Form 6-K
Table of Contents

 

 

FORM 6-K

SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, D.C. 20549

Report of Foreign Private Issuer

Pursuant to Rule 13a-16 or 15d-16 of

The Securities Exchange Act of 1934

For the Month of February 2010

Commission File Number: 1-6784

Panasonic Corporation

Kadoma, Osaka, Japan

Indicate by check mark whether the registrant files or will file annual reports under cover Form 20-F or Form 40-F.

Form 20-F  x    Form 40-F  ¨

Indicate by check mark if the registrant is submitting the Form 6-K in paper as permitted by Regulation S-T Rule 101 (b)(1):     

Indicate by check mark if the registrant is submitting the Form 6-K in paper as permitted by Regulation S-T Rule 101 (b)(7):     

Indicate by check mark whether by furnishing the information contained in this Form, the registrant is also thereby furnishing the information to the Commission pursuant to Rule 12g3-2(b) under the Securities Exchange Act of 1934.

Yes  ¨    No  x

If “Yes” is marked, indicate below the file number assigned to the registrant in connection with Rule 12g3-2(b): 82-    

 

 

 


Table of Contents

This Form 6-K consists of:

 

1. Quarterly report for the three months ended December 31, 2009, filed on February  12, 2010 with the Japanese government pursuant to the Financial Instruments and Exchange Law of Japan. (English translation)


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SIGNATURE

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.

 

Panasonic Corporation
By:  

/s/    YUKITOSHI ONDA

  Yukitoshi Onda, Attorney-in-Fact
  General Manager of Investor Relations
  Panasonic Corporation

Dated: February 26, 2010


Table of Contents

[English summary with full translation of consolidated financial information]

 

 

 

 

 

 

Quarterly Report filed with the Japanese government

pursuant to the Financial Instruments and Exchange

Law of Japan

 

 

 

 

For the three months ended

December 31, 2009

 

 

 

 

 

 

 

 

 

 

 

 

Panasonic Corporation

Osaka, Japan


Table of Contents

CONTENTS

 

          Page
Disclaimer Regarding Forward-Looking Statements    1

I

   Corporate Information    2
   (1)     Consolidated Financial Summary    2
   (2)     Principal Businesses    3
   (3)     Changes in Affiliated Companies    4
   (4)     Number of Employees    4
II    The Business    5
   (1)     Operating Results    5
   (2)     Operating Results by Segment    6
   (3)     Assets, Liabilities and Equity    7
   (4)     Cash Flows    8
   (5)     Research and Development    8
   (6)     Risk Factors    9
III    Property, Plant and Equipment    10
   (1)     Major Property, Plant and Equipment    10
   (2)     Plan of the Purchase and Retirement of Major Property, Plant and Equipment    10
IV    Shares and Shareholders    11
   (1)     Shares of Common Stock Issued    11
   (2)     Amount of Common Stock (Stated Capital)    11
   (3)     Stock Price    11
V    Financial Statements    12


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Disclaimer Regarding Forward-Looking Statements

 

This quarterly report 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 quarterly report 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 quarterly report. 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, Asia and other 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 including the acquisition of SANYO Electric Co., Ltd.; 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.

 

 

 

 

 

Note: Certain information previously filed with the SEC in other reports is not included in this English translation.


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I Corporate Information

 

 

(1) Consolidated Financial Summary

 

         
    Yen (millions), except per share amounts  
    Nine months
ended
December 31,
2009
    Nine months
ended
December 31,
2008
    Three months
ended
December 31,
2009
  Three months
ended
December 31,
2008
    Year
ended
   March 31,   
2009
 

Net sales

  5,219,884      6,223,651      1,886,588   1,879,940      7,765,507   

Income (loss) before income taxes

  54,642      144,156      81,095   (59,140   (382,634

Net income (loss)

  (16,477   51,838      34,799   (88,758   (403,843

Net income (loss) attributable to Panasonic Corporation

  (14,609   65,376      32,259   (63,116   (378,961

Total Panasonic Corporation shareholders’ equity

  —        —        2,763,230   3,313,288      2,783,980   

Total equity

  —        —        3,703,704   3,770,657      3,212,581   

Total assets

  —        —        8,675,083   6,590,944      6,403,316   

Panasonic Corporation shareholders’ equity per share of common stock (yen)

