We would now like to start the presentation of the consolidated financial results for the third quarter ended December 31, 2014, for Hitachi, Ltd.

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

Mr. Nakamura, please.

And please refer to the material that is being handed to you, and please refer to the slides.

I would like to start with Page 4.

Now these are the highlights for the third quarter. The revenues were JPY 2,321,200,000,000, up 1% year-on-year.

Operating income was JPY 108.1 billion, down 11%. EBIT, JPY 150.4 billion, down 11%.

As a result, net income for the quarter was JPY 83.3 billion, down 12%. The stockholders' equity ratio for Manufacturing, Services and Others was 26.9%.

In the third quarter, the Waupaca acquisition by Hitachi Metals took place, and that is the reason why it is down by 0.5 percentage point.

For core free cash flow is negative JPY 79.4 billion. This is when bonus payment is made.

Therefore, third quarter was red ink, but it increased by JPY 53.8 billion year-on-year.

Now let's look at the highlights for the 3 quarters, on Page 5. Revenues was JPY 6,818,000,000,000, up 1% year-on-year.

Operating income was JPY 322.1 billion, up 9%. EBIT was JPY 367.8 billion, up 18%.

As a result, net income was JPY 174.9 billion, up 37%. Core free cash flows was negative JPY 41.9 billion, increased by JPY 84.9 billion year-on-year, which is an improvement.

Let's move on to Page 7. This is the waterfall chart for factors -- for changes in the operating income for the 3 months.

There is the thermal power reorganization, Maxell becoming equity-method company, having an impact of business reorganization. There was a lower sales prices, investment in business development, increase of labor costs and depreciation, deterioration of power and telecommunication.

There was a lack of capacity utilization, but this has been offset by exchange gain as well as a higher capacity utilization and others, leading to JPY 8.1 billion (sic) [JPY 108.1 billion]. Now minus JPY 11 billion for the thermal power and Maxell, has been offset by JPY 23 billion, and as a result of -- this is JPY 23 billion because of the cost reduction as well as the price improvement and leading to JPY 11 billion.

So the personnel cost should have been offset by the capacity utilization. But this was smaller than previously, so that's JPY 40 billion.

And that is the reason why it's having an impact of JPY 13.8 billion.

Now please refer to the lower, which is for the 9 months. Impact of business reorganization, JPY 21 billion.

The Smart Transformation Project, that's JPY 71 billion. And after investment on business development of JPY 44 billion.

And personnel cost has been improved by capacity utilization, JPY 6 billion, leading to JPY 26.7 billion for the -- as a result.

Now moving on to the net income situation.

Please refer to 1-8. This is for the 3 months bottom line, from JPY 94.5 billion to JPY 83.3 billion, which is negative JPY 11.1 billion.

This is a result of business reorganization, JPY 11 billion. This has remained as is.

And operating income should have improved further because of capacity utilization. If that were the case, it would have been better.

However, that was not the case.

On a 9-month basis, please refer to the 1-9. The thermal power as well as Maxell's, the impact of business reorganization, was minus JPY 21 billion, but we have been able to increase operating income by JPY 47.7 million (sic) [JPY 47.7 billion].

Improvement in net other income was JPY 27.5 million (sic) [JPY 27.5 billion]. There was also the capacity utilization improvement as well, resulting in JPY 47.6 billion year-on-year.

The next page is Revenues by Market.

For 9 months, on the right-hand side, should be referred to, for Japan was JPY 3,593,700,000,000, a 98% year-over-year. A 2 percentage point deterioration was recorded.

Outside Japan, JPY 3,224,200,000,000, for 47%. And ASEAN and China is increasing.

North America increased as well. However, for other areas, because of the thermal power reorganization, the impact led to 85%.

And total was 101%.

Now because of the foreign exchange as well as Maxell, and thermal power plant business integration will be given as well. If we take these out, for Japan, it would be 101%; 107% for outside Japan; and 104% for other areas.

Therefore, it is an increase for all areas. Total is 104%.

Now let's look at 1-11, which is the breakdown between manufacturing, service and others and financial service. And for the revenues, was JPY 6,646,100,000,000; and operating income, JPY 294.7 billion, for manufacturing, service and others.

And for the 9 months, you can see that revenues and earnings have increased.

Now the balance sheet will be explained. Please refer to Page 16.

