Since it's time, let us begin the Hitachi Ltd., the results announcement for fiscal 2017. Now our presenters here is Mr.

Mitsuaki Nishiyama, Senior Vice President and Executive Officer, CFO. In the same group, Tomomi Kato, General Manager, Financial Strategy Division; Brand Communication General Manager, Mr.

Yasuo Hirano.

Now in regard to the overview about the results, Mr. Nishayama will present.

Well, then, let me present the outline of consolidated financial results for fiscal year 2017. Let me use the PowerPoint slides to explain.

First of all, Page 5, Slide 1-2, if you could turn to that page. This is the summary of profit and loss.

Top line revenue fiscal year 2017 was JPY 9.368 trillion year-on-year, 2% increase, 102% of last year. Hitachi Logistics Transportation, Hitachi Koki reorganization was conducted, and because of that, there was an increase of 2%.

Adjusted operating income, JPY 714.6 billion. The ratio is 7.6%.

Year-on-year, 127.3% increase. That's a 22% increase year-on-year.

EBIT, JPY 644.2 billion. Second from the bottom, net income attributable to Hitachi's stockholders, JPY 362.9 billion, plus JPY 131.7 billion year-on-year.

So 7.6%, JPY 714 billion, this is a record high. And net income, JPY 362.9 billion is also a record high.

Now as to the dividend. Year-end dividend for fiscal year '17 is JPY 8.

It was JPY 7 for the interim last year. And so together with the interim, for the full year, we're going to pay a dividend of JPY 15.

Next Slide 1-3. This is factors affecting changes in revenue and adjusted operating income.

This is a macro-level analysis. On the left-hand side, revenue analysis is given.

Downward arrow, impact of reorganization. This was a negative JPY 355 billion.

Hitachi Construction, Hitachi Chemical and -- or rather Hitachi Construction Machinery, Hitachi Chemical Industrial Products reorganization. And foreign exchange, JPY 165 billion; business scale expansion, JPY 396.3 billion.

Now on the right-hand side. Adjusted operating income portfolio reorganization, JPY 32 billion.

This is a negative factor. Foreign exchange, plus JPY 23 billion.

Excluding these, profitability improvement, JPY 136.3 billion. So this is year-on-year 124%, up 24% year-on-year.

And getting back to the left-hand side, business scale expansion because of impact of reorganization, foreign exchange. Excluding these, business scale expansion was up by 4% year-on-year.

So on a net basis, this is increase in revenue.

Moving on to the next page, Slide 1-4. This is by region.

Second from the top, second from the right column. Overseas ratio is 50%.

It was 48% back in fiscal year '16, so there was an increase of 2% year-on-year. As you can see, year-on-year comparison, 98% for Japan, 107% last year for outside Japan.

In particular, there was an increase in China, 112% of Asia. Excluding China, ASEAN and India, 112%.

North America, 103%, so up 3% year-on-year. Europe was 99% of last year.

It apparently is a decline. But if we exclude ForEx fluctuation or reorganization, Hitachi Koki's reorganization impact, excluding that, it was actually 113% of last year.

Now as to the breakdown. China, 11% as opposed to 10% last year.

Asia, 11%; and North America, 13%. So overseas ratio in these regions has risen.

1-5, a summary of consolidated financial position and statement of cash flows.

Total assets, JPY 10,106.6 billion. This is up by JPY 442.6 billion increase.

Because of mandate, assets increased and we also made proactive CapEx. And because of these factors, there was an increase.

On the other hand, we have improved now on our working capital. So interest-bearing debt, there was a decline of JPY 126.3 billion.

CCC, fourth from the bottom, cash conversion cycle, 69.7 days. The medium-term target was 7 days for fiscal year 2018.

So ahead of the medium plan by a year, we were able to hit 70 days.

And equity ratio, shareholder equity ratio, 32.4%. This was an improvement year-on-year.

Our D/E ratio was 0.23x. In the past, it was the highest in 2008, 1.29 during the Lehman shock.

But now it has come down to 0.23x, so our financial makeup has improved.

ROA, at the very bottom, 5.0%. Last year, it was 3.3%, which was below 5%.

In the medium-term business plan, we are to bring this above 5% in fiscal year 2018. So we have reached that level of 5%.

4.4% was the number in 2011, which was the past record high, but this time, we have been able to exceed that and achieve a new record high.

So profitability improvement as well as cash flow improvement and asset turnover and efficiency, we were able to make improvements on all those fronts.

Cash flow statement is given at the bottom. Cash flow from operating activities, JPY 727 billion; margin, 7.8%; cash flows from investment activities, negative JPY 474.3 billion.

