PC Panasonic Corp.

Panasonic Corporation (Panasonic)(NYSE:PC) today reported its consolidated financial results for the second quarter and six months ended September 30, 2009, of the current fiscal year ending March 31, 2010 (fiscal 2010).

Consolidated Second-quarter Results

Consolidated group sales for the second quarter decreased 21% to 1,737.8 billion yen, from 2,191.7 billion yen in the same three-month period a year ago. Of the consolidated group total, domestic sales amounted to 917.3 billion yen, down 14% from 1,065.4 billion yen a year ago. Overseas sales decreased 27% to 820.5 billion yen, from 1,126.3 billion yen in the second quarter of the previous year.

In the electronics industry during the second quarter under review, despite visible sign of market stabilization in some regions, severe business conditions continued as the global recession and shrinking demand coincided with changes in the market structure including a demand shift to emerging markets and lower-priced products. Responding to these business conditions, Panasonic simultaneously rebuilds its management structure while preparing and taking action for future growth in fiscal 2010 as the final year of the GP3 plan.

Specifically, Panasonic implements drastic business structural reforms to rebuild its management structure. In addition, the company pursues penetration and internalization of "Itakona," acceleration of procurement cost reduction, reinforcement of comprehensive cost reduction efforts, and capital investment and inventory reductions. On the other hand, regarding preparations and actions for future growth, the company strengthens product competitiveness by creating products that are unique to Panasonic on the basis of "super link," "super energy saving" and "thorough universal design." Besides, the company continues to focus on the four major themes of the GP3 plan: double-digit growth in overseas sales, four strategic businesses, manufacturing innovation and the 'eco ideas' strategy.

Regarding earnings, operating profit1 for the second quarter was 49.1 billion yen, down from 118.6 billion yen a year ago. However, it recovered from a loss in the first quarter. This result was due mainly to initiatives such as fixed cost reduction and streamlining of material cost in spite of the effect of a sharp sales decrease and price decline. As a result of these and other factors, the company recorded a pre-tax income of 25.3 billion yen, down from 84.0 billion yen in the previous year. Accordingly, net income attributable to Panasonic Corporation resulted in 6.1 billion yen, down from 55.5 billion yen a year ago.

1 For information about operating profit, see Note 2 of the Notes to consolidated financial statements.

Consolidated Six-month Results

Consolidated group sales for the six months ended September 30, 2009 decreased 23% to 3,333.3 billion yen, compared with 4,343.7 billion yen in the same six-month period a year ago. Domestic sales amounted to 1,776.0 billion yen, down 16% from 2,110.6 billion yen in the previous year's six months, while overseas sales decreased 30% to 1,557.3 billion yen from 2,233.1 billion yen a year ago.

For reasons similar to those given for the second quarter results, the company's operating profit for the six months was 28.9 billion yen, compared with the previous year's 228.2 billion yen. In other income (deductions), the company incurred 22.7 billion yen as expenses associated with the implementation of early retirement programs. These and other factors resulted in a pre-tax loss of 26.5 billion yen, down from a pre-tax income of 203.3 billion yen in the same period a year ago. Net income attributable to Panasonic Corporation turned to a loss of 46.9 billion yen, down from a net income of 128.5 billion yen in the six months of the previous year.

Consolidated Six-month Sales Breakdown by Product Category

The company's six-month consolidated sales by product category, as compared with prior year amounts, are summarized as follows:

Digital AVC Networks

Digital AVC Networks sales decreased 23% to 1,510.6 billion yen, from 1,969.0 billion yen in the same period of the previous year. Sales of video and audio equipment decreased 21% from the previous year. Although domestic sales of flat-panel TVs and global sales of BD recorders were favorable, this result was due mainly to sluggish overseas sales of flat-panel TVs and global sales of digital cameras. In information and communications equipment, weak sales of notebook PCs and other products led to a 26% overall sales decrease from a year ago.

Home Appliances

Sales of Home Appliances decreased 18% to 538.2 billion yen, compared with 654.1 billion yen in the previous year, due mainly to a sales decline of air conditioners and compressors, despite favorable sales in refrigerators.

PEW and PanaHome

Sales of PEW and PanaHome decreased 18% to 688.3 billion yen, from 837.2 billion yen a year ago. Sluggish housing market conditions led to a decrease in sales in PEW and PanaHome.

Components and Devices

Sales of Components and Devices were down 27% to 397.0 billion yen, compared with 541.9 billion yen in the previous year, due mainly to a sales downturn of semiconductors and general electronic components.

Other

Sales of Other totaled 199.2 billion yen, down 42% from 341.5 billion yen in the same period a year ago, due mainly to a significant sales decline in factory automation equipment.

Consolidated Financial Condition

Net cash provided by operating activities in the fiscal 2010 six months ended September 30, 2009 amounted to 156.2 billion yen. This was attributable primarily to depreciation and an increase in trade payables, despite a net loss and an increase in trade receivables. Net cash used in investing activities amounted to 20.2 billion yen. Despite a decrease in time deposits, this result was due primarily to capital expenditures for tangible fixed assets mainly consisting of manufacturing facilities of the company's priority business areas, such as flat-panel TVs and batteries. Net cash provided by financing activities was 372.6 billion yen, due mainly to an increase in short-term debt by issuing short-term bonds. All these activities associated with the effect of exchange rate fluctuations, resulted in cash and cash equivalents of 1,459.5 billion yen as of September 30, 2009, an increase of 485.6 billion yen, compared with the end of the last fiscal year (March 31, 2009).