This is the summary balance sheet. Details not given, but in terms of manufacturing, service and others, we have topped off the JPY 10 trillion mark, and this is because of the weak yen, as well as a mark-to-market evaluation impact is shown as well.

So this is an increase of JPY 932.6 billion. On adjusted basis, this is JPY 622 billion.

In terms of trade receivables and inventories, now that was increased by JPY 277.9 billion. In terms of cash and others, it has increased by the tune of JPY 100 billion.

Toward the end of the year, end of fiscal year, trade receivables and inventories will decrease, but in terms of cash, this is because of China and others, at the end of the year, this will also decrease as well.

Now the cash conversion cycle is 84.3 days. This is too high, and we will aim for 76 days for the cash conversion cycle.

The stockholders' equity ratio was 26.9%. And D/E ratio is 0.47x.

This is because of the impact of the acquisition of Waupaca, which is included in the 0.07 point increase, but we have to manage the D/E ratio within 0.5x.

For the Financial Services, D/E ratio is 6.06x. Inclusive of the off-balance-sheet items, this has been managed, and the number is 7.17x.

And we would like to manage this below 7.5x to maintain an A rating by increasing the profitability as well, and that is how we will proceed.

Cash flows, please refer to Page 17. This is the manufacturing, service and others in the middle table.

The cash flows from operating activities, JPY 274.4 billion, and that is improvement of JPY 61.4 billion year-on-year. And the core free cash flow is minus JPY 41.9 billion, but this is an increase of JPY 84.9 billion year-over-year.

For December bonus was paid, and therefore, domestically, a JPY 200 billion bonus payment was made. And in the fourth quarter, this will revert back to black ink.

Now for Financial Services, cash flow from operating activities, minus JPY 75.2 billion. This is because the receivers -- receivables are increasing because of the U.K.

business. However, although this is increasing, this will be managed within the DER of 7.5x.

Now in terms of capital expenditures. Integration expenditures and capital expenditure for manufacturing, service and others was JPY 256.5 billion, which is 90% year-over-year.

Maxell, still on par. If the impact was not there, it was 94% depreciation; but for manufacturing services, 98.6% and 102% [ph].

But in the absence of the special factors, it would have been 106%.

Now going -- capital expenditures have started to be suppressed for manufacturing, service and others. And R&D expenditures, JPY 244.6 billion, 94%.

But in the absence of the thermal power business, it would have been flat.

Now moving on to Page 21 and 22, segment information will be provided. Please refer to the third quarter accumulated numbers on the right-hand side.

Now compared to previous year, we had a revenue decline for Power Systems. This is because of the thermal power reorganization.

And down below, others, Maxell IPO becoming equity-method company has had an impact here. In terms of operating profit, where we had negative were in the segments power system and because of China, a minus shovel [ph] impact in the Construction Machinery.

Now I would like to go to Page 24.

First of all, starting with the business environment. In the U.S., supported by the recovering consumer spending and housing investment, the economic recovery seems to be accelerating.

However, in Europe, there is geopolitical risks and financial uncertainty, mainly in Southern European countries. In China, the economic growth is decelerating.

And with that, Southeast Asia is also stagnating. And therefore, overall, on global basis, we are starting to see a trend of the economic slowdown.

However, the yen is depreciating, so as you see, on a full year basis forecast, fourth quarter is JPY 115 to a dollar. Including the overseas production, our revenue, JPY 9,600,000,000,000; operating income, JPY 580 billion; EBIT, JPY 540 billion; and net income, JPY 250 billion, so no change.

So as you can see on this table, 2013 bottom line is JPY 264.9 billion. So we want to exceed that at least, so we will do our very best for the remaining 3 months to make an improvement.

Next is by segment information on Page 27 and 28, the forecast.

The far right, previous forecast comparison. Revenue was revised downward on the Social Infrastructure & Industrial Systems.

Infrastructure segment revenue declined. And this is because the oil and gas and the Middle East and Asia contract is being postponed.

It's not being closed. And therefore, the revenues are slipped or gone in some areas.

Now on the operating income basis, the downward revision is the Information & Telecommunication Systems and the Social Infrastructure & Industrial Systems. For Information & Telecommunication Systems, the domestic carriers investment is being suppressed, and that is has an impact on the operating capacity utilization, so we incorporated that.

And for the Social Infrastructure & Industrial Systems, the factors that I mentioned earlier have an impact, and therefore, we made a downward revision.