  —        —        1,334.50   1,600.10      1,344.50   

Net income (loss) per share attributable to Panasonic Corporation common shareholders, basic (yen)

  (7.06   31.40      15.58   (30.48   (182.25

Net income (loss) per share attributable to Panasonic Corporation common shareholders, diluted (yen)

  —        31.40      —     —        (182.25

Panasonic Corporation shareholders’ equity / total assets (%)

  —        —        31.9   50.3      43.5   

Net cash provided by operating activities

  306,159      123,902      —     —        116,647   

Net cash used in investing activities

  (338,219   (355,551   —     —        (469,477

Net cash provided by (used in) financing activities

  183,049      (198,239   —     —        148,712   

Cash and cash equivalents at end of period

  —        —        1,110,905   724,125      973,867   

Total employees (persons)

  —        —        382,480   307,444      292,250   

 

Notes:    1.    The Company’s consolidated financial statements are prepared in conformity with U.S. generally accepted accounting principles (U.S. GAAP).
   2.    On April 1, 2009, the Company adopted Financial Accounting Standards Board Accounting Standards Codification 810, “Consolidation” (formerly Statement of Financial Accounting Standards No. 160). Accordingly, prior year amounts in the consolidated financial statements have been reclassified to conform with the presentation used for the nine months and the three months ended December 31, 2009.
   3.    Net income per share attributable to Panasonic Corporation common shareholders, diluted for the nine months and the three months ended December 31, 2009, and for the three months ended December 31, 2008 has been omitted because the Company did not have potentially dilutive common shares that were outstanding for these periods.
   4.    SANYO Electric Co., Ltd. (SANYO) and its subsidiaries became the Company’s consolidated subsidiaries in December 2009 through a tender offer. As a result, total assets increased by 2,031,133 million yen on the consolidated balance sheet as of December 31, 2009.


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(2) Principal Businesses

 

The Panasonic Group is comprised primarily of the parent Panasonic Corporation and 691 consolidated subsidiaries in and outside of Japan, operating in close cooperation with each other. As a comprehensive electronics manufacturer, Panasonic is engaged in production, sales and service activities in a broad array of business areas.

 

The Company strengthens the unity of all employees throughout the group and ultimately enhances the value of the “Panasonic” brand globally. The Company will continue its tireless efforts to generate ideas that brighten the lives of people everywhere in order to contribute to a better future both for the Earth and for the further development of society.

 

The Company’s business segment classifications consist of five segments, namely, “Digital AVC Networks,” “Home Appliances,” “PEW and PanaHome,” “Components and Devices,” and “Other.” “Digital AVC Networks” includes video and audio equipment, and information and communications equipment. “Home Appliances” includes household equipment. “PEW and PanaHome” includes electrical supplies, home appliances, building materials and equipment, and housing business. “Components and Devices” includes general electronic components, semiconductors, electric motors and batteries. “Other” includes FA equipment and other industrial equipment.

 

For production, Panasonic adopts a management system that takes charge of each product in the Company or its affiliates. In recent years, the Company has been enhancing production capacity at its overseas affiliates to further develop global business. Meanwhile, in Japan, Panasonic’s products are sold through sales channels at its domestic locations, each established according to products or customers. The Company also sells directly to large-scale consumers, such as the government and corporations.

 

For exports, sales are handled mainly through sales subsidiaries and agents located in their respective countries.

 

Certain products produced at domestic affiliates are purchased by the Company and sold through the same sales channels as products produced by the Company itself. Additionally, products produced at overseas affiliates are sold mainly through sales subsidiaries in respective countries.

 

Meanwhile, most import operations are carried out internally, and the Company aims to expand them to promote international economic cooperation.

 

Certain PEW and PanaHome products are sold on a proprietary basis at home and abroad.

 

SANYO and its 164 subsidiaries became the Company’s consolidated subsidiaries in December 2009. They are composed of four segments, which are “Consumer,” “Commercial,” “Component” and “Other,” and will be disclosed as “SANYO” segment in the Company’s consolidated financial statements.