The company's consolidated total assets as of September 30, 2009 increased 405.2 billion yen to 6,808.6 billion yen, compared with the end of the last fiscal year. This was due mainly to increases in cash and cash equivalents by issuing short-term bonds, an increase in accounts receivables, and an increase in tangible fixed assets. Panasonic Corporation shareholders' equity decreased 82.8 billion yen, compared with the end of the last fiscal year, to 2,701.2 billion yen as of September 30, 2009. This result was due primarily to a decrease in retained earnings.

Interim and Year-end Dividend

The Board of Directors of the company resolved today to distribute an interim (semiannual) cash dividend of 5.0 yen per common share to shareholders of record as of September 30, 2009, payable November 30, 2009. This is a decrease from last year's interim dividend of 22.5 yen. The company also plans to distribute a year-end cash dividend of 5.0 yen per common share (payable to shareholders of record as of March 31, 2010). If implemented, total dividends for fiscal 2010, including the aforementioned interim dividend of 5.0 yen per common share, will be 10.0 yen per common share.

Outlook for Fiscal 2010

The electronics industry from the third quarter onwards is not expected to make a rapid recovery, due to negative effects such as uncertain business economic trends mainly in Europe and the United States, a rapidly proceeding appreciation of the yen, weak consumer spendings and sluggish capital investment. Panasonic, however, revised its previous earnings forecast upward. This was taking account of the second quarter results, despite the completion of the favorable effects from economic stimulus measures for consumer electronics products in each country and ever-intensified global price competition. Regarding consolidated results forecast for fiscal 2010, its sales forecast of 7,000 billion yen remains unchanged. Operating profit is expected to be 120 billion yen, an improvement from the previous forecast of 75 billion yen. Loss before income taxes2 is expected to improve from 95 billion yen to 40 billion yen. Net loss attributable to Panasonic Corporation is expected to improve from 195 billion yen to 140 billion yen. Net loss per share attributable to Panasonic Corporation common shareholders is expected to improve from 94.17 yen to 67.61 yen.

Panasonic Corporation is one of the world's leading manufacturers of electronic and electric products for consumer, business and industrial use. Panasonic's shares are listed on the Tokyo, Osaka, Nagoya and New York stock exchanges.

For more information, please visit the following web sites:

Panasonic home page URL: http://panasonic.net/

Panasonic IR web site URL: http://panasonic.net/ir/

2 Factors affecting the forecast for other income (deductions) of 160 billion yen (the difference between operating profit and loss before income taxes) include business restructuring expenses of 88 billion yen.

Disclaimer Regarding Forward-Looking Statements

This press release includes forward-looking statements (within the meaning of Section 27A of the U.S. Securities Act of 1933 and Section 21E of the U.S. Securities Exchange Act of 1934) about Panasonic and its Group companies (the Panasonic Group). To the extent that statements in this press release do not relate to historical or current facts, they constitute forward-looking statements. These forward-looking statements are based on the current assumptions and beliefs of the Panasonic Group in light of the information currently available to it, and involve known and unknown risks, uncertainties and other factors. Such risks, uncertainties and other factors may cause the Panasonic Group's actual results, performance, achievements or financial position to be materially different from any future results, performance, achievements or financial position expressed or implied by these forward-looking statements. Panasonic undertakes no obligation to publicly update any forward-looking statements after the date of this press release. Investors are advised to consult any further disclosures by Panasonic in its subsequent filings with the U.S. Securities and Exchange Commission pursuant to the Securities Exchange Act of 1934 and its other filings.

The risks, uncertainties and other factors referred to above include, but are not limited to, economic conditions, particularly consumer spending and corporate capital expenditures in the United States, Europe, Japan, China and other Asian countries; volatility in demand for electronic equipment and components from business and industrial customers, as well as consumers in many product and geographical markets; currency rate fluctuations, notably between the yen, the U.S. dollar, the euro, the Chinese yuan, Asian currencies and other currencies in which the Panasonic Group operates businesses, or in which assets and liabilities of the Panasonic Group are denominated; the possibility of the Panasonic Group incurring additional costs of raising funds, because of changes in the fund raising environment; the ability of the Panasonic Group to respond to rapid technological changes and changing consumer preferences with timely and cost-effective introductions of new products in markets that are highly competitive in terms of both price and technology; the possibility of not achieving expected results on the alliances or mergers and acquisitions; the ability of the Panasonic Group to achieve its business objectives through joint ventures and other collaborative agreements with other companies; the ability of the Panasonic Group to maintain competitive strength in many product and geographical areas; the possibility of incurring expenses resulting from any defects in products or services of the Panasonic Group; the possibility that the Panasonic Group may face intellectual property infringement claims by third parties; current and potential, direct and indirect restrictions imposed by other countries over trade, manufacturing, labor and operations; fluctuations in market prices of securities and other assets in which the Panasonic Group has holdings or changes in valuation of long-lived assets, including property, plant and equipment and goodwill, deferred tax assets and uncertain tax positions; future changes or revisions to accounting policies or accounting rules; as well as natural disasters including earthquakes, prevalence of infectious diseases throughout the world and other events that may negatively impact business activities of the Panasonic Group. The factors listed above are not all-inclusive and further information is contained in Panasonic's latest annual report on Form 20-F, which is on file with the U.S. Securities and Exchange Commission.