And the increase is in the Electronic Systems & Equipment and Financial Services. And the other two, corporate items and elimination, the risk is gone, cleared now.

Next is the development of Social Innovation Business for the next stage of growth. Please turn to Page 30.

First is the acceleration of global management, establishment of global structure for the Social Innovation Business, with a goal of increasing the ratio of overseas sales to more than 50%. As you see in your handout, we are moving forward.

Specifically, we are dividing global markets into 4 regions. And we're assigning 4 chief executives, including the appointment of 2 new chief executives.

And we are transforming to an autonomous decentralizing global management structure where each region leads its business autonomously. And the chief executives will be responsible for investments, return on investment and regional profit and loss for the Social Innovation Business.

And with that, we will adapt the International Financial Reporting Standards, IFRS, for the Hitachi Group, beginning fiscal year 2015, so that we can correspond to the globalization and unify the evaluation criteria for financial results throughout the Hitachi Group.

Next is Page 31, progress on the 2015 Mid-term Management Plan and the evolution of the Social Innovation Business. Let me give you some case examples.

In Information & Telecommunication Systems segment, we strengthened the production structure by reorganizing the manufacturing bases in Japan. And we accelerated global business expansion through the strengthening the solutions services business foothold in Asia and accelerating cost-reduction measures and optimization of personnel placement and promoting organizational reform to reinforce the potential IoT-related business in the telecommunications and network system business.

In Social Infrastructure & Industrial Systems segment, we established a new train depot maintenance facility and modified the existing ones in the U.K. and accelerating the optimization of business portfolio.

And given the market changes, we are screening for overseas project and further strengthening project management in the Infrastructure System Company.

In the High Functional Materials & Components segment, Hitachi Metals acquired Waupaca Foundry to strengthen the global production and sales system. And the Hitachi Chemical is expanding the energy storage business and enhanced global development through the -- by making the CSB a wholly owned subsidiary.

In the Automotive Systems segment, we are strengthening and expanding global development production and sales system based on the regional headquarters in the Americas, Europe, Asia and China. In Smart Life & Ecofriendly Systems segment, we aim to increase global competitiveness capabilities in the air-conditioning system business by establishing a joint venture with Johnson Controls, JCI.

And lastly, Page 34 -- Page 33, our Smart Transformation Project. The cumulative benefit up to the third quarter is JPY 71 billion.

We are making steady progress to achieve the cost-reduction target to JPY 100 billion, up from JPY 90 billion.

Now main initiatives and progress up to the third quarter. We transferred the administrative, financial and accounting operations in Japan to Genpact with BPO from November; and partial BPO of overseas HR operations from April this year onward.

And we are sharing the logistics IT platform and starting the concentrating transport-related operations and shared transportation through links between businesses. We are streamlining linked operation with Hitachi High-Tech, Hitachi Capital and Hitachi Transport System and started global procurement scheme utilizing each company's functions.

That's all. Thank you.

And we'd like to move on to the Q&A. Please wait for the microphone to be brought to you.

And state your name and affiliation before asking your question.

I have 2 questions. My first question is the normal question I'm providing for the operating profit of the third quarter, the internal target and the actual result.

The changes is what I would like to ask about.

Actually, we were expecting more in terms of internal target. We had upside of JPY 7 billion.

However, unfortunately, because of capacity utilization, third quarter, I said that there's a plus JPY 8 billion, but in fact, we had expectations for a further JPY 13 billion. So this is a shortfall.

So JPY 7 billion was the positive number. Please -- in terms of segment, since it's JPY 7 billion, it is very detailed.

Now in terms of the electronic system, there's about JPY 5 billion. And Construction Machinery, it was better by JPY 2 billion; and Financial Services, plus JPY 2 billion.

Now what was not good was the information and telecommunication system was minus JPY 3 billion. In terms of power system, minus JPY 3 billion.

Now in the fourth quarter, there was upfront loading, front-loading of cost. Automotive system in China in December, toward the end, the orders were slow for our business, so that's minus JPY 3 billion.

Now what about the social infrastructure?

It's JPY 1 billion plus, positive JPY 1 billion.

In terms of the Information & Telecommunication Systems, about for the full year forecast for the telecommunication downside, is that reflected in the full year forecast? According to your explanation, it seems that revenue as well as earnings have come down.