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(3) Changes in Affiliated Companies

 

SANYO, its subsidiaries and its associated companies became the Company’s consolidated affiliated companies. The major companies are SANYO Electric Co., Ltd.(50.2%), SANYO Consumer Electronics Co., Ltd.(92.9%), SANYO Electric Logistics Co., Ltd.(58.0%), SANYO NORTH AMERICA CORPORATION (100%), SANYO EUROPE LTD.(100%), and SANYO ASIA PTE LTD (100%).

 

Note:   Percentages in the parenthesis show the Company’s voting rights including indirect holdings

 

(4) Number of Employees (as of December 31, 2009)

 

1. Consolidated:

   382,480 persons  

2. Parent-alone:

   45,922 persons     

 

*   During the three months ended December 31, 2009, the number of employees increased by 98,041 persons, mainly as a result of the consolidation of SANYO and its subsidiaries in December 2009.


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II The Business

 

(1) Operating Results

 

In the electronics industry during the third quarter of fiscal 2010, despite visible signs of market recovery in some regions such as China and Asia, severe business condition continued with changes in the market structure, including demand shift to the emerging markets and lower-priced products. In this business condition, Panasonic simultaneously rebuilt its management structure while preparing and taking action for growth in fiscal 2010, as the final year of its GP3 plan.

 

Consolidated group sales for the third quarter amounted to 1,886,588 million yen, remaining at the same level with the third quarter of fiscal 2009.

 

Regarding earnings, operating profit* for the third quarter was 101,007 million yen, an increase of 283% compared with the same period a year ago. This result was due mainly to initiatives such as streamlining of material cost and fixed cost reduction despite the effect of a price decline. Pre-tax income for the third quarter was 81,095 million yen, compared with a loss of 59,140 million yen in the same period a year ago. Accordingly, net income for the third quarter was 34,799 million yen, compared with a loss of 88,758 million yen in the same period a year ago, and net income attributable to Panasonic Corporation was 32,259 million yen, compared with a loss of 63,116 million yen in the same period a year ago.

 

*   In order to be consistent with generally accepted financial reporting practices in Japan, operating profit 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.


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(2) Operating Results by Segment

 

The following information shows the operating results by business segment for the third quarter.

 

Digital AVC Networks

 

Sales of Digital AVC Networks for the period amounted to 974,095 million yen, an increase of 4% compared with the same period a year ago. Sales of video and audio equipment increased, due mainly to favorable sales in digital AV products such as flat-panel TVs in Japan and overseas. Sales of information and communications equipment decreased, due mainly to weak sales in notebook PCs and mobile phones, although sales of automotive electronics were favorable. Segment profit amounted to 40,181 million yen, compared with a loss of 4,863 million yen in the same period a year ago, due mainly to a sales increase and streamlining efforts.

 

Home Appliances

 

Sales of Home Appliances for the period amounted to 289,533 million yen, a decrease of 1% compared with the same period a year ago. Sales of electric lamps and cooking products declined despite favorable sales in refrigerators and air conditioners. Segment profit amounted to 30,703 million yen, an increase of 69% compared with the same period a year ago, due mainly to streamlining efforts, although sales were almost unchanged compared with the same period a year ago.

 

PEW and PanaHome

 

Sales of PEW and PanaHome for the period amounted to 410,657 million yen, a decrease of 5% compared with the same period a year ago. Sluggish housing market conditions led to a decrease in sales in Panasonic Electric Works Co., Ltd., PanaHome Corporation and their subsidiaries. Segment profit amounted to 17,453 million yen, an increase of 68% compared with the same period a year ago despite a sales decrease, due mainly to streamlining efforts.

 

Components and Devices

 

Sales of Components and Devices for the period amounted to 265,647 million yen, a decrease of 5% compared with the same period a year ago. A sales downturn of batteries and semiconductor resulted in a decrease in overall sales, despite favorable sales in general electronic components. Segment profit amounted to 19,855 million yen, an increase of 298% compared with the same period a year ago, due mainly to the fixed cost reduction, despite a sales decrease.

 

Other

 

Sales of Other for the period amounted to 231,663 million yen, an increase of 4% compared with the same period a year ago. Sales in factory automation equipment recovered to the same level of last year. Segment profit amounted to 6,131 million yen, an increase of 6789% compared with the same period a year ago, due mainly to a sales increase and streamlining efforts.


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The following information shows the geographical sales and profit by region for the third quarter.