(Financial Tables and Additional Information Attached)

  Panasonic Corporation

Consolidated Statement of Operations *

(Three months ended September 30)            

Yen (millions)

Percentage

2009

2008

2009/2008

Net sales ¥ 1,737,838 ¥ 2,191,714 79% Cost of sales (1,252,666 ) (1,572,854 ) Selling, general and administrative expenses (436,132 ) (500,279 ) Interest income 3,131 7,547 Dividend income 686 888 Interest expense (5,521 ) (5,558 ) Expenses associated with the implementation of early retirement programs ** (1,108 ) (368 ) Other income (deductions), net (20,916 ) (37,049 ) Income before income taxes 25,312 84,041 30%   Provision for income taxes (15,022 ) (23,765 ) Equity in earnings (losses) of associated companies (210 ) 3,140     Net income 10,080 63,416 16%   Less: Net income attributable to noncontrolling interests 3,971   7,955     Net income attributable to Panasonic Corporation ¥ 6,109   ¥ 55,461   11%   Net income attributable to Panasonic Corporation common shareholders, basic per common share 2.95 yen 26.72 yen per ADS 2.95 yen 26.72 yen Net income attributable to Panasonic Corporation common shareholders, diluted per common share *** -- -- per ADS *** -- --   (Parentheses indicate expenses, deductions or losses.)  

* ** *** See Notes to consolidated financial statements.

   

Supplementary Information

(Three months ended September 30)

Yen (millions)

2009

2008

Depreciation (tangible assets) ¥ 56,509 ¥ 84,868 Capital investment **** ¥ 89,551 ¥ 137,175 R&D expenditures ¥ 122,434 ¥ 134,068   Number of employees (September 30) 284,439 313,594   **** These figures are calculated on an accrual basis.   Panasonic Corporation

Consolidated Statement of Operations *

(Six months ended September 30)      

Yen (millions)

Percentage

2009

2008

2009/2008

Net sales ¥ 3,333,296 ¥ 4,343,711 77 % Cost of sales (2,423,537 ) (3,098,704 ) Selling, general and administrative expenses (880,902 ) (1,016,853 ) Interest income 6,044 14,745 Dividend income 4,103 6,231 Interest expense (11,566 ) (11,314 ) Expenses associated with the implementation of early retirement programs ** (22,694 ) (593 ) Other income (deductions), net (31,197 ) (33,927 ) Income (loss) before income taxes (26,453 ) 203,296 --   Provision for income taxes (22,774 ) (66,177 ) Equity in earnings (losses) of associated companies (2,049 ) 3,477     Net income (loss) (51,276 ) 140,596 --   Less: Net income (loss) attributable to noncontrolling interests (4,408 ) 12,104     Net income (loss) attributable to Panasonic Corporation

¥ (46,868

)

¥ 128,492   --   Net income (loss) attributable to Panasonic Corporation common shareholders, basic per common share (22.63) yen 61.58 yen per ADS (22.63) yen 61.58 yen Net income (loss) attributable to Panasonic Corporation common shareholders, diluted per common share *** -- 61.58 yen per ADS *** -- 61.58 yen   (Parentheses indicate expenses, deductions or losses.)  

* ** *** See Notes to consolidated financial statements.

   

Supplementary Information

(Six months ended September 30)  

Yen (millions)

2009

2008

Depreciation (tangible assets) ¥ 113,712 ¥ 165,979 Capital investment **** ¥ 203,866 ¥ 239,857 R&D expenditures ¥ 236,015 ¥ 265,142   Number of employees (September 30) 284,439 313,594   **** These figures are calculated on an accrual basis.   Panasonic Corporation

Consolidated Balance Sheet **

September 30, 2009

With comparative figures for March 31, 2009    

Yen (millions)

Assets

Sept. 30, 2009

March 31, 2009

Current assets: Cash and cash equivalents ¥ 1,459,505 ¥ 973,867 Time deposits 31,832 189,288 Short-term investments 22 1,998 Trade receivables: Notes 48,153 42,766 Accounts 813,997 743,498 Allowance for doubtful receivables (20,397 ) (21,131 ) Inventories 783,184 771,137 Other current assets 442,874   493,271     Total current assets 3,559,170   3,194,694   Investments and advances 566,336 551,751 Property, plant and equipment, net of accumulated depreciation 1,626,785 1,574,830 Other assets 1,056,261   1,082,041     Total assets ¥ 6,808,552   ¥ 6,403,316    

