 2 years in a row, all segments are in the black.

Now in fiscal year 2014, we reorganized ourselves. So we restated fiscal year '13, and that is a slight difference.

And so we have some notes of the numbers at the very bottom of the page. The Power segment, where the thermal power is integrated, and the Financial Services, except for those 2, the operating income is all positive.

Operating income margin improved in 7 segments, of which 5 -- the overall margin is 6%, but 5 out of 7 are exceeding this level.

Now the overview of each segment. This is from Page 30 and onwards, so let me just hit the high points.

In the Information & Telecommunication Systems, revenue, JPY 1,954 billion, 109%, and the outlook is JPY 1,950 billion, 101%.

The telecommunication network system division demand will decline about 20%, but storage solution and operation service business will expand. So that is how we will increase year-over-year.

Operating income, JPY 136 billion. Storage solutions and the operation service businesses will expand.

In addition, we will implement better project management in services to contain the loss. In 2008, JPY 138.4 billion was achieved.

So this fiscal year, we would very much like to exceed this record in Information & Telecommunication Systems segment.

Next, 31, this is Power Systems. Fiscal 2014 outlook, revenues JPY 520 billion, 67% year-on-year.

This is because of converting Mitsubishi Hitachi Power Systems into equity method affiliate. That is JPY 300 billion.

Except for that, it is 109% year-on-year. And operating income, it is JPY 14 billion impact, negative impact.

Other than that, it is positive. So that is why operating income will go down.

The next page is Social Infrastructure & Industrial Systems. Revenue, JPY 1,570 billion.

Elevator, escalator business in China is strong, and IEP and overseas projects will increase, and therefore, 105% year-on-year. Operating income, JPY 90 billion.

We will curtail unprofitable projects, and revenue will increase. And the strong performance in elevators and escalators are reflected, JPY 30 billion up on a year-on-year basis.

Now if you could skip to Page 35. This is the High Functional Materials & Components.

2014 revenue, JPY 1.4 trillion. Firm growth in automotive-related products and touch panel materials.

And with that, operating income, JPY 108 billion, plus JPY 6.2 billion.

Next, Automotive Systems. Revenue, JPY 940 billion, 105% year-over-year.

We will expand local production capacity in emerging countries and increase support for customers' global expansions in the growing automotive sector environment. And safety-related reliability and the technology innovation will be utilized to expand the customer base.

And therefore, operating income is JPY 60 billion, plus JPY 12.6 billion. EBIT and operating margin is now up to 6.4%.

Next page is Digital Media & Consumer Products. For Digital Media, our reorganization is almost completed, so the home appliances and commercial use.

Life innovation will be the focus. So from 2014, it is renamed as Smart Life & Ecofriendly Systems.

Revenue, JPY 740 billion, which is on par with the previous year. In Japan, there will be a swim-back from last-minute demand ahead of the consumption tax hike.

However, the main 6 home appliance products, in April, we have been keeping top share for 28 months in a row. And so we will offset that with launch of new products ahead of schedule and expansion of overseas businesses.

Overseas, we will expand by 7% so that we can be on par with the previous year. Operating income, JPY 24 billion.

With the current measure, we expect to increase JPY 4 billion.

Next, Page 38, logistics and other services. JPY 38 billion operating income.

This is up by $7.2 billion. Digital Media has shifted here.

This loss-making product measures is now complete, and therefore, we expect operating income to go up. This fiscal year, Hitachi Logistics will grow again in ODD, and the Hikari [ph], the optics archive business will grow, and that is how we will increase the earnings.

Now number two is regarding the dividend payment. The results have been announced.

And at the Board meeting, we have decided to increase the dividend per share from the conventional JPY 5 to JPY 5.50 per share. We have done some share buyback, and therefore, the payout ratio is 21%.

00. Based on today's information, each of the in-house companies will be talking about the progress made against the Mid-term Management Plan.

You are cordially invited to this event.

We would now like to open the floor for questions. Please wait for the microphone to be brought to you, and state your name and affiliation.

I have 3 questions. First question is regarding confirmation of numbers past.

In terms of Information & Telecommunications, as well as Social Infrastructure, I would like to know what -- the first quarter what is received compared to previous year and also the forecast? The second question is as follows, in terms of tax.

Now for the fiscal 2013 and 2014, it seems like the tax rate is rather high. For the period ended March 2014, I'm sure that there is impact on the integration of the thermal power generation business.