So that is how I have understood the reasons, but for next year, domestic revenues are not expected to increase, so have you earmarked restructuring expenses for next year? Or how should we view profitability for the next year?

In terms of the information and telecommunication, down by JPY 16 billion, according to revision. This is for the telecommunications.

The LTE-related hardware for carriers has been a very stable product for us. However, the investments have been curtailed, having an impact for us.

Next year, we cannot expect increase either. So that has been taken into consideration, and we are now focused on solutions.

We have started this from December of 2013. We have changed the structure.

We have been continuing this process. However, on the part of carriers, they were ahead of us, and we were not able to keep up.

That is the reason why a negative number has been incurred by us. But restructuring will be an ongoing process for us, for IoT will be our new focus.

This is not just for information, but rather it will also evolve social infrastructure segment as well. So in the products of this area, we would like to embed M2M technologies as well.

We have structures in the -- in both the Information & Telecommunication as well as Social Infrastructure & Industrial Systems as well, but we have to also reduce costs at the same time. We will do this to a certain level but may come emerge next fiscal year rather than this fiscal year.

Thank you.

I have 3 questions. First is in the analysis of the increase/decrease of the operating income.

In the information and telecommunication and power, you said JPY 11 billion negative, together, but could you break this down to Power Systems segment and Information & Telecommunication Systems segment? Power Systems of second half, I think your forecast was JPY 10 billion.

Is this unchanged? So that's my first question.

Is this about the business restructuring?

Breakdown: Power Systems, JPY 7 billion; and information and telecommunications, minus JPY 4 billion. And Power Systems, no change.

So fourth quarter, the remaining JPY 3 billion, and that's it?

Yes, JPY 3 billion. Yes, that's the cost.

Yes, you're right.

Second question, regarding the Social Infrastructure & Industrial Systems. In three -- third quarter alone, it is an upside, you said, but on the full year basis, you have made a downward revision.

So the oil and gas that you mentioned and the deals that you mentioned, are they completely stopped? Or are they already decided to be postponed and that is why you mentioned what you said?

Or is it still uncertain and you are being on the safe side, you are just incorporating the risk? Which is the case?

Not decided, but the -- if the contract is pushed forward, if it is postponed, then we are applying the percentage-of-construction method. And so if the construction is quicker than we expect, than planned, then the receivable can be posted on the fourth quarter.

But if it is postponed, then even if the contract is there, it will not be reflected in this year. So it's not that the contract went down.

It is just not included in this fiscal year.

In the second half last year, in the social infrastructure and industrial system, there were some loss, in the project-related loss. That is not any -- that is not in this year?

Yes, there are some small ones still but not like as big as last year; some contract time lag, postponement or the customer stopping the development. The oil related, when they do not have the budget, then sometimes they stop the plan, and sometimes a specification change.

But we were applying the Japanese method, and we were trying to ask the customers to bear the incremental cost, but the clients said they cannot pay, and so that was incorporated in our forecast. It's not over.

We're still negotiating.

The social innovation global structure that you mentioned this time, you -- so you will have a chief executive in the 4 regions. So the chief executives will have the delegation of authority, right?

How will you manage the risk? So for the decision made by the chief executives, how will the headquarter check?

How will you check their decision?

According to the text here, it seems like they will go ahead and spend JPY 100 billion, JPY 200 billion on their discretion, but Hitachi Group will never do that. First, Jack.

Jack Domme is appointed as the Chief Executive for the Americas, Hitachi Data Systems. He is also the CEO for Hitachi Data Systems in U.S.

And from the hard company, he has successfully switched to soft-oriented company and now will change to cloud and then to big data. The market is changing rapidly.

It is not just about information. From the user's point of view, it may be the manufacturing, monozukuri area or the administrative area.

So from the market perspective, the technology is -- they want to use technology for all purposes. They want to have the technology to be unified and converged.

And so under Jack Domme, chief executives, we can facilitate this One Hitachi. So each company, the vertical line and the horizontal regions, how to structure this will have to be decided.

This is not unlimited. First, we have to set the policy.

So when we set the budget, we will formulate a Mid-term Management Plan under which we will run this regional strategy, and each line's budget will also be organized accordingly. So that is how we will move, run this organization.

In addition, we have to do a good risk management, so the way we will assign the authority. This has to be decided by March.

This time, HR is involved, so we included this earlier.