Liabilities and Equity

Current liabilities: Short-term debt ¥ 468,480 ¥ 94,355 Trade payables: Notes 32,811 38,202 Accounts 770,054 641,166 Other current liabilities 1,195,618   1,226,705     Total current liabilities 2,466,963   2,000,428     Noncurrent liabilities: Long-term debt 681,747 651,310 Other long-term liabilities 553,736   538,997     Total noncurrent liabilities 1,235,483   1,190,307     Total liabilities 3,702,446   3,190,735     Panasonic Corporation shareholders' equity: Common stock 258,740 258,740 Capital surplus 1,209,642 1,217,764 Legal reserve 93,826 92,726 Retained earnings 2,415,918 2,479,416 Accumulated other comprehensive income (loss) * (606,647 ) (594,377 ) Treasury stock (670,310 ) (670,289 )   Total Panasonic Corporation shareholders' equity 2,701,169   2,783,980     Noncontrolling interests 404,937   428,601     Total equity 3,106,106   3,212,581     Total liabilities and equity ¥ 6,808,552   ¥ 6,403,316     * Accumulated other comprehensive income (loss) breakdown:    

Yen (millions)

Sept. 30, 2009

March 31, 2009

Cumulative translation adjustments

¥ (391,053

)

¥ (341,592

)

Unrealized holding gains (losses) of available-for-sale securities 21,196 (10,563 ) Unrealized gains (losses) of derivative instruments 2,092 (4,889 ) Pension liability adjustments (238,882 ) (237,333 )  

** See Notes to consolidated financial statements.

  Panasonic Corporation

Consolidated Sales Breakdown *

(Three months ended September 30)          

Yen (billions)

Percentage

2009

2008

2009/2008

 

Digital AVC Networks

Video and audio equipment ¥ 404.6 ¥ 496.4 82%   Information and communications equipment   375.0   497.2 75%   Subtotal   779.6   993.6 78%  

Home Appliances

  259.2   311.3 83%  

PEW and PanaHome

  375.1   448.1 84%  

Components and Devices

  214.8   272.6 79%  

Other

  109.1   166.1 66%   Total   ¥ 1,737.8   ¥ 2,191.7 79%   Domestic sales 917.3 1,065.4 86%   Overseas sales 820.5 1,126.3 73%     (Six months ended September 30)  

Yen (billions)

Percentage

2009

2008

2009/2008

 

Digital AVC Networks

Video and audio equipment ¥ 763.7 ¥ 962.7 79%   Information and communications equipment   746.9   1,006.3 74%   Subtotal   1,510.6   1,969.0 77%

 

Home Appliances

  538.2   654.1 82%  

PEW and PanaHome

  688.3   837.2 82%  

Components and Devices

  397.0   541.9 73%  

Other

  199.2   341.5 58%  

Total

  ¥ 3,333.3   ¥ 4,343.7 77%   Domestic sales 1,776.0 2,110.6 84%   Overseas sales 1,557.3 2,233.1 70%  

* See Notes to consolidated financial statements.

        Panasonic Corporation

Consolidated Sales Breakdown *

(Six months ended September 30)   [Overseas Sales by Region]

Yen (billions)

Percentage

2009

2008

2009/2008

  North and South America ¥ 424.6 ¥ 584.6 73%   Europe 353.1 575.4 61%   Asia, China and others 779.6 1,073.1 73%   Total ¥ 1,557.3 ¥ 2,233.1 70%     [Domestic/Overseas Sales Breakdown]   Domestic sales Overseas sales

Yen (billions)

Percentage

Yen (billions)

Percentage

2009

2009/2008

2009

2009/2008

Digital AVC Networks

Video and audio equipment ¥ 257.9 100% ¥ 505.8 72%   Information and communications equipment 399.5 83% 347.4 66%   Subtotal 657.4 89% 853.2 69%  

Home Appliances

309.3 91% 228.9 73%  

PEW and PanaHome

565.8 85% 122.5 70%  

Components and Devices

127.5 70% 269.5 75%  

Other

116.0 62% 83.2 54%   Total ¥ 1,776.0 84% ¥ 1,557.3 70%  

* See Notes to consolidated financial statements.

  Panasonic Corporation

Consolidated Information by Business Segment *

(Six months ended September 30)       By Business Segment:  

Yen (billions)

Percentage [Sales]

2009

2008

2009/2008

  Digital AVC Networks ¥ 1,604.1 ¥ 2,102.9 76 % Home Appliances 567.1 685.5 83 % PEW and PanaHome 773.7 928.7 83 % Components and Devices 491.1 670.2 73 % Other 446.1   598.6   75 % Subtotal 3,882.1 4,985.9 78 % Eliminations (548.8 ) (642.2 ) -- Consolidated total ¥ 3,333.3   ¥ 4,343.7   77 %   [Segment Profit]**   Digital AVC Networks ¥ 12.7 ¥ 102.8 12 % Home Appliances 29.0 46.9 62 % PEW and PanaHome 4.2 35.8 12 % Components and Devices 1.3 49.0 3 % Other 2.1   28.8   7 % Subtotal 49.3 263.3 19 % Corporate and eliminations (20.4 ) (35.1 ) -- Consolidated total ¥ 28.9   ¥ 228.2   13 %  

* ** See Notes to consolidated financial statements.