What is the actual impact? And what should be the future tax rate going forward?

Last point is the following. For the period ended March 2014 and period ending March 2015, for net income, we have received the breakdown.

What is the breakdown for the operating income?

Now in terms of the orders received, since we have my colleague here, he will give the explanation. In terms of the Information & Telecommunications Systems has increased in the fourth quarter, and that is our understanding.

And therefore, for the first half, we believe that domestic performance will be better. In terms of the Social Infrastructure & Industrial Systems, orders are received for the fourth quarter to the first quarter of this fiscal year.

In the second quarter, there is some carry over. Or therefore, numbers will be presented later.

According to my understanding, the orders received are increasing.

Now with regard to your question about tax for '14 and '15, it is rather high on my part. In the fiscal year 2015, a 25% tax can't be accommodated.

For 2013, 2014, the Automotive Systems, there is a penalty paid to the Department of Justice. And according to tax -- there is no tax effect.

And profit will be deteriorated, but there is no impact on tax. So this is rather problematic, but we have to make sure there is no compliance risk going forward.

That will be an important focus. In terms of the thermal power integration, profit has increased by JPY 130 billion.

In terms of tax effect, we don't have tax-effect asset. Usually, we should have assets and liabilities, both sides -- it should be posted on both sides, but they are subject to valuation losses.

So JPY 34.7 billion liability has been impacted, and this is the liability side in terms of tax effect -- no, I'm sorry, it could be a mistake. It's JPY 35.7 billion.

And therefore, there is a certain buff -- there is certain increase. But this is a tax-effect liability so it will go away going forward.

Now this is an accounting matter. And for fiscal year 2014, MHPS impact has been reported to METI.

In terms of tax merit, JPY 100 billion in terms of income has been posted, and the reduction in income is to the same level, and this is the first project under the industrial revitalization loan, and therefore, there is going to be a negative impact in terms of income. But the profit margin for this company is very significant, we will have the strength to compete against GE and Siemens.

And therefore, in 3 years, we have to recover this, in 3 years. But according to the law, it can be for 10 years.

It can be subject to 10 years. But in fiscal year 2014, the deferred tax asset or deferred tax liability of JPY 36 billion is factored in.

But this will also be reversed, and therefore, for fiscal 2015, it will be an advantage for us. It will be a benefit for us, but for fiscal 2013, 2014 are subject to special factors.

This is also special factors shown in P&L as well. But all the special factors will go away in 2015, and therefore, we should be able to reduce the tax rate to around 25%.

But this is very much related to the accounting issues. In terms of equity method, profit will be accounted for in terms of MHPS and for equity method profit, net of tax, the parties of the equity method, in other words, for us, it's 35%.

And according to SEC standards, the evaluations profit will be considered. In the past, equity method is to be separated away and then sold thereafter, in the past.

However, in the 2015 midterm plan, as Mr. Nakanishi and Mr.

Higashihara have already mentioned, within the business, we are going to be strengthening one by one, and there are areas where we will do this on our own and also, other areas where we'll be working with the other global players. But in the latter half, it will be subject to the equity method company.

This is not to reduce our ownership, but it is to increase our strength. And for the entities that are subject to equity method, if it is fully consolidated, it will reflected.

But if -- but otherwise, it is very difficult to understand why tax will be incurred again. Therefore, on our part, the management policy must be reflected appropriately in our financial statements, that is our view.

And in terms -- we are also considering the -- adopting the IFRS method, although we have not yet decided because, currently, there is a disconnect between the management policy and the financial statements, and we are currently considering this aspect. From 2013 to 2014, in terms of operating income, as for the changes that have taken place, first of all, in terms of the business, especially Maxell, as well as integrating thermal power business has an impact of JPY 21 billion.

Smart Transformation, we are looking at JPY 90 billion, and business investment of JPY 40 billion is expected. In terms of capacity utilization, JPY 40 billion, a positive is expected.

In terms of actual revenues with the changes in portfolio, JPY 450 billion reduction should take place, and then we should have a positive number of JPY 230 billion to JPY 240 billion. This is the increase in substance in terms of capacity utilization and foreign exchange.

We are looking at 90 -- assuming JPY 198 billion and JPY 130, assuming that's minus JPY 8 billion and others minus JPY 20 billion. Those are the numbers we are contemplating in terms of operating income.