M&A as well as Industrial Equipment, Sullair, these M&As are included. Hitachi Chemicals M&A.

There was outflow of cash, so there were a lot of outflows of cash. Free cash flow was JPY 252.8 billion.

We were able to achieve that number.

Moving on to 1-6, revenues, adjusted operating income and EBIT by business segment. Overall, information, telecom, social infrastructure, industrial systems and construction machinery, they all contributed greatly to increased profitability.

Starting from the top, year-on-year comparison. Information & Telecom Systems.

IT Platform & Products had further structural reform. There was narrowing down at the product lineup in these areas.

As a result, there was some decline in sales, but system integration business in the Japan market increased, so 1% increase year-on-year in revenue. On the operating income side, SI profitability improvement was seen.

IT Platform & Products structural reform proceeded. Because of these factors, a JPY 36.2 billion improvement year-on-year in adjusted operating income.

Moving on to Social Infrastructure & Industrial Systems. Railway systems in the U.K.

saw an increase in revenue. Sullair acquisition contributed to sales increase of industrial equipment.

As a result, 2% increase year-on-year. Adjusted operating income, JPY 38.5 billion increase year-on-year.

Elevator business in China saw a decline in average sales price and increase in material. But power, energy, industrial equipment and so forth saw profitability improvement.

So as a result, JPY 38.5 billion increase year-on-year.

EBIT, improvement of JPY 121.2 billion. And last year, posting of a JPY 66 billion impairment loss in power and energy business, but that is eliminated this year.

So including operating income and nonoperating income, there was an improvement, and EBIT rose by JPY 121.2 billion.

1-7, Electronic Systems & Equipment. Hitachi Kokusai Electric, Hitachi High-Technology, semiconductor production equipment had increase in sales.

Hitachi Koki's reorganization was a negative factor, so it was 93% of last year, a decline year-on-year.

Adjusted operating income, on the other hand, Hitachi Koki's -- was deconsolidated, but semiconductor production equipment, sales increase contributed, so as a result, JPY 5.3 billion increase in adjusted operating income.

Construction Machinery, in terms of revenue, centering around China and overseas markets, there was a sales increase. Acquisition of Bradken and H-E Parts, they were consolidated, so up 27% year-on-year.

In line with that, adjusted operating income increased by JPY 66.2 billion year-on-year.

Moving on to 1-8. First is High Functional Materials & Components, 13% up year-on-year.

Electronic products as well as automotive-related products, sales increased for this area. On top of that, Hitachi Chemical, FIAMM Technology, which has now been integrated and consolidated, has 13% year-on-year growth on revenues.

According to that, adjusted operating income also was up JPY 1.9 billion.

EBIT was down by JPY 24.6 billion, but the reason is that there are some impairment losses posted in Hitachi Metals. And also in Hitachi Chemical, there are some penalties posted related to the competition law of related expenses, and therefore, EBIT has declined slightly.

And regarding Automotive Systems, the sales was increased in China. That was a major positive impact on this area.

On top of that, the sales to U.S. had decreased.

And therefore, the increase was only 1%, very small.

Operating income was down JPY 6.7 billion year-on-year, which is that the profitability related to Clarion deteriorated of a car information system, and also, sales decreased in North America. As a result, adjusted operating income was down by JPY 6.7 billion year-on-year.

Now EBIT was down JPY 23.4 billion. That is because that in the previous period, there was the gains of this disposal of the real estate that was posted and which we do not have that impact this year.

Now moving on to 1-9, the Smart Life & Ecofriendly Systems. And the revenue was down by 3%.

This is because that a change of accounting methods to a net basis of revenue for the part procured products in overseas. However, there were some cost reduction impact, and therefore, the operating income was up by JPY 2.6 billion.

Through the Others segment as well as Financial Services segment, these were also impacted by the reorganization of Hitachi Transport System or impacts of reorganization of Hitachi Capital.

Moving on to 1-10 and beyond, I would like to elaborate on the topics. First, on 1-10, this is the progress of Lumada business.

In fiscal 2017, the initial target for the revenue of Lumada businesses was JPY 950 billion. That was the projection.

And actual results was JPY 1,006,000,000,000. That was increase of about 6% of the target and 12% year-on-year growth.

[ especially ] for number one of Lumada core business was [ indiscernible ] from JPY 120 billion in 2016 to JPY 230 billion. And in FY 2018, JPY 1,070,000,000,000 was -- is projected.

Initial target was JPY 1,050,000,000,000. However, we are expecting JPY 20 billion upside because of the better progress than expected, and therefore, JPY 1,070,000,000,000 is expected.