      Panasonic Corporation Consolidated Information by Business Field * (Six months ended September 30)

By Business Field**:

Yen (billions)

Percentage [Sales]

2009

2008

2009/2008

  Digital AVC Networks Solution ¥ 1,604.1 ¥ 2,102.9 76 % Solutions for the Environment and Comfortable Living 1,340.8 1,614.2 83 % Devices and Industry Solution 937.2   1,268.8   74 % Subtotal 3,882.1 4,985.9 78 % Eliminations (548.8 ) (642.2 ) -- Consolidated total ¥ 3,333.3   ¥ 4,343.7   77 %     [Business Field Profit]***   Digital AVC Networks Solution ¥ 12.7 ¥ 102.8 12 % Solutions for the Environment and Comfortable Living 33.1 82.7 40 % Devices and Industry Solution 3.5   77.8   4 % Subtotal 49.3 263.3 19 % Corporate and eliminations (20.4 ) (35.1 ) -- Consolidated total ¥ 28.9   ¥ 228.2   13 %    

* ***See Notes to consolidated financial statements.

 

**For definition of business fields of the Group, see Note 10 of Notes to consolidated financial statements.

  Panasonic Corporation

Consolidated Statement of Cash Flows *

(Six months ended September 30)    

Yen (millions)

Cash flows from operating activities:

2009

2008

Net income (loss)

¥ (51,276

)

¥ 140,596 Adjustments to reconcile net income (loss) to net cash provided by operating activities: Depreciation and amortization 131,316 185,160 Net gain on sale of investments (407 ) (5,836 ) (Increase) decrease in trade receivables (98,019 ) 25,203 (Increase) decrease in inventories (22,586 ) (135,804 ) Increase (decrease) in trade payables 140,974 26,216 Increase (decrease) in retirement and severance benefits (8,357 ) (54,997 ) Other 64,585   (44,274 ) Net cash provided by operating activities 156,230   136,264    

Cash flows from investing activities:

Proceeds from disposition of investments and advances 34,837 83,944 Increase in investments and advances (3,926 ) (25,579 ) Capital expenditures (203,219 ) (271,773 ) Proceeds from sale of fixed assets 18,544 14,331 (Increase) decrease in time deposits 154,792 (47,548 ) Other (21,247 ) (23,342 ) Net cash used in investing activities (20,219 ) (269,967 )  

Cash flows from financing activities:

Increase (decrease) in short-term debt 383,023 (8,479 ) Increase (decrease) in long-term debt 23,960 13,029 Dividends paid to Panasonic Corporation common shareholders (15,530 ) (36,769 ) Dividends paid to noncontrolling interests (9,071 ) (13,270 ) (Increase) decrease in treasury stock (27 ) (71,473 ) Other (9,778 ) (37 ) Net cash provided by (used in) financing activities 372,577   (116,999 )   Effect of exchange rate changes on cash and cash equivalents (22,950 ) 9,019   Net increase (decrease) in cash and cash equivalents 485,638 (241,683 ) Cash and cash equivalents at beginning of period 973,867   1,214,816   Cash and cash equivalents at end of period ¥ 1,459,505   ¥ 973,133    

*See Notes to consolidated financial statements.

 

Notes to consolidated financial statements:

1. The company's consolidated financial statements are prepared in conformity with U.S. generally accepted accounting principles (U.S. GAAP).

2. In order to be consistent with generally accepted financial reporting practices in Japan, operating profit (loss) is presented as net sales less cost of sales and selling, general and administrative expenses. The company believes that this is useful to investors in comparing the company's financial results with those of other Japanese companies. Please refer to the accompanying consolidated statement of operations and Note 3 for U.S. GAAP reconciliation.

3. Under U.S. GAAP, expenses associated with the implementation of early retirement programs at certain domestic and overseas companies are included as part of operating profit (loss) in the statement of operations.

4. In June 2009, FASB issued the FASB Accounting Standards Codification (ASC) 105 "Generally Accepted Accounting principles". Accordingly, consolidated financial statements for the period ending after the effective date of ASC 105 should contain Codification citations in place of any corresponding references to legacy accounting pronouncements. The company adopted ASC 105 for the six months ended September 30, 2009. The Codification does not change or alter existing U.S. GAAP and, therefore, the adoption of ASC 105 did not have an effect on the company's consolidated financial statements.

5. The company adopted ASC 805, "Business Combinations" (formerly SFAS No. 141 (revised 2007), "Business Combinations") and ASC 810, "Consolidation" (formerly SFAS No. 160, "Noncontrolling Interests in Consolidated Financial Statements—an amendment to ARB No. 51") for fiscal 2010. ASC 805 and 810 require most identifiable assets, liabilities, noncontrolling interests, and goodwill acquired in a business combination to be recorded at "full fair value" and require noncontrolling interests (referred to as minority interests until fiscal 2009) to be reported as a component of equity, which changes the accounting for transactions with noncontrolling interest holders. Accordingly, "Noncontrolling interests," which was referred to as "Minority interests" and was classified between liabilities and stockholders' equity on the consolidated balance sheet as a separate component until fiscal 2009, are now included in equity. The presentations of the other financial statements were also changed. These presentation requirements have been adopted retrospectively and prior year amounts in the consolidated financial statements have been reclassified to conform to ASC 810.

6. Comprehensive income (loss) attributable to Panasonic Corporation was reported as a loss of 59,138 million yen for the six months ended September 30, 2009, and a gain of 122,745 million yen for the six months ended September 30, 2008. Comprehensive income (loss) attributable to Panasonic Corporation includes "net income (loss) attributable to Panasonic Corporation" and increases (decreases) in accumulated other comprehensive income (loss) attributable to Panasonic Corporation.

