Although not stipulated here, I'd like to talk about the second quarter impact. Revenues was impacted by 60 billion Yen; operating loss impacted by 20 billion Yen; and other deductions, 5 billion Yen. We have seen some recovery in the second quarter, but there is still impact of the earthquake, with respect to the supply chain, as well as the customers' situation. But all-in-all, we believe that we have normalized our operations in the second quarter.Next, please refer to 1-7 on page 10, and this is the revenues by market. I have already given you the total previously. Japan was 102% year-over-year. Outside Japan, 101%; as a result, outside Japan accounts for 44%. In terms of the regional breakdown, China was at 92% year-on-year. It has continued to grow over the years. However, in the first half, because of the tightening of the monetary policy, we recorded a decrease in revenue. But Asia, ex-China, as well as North America and Europe, we recorded increase in revenues. Now, for other areas, we have recorded 109%. This is the significant increase in Africa, as well as Europe. Next, page 11 and the consolidated balance sheet. Total assets was flat compared to the previous year. On the other hand, the interest bearing debt was 2,641.1 trillion Yen, this increased from the June end, which was 2.860 trillion Yen. But this has decreased from the level of June end. But this is because of the fact that inventories is high and decline in account receivables in the first half. As a result, the stockholders’ equity ratio was 15.8% and D/E ratio was 1.08 times deterioration from the previous year-end. Next, I would like to move onto 1-9, consolidated statements of cash flows. Cash flows from other new activities were 93.1 billion Yen, decreased significant because of the increase in inventory and a decrease in the account receivable receipts.
Last year, we posted proceeds from the sales of business, which we did not have this fiscal year. Because of M&A, there was increase in expenditure; that is the reason why it deteriorated. Therefore, the negative free cash flow was 128.6 billion Yen. However, for the fiscal year, we have set an objective; we will improve in the second half, and we would like to end the fiscal year with a positive cash flow.1-10 on page 13. This is the balance sheet breakdown by Manufacturing, Services & Others, and Financial Services. Please refer to the stockholders' equity ratio and the D/E ratio. In particular D/E ration for Manufacturing, Services & Others was 0.76 times and deteriorated some 0.68 at the end of last fiscal year. 1-11, page 14; this is the capital investment and research and development expenditure. I would like to highlight the internal use assets, 154.6 billion Yen. And this is increase of 30% year-on-year and this is in the area of Hitachi Construction Machinery as well as the automotive plants, so we have made investment to increase the production in these areas. And also we have made investment for restoration after the earthquake, causing this increase. The consolidated research and development expenditures was 199.1%, percentage of revenues were 4.24%. Next, I would like to talk about the segment information and first of all starting with revenue. I’m pleased to note the year-over-year numbers, which shows the characteristics. Information & Telecommunication Systems, the storage solution was strong globally showing a significant growth. And also there was a steady improvement seen in Japan, for the Solutions business, showing a steady recovery we ended with 103%. Read the rest of this transcript for free on seekingalpha.com