I have 3 questions. First question is regarding the third quarter, October to December, regarding profitability.

How is foreign exchange impacting this? I think it maybe your -- the assumption was JPY 100, but it is JPY 115, so what has been the impact of foreign exchange, by segment as well?

Positives and negative impact is what I'd like to hear about.

Now from October to December, on a cumulative basis, the impact on operating profit is shown here. It is JPY 14 billion.

In terms of revenues, impact was JPY 90 billion, impact by foreign exchange. In terms of segments, for the major impacts, for the Construction Machinery as well as high functional materials have been impacted.

In terms of Construction Machinery, it's about JPY 5 billion. And for the metals is JPY 4 billion, automotive JPY 2 billion.

These are the major areas that were impacted.

You mentioned that, vis-à-vis the plan, the profit was -- had an upside of JPY 7 billion. Is that including JPY 14 billion?

There's no difference with the previous term. I said JPY 14 billion year-on-year, but against the plan, it's about JPY 15 billion, so the difference is about JPY 1 billion.

You said that JPY 100 for the second half, so I'm asking about the difference there.

Currently, it is a difference of JPY 100 and JPY 115. That's JPY 15 billion.

And is the allocation as you have explained?

No. 15% is accounted for by the Construction Machinery and high functional materials.

You said JPY 7 billion upside. Is that including impact of foreign exchange?

Yes, it is included.

In terms of the full year plan, regarding foreign exchange, you did not change the JPY 580 billion but fourth quarter changed to JPY 115, so what is going to be the impact of foreign exchange for the full year?

From October, I -- we announced the second quarter results on the 29th of October. For the second half, foreign exchange impact for revenue is JPY 175 billion; operating profit, JPY 20 billion.

By segment, do you have the information by segment?

No.

You have changed the plan for segment. I want to know how the foreign exchange is going to have impact on each of the segments.

We are looking at this in the total number. Basically, it's the Construction Machinery and high functional material and components that will be impacted significantly.

For the fourth quarter, by segment, we have the profit number on a net basis, but what about on a year-on-year basis by segment? Please elaborate.

For example, a JPY 10 billion increase in terms of information and telecommunications.

So on year-on-year basis, in terms of information and telecommunications, JPY 67.1 billion, and that's increased by JPY 8.6 billion year-on-year. Power Systems, it's JPY 19.1 billion and so plus JPY 8.7 billion.

Social infrastructure has JPY 56.2 billion, so plus JPY 9.7 billion.

And what are the factors driving this increase?

Now in terms of information and telecommunication and toward the end of the fiscal year, there will be a concentration of sales recorded.

Public system -- public as well as systems, financial systems, are driving the growth in terms of Information & Telecommunication Systems.

Now in terms of social infrastructure, there will be increase in revenues. And there will be increase in terms of sales recorded for the urban development business.

Also, the weak yen is having an impact in this area.

What about the Electronic Systems & Equipment?

We are being conservative for this segment. Operating profit decreased as expected.

Last year, for high tech as well as in Kokusai Electric, has had an impact, but for this year, third quarter, a concentration was seen, but I think there will be more in the fourth quarter as well. But last year, there was significant sales in third quarter and fourth quarter, so that is the difference we are seeing this year.

I have 3 questions. First is similar to the previous question.

Third quarter, vis-à-vis plan, the foreign exchange impact is JPY 15 billion positive, so JPY 7 billion, meaning excluding foreign exchange, it is a downside, decrease? Up to the first quarter, there was a momentum, but maybe we had too much expectation for the third quarter, but it seems like it is lower than my expectation.

So overall, in third quarter and looking into fourth quarter, the -- is the business environment becoming more difficult or -- and in Japan and the oil-related part in China, including all these factors? My first question is, how is the actual situation right now?

So if you could elaborate, please.

In third quarter, the Information & Telecommunication Systems, the carrier -- hardware sales to the carriers started declining, and more decline in the fourth quarter. We did not expect this.

We did not plan this. We thought it will be higher this year.

And we thought it will be lower next year, but we started seeing a decrease this year. This capacity utilization is lower than we expected.

Is this the largest player? Are you talking about the largest player?

All carriers, they're all saying LTE, no more LTE. Because they're all doing -- they've all completed it.

In other areas, starting with China market, in December, the order started declining.

Which area?

Automotive related, automotive parts.