7. Diluted net income (loss) per share, attributable to Panasonic Corporation common shareholders, for the second quarter, six months ended September 30, 2009 and for the second quarter of fiscal 2009, has been omitted because the company did not have potential common shares that were outstanding for the period.

8. Regarding consolidated segment profit, expenses for basic research and administrative expenses at the corporate headquarters level are treated as unallocatable expenses for each business segment, and are included in Corporate and eliminations.

9. The company's business segments are classified according to a business domain-based management system, which focuses on global consolidated management by each business domain, in order to ensure consistency of its internal management structure and disclosure.

Principal internal divisional companies or units and subsidiaries operating in respective segments are as follows:

Digital AVC Networks

AVC Networks Company, Panasonic Communications Co., Ltd.,

Panasonic Mobile Communications Co., Ltd., Automotive Systems Company,

System Solutions Company, Panasonic Shikoku Electronics Co., Ltd.

Home Appliances

Home Appliances Company, Lighting Company,

Panasonic Ecology Systems Co., Ltd.

PEW and PanaHome

Panasonic Electric Works Co., Ltd., PanaHome Corporation

Components and Devices

Semiconductor Company, Panasonic Electronic Devices Co., Ltd.,

Energy Company, Motor Company

Other

Panasonic Factory Solutions Co., Ltd., Panasonic Welding Systems Co., Ltd.

10. In a phase of growth for global excellence, Panasonic discloses three business fields of the group which consist of five segments as shown below in order to further clarify its business fields for investors. Sales and profits by business fields are calculated as the simple total of business segments making up each business field.

Digital AVC Networks Solution

Digital AVC Networks

Solutions for the Environment and Comfortable Living

Home Appliances, PEW and PanaHome

Devices and Industry Solution

Components and Devices, Other

11. Number of consolidated companies: 533 (including parent company)

12. Number of associated companies under the equity method: 188

                   

Supplemental Consolidated Financial Data for Fiscal 2010

Second Quarter and Six Months ended September 30, 2009

 

1. Sales breakdown

yen (billions) Fiscal 2010

Second Quarter

Total       Domestic   Overseas           10/09  

Localcurrencybasis 10/09

  10/09   10/09  

Localcurrencybasis 10/09

Video and Audio Equipment   404.6   82%   91% 134.9   107% 269.7   73%   86%

Information andCommunications Equipment

  375.0   75%   82% 191.9   82% 183.1   69%   81% Digital AVC Networks   779.6   78%   86% 326.8   91% 452.8   71%   84% Home Appliances   259.2   83%   89% 149.3   89% 109.9   76%   89% PEW and PanaHome   375.1   84%   86% 310.5   87% 64.6   72%   83% Components and Devices   214.8   79%   87% 68.7   77% 146.1   80%   92% Other   109.1   66%   68% 62.0   67% 47.1   64%   70% Total   1,737.8   79%   85%   917.3   86%   820.5   73%   85% yen (billions) Fiscal 2010 Six Months

ended September 30, 2009

Total       Domestic   Overseas           10/09  

Localcurrencybasis 10/09

  10/09   10/09  

Localcurrencybasis 10/09

Video and Audio Equipment   763.7   79%   88% 257.9   100% 505.8   72%   84%

Information andCommunications Equipment

  746.9   74%   79% 399.5   83% 347.4   66%   76% Digital AVC Networks   1,510.6   77%   84% 657.4   89% 853.2   69%   81% Home Appliances   538.2   82%   87% 309.3   91% 228.9   73%   83% PEW and PanaHome   688.3   82%   84% 565.8   85% 122.5   70%   80% Components and Devices   397.0   73%   80% 127.5   70% 269.5   75%   85% Other   199.2   58%   60% 116.0   62% 83.2   54%   58% Total   3,333.3   77%   82%   1,776.0   84%   1,557.3   70%   80%            

2. Overseas Sales by Region

yen (billions) Fiscal 2010 Second Quarter Fiscal 2010 Six Months

ended September 30, 2009

                    10/09  

Localcurrencybasis 10/09

    10/09   Local

currency

basis 10/09

North and South America   221.0   74%   85% 424.6   73%   81% Europe   185.9   66%   81% 353.1   61%   76% Asia   211.2   77%   92% 403.4   75%   88% China   202.4   74%   82% 376.2   71%   76% Total   820.5   73%   85%   1,557.3   70%   80%            

3. Sales by Products

yen (billions) Product Category Products   Fiscal 2010   Second Quarter   Six Months

ended September 30

    Sales   10/09   Sales   10/09 Digital AVC Networks   TVs   250.1   85%   465.8   82%   Plasma TVs   135.3   80%   258.7   81%   LCD TVs   97.0   94%   172.0   87%   Digital Cameras   56.3   90%   104.1   82%   BD / DVD recorders   31.2   96%   61.9   96%   BD recorders / players   21.8   128%   44.6   150%   VCRs / camcorders   16.0   65%   32.5   66%   Audio equipment   18.2   69%   34.5   66%   Information equipment   259.5   77%   481.5   73%  

Communicationsequipment

  115.5   72%   265.4   77%  

Mobile communicationsequipment

  54.7   73%   146.3   82% Home Appliances   Air conditioners   52.3   83%   129.2   79%   Refrigerators   32.6   101%   65.2   103% Components and Devices   General components   81.4   79%   152.0   73%   Semiconductors *   89.5   73%   165.7   68%   Batteries   62.3   77%   116.5   76% Other   FA equipment   23.3   51%   37.5   37% *Information for semiconductors is on a production basis.  