Now regarding tax for 2014, 33% is the ratio -- tax rate for this year. The deferred tax liability number is what I would like to ask for further details in terms of substance.

In terms of tax, I think it was -- for 2014, it's 33%. And in the absence of DTL, it would be below 30%.

25% to 30% is the level for fiscal year 2014. And originally, in the midterm plan, we have been considering 25%, and that will be the basis for our taxation strategy.

Now in terms of orders received, now for the -- it is difficult to talk about fourth quarter. But at the end of 2013, in terms of -- if we do not -- if adjusting for foreign exchange as well and others, for fiscal year 2013, it's 101%.

Now it's 110% without adjusting for foreign exchange. And if we adjust for foreign exchange, it's 101%.

Infrastructure is not impacted by foreign exchange significantly, and therefore, it is around 100%. Now for fiscal year 2014, in the first quarter, for the infrastructure business, it is rather weak.

It is below 100%, before -- below 100%. For information, we are aiming for 104%.

I have 3 questions, mainly figures on fourth quarter. First question is nonoperating portion.

There is a loss of disposal of fixed asset. According to the figure you gave us, it is JPY 54 billion, and reorganization cost is, in the fourth quarter, JPY 44.4 billion.

So first of all, I want to confirm this figure because it's large. So what actually incurred?

And what is the background of this figure, first of all? That's my first question.

Second question, hardware fourth quarter operating income is JPY 900 million, which is rather small. So were there any exceptional extraordinary circumstances that can make figure rather low?

What was the second question again?

It's in the Information & Telecommunications segment, hardware operating income in the fourth quarter is JPY 900 million. In the past, it was, at one point, reached JPY 10 billion.

So I would like to ask you the reason. That's my second question.

Third question is the utilization ratio, capacity utilization, JPY 10 billion-plus on a full year basis and fourth quarter, JPY 60 billion impact and last year, JPY 190 billion. So if you add that, profit should be JPY 250 billion, but it is less than JPY 240 billion.

So any big factors, like hardware, that impacted operating income? So 3 questions.

So the loss on disposal of fixed asset impairment. It's mainly impairment loss.

So in March, at the end of the fiscal year, we had that, around JPY 30 billion.

Which segment, please? Will this contribute to cost reduction in the next year?

Yes. Yes, it will contribute.

And we have factored that in already.

Do you have the breakdown figure?

Mainly Automotive Systems related and Social Infrastructure & Industrial Systems.

It is difficult to give you the details. We took various measures at the end of the fiscal year, so I think that's all we can say for now.

Now the hardware under Information & Telecommunications system. Telecommunications was slow, and so telecommunications compared to our initial forecast, the hardware sales for carriers dropped, and this led to a lower figure.

We see this as a problem, and so we are formulating the restructuring project, once again, to restructure ourselves. Now you mentioned that the operating income is rather small.

In the Information & Telecommunication Systems segment, operating income was small, so Information & Telecommunications was slow and the cost increase in large-scale projects. We thought the cost will be around flat but it increased and so this impacted Information & Telecommunications Systems segment and infrastructure segment.

What is the cost increase in large projects? Social Infrastructure & Industrial Systems has air conditioner overseas.

I understand that this is not about fourth quarter.

There was additional incurrence in the fourth quarter.

How much?

Around JPY 10 billion, around JPY 10 billion.

So Social Infrastructure, JPY 10 billion. And Information & Telecommunications Systems?

About half of that.

So about JPY 15 billion in total? Now the nonoperating segment, the restructuring and the loss on disposal, so is there a cost reduction impact or contribution next year?

We expect JPY 20 billion to JPY 30 billion. So next year's Smart Transformation Project impact is JPY 90 billion, and originally, we aim, for fiscal year 2014, JPY 100 billion for fiscal year 2014.

And we have shortage, so we want to accumulate those factors, positive factors, so that, altogether, we can enjoy JPY 100 billion impact.

I have 3 questions. Question one is regarding what was explained in the midterm plan, also on the acquisition activities taking place.

And with the current financial strength that kind of activity in terms of M&A will be difficult for Hitachi. But in terms of financial discipline a 0.5x D/E ratio was mentioned.

Even currently, this 0.5x should be maintained, is that your view? Now next question is regarding dividend.

For the current period just ended, there was valuation gains as well. So JPY 5.5 or a total of JPY 10.5 is to be paid.

And for the -- the highest dividend was JPY 11. But what about for the fiscal year --new fiscal year?