What we often hear is the elevator, escalator. Is that okay?

Maybe slightly, but it's still okay. Revenue is unchanged.

So it's not that elevator, escalator is negative, no. Small-, medium-sized developers may be having more difficulty financially, but the large ones are still okay, financially stable.

In Middle East and oil-related area, the customers are starting to spend less.

So in Japan, other than the big drop in information and telecommunication, nothing else.

In the Smart Life & Ecofriendly Systems, we see a decline in Japan. However, overseas, the air-conditioner related business is growing.

So overall, the Smart Life & Ecofriendly Systems revenue is increasing. It's not like information and telecommunication system.

Information and telecommunication, we don't do much overseas business, so the domestic decline has a big impact.

Now let me talk about some businesses that I am looking at. I understand the information and telecommunication part, but SI and outsourcing, the private demand and the public demand, how is it?

And the missed deals, how are the things? And if we subtract for quarter, it is JPY 19.1 billion.

So unless you have a big jump in the operating profit, it doesn't seem like you can achieve the full year forecast. Is this okay?

Are you on schedule? And in the automotive system, the oil is leading to JPY 100 billion increase, and you have already used up the buffer for the elimination, corporate elimination.

If you could elaborate on those segments that I am looking at.

In Power Systems, what we are expecting in third quarter is new energy, but this is now pushed to fourth quarter, and because of that and of comparing the fourth quarter of 2013 and 2014, about JPY 9 billion upside. However, the new energy will be handled within the plan.

A feed-in tariff doesn't seem to look good. Are you okay?

Next year, not good, but we will do hard this year.

And another is the nuclear power plant related. This is the contract with the customers.

Originally, we were to get the contract in the third quarter, but this is postponed. So those 2 factors, so from third quarter to fourth quarter.

And what about the ITSG, information and telecommunications?

There is no lost contract. I'm not saying 0, but we do system deals, system development.

It cannot be all profitable. I have not, never had a case where everything is profitable.

But it will not be like last year or the year before that. This information part is big.

Looking at Fujitsu and NEC, it's not bad, but after the XP special demand, including hardware, this is the demerit, disadvantage of weak yen. It's very difficult.

What about your case? Are you experiencing the same thing in SI, including hardware?

In SI, in system development, the large financial institutions or the public, yes, we do have that, but in industrial, there is a trend for cloud. It is coming very quickly.

And so the fixed asset is increasing. We have to develop software, so fixed asset is increasing.

So top line, this hard -- the growth of the hard is not as strong as before.

Last question is you are introducing IFRS. In your case, you're U.S.

GAAP, so the goodwill is a minimal impact, but the underfunding, about tens of billions, maybe JPY 50 billion.

JPY 60 billion last year. However, the pension investment management is now becoming positive.

So we are now gaining gain. We are enjoying gain in investment.

Last year, JPY 85 billion positive in the year investment, and this was amortized in 10 years. So a big negative in the past is now declining.

And this year, we will again enjoy some gain, so this will again be positive. So it's not that we can add a big amount.

So maybe tens of billions of yen?

In our case, the disposal of the fixed asset and the restructuring, like Hitachi Chemical did, JPY 13 billion, and I cannot say this out loud, but these negatives will also be done. Operating profit or EBIT will not increase significantly from that.

This time, the tax rate will go down, but in your case, during Lehman crisis, you dropped, so minimal impact?

Embarrassingly, no.

I have 3 questions regarding reorganization. Last year, ABB partnership was also announced.

Going forward, because of the other body, global incorporation, I believe, is expected. Please elaborate.

And second question is regarding cloud-related matters. Hitachi data storage, the storage division is assuming a mega cloud, so parts will be incurred [ph], but system could be developed on their own.

And therefore, EMC, your competitor, is thinking about what to do with VMware. So I believe that the environment is changing, and against this backdrop, what is the positioning of HDS?

Please elaborate. Third question is regarding SPE, semiconductor and production equipment, Tokyo Electron and Applied deal is subject to uncertainty.

And therefore, against this backdrop, what is your view for your subsidiary? And for the SPE business overall, what is your view?

Now as regarding the partnership with ABB, the director of power transmission and distribution, this is what we will be working on. Now we would be happy to work with the companies where we can, so this is something that we will be contemplating.

We are now working with ABB. And there could be other opportunities as well, but it isn't as if anything specific is in pursuit at the moment.