4. Segment Information

yen (billions)   Fiscal 2010 Second Quarter   Fiscal 2010 Six Months ended September 30     Sales   10/09   Segment

Profit

  % of sales   10/09 Sales   10/09   Segment

Profit

  % of sales   10/09 Digital AVC Networks   830.8   79% 26.3   3.2%   55% 1,604.1   76% 12.7   0.8%   12% Home Appliances   273.2   82% 8.7   3.2%   56% 567.1   83% 29.0   5.1%   62% PEW and PanaHome   416.0   84% 12.0   2.9%   47% 773.7   83% 4.2   0.5%   12% Components and Devices   261.5   78% 12.8   4.9%   43% 491.1   73% 1.3   0.3%   3% Other   241.4   78% 3.0   1.2%   20% 446.1   75% 2.1   0.5%   7% Total   2,022.9   80% 62.8   3.1%   47% 3,882.1   78% 49.3   1.3%   19% Corporate and eliminations   -285.1   - -13.7   -   - -548.8   - -20.4   -   - Consolidated total   1,737.8   79%   49.1   2.8%   41%   3,333.3   77%   28.9   0.9%   13%             5. Financial data for the primary domain companies (Business domain company basis)

< Sales, Domain company profit (production division basis), and Capital Investment * >

Fiscal 2010 Second Quarter

  yen (billions)   Sales   Domain company profit   Capital Investment                         10/09     % of sales   10/09     10-09 AVC Networks Company   435.5   79% 1.7   0.4%   8% 42.1   -17.1 Panasonic Mobile Communications Co., Ltd.   63.9   71% 1.9   3.0%   30% 0.7   -0.8 Panasonic Electronic Devices Co., Ltd.   95.6   79% 2.9   3.0%   36% 4.4   -5.3 Factory Automation Business   24.3   47%   -1.9   -8.0%   -   1.3   +0.7  

Fiscal 2010 Six Months ended September 30, 2009

  yen (billions) Sales Domain company profit Capital Investment                   10/09     % of sales   10/09     10-09 AVC Networks Company   802.3   74% -32.9   -4.1%   - 110.1   +13.5 Panasonic Mobile Communications Co., Ltd.   165.9   79% 9.7   5.8%   46% 1.1   -0.9 Panasonic Electronic Devices Co., Ltd.   179.9   73% -0.9   -0.5%   - 9.1   -9.9 Factory Automation Business   40.2   36%   -9.5   -23.6%   -   1.4   +0.4

* These figures are calculated on an accrual basis.

 

6. Capital Investment by segments *

yen (billions)   Second Quarter  

Six Months endedSeptember 30, 2009

                10-09     10-09 Digital AVC Networks   46.8   -25.9 116.8   -5.2 Home Appliances   9.9   -1.8 22.4   -3.1 PEW and PanaHome   6.1   -4.2 12.6   -7.3 Components and Devices **   24.1   -10.1 47.6   -10.8 Other   2.7   -5.6 4.5   -9.6 Total   89.6   -47.6   203.9   -36.0

< 3.6 >

< -12.5 >

< 9.1 >

< -14.2 >

* These figures are calculated on an accrual basis.  

7. Foreign Currency Exchange Rates

< Export Rates >

  Fiscal 2009   Fiscal 2010     Second Quarter  

Six Months endedSeptember 30

  Full Year   Second Quarter  

Six Months endedSeptember 30

U.S. Dollars   ¥104   ¥104   ¥103   ¥97   ¥95 Euro   ¥160   ¥159   ¥153   ¥130   ¥126  

< Rates Used for Consolidation >

Fiscal 2009   Fiscal 2010     Second Quarter  

Six Months endedSeptember 30

  Full Year   Second Quarter  

Six Months endedSeptember 30

U.S. Dollars   ¥108   ¥106   ¥101   ¥94   ¥96 Euro   ¥162   ¥163   ¥143   ¥134   ¥133  

< Foreign Currency Transaction > *

 

(billions)

Fiscal 2009   Fiscal 2010     Second Quarter  

Six Months endedSeptember 30

  Full Year   Second Quarter  

Six Months endedSeptember 30

U.S. Dollars   US$1.0   US$1.5   US$2.4   US$0.5   US$0.9 Euro   € 0.4   € 0.8   € 1.4   € 0.3   € 0.6 * These figures are based on the net foreign exchange exposure of the company.      

8. Number of Employees

(persons)

    End of September 2008   End of March 2009   End of June 2009   End of September 2009 Domestic   134,481   132,144   130,066   127,888 Overseas   179,113   160,106   158,867   156,551 Total   313,594   292,250   288,933   284,439            

< Attachment 1 > Reference

Segment information for fiscal 2010

 

Sales

  Yen(billions)    

1st Quarter(Apr. to Jun.)