That is associated with mostly the core business, which initially was expected to be JPY 290 billion, but it is expected to be JPY 310 billion, which is an about JPY 80 billion increase compared with 2017.

Now moving on to 1-11. There are some topics relate to strengthening of the business towards the growth.

This is the summary of we have done in FY 2017. And also, major items of the business portfolio transformation is also described as well.

Moving on to 1-12. There are 2 major topics related to projects.

First is the nuclear power project in U.K., called Horizon Project. In the third quarter result announcement, the GDA, which is the certification for the design and spec, has now been obtained.

However, which -- we are currently negotiating with the British government for the financing support. And the criteria for business continuity, there are 3 listed on this table on this slide.

In order to fulfill these 3 conditions, we will be presenting our negotiation with U.K. government.

The second topic is related to thermal power project in South Africa, which we are taking appropriate measures in the arbitration procedure.

Now for the Slides 2-1 and beyond, we are disclosing the forecast outlook for FY '18. And the revenue is JPY 9,000 -- JPY 9,400,000,000,000, which is 31.3%, almost flat.

And adjusted operating income is going to be JPY 750 billion, which is 8%. And the net income attributable to Hitachi, Ltd.'

s shareholders is about JPY 400 billion. And operating margin of 8%, which was -- and also JPY 400 billion for the net income stipulated in our medium-term management plan is in line with this one.

So JPY 700 billion (sic) [ JPY 750 billion ] of EBIT, which is the increase of JPY 105.7 billion. And the net income attributable to the shareholders of JPY 400 billion is an increase of a JPY 30 billion.

Assumptions is that the foreign exchange rate is assumed to be JPY 105 to the dollars and also JPY 130 to the euro.

Moving on to 2-2. We are disclosing the changes in revenues of FY 2018 vis-à-vis FY 2017.

First is revenues. Because of the Kokusai Denki, JPY 280 billion -- JPY 180 billion is impact of reorganization.

Hitachi Kokusai Electric is JPY 185 billion. Foreign exchange rate impact is negative JPY 160 billion.

And when we exclude that, then our business scale expansion and others are considered to be JPY 376.3 billion. So we are expecting JPY 9,400,000,000,000 on the adjusted operating income.

Because of the Hitachi Kokusai Electric reorganization, the income is down by JPY 25 billion, and foreign exchange rate impact is expected to be JPY 30 billion. And the other profitability improvement, it is expected to be JPY 90.3 billion.

When you exclude extraordinary items, and it is going to be 14% increase. That is our target.

Moving on to 2-3 and 2-4 are the segment revenues and adjusted operating income outlook. By segment, the third from the top, which is Electric Systems & Equipment, 92%, which is 8% down year-over-year.

Hitachi Kokusai Electric deconsolidation is increased for both revenues and adjusted operating income. When we net out this impact, and net effect is going to be positive growth for this segment.

By segment, the Electric & Systems -- Electronic Systems & Equipment will be the only one which will see a negative growth. However, for the other segments, we are seeing positive growth.

That is all for myself.

We would like to move on to questions and answers. So the time is limited.

For the same of the proceedings, we would like to take questions from the media. And in the latter half, we would like to take questions from investors and analysts.

We will bring a microphone to you, so please state your name and affiliation before asking your question.

So from the media, are there any questions?

I have 2 I would like to ask. Question number one.

Right now, many listed companies are now seeing their performance results. They are either up or down.

And you have now a forecast of record high operating income. Given the risks that may exist with respect to the business environment for the fiscal year, what was good, what was bad?

That's my first question. Second question is as follows: The operating income ratio of 8%, you have met the commitment.

And top line, you have been aiming at achieving JPY 10 trillion for the top line. So given the commitment and the forecast that you have given, well, you are reorganizing group companies, reviewing portfolio, taking proactive countermeasures.

Will they continue? How proactive are you prepared to be in taking such measures?

Now fiscal year 2018, the business environment. On that, what is noteworthy is, as was shown in our variance with the plan for FY '17, for some of the products-oriented business, the material costs has surged, and we were impacted by that.

In each of the businesses, measures were taken; cost reduction, for example, passing the price increase to the sales price. But I think this trend will continue, the trend of rising material costs.

And another factor in the economic environment is such that there is impact from trade. Trade and commerce between countries, there is trade friction.

If it deteriorates, then it will have impact on not just one single country but on others as well. There will be negative impact on a worldwide basis.

So economic sluggishness, risk off will lead to cheaper dollar or higher yen. In other words, that could possibly happen.

But so far, we have pursued a business structural reform to drive profitability. We have been withdrawing from low profitability businesses.