The other party is having significant profit on their own. And so we will work in partnership.

For Mitsubishi Hitachi's, what is the impact there, MHPS?

Now as -- I don't think there is going to be competition between ABB and MHPS. Now regarding cloud, you're saying that HDS will be impacted negatively.

And in the case of Amazon, they will have their own storage and procuring their parts as well. Now going forward, I believe that the platform or foundation will have to be established.

And on top of that, there'll be various applications. Big data solutions can be provided based on this foundation.

I think the market will make a transition in this way. So it's not just the selling of hardware, but rather the foundation or the platform must be established, and the utilization thereof will lead to generating revenue and profits.

This is a new business model within the Hitachi Group. We are pursuing this focus as well.

And HDS will play a central role, especially in North America. Therefore, if anything, I believe that we can leverage HDS to expand our business, although the sub sets will change.

Regarding third quarter, for information and telecommunication, I believe that a new product is going to be introduced by HDS, but it seems that -- so what is going to be the impact there?

The revenue will be flat because -- on yen basis, it is flat -- it is increasing, but in terms of foreign currency basis, it is flat. For the storage or in terms of hardware, even when it is flat our market share is increasing.

Therefore, good efforts are being made by HDS, but this is not enough. On our part, in the mid-range, we have to do more.

In the near future, we have to introduce something new. That is imperative for us.

However, we do have storage. And utilizing storage, data can be processed through data mining and the result of the analysis can be provided to customers by way of a solution.

There is numerical data as well as video content as well, image content as well. This will be subject to big data analysis.

And by industry, proposals can be made. We are doing our utmost to develop software to enable us to do so.

Now regarding SPE: Now for the Tokyo -- TEL and for Applied, it seems that they're finding it very difficult to close. I understand the deadline is 24th of March.

I don't know what is going to happen there, and it could be extended further. So then against this backdrop, what is Hitachi prepared to do?

If something emerges, we will come back to provide information to you. So what I'd like to emphasize, that it is very difficult in this area because it -- the business is becoming oligopolistic.

And it is not a measure for bailant [ph], but for 2 strong players to work together will mean that the number of players will decrease, which is making it very difficult.

The SPE market, there is only 3 major customers. And when we think about the technologies, I believe that suppliers should be included as well.

And on the part of Hitachi Group, there is 2. And domestic consolidation may take place if the aforementioned deal does not emerge.

That is one way of thinking about this industry. However, it is difficult because, if we work with a weak player, then it will have a detrimental impact on the company.

So this industry is very difficult. We have to think very hard about the way forward for this industry.

I have an overall question. Global procurement, Hitachi High-Technologies, Hitachi Capital will be utilized.

I understand that very well, but their mission is to contribute to Hitachi Group and to work hard within their own areas. So how is this emphasis be divided?

We are -- if we just ask them to do this for Hitachi, then there will be no point in them being public, so that is not our point. That is not our intention.

For example, Hitachi High-Technologies' procurement, their commercial department is utilized; and Hitachi's logistics capability and capitals, financial capability. If we can integrate them, then we can do external sales.

So first, we would like to use this mechanism internally and then set this foundation and then start selling externally. So that's where we started.

So with the Smart Transformation Project, we will work this and then use this for external sales to increase our top line. So that is our order.

So Hitachi High-Technologies will start thinking of externally -- external sales. They are starting to come up with menus now.

Another is the Smart Life & Ecofriendly Systems. You have a joint venture in the air conditioner with Johnson Controls.

In terms of B2C, it's different, but B2B, B2C included air-conditioning. I understand this very well, but in this development, so the Smart Life & Ecofriendly Systems is not just B2C.

Is that understanding correct?

Yes. Yes, in the Smart Life & Ecofriendly Systems, we will improve the social infrastructure at homes so that women can start working outside.

We want to offer such infrastructure, using infrastructure innovation. So that is going to be B2C.

And for JCI joint venture portion, in air-conditioning, the building management, building solutions will be related, so this is completely B2B. Right now, we're doing the joint venture in air-conditioning, but furthermore, we will do more building solution through alliance.

So we are trying to expand with them on possibly expanding this business alliance.

So in urban development, too, in the future.

We do deliver for the building related, but yes, we will move in that direction.

We can take one more question.

And there seem not, therefore, we would like to bring this meeting to a close. Thank you very much for your participation.