 

Japan

 

Sales in Japan amounted to 1,446,890 million yen, a decrease of 2% compared with the same period a year ago, although sales gains were recorded in flat-panel TVs and refrigerators due to the positive effect of “eco-point” economic stimulus program. This was due mainly to a sales decrease in mobile phones, semiconductors and batteries. Profit in this region amounted to 81,809 million yen, an increase of 632% compared with the same period a year ago, due mainly to streamlining efforts.

 

Americas

 

Sales in the Americas amounted to 245,235 million yen, a decrease of 2% compared with the same period a year ago. This was due mainly to sales declines in information and communications equipments and home appliances, and the effect of exchange rate, although sales in AV products such as flat-panel TVs and digital cameras were favorable. Profit in this region turned into black to 1,234 million yen, compared with a loss of 6,657 million yen in the same period a year ago, due mainly to streamlining efforts.

 

Europe

 

Sales in Europe amounted to 228,797 million yen, remaining at the same level compared with the same period a year ago. This was due mainly to a sales decrease of automotive electronics and home appliances, although sales of digital AV products such as flat-panel TVs and digital cameras were favorable. Due to an overall sales decrease and price decline, it continued to result in an operating loss, but improving to 3,171 million yen from a loss of 5,720 million yen in the same period a year ago.

 

Asia, China and Others

 

Sales in Asia, China and Others amounted to 581,837 million yen, an increase of 9% compared with the same period a year ago. This was due mainly to an increase in sales of many products, including flat-panel TVs, air conditioners and washing machines, thanks to strong market conditions. Geographical profit amounted to 32,765 million yen, an increase of 127% compared with the same period a year ago, mainly as a result of a sales increase.

 

(3) Assets, Liabilities and Equity

 

The Company’s consolidated total assets as of December 31, 2009 increased by 1,866,531 million yen to 8,675,083 million yen compared with the end of the second quarter of fiscal 2010, due primarily to the effect of consolidating SANYO and its subsidiaries.

 

With regard to liabilities, total liabilities amounted to 4,971,379 million yen, an increase of 1,268,933 million yen compared with the end of the second quarter of fiscal 2010. This was also due mainly to the effect of consolidating SANYO and its subsidiaries.

 

Panasonic Corporation shareholders’ equity increased by 62,061 million yen, compared with the end of the second quarter of fiscal 2010, to 2,763,230 million yen. This result was due primarily to net income attributable to Panasonic Corporation. Noncontrolling interests increased by 535,537 million yen to 940,474 million yen, due primarily to the effect of SANYO acquisition.


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(4) Cash Flows

 

Cash flows from operating activities

 

Net cash provided by operating activities in the fiscal 2010 third quarter totaled 149,929 million yen, compared with cash outflow of 12,362 million yen in the third quarter of fiscal 2009. This was due primarily to an improvement of net income, an increase in trade payable and a decrease in inventories, despite an increase in trade receivables.

 

Cash flows from investing activities

 

Net cash used in investing activities in the fiscal 2010 third quarter amounted to 318,000 million yen, an increase of 232,416 million yen from the fiscal 2009 third quarter. This result was due mainly to cash outflows (net of cash and cash equivalents of SANYO and its subsidiaries) to purchase SANYO shares.

 

Cash flows from financing activities

 

Net cash used in financing activities in the fiscal 2010 third quarter amounted to 189,528 million yen, an increase of 108,288 million yen from the fiscal 2009 third quarter. This was due mainly to a decrease in short-term debts affected by redemption of bonds, despite a decrease in the payment of cash dividends and repayments of long-term debt.

 

With all of these activities and an effect of exchange rate fluctuations, cash and cash equivalents for the third quarter of fiscal 2010 amounted to 1,110,905 million yen, a decrease of 348,600 million yen from the end of the second quarter of fiscal 2010.

 

(5) Research and Development

 

Panasonic’s R&D expenditures for the third quarter of fiscal 2010 totaled 113,916 million yen. There were no significant changes in R&D activities for the period. The expenditures of SANYO and its subsidiaries are not included in this amount.


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(6) Risk Factors

 

There were no risks newly identified during the three months ended December 31, 2009. However, there were significant changes with regard to the “Risk Factors” stated in the annual report of the prior fiscal year as follows.