We have prepared ourselves for that. So we will continue to closely monitor the evolving business environment.

We would like to harvest the fruits of the measures that we have taken so far. Now 8% operating income ratio, bottom line, JPY 400 billion, committing to the targets in the medium-term business plan.

For fiscal year 2017, as you saw, profitability and asset efficiency turnover have risen. So I think we are seeing the results of improvements.

So portfolio restructuring efforts and business structural reform endeavors and operational cost reduction measures have been taken. And I think we are seeing positive results of that.

I think we now have a good view to achieving 8%. But compared to the global top companies, our profitability is not yet there, not up to their standard yet.

So we need to clear the first threshold of 8% and go further beyond. Now as to the size of the revenue, our target is JPY 10 trillion.

We're not necessarily bent on achieving the top line only, rather than -- that our primary focus is improving profitability. That has been our thinking all along, JPY 10 trillion.

So in May 2016, we announced the medium-term business plan, and revenue target was 10%; income ratio, 8%. Forecast of JPY 9.4 trillion, we came out this time.

There is a JPY 0.6 trillion gap. And one of the factors behind is ForEx fluctuation.

There was negative JPY 100 billion impact in revenue because of ForEx fluctuation. And the portfolio reorganization impact, Hitachi Koki, Kokusai Electric, these are the reorganizations of portfolio after the announcement of the midterm business plan, JPY 630 billion in impact.

So together, negative JPY 530 billion impact was seen. On the other hand, so a number of M&As have been conducted as part of our measures, initiatives.

So rather than trying to embark on very large M&As, we would like to have M&As, mergers and acquisitions, to supplement our businesses. So rather than pursuing just top line, we would like to focus more on profitability.

That is how we would like to manage our businesses.

Two questions. First is nuclear power station business.

Well, Toshiba, related to the nuclear recycling business, has shown the desire to integrate the operations among the 3 companies. What is the progress to this extent?

Related to that, I'm sure that it's still in the planning stage. However, what about the nuclear furnace business, reactor business?

What is your take on that particular business, nuclear reactor business? And also, let me confirm, what is the sensitivity of the foreign exchange rate in terms of revenues as well as adjusted operating income?

What is the assumed or average foreign exchange rate? And if you could share, that would be appreciated.

For nuclear reactor -- or excuse me, recycling and the reactor business of nuclear power, our nuclear recycling and also nuclear business reorganization, there is no specific plan at all. And in regard to your second question, which is the foreign exchange rate assumption, in FY 2018, which means that in March 2019, the dollar is assumed to JPY 105 to the dollar and JPY 130 to euro.

And exposure is that JPY 1 change to the dollar is that JPY 180 billion grow the revenues and JPY 3 billion grow the adjusted operating income. And the JPY 1 change to the euro is JPY 6 billion for the revenues and JPY 1 billion for the adjusted operating income.

That's the sensitivity.

Any other questions?

There are 3 questions. Question number one.

This may be close to what was asked already, but I would like to ask about risks. Earlier, you talked about macro-level risks.

You gave a list of such potential risks. Conversely put, for each of the business areas, are you not seeing much of a risk?

Is that correct? If you are seeing risks, which specific business areas or divisions?

Question number two. Last meeting or 2 meetings ago, I asked about whether your capability overall has risen as a company.

And I thought I received a positive answer. But after this performance announcement, what do you think is happening to your capability?

Is it up? Sorry for the abstract question.

And question number three has to do with the nuclear power business in the U.K. Strike price, if you can give us an idea as to what the strike price is going to be, I'd appreciate it.

You talked about construction material costs rising. With that strike price, the acceptable level of strike price may be changing.

So if that is the case, if you could please share that with us. And another clarification.

Taking this off balance, and the number should be close to 0, I would understand. But would it be outside of the consolidation and turned into an equity method affiliate?

Is that acceptable?

So to address your first point, are there any specific risks that we see in each of the businesses? To answer that, of course, there are risks in all the areas.

And that is why we are taking measures to pursue business, structural reform and cost reduction initiatives. As I said earlier, products and related businesses are affected by material cost rise.

Material prices are hovering high, and so if they are to further increase, we will have to continue to reduce costs on our side. One of the major areas is Automotive Systems, Social Infrastructure & Industrial, elevator business, for example.

These divisions are impacted by material cost rise. And High Functional Materials & Components, they are also affected.

And whether or not we can pass the increase in price to the sales price, how quickly can we do that, we have to closely consider that. Social Infrastructure & Industrial Systems, there is one large project that remaining in Middle East.

