1. Reorganization of our overseas business and ensuing losses

In November 1999, we set up a joint venture with Finnish copper products manufacturer: 'Outokumpu Copper Products Oy', to assist our Thailand based copper products business. This joint venture is called 'Outokumpu Hitachi Copper Tube (Thailand) Ltd' (herein written as OHCT).

Hitachi Cable's affiliated company (for copper related products) - 'Bangkok Metal Industry Co., Ltd' (herein BMI), has been acquired by OHCT. We will clear the debts previously incurred by BMI and this will result in an expected losses of about 2.1 billion Yen.

Hitachi Cable has "accounts receivable" from the Thai telecommunications company - 'Telecom Asia Corp., Ltd.'. Following their implementation of a reconstruction policy, part of the accounts receivable will be extended over a long term and it is expected that recovery won't be possible. The accounts receivable balance will be transferred to "allowance for bad debts" and losses of about 600 million Yen are forecast.

2.Concerning business results forecast

The total losses mentioned above (approx. 2.7 billion Yen) will be included as extraordinary losses, in the March 2000 period. It is our intention to cover these losses with profits from the sale of securities. We believe that the losses mentioned in 1. will have negligible effect on our business results forecast.