 

Alliances with, and strategic investments in, third parties, and mergers and acquisitions undertaken by Panasonic, may not produce positive results

 

Panasonic develops its business by forming alliances or joint ventures with, and making strategic investments in, other companies, including investments in start-up companies. Furthermore, the strategic importance of partnering with third parties is increasing. In some cases, such partnerships are crucial to Panasonic’s goal of introducing new products and services, but Panasonic may not be able to successfully collaborate or achieve expected synergies with its partners. Panasonic does not, however, control these partners, who may make decisions regarding their business undertakings with Panasonic that may be contrary to Panasonic’s interests. In addition, if these partners change their business strategies, Panasonic may fail to maintain these partnerships. Panasonic and SANYO, upon resolutions of meetings of their respective Boards of Directors held on December 19, 2008, entered into a Capital and Business Alliance Agreement to widely pursue synergies on all business aspects of both companies. Panasonic commenced a tender offer for SANYO shares (at a purchase price of 131 yen per share of common stock, 1,310 yen per share of Class A preferred stock and 1,310 yen per share of Class B preferred stock), the tender offer period of which was from November 5, 2009 through December 9, 2009, pursuant to a resolution of meeting of the Board of Directors held on November 4, 2009. As a result of Panasonic’s conversion of the Class B preferred shares of SANYO, which Panasonic acquired through the tender offer, into common shares, SANYO and its subsidiaries became Panasonic’s consolidated subsidiaries. However, Panasonic may fail to achieve the expected result, despite the Company’s efforts in maximizing synergy by adding SANYO to the Panasonic Group. Furthermore, as a result of consolidating SANYO, deterioration of SANYO’s operating results and financial condition may adversely affect Panasonic’s operating results and financial condition.

 

Note:   The forward-looking statements in the above information are based on our belief as of the filing date of this quarterly report.


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III Property, Plant and Equipment

 

(1) Major Property, Plant and Equipment

 

During the three months ended December 31, 2009, SANYO and its subsidiaries became Panasonic’s consolidated subsidiaries. As a result, some of SANYO’s facilities such as Tokyo Building, Sumoto Plant, Tokushima Plant and Kaizuka Plant became the Company’s major property, plant and equipment.

 

(2) Plan of the Purchase and Retirement of Major Property, Plant and Equipment

 

During the three months ended December 31, 2009, the Company does not have any current plans to purchase, expand, refurbish, retire and dispose major property, plant and equipment.

 

During the three months ended December 31, 2009, the Company invested a total of 71,729 million yen in property, plant and equipment, with an emphasis on production facilities in such priority business areas as flat-panel TVs and batteries. The breakdown of capital investment by business segment is as follows (The capital investments of SANYO and its subsidiaries are excluded):

 

              Business Segment        

   Yen
(millions)
    

Digital AVC Networks

   37,807   

Home Appliances

   5,570   

PEW and PanaHome

   6,635   

Components and Devices

   20,070   

Other

   606   
       

Subtotal

   70,688   

Corporate

   1,041   
       

Total

   71,729   
       


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IV Shares and Shareholders

 

(1) Shares of Common Stock Issued as of December 31, 2009:    2,453,053,497 shares

 

The common stock of the Company is listed on the Tokyo, Osaka and Nagoya stock exchanges in Japan. In the United States, the Company’s American Depositary Shares (ADSs) are listed on the New York Stock Exchange.

 

(2) Amount of Common Stock (Stated Capital) as of December 31, 2009:    258,740 million yen

 

(3) Stock Price

 

The following table sets forth the monthly reported high and low market prices per share of the Company’s common stock on the Tokyo Stock Exchange for the nine months of fiscal 2010:

 

     Yen     
     April    May    June    July    August    September    October    November    December     

High

   1,446    1,510    1,408    1,500    1,541    1,505    1,326    1,285    1,356   

Low

   1,070    1,292    1,260    1,175    1,414    1,308    1,210    1,062    1,080   


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CONTENTS

 

V Financial Statements

 

Index of Consolidated Financial Statements of Panasonic Corporation and Subsidiaries:

 

     Page

Consolidated Balance Sheets as of December 31 and March 31, 2009

   13

Consolidated Statements of Operations for the nine months and three months ended December  31, 2009 and 2008

   15

Consolidated Statements of Cash Flows for the nine months ended December 31, 2009 and 2008