So I think we need to continue to closely monitor that. By the end of fiscal year '18, the last large project will be completed, concluded.

Now other than that, overall, if we can stick to the current plan, we believe we can hit the targets. Now has our capability risen overall as a company?

That was your second question. Against the current plan, there are ups and downs somewhat, but overall, I think the base line of our capability has risen overall.

Each of the business units in fiscal year 2017, their operating income ratio was less than 5%, some of them. But in fiscal year '18, each of the business units has seen over 5% income ratio.

That is the forecast and the plan. But then is this satisfying for us in terms of the level of capabilities?

Not at all. We are to be within global top [ of our ] companies.

We have to do more in order to raise our profitability. So we need to pursue improvements that we have planned.

We need to take steps and initiatives, structural reform and cost reduction included. And I think we need to continue to work hard on that.

The nuclear power project, Horizon Project in the U.K., the strike price was asked and taking this project off balance sheet. On that, we are in the process of negotiating with the U.K.

government side. We like to refrain from making further comments.

Time to close this session is approaching. And therefore, for the members of panel, this is the last question.

Three questions. First, for Information & Telecom businesses, operating margin year-on-year, 1.7%, 9.4% this year.

What is your take on this particular business? What is the major reason?

And 9.7% projected for next year, what is your initiatives that you are going to take on? And for Information Telecommunication Systems, forecast is that the revenue is almost flat from the next year, and yet operating margin improves.

Well, operating income rises, and are you forecasting on profitability for this business?

I'd like to talk about the Information & Telecommunication Systems separately in 2 segments. And if you could look on Page 26, I would like to answer to your question.

First, for the Front business, which is performing quite well. The project management, which we've been actively implementing, have been taking roots in the practice of our company in the businesses but only into the Front businesses.

Our strategy have been taking deep roots in the Front business overall. So SI project management are now well put in place.

Therefore, in FY 2017, a 10.1% growth, and in 2018, a 10.5%. So that is the projection which we announced this time.

That increases the very basis of profitability and also contribute to the stabilization of the profitability. And the second segment is IT Platform, which is a 40% last year and 6.5% last year, and we're going to be 7.7% this year.

IT Platform product area is first [ place ] and the telecom network area and also IT network products. Also, we are narrowing down the profit products, and we are -- slowly narrowing down to the highly performing products with the high profitability.

So in storage business, which is a flash storage, is performing quite well. New products are to be implemented on schedule -- or were actually launched in the market as is scheduled.

And also, we were able to achieve or launch higher, faster than the plan. So we were able to improve the profitability because of that reason.

Thank you.

Second question, really, to hard business, again, related to the Information & Telecommunication Systems. Flat storage, you narrowed down the products.

And for the lower profitable products such as mainframe products, do you have any specific ideas that we were able -- you were able to disclose?

We were able to narrow down the products already. For mainframe, we've narrowed down our product lineup.

And also, for the telecom network, we had a drastic, very bold restructuring as well by focusing on the profitability, and that we are going to continue to do. But storage is the strength of our business.

The new area is a flash storage. We were successfully able to launch that product line, and we'd like to use that as a core for our hardware products.

But again, solution will have to be enhanced on a global basis. So selling hardware or doing SI services are not the only thing which we will do.

Bringing hardware to the customers, but we will be sitting closer to the customers and providing a comprehensive lineup of hardware and software and providing the whole solutions to the customers so that we can develop our business on a global basis. Thank you very much.

Last one question. Related to Front business, in FY 2018, AI or IoT or Lumada business, that are actually better progress than your initial projections.

So AI or IoT, combined with your solutions, would that be one of your focus area?

Yes. That will be the overall growth.

It is not just limited to Information & Telecommunication Systems. It will be related to the overall growth companies.

That will be the driver for all the companies. Well, the mother business progress, like I reported earlier, it's still a very -- small.

So size of the business is still small. However, by growing the core for overall Hitachi, Ltd., we will be able to enjoy overall profitability.

So core growth of the mother core business is the key driver for us.

Next, to continue, we would like to take questions from investors and analysts. Any questions, please?

There are 2 I would like to ask. Question number one has to do with the actual performance.

Corporate items and eliminations compared to the January announcement, are there some variance? So the buffer that you originally assumed did not materialize, and so did that contribute?

If you could share with us a breakdown, please do so. And the -- according to the new year guidance, corporate items and elimination compared to last year's actual, there's a decline of JPY 36 billion as a factor.

So what is the buffer included, if you could share that with us? Now another question has to do with the Social Infrastructure & Industrial Systems new year guidance that was given.