  2nd Quarter

(Jul. to Sep.)

Digital AVC Networks   773.3   830.8 Home Appliances   293.9   273.2 PEW and PanaHome   357.7   416.0

Components andDevices

  229.6   261.5 Other   204.7   241.4 Subtotal   1,859.2   2,022.9 Eliminations   -263.7   -285.1 Total   1,595.5   1,737.8  

Segment profit

            1st Quarter

(Apr. to Jun.)

  2nd Quarter

(Jul. to Sep.)

Digital AVC Networks   -13.6   26.3 Home Appliances   20.3   8.7 PEW and PanaHome   -7.8   12.0

Components andDevices

  -11.5   12.8 Other   -0.9   3.0

Subtotal

  -13.5   62.8

Corporate andeliminations

  -6.7   -13.7 Total   -20.2   49.1  

< Attachment 2 > Reference

Segment information for fiscal 2009

         

Sales

                 

Yen(billions)

    1st Quarter

(Apr. to Jun.)

  2nd Quarter

(Jul. to Sept.)

  3rd Quarter

(Oct. to Dec.)

  4th Quarter

(Jan. to Mar.)

  Full year

(Apr. to Mar.)

Digital AVC Networks   1,046.4   1,056.5   937.3   708.8   3,749.0 Home Appliances   352.1   333.4   292.1   245.3   1,222.9 PEW and PanaHome   432.8   495.9   432.7   404.9   1,766.3

Components andDevices

  334.5   335.7   278.3   178.8   1,127.3 Other   289.4   309.2   222.4   250.7   1,071.7 Subtotal   2,455.2   2,530.7   2,162.8   1,788.5   8,937.2 Eliminations   -303.2   -339.0   -282.8   -246.7   -1,171.7 Total   2,152.0   2,191.7   1,880.0   1,541.8   7,765.5  

Segment profit

                        1st Quarter

(Apr. to Jun.)

  2nd Quarter

(Jul. to Sept.)

  3rd Quarter

(Oct. to Dec.)

  4th Quarter

(Jan. to Mar.)

  Full year

(Apr. to Mar.)

Digital AVC Networks   55.0   47.8   -4.9   -94.7   3.2 Home Appliances   31.5   15.4   18.2   -16.1   49.0 PEW and PanaHome   10.5   25.3   10.3   -6.0   40.1

Components andDevices

  19.5   29.5   5.0   -46.9   7.1 Other   13.9   14.9   0.1   -5.0   23.9

Subtotal

  130.4   132.9   28.7   -168.7   123.3

Corporate andeliminations

  -20.8   -14.3   -2.4   -12.9   -50.4 Total   109.6   118.6   26.3   -181.6   72.9

Notes:

1. JVC and its consolidated subsidiaries became associated companies under the equity method from August 2007.
2. The company has changed the transaction between Global Procurement Service Company and other segments since April 1, 2008. Accordingly, segment information for Other and Corporate and eliminations of fiscal 2008 has been reclassified to conform to the presentation for fiscal 2009.
3. The name of "AVC Networks" was changed to "Digital AVC Networks" in April 2008.
4. The name of "MEW and PanaHome" was changed to "PEW and PanaHome" as of October 1, 2008.

         

< Attachment 3 > Reference

Segment information for fiscal 2008

 

Sales

                  Yen(billions)     1st Quarter

(Apr. to Jun.)

  2nd Quarter

(Jul. to Sept.)

  3rd Quarter

(Oct. to Dec.)

  4th Quarter

(Jan. to Mar.)

  Full year

(Apr. to Mar.)

Digital AVC Networks   996.1   1,063.5   1,207.7   1,052.3   4,319.6 Home Appliances   349.4   317.6   339.2   310.2   1,316.4 PEW and PanaHome   431.9   505.3   472.5   500.6   1,910.3

Components andDevices

  348.2   364.1   357.3   329.1   1,398.7 Other   260.4   281.9   249.8   292.1   1,084.2 JVC   138.0   45.1   --   --   183.1 Subtotal   2,524.0   2,577.5   2,626.5   2,484.3   10,212.3 Eliminations   -284.5   -291.7   -281.9   -285.3   -1,143.4 Total   2,239.5   2,285.8   2,344.6   2,199.0   9,068.9  

Segment profit

                        1st Quarter

(Apr. to Jun.)

  2nd Quarter

(Jul. to Sept.)

  3rd Quarter

(Oct. to Dec.)

  4th Quarter

(Jan. to Mar.)

  Full year

(Apr. to Mar.)

Digital AVC Networks   38.9   71.2   84.3   57.9   252.3 Home Appliances   18.0   19.3   25.9   23.2   86.4 PEW and PanaHome   9.9   31.2   27.3   28.0   96.4

Components andDevices

  18.4   31.1   27.8   27.7   105.0 Other   13.8   21.1   12.1   17.2   64.2 JVC   -6.7   -3.0   --   --   -9.7 Subtotal   92.3   170.9   177.4   154.0   594.6

Corporate andeliminations

  -18.4   -24.8   -12.0   -19.9   -75.1 Total   73.9   146.1   165.4   134.1   519.5