I don't think payout ratio or share buyback policy has been announced. Please elaborate on this point.

The next point is regarding the investment in financial institutions. So all financial institutions are becoming strategic domestically.

For example, 24-hour transactions is the focus in this area. But in terms of Hitachi business, is this an opportunity for obtaining orders?

And on the part of TSC, they are also extending the transaction hours. So in terms of when the transaction time is extended, what is going to be the impact on the part of your company in terms of equity price formation?

Now, regarding financial strength, in terms of -- the financial discipline should be maintained according to our view. Currently, we are 0.4x.

So up until 0.5x, we still have some latitude. From the 2012 midterm plan to the 2015 Mid-term Management Plan -- in the previous midterm plan, we had to do away with loss-making business, and we have also increased capital as well.

But now we are trying to pursue a growth trajectory in the new Mid-term Management Plan. Therefore, by accumulating profits, the equity will also increase, capital will also increase.

And therefore, we shall utilize this leverage. In this fiscal year, in the -- it is necessary for -- investments will be limited to the operating cash flow this fiscal year.

As mentioned by Mr. Nakamura -- by Mr.

Nakanishi and Mr. Higashihara, it is necessary for you not considering major investments, but we have to be able to control the companies that we acquire.

Therefore, we don't want to find ourselves in a situation where there will be impairment of goodwill because that will impair our capital and we will lose the opportunity to utilize our leverage. Therefore, in that sense, we must be prudent for the time being, and debt/equity ratio of 0.5x or less should be maintained until the time frame of 2015.

With respect to dividends, in the past, highest was JPY 11. And currently, it is JPY 5.5 for the second half.

And if we maintain this in first half at JPY 5.5, we should have JPY 11. But this not to be decided by myself but rather it is decided by the board.

And in order to achieve this goal, we should improve our performance. As I mentioned, inclusive of share buyback -- to increase the return to the shareholders, inclusive of dividend, we have not gone below 20% in terms of payout ratio.

We must also return the benefit to our shareholders for growth as well. And to the shareholders, we have to also return the benefit or the fruits of our growth.

Therefore, this level that I mentioned should be borne in mind, but we have not yet decided what the payout ratio should be. If it is too low, then we will not be enjoying the benefit of growth with our shareholders.

Therefore, further consideration will be warranted. Now in terms of IT investment in financial institutions, I believe this is a significant opportunity for our company.

Up until 2015, in terms of information business for financial institutions should remain strong. And now the transaction time, trading time will be extended, and high-speed transactions will increase in terms of trading hours.

So in microsecond level -- scale, we will have enormous transactions taking place. But this is something to be considered by the regulators.

We don't know what is going to ultimately happen, but I believe that longer trading hours is more favorable, is better for us.

I have 2 questions. They're both on the Information & Telecommunication Systems segment.

First, regarding cloud 2013 revenue. What was the revenue of cloud in 2013?

Fiscal year 2012 was JPY 200 billion, and you mentioned you will aim for JPY 550 billion in 2015. So what was your result in 2013?

And related to that, profitability, operating profit. Compared to the average in Information & Telecommunication Systems is cloud operating income ratio higher or lower?

And this is related to the earlier question. The cost increase, JPY 10 billion, in large-scale projects.

Information & Telecommunications Systems, in other words, the system development cost increased. What was the level of cost increase there?

Cloud business scale. Let me respond.

2012, as you correctly mentioned, it was JPY 200 billion. 2013 was JPY 260 billion, and the operating income ratio is not disclosed, I'm sorry.

But we want to improve the margin in 2015.

Is that related?

This is the N times model. So the service business is where we developed the platform and increased the revenue going forward.

That is what we see -- how we see it. Now cost increase, Information & Telecommunications Systems portion is about JPY 14 billion, JPY 14 billion.

You said total is JPY 10 billion, so it's larger than that?

It is lower than last year. The absolute number is JPY 14 billion.

Last year, JPY 20 billion.

Compared to JPY 20 billion last year, the total in 2013 is JPY 14 billion in large-scale project. We see a cost increase there.

So total, JPY 14 billion, it's lower than last year. It's improving -- so it is improving by JPY 6 billion?

Yes.

I have 3 questions. First question is overlapping with the previous question.

By way of combination, I'd like to ask regarding loss-making projects for the Digital Media IT. It seems very significant in Digital Media.

Now what about the situation for Social Infrastructure? But nevertheless, you are looking to increase the profit.