Adjusted operating income of JPY 49 billion increase, I think that is your plan. So according to the appendix material, when you break that down into sub areas, revenue is -- not seem to increase all that much.

So how are you going to raise the profitability? What's going to be the measures or plan?

So the previous fiscal year, fiscal year '17, as you said, operating income risk of JPY 30 billion, that was incorporated as a risk, as you rightly said. Compared to the last outlook that we gave -- 1-6, 1-7, if you could take a look.

Operating income, Social Infrastructure & Industrial Systems, negative JPY 9.4 billion; Automotive Systems, JPY 3.4 billion. High Functional Materials, JPY 5.1 billion.

There were deteriorations. Other than that, Information & Telecom Systems, Hitachi Construction Machinery and others saw improvements.

So the risk that was factored in on a net-to-net basis remained. There were areas that saw improvements, and they canceled out the negatives.

So that was what happened in 2017. For fiscal year 2018, operating income for that, risk buffer of JPY 20 billion in the operating income is assumed.

For each of the business unit scenarios, there are risks that are not yet clear and ascertained. As was the question from the media earlier, overall, the general business environment contains some risk factors.

Considering that, JPY 20 billion in operating income, and that is reflected in corporate items and elimination. Fiscal year '18 Social Infrastructure & Industrial Systems, JPY 49.4 billion.

The drivers behind that, you asked. Roughly speaking, our industrial and distribution business is going to improve through business structural reform.

That is what we are assuming. And low profitability projects will be withdrawn from, and such efforts have continued and will continue.

And because of the positive impact from that, there will be a major improvement. Wei Wei industrial equipment, I believe they can drive their sales quite successfully going forward, and so that is why we are planning an increase in revenue.

I'm sorry for asking some details, but corporate items and elimination, in terms of the number JPY 30 billion, there is an improvement. Other than the buffer not realizing, there was another JPY 10 billion impact.

Is it important? If so, please answer why.

You're asking about fiscal year '17, the previous fiscal term?

Yes.

Expenses at the head office were brought down. Suppression of expenses at the head office continued.

And so as a result, it came out as a positive factor. And proactively, we are making investments into R&D and development.

And the timing has changed and some is brought into fiscal year '18. But no major structure reasons.

So for new year, JPY 20 billion buffer, but a deterioration of JPY 36.3 billion and a JPY 20 billion of impact, that's because of deterioration that you assume may happen in the business environment?

Correct.

Three questions to the point. First, in FY '17 versus FY '18, restructuring costs and impacts, if we're able to quantify and disclose, we'd like to hear.

And Social Infrastructure business that you mentioned that one of the benefit is coming from the restructuring impacting, if you were able to disclose a specific number, it will be appreciated. The second one, actually, is explained on Page 15.

In regard to the data, if you could actually disclose the breakdown more, it will be appreciated. And on 28, in regard to the litigation, that would be appreciated.

And Page 28, number of subsidiaries are now -- been disclosed, but as I believe that the company has already announced the strategy to reduce the number of subsidiaries to a half level. And is that going to be something that you're going to implement this year?

And what is the image that you are going to implement this year in terms of number of subsidiaries and affiliates? And from the strategic point of view, what is your strategic view on reducing the number of subsidiaries?

To the extent you can disclose, it will be appreciated.

First, for the restructuring costs as well as the impact. And restructuring-related costs in FY 2017 was posted at JPY 63 -- JPY 64 -- JPY 63 -- JPY 64.3 billion.

And FY '18 is about JPY 50 billion, which we are projected in this plan. And for the impact of restructuring, reorganization on year-on-year basis, for FY '17, JPY 15 billion impact year-on-year.

And for FY '18 compared with FY '17, JPY 14 billion is projected. And related to the second question, on Page 15, as you remember, this is related to South African project that you would like to hear.

Understood. Now we are in the process of arbitration.

We are bound by the confidentiality agreement. And therefore, we are simply following the instructions of the arbitration procedures, and we are taking appropriate measures.

And therefore, we would like to refrain from disclosing any detail about this arbitration. In regard to the number of subsidiaries, Hitachi Chemical, Hitachi Construction and Machinery [ imagery ] had happened, and therefore, number of subsidiaries have increased.

879 companies are under consideration now. Now when we exclude the listed companies, and still, we have over 571 subsidiaries, unlisted subsidiaries, everyone is actually the fully owned subsidiaries.

So we'd like to first try to work on the reduction of numbers for this 570 companies first. That will be the first target.

And to the extent possible, we'd like to merge into our company or perhaps one country, one business, one subsidiary. And if there are multiple businesses belonging to the same business in the same country, and we'd like to integrate.

But objective is not to increase -- decrease the number of subsidiaries. It's for the improvement of efficiency, improve the governance and compliance and try to reduce the compliance risks.

And these are also our objectives as well. So through that exercise, the indirect business or operational efficiency need to be improved.

And in our management index, we will include the indicator to show some indirect business efficiency. Of course, there will be several other projects, but this is considered to be one of the important project, and we are preparing the detailed picture about this plan.

Now in 2018, we will be drawing up a very detailed plan, and we will implement as fast as possible. But of course, the majority of that will be materialized in FY 2019 and 2020.

And therefore, execution period lies in 2019 and 2020. And we would like to enjoy the full benefits in FY 2021.

So that is the plan at this point. Thank you very much.

Any further questions?

There are really 3 questions I would like to ask. Question number one.

If you could answer each of the questions as I raise them. First, actual performance.

Adjusted operating income for Information & Telecom Systems, compared to the plan in this business unit, there was an upside. What is the factor background behind that?

Social Infrastructure, JPY 94 trillion, it was not met. Automotive, JPY 3.4 billion.

You made a downward revision to forecast and then it changed again. So what were the factors behind that?

Are they tentative or structural? So for those 3 business units, if you could please comment.

1-6, 1-7, if you could look at those slides. The last forecast was given.

And compared to that, how has it changed? First, on Information & Telecom Systems, the last forecast, compared to that, improvement of JPY 10.2 billion.

And that's because Japan's SI business was robust. Compared to the last forecast we've given, profitability or revenue, there are so many projects in this area.

But the risks that we assumed did not materialize or there were some improvements as well. So mainly for the Japanese SI business, because this was robust, there was an upside.

And IT Platform business, flash storage. And since the third quarter and onward -- or rather, since the fourth quarter and onward, sales were generated according to plan.

With these new products, it was quite successful. And so Japan business, business in Japan was better than expected.

So those were the factors. And with respect to Social Infrastructure & Industrial Systems, the main factors are such that, as I said earlier, EPC, large-scale projects, fiscal year '15 and onward, we have not received orders because we decided to withdraw from this domain in the second half of 2014, we're not receiving any projects.

And so we are now winding down the existing projects at the moment. But there is work still remaining.

The last project that I talked about in the Middle East where construction is ongoing, we have allocated our costs for that. This is related to the construction contractor locally.

Because of extension of the construction period, there was additional costs that had to be allocated. 90% done; the remaining is 10%.

So by the end of 2018, it's to be completed. And on the Automotive Systems, Automotive Systems in North America.

Well, in the last forecast, the business was sluggish in North America and sluggish sales in Clarion. Those were the factors that were incorporated in the last forecast.

Productivity enhancement in North America, that we have been working on since fiscal year 2017. And we did include that factor in the last forecast, but the productivity enhancement initiatives are somewhat lagging behind, and they have somewhat been factored in.

So compared to the last outlook, a deterioration of JPY 3.4 billion. So structural versus tentative, are they structural or tentative?

For Information & Telecom Systems, these are structural factors that are contributing to positive results. And Automotive, these are tentative factors.

Automotive productivity enhancement -- or rather, Social & Infrastructure, they are tentative. Automotive Systems, I think we need to continue to watch the productivity enhancement.

My second question, your EBIT plan for this year, adjusted operating income, plus JPY 35.3 billion, JPY 105.7 billion. Between EBIT and adjusted operating income, there's some gap between JPY 70 billion or so.

If you could please provide commentary.

So operating income on an adjusted basis and EBIT, so nonoperating loss and profit, I think I should give you the breakdown that's most straightforward. Fiscal year 2017, excluding interest costs, nonoperating expense, it was JPY 70.3 billion in total.

In fiscal year '18, the total is assumed to be 0 on a net basis. To give you the breakdown, fiscal year '17 breakdown is as follows: business reorganization costs, so business reorganization, profit and loss, it was plus JPY 9.7 billion; structural reform, JPY 62.3 billion; and plus, equity method affiliate, JPY 63.4 billion.

Other than that, loss of JPY 78 billion. So on a net basis, JPY 70.3 billion minus.

For fiscal year '18, business reorganization, plus JPY 30 billion; structural reform costs -- or loss, JPY 50 billion; and equity method affiliate, about negative JPY 60 billion. And other than that, JPY 40 billion loss.

So on a net basis, 0. And that is why the gap has narrowed down to 0.

Operating income, JPY 750 billion; EBIT, JPY 750 billion. That's the plan that we have.

I hope I answered your question.