How do you intend to achieve this?

Regarding loss-making -- loss-incurring prevented for infrastructure is JPY 14 billion for IT and infrastructure, JPY 16 billion. So altogether, it's JPY 30 billion.

The period ended was JPY 20 billion, so it's deterioration by JPY 10 billion. Now Digital Media IT is from JPY 20 billion to JPY 40 billion.

For infrastructure, there was no significant problem for 2012. And overseas, we have captured some projects.

And as mentioned by Mr. Higashihara, because of the difference in culture, as well as customs, the specifications were changed.

That's causing negative impact. So that's March 2014, but the impact will go away.

So we believe that there will be improvement by JPY 16 billion. Now in terms of traffic, IEP will be posting profit for elevators in China.

There will be significant improvement factored in. Well, it may not be so significant.

But up until 2014, we believe that momentum will continue. On the part of Chinese government, according to their strategy, we believe that there will be certain business in China.

What about in terms of IT business, Information & Telecommunication business?

Now in terms of Information & Telecommunication network, for -- investment for telecommunication carriers have run its course, and business structural reform will be implemented to reduce costs. And the negative JPY 14 billion will go away.

In terms of capacity utilization, inclusive of financial institutions, we believe that there will be an increase in the area of systems solution. Systems solution will increase.

For storage solutions, on the other hand, new products will be -- has been launched, and therefore, we believe that the aforementioned number is achievable.

Now the corporate elimination is JPY 70 [ph] billion, eliminations and corporate items. And for last year, it's JPY 16 [ph] billion.

So you said that JPY 56 billion is buffer. But if there's not a buffer, then you said that there is expense increase, cost increase.

So what is the breakdown between cost increase and the other being risk factored in? And where do you see the risk residing in which segment?

What is the allocation amongst the segments in terms of risks identified.

For the JPY 70 billion has been forecast. And for 2013 number is also presented.

Adjusting from this, in reality, there is increase of JPY 55 billion. As I mentioned in terms of business development investment, this is not just limited to development, but also to establish our sales channel as well.

So it will include incubation costs, and we are looking at this through the segments. Therefore, overall, we believe that the increase will be JPY 10 billion that is being factored in.

It may not amount to that, but in terms of business development investment, we are considering JPY 10 billion -- earmarking JPY 10 billion, so remaining is JPY 40 billion. And for the remaining JPY 40 billion we don't have the break down.

But is it significant in terms of Information & Telecommunication Systems?

In terms of projects, through operations, it could increase. But in terms of capacity utilization, we wanted to be more bullish.

However, with the problems in Ukraine and in Russia, 2% GDP growth is likely to go into negative territory, and there is a flight of capital occurring as well. In Europe, there is dependence in terms of gas trade.

And other than south Europe, Europe seem to be improving. However, there is now uncertainty.

And there is also significant transactions with China from that region as well. So we have to wait and see how this will prevail in terms of revenue.

There could be decline of capacity utilization impact to the tune of JPY 100 billion. That has been factored in.

So it will be the segments that has transactions in these areas.

So it must be Infrastructure?

It could be other segments as well.

In terms of the financial structure, you said 25% tax rate.

Now deferred tax -- nonoperating losses is going to be utilized.

If that is the case, what is the normalized tax rate? And with the NOL, how long can it be used?

And my last question is very simple, regarding free cash flow. What is the amount?

Now a tax rate of 25%. Up until 2015, we should be able to utilize the NOL.

We should -- we will utilize this until 2015. So that is factored in, and we believe that 25% will be the rate.

According to the tax rate, it should be around 25% to 30%.

This is the actual forecast, but if we normalize, subtracting the NOL, what will the tax rate be?

It will be around 25% to 30%. Regarding free cash flow, we would like to achieve JPY 100 billion.

This is for free cash flow. In terms of core, we have to consider the investment, as well inclusive of M&A.

Therefore, in terms of the core free cash flow and selling the idle real estate, it should be considered as well, so I believe that JPY 100 billion should be achieved.

Regarding thermal power generation, there were some comments. Now what about nuclear power generation?

In Hitachi, the -- we'd like you to -- to ask you about your view on the nuclear power plant. Government is now aggressively discussing the export of nuclear power generation.

The -- you're participating in a bid in Finland and other activities. In Europe, the safety standard is very high, and so high standards is required.

Do you think your investment will be paid off? Or if you think of risk, how much do you anticipate?

Another question is rather specific. Oma nuclear power plant, which is under construction, is setting the nuclear reactor.

The core catcher that is in Europe, I hear that it is expensive. Will you propose or prepare core catcher?

And do you have a financing plan for that?

Nuclear power business, our view is the baseload as baseload power, we understand this as an important business. In Europe, renewable energy ratio is now being raised.

They are trying to make efforts to raise the proportion. But in Germany, it is defined as a coincidental power and is not core.

The core should not be wind and natural power. That cannot be done with the current scientific level because it is coincidental, that is what Germany says.

So how to secure stable power generation? The solution will be gas and thermal and nuclear.

These will be indispensable. In the past, thermal and hydropower had some portion, and in Japan, nuclear power plant is suspended.

So some may say that this may continue, but the world economy is expanding energy consumption with the growth of the emerging markets. By 2020, energy consumption will be double, close to double.

And so how can we meet this demand that will be close to double by 2020? Gas, coal and oil, we cannot meet all the demand with only that.

The emerging markets are growing economically. Which power should be used?

This should be discussed without delay, trying to find the right balance. In the U.K., the climate change ministry is trying to discuss the right balance.

The climate change ministry is deciding this and discussing how to supply power on a stable basis. I think the nuclear accounts for about 20%.

However, the safety standard is high, so French companies are now having a hard time trying to remake their products, and this has not been completed yet. We are already starting to take action, and we are going to make this again in the U.K.

We will take measures to meet the safety standard, of course, in a way, that it pays off. We want to realize Horizon project that will pay off.

Horizon is not a power-generating company. Hinkley Point -- the one that is started in Hinkley Point, that is EDF, so that was done by an electric power company.

In our case, our Horizon project, the 2 nuclear power plants -- only with new 2 power plants, it will not ensure stability, and so that, I think, is the higher-risk. How to manage is the largest challenge we are up against and trying to take various measures.

Now Oma nuclear power plant, the core catcher preparation, of course, we think this will be needed. This is something we have to work with the electric power companies, so I cannot give you an answer here.

But I'm sure this will be discussed going forward.

From a manufacturer standpoint, in order to ensure the global highest standard, will you take some -- make some proposals?

I think we are a member of the discussion group. This is always done on the interactive basis.

So yes, I'm sure this discussion is underway.

So we have gone beyond the allocated time, but we can take one more question.

Now according to what you have mentioned, in terms of Mid-term Management Plan, you have not yet given up the JPY 10 trillion and operating income is to be achieved according to the target. But below the operating income, net profit is about half of operating income, that was your goal.

But for this fiscal year, according to your forecast, there is still improvement to be made. This is also related to tax rate.

But what other reasons why you are lagging behind this fiscal year. And whether you can achieve this target for next fiscal year is my question.

JPY 10 trillion in revenue seems difficult to achieve. In order to achieve this level, what will you implement this fiscal year -- incurring what expenses to implement what initiatives so that JPY 10 trillion can be achieved for next fiscal year?

Are there front-loaded investments -- costs that you are earmarking?

For 2015, JPY 10 trillion seems difficult to achieve under the current circumstances. That is 1 factor we have to consider.

But it is not beyond our reach either. Therefore, at each in-house company, we are trying to identify measures that will be required on a quarterly basis.

These strategies will be subject to the PDCA. In this regard, in terms of business development investment, will be based on organic basis.

But beyond that, M&A may be required. Now the investment in terms of M&A to have significant increment in terms of revenue is difficult to identify because we need to consider the target company as well.

So it's very difficult to respond to a question about what is the incremental revenue to be achieved as a result of M&A. However, we will do our utmost to achieve JPY 10 trillion.

In terms of bottom line, it's less than half of operating income. For fiscal year 2013 -- or rather 2014, it seems that we are not going to achieve this level.

This is because of the deferred tax liability having a significant impact. Furthermore, on a nonoperating basis, there are certain risks that we are contemplating.

In the absence of such risks occurring, we should be able to have an increase to the current level. Now it's JPY 560 billion, half of that is around JPY 280 billion.

In this regard, the deferred tax liability will have an impact. The impact is around -- is significant.

And for 2015, however, this impact will go away. And so half of the operating income should be achieved in terms of net income.

That seems achievable.

Thank you very much. I would like to bring this meeting to a close.

And thank you very much for your attendance over the long hours.