Last but not least, Social Infrastructure & Industrial Systems, for each of the businesses there, if you can give us a forecast qualitatively. That's Page 27 by each BU.

There are quite a lot of BUs there are planned for negative growth declines. And so what's your thinking on each of the businesses?

Railway, it's pretty clear what's going to happen. If you could comment on other BUs.

So Nuclear Power BU, Nuclear Energy BU, the timing of receiving our orders for projects and so forth, because of the timings, there is going to be a slight decline. And now Industry & Distribution BU, structurally, this is not expected to grow all that much.

There is so low profitability business. Rather than driving revenue, we should work on product mix and business mix.

And by so doing, we should focus on profitability. That is the plan.

And that's how you see the number as is stated here. And Water BU, this is going to shrink somewhat year-on-year.

This as well has to do with increase and decrease in the number of projects depending on the term. And Industrial Products BU, on this, we acquired Sullair.

Exclusive of that, we are strengthening our industrial equipment business, and that is what we are looking to do. Sullair sales were somewhat down.

But for fiscal year 2018, the status of orders is quite successful. Orders are up quite nicely, so we are expecting an increase in sales there.

And what was acquired -- through the acquisition of Sullair, we acquired new channels. Especially in North America, we would like to leverage such sales, such channels to expand the sales of Hitachi industrial systems products.

And Sullair, on a full year basis, it's going to contribute a sales of JPY 50 billion. And Building Systems BU, for this, in terms of the number of units sold in China, it's to be flat.

But the average sales prices are down, which is affecting this business. So it's not expected to grow all that much.

So fiscal year '18 year-on-year decline is planned. But profitability-wise, expansion into Asia markets, growth in Asia markets and in China as well.

High-end products, our orders for high-end products, that should be secured, so the profitability can be maintained, and that is our plan. For Railway business, so IEP in the U.K., Italian railway, they're going to have projects that are going to be on a full-fledged basis.

They're going to have full production activities, and so they should be doing well. One last question, please.

Brief questions, 2 questions. First, free cash flow for this year.

Net profit is JPY 400 billion. We would expect that the cash flow could be 0 because you've used for everything for M&A.

So let me confirm. Dividend, for the fiscal year ended, the payout was planned to 20%.

Mitsubishi Electric increased the dividend payout as well. Now what is your concept toward the dividend?

I do not recommend the buyback, but I would expect that a dividend could be increased more. Let me check these 2 points.

Regarding free cash flow, whether the company may make investment into major investment, major M&A or not, it's just a matter of timing. For free cash flow vis-à-vis the plan, in 2016 and '17, and the medium business plan, well, first year of '16, '17 and '18, that was the 3-year.

And after that, the remaining free cash flow is going to be JPY 300 billion. And that was the initial plan.

And on that, in FY '16 and '17, we were able to exceed the free cash flow, exceeding JPY 300 billion already. Then within this range, shall we make an investment within this range and the company may not involve in any investment beyond that, that is not the case.

If there are great opportunities, we will be endeavoring into a major investment. And with that, perhaps in the single year basis, there might be positive or negative as well.

But D/E ratio, debt-to-equity ratio, for example, disposal of our assets or reorganization of the portfolios, business portfolio. And also, we've disposed some of the investment of securities and also disposal of real estate, we were able to reduce the debt ratio.

We were able to have a lower D/E ratio, which proves that we have some room for further investments. So we will be carefully monitoring the financial positions.

And if needed, we will be endeavoring into the full investment as well. But it's up to the project.

We will be closely examine the projects. And when we decide that is necessary, we will be making a necessary investment.

We've invested for the purpose of enhancement of the businesses going forward in order to enhance the delivery capabilities to the front side of the Lumada projects, for example. Also, for each and every product area, that if there is a great opportunity, we would like to do some investment.

Now regarding dividend payout, dividend is the major instruments for the return to shareholders. 20% to 30% payout is our rough target per site.

So annual payout on consolidated basis is about 20%. So we are at the bottom of our desired range.

That's just an outcome. But this is to make an investment for the future growth, for sure, and we've actually grown in business and we improved profits.

And as a result, we've tried to expand the dividend for a steady manner, that's the principle.

A follow-up question. For free cash flow, without having major M&A, CCC is actually improving, and therefore, JPY 400 billion, which is close to net income, you were able to earn a free cash flow of about JPY 400 billion.

You were able to achieve that foundation?

For the certain M&A and reorganization, it was already projected in our cash flow -- free cash flow projection. So therefore, positive free cash flow is going to be generated in this fiscal year.

And with that, we would like to conclude the meeting for the media and the investors as well as analysts. So thank you.

00. Thank you.