   17

Notes to Consolidated Financial Statements

   19


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PANASONIC CORPORATION

AND SUBSIDIARIES

 

Consolidated Balance Sheets

 

December 31 and March 31, 2009

 

     Yen (millions)  

Assets

   December 31, 2009     March 31, 2009  

Current assets:

    

Cash and cash equivalents

   1,110,905      973,867   

Time deposits

   95,388      189,288   

Short-term investments (Notes 4 and 14)

   6,560      1,998   

Trade receivables:

    

Notes

   75,485      42,766   

Accounts

   1,182,640      743,498   

Allowance for doubtful receivables

   (20,296   (21,131
            

Net trade receivables

   1,237,829      765,133   
            

Inventories (Note 3)

   979,348      771,137   

Other current assets (Notes 13 and 14)

   467,396      493,271   
            

Total current assets

   3,897,426      3,194,694   
            

Investments and advances (Notes 4 and 14)

   683,350      551,751   

Property, plant and equipment (Notes 6 and 14):

    

Land

   389,038      298,346   

Buildings

   1,765,723      1,532,359   

Machinery and equipment

   2,383,096      2,229,123   

Construction in progress

   167,676      213,617   
            
   4,705,533      4,273,445   

Less accumulated depreciation

   2,678,942      2,698,615   
            

Net property, plant and equipment

   2,026,591      1,574,830   
            

Other assets:

    

Goodwill and intangible assets (Notes 6 and 14)

   1,517,365      531,504   

Other assets

   550,351      550,537   
            

Total other assets

   2,067,716      1,082,041   
            
   8,675,083      6,403,316   
            

 

See accompanying Notes to Consolidated Financial Statements.


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PANASONIC CORPORATION

AND SUBSIDIARIES

 

Consolidated Balance Sheets

 

December 31 and March 31, 2009

 

     Yen (millions)  

Liabilities and Equity

   December 31, 2009     March 31, 2009  

Current liabilities:

    

Short-term debt, including current portion of long-term debt (Notes 12 and 14)

   411,858      94,355   

Trade payables:

    

Notes

   64,299      38,202   

Accounts

   1,007,527      641,166   
            

Total trade payables

   1,071,826      679,368   
            

Accrued income taxes

   40,487      26,139   

Accrued payroll

   97,258      115,845   

Other accrued expenses

   768,444      672,836   

Deposits and advances from customers

   80,717      60,935   

Employees’ deposits

   10,291      269   

Other current liabilities (Notes 13 and 14)

   384,263      350,681   
            

Total current liabilities

   2,865,144      2,000,428   
            

Noncurrent liabilities:

    

Long-term debt (Note 14)

   1,118,487      651,310   

Retirement and severance benefits

   601,470      404,367   

Other liabilities

   386,278      134,630   
            

Total noncurrent liabilities

   2,106,235      1,190,307   
            

Equity:

    

Panasonic Corporation shareholders’ equity:

    

Common stock (Note 7)

   258,740      258,740   

Capital surplus

   1,209,618      1,217,764   

Legal reserve

   93,645      92,726   

Retained earnings

   2,438,005      2,479,416   

Accumulated other comprehensive income (loss):

    

Cumulative translation adjustments

   (364,059   (341,592

Unrealized holding gains (losses) of available-for-sale securities (Note 4)

   34,542      (10,563

Unrealized gains (losses) of derivative instruments
(Note 13)

   406      (4,889

Pension liability adjustments

   (237,352   (237,333
            

Total accumulated other comprehensive income (loss)

   (566,463   (594,377
            

Treasury stock, at cost (Note 7)

   (670,315   (670,289
            

Total Panasonic Corporation shareholders’ equity (Note 11)

   2,763,230      2,783,980   
            

Noncontrolling interests (Note 11)

   940,474      428,601   
            

Total equity (Note 11)

   3,703,704      3,212,581   

Commitments and contingent liabilities (Notes 5 and 15)

            
   8,675,083      6,403,316   
            

 

See accompanying Notes to Consolidated Financial Statements.


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PANASONIC CORPORATION

AND SUBSIDIARIES

 

Consolidated Statements of Operations

 

Nine months ended December 31, 2009 and 2008

 

     Yen (millions)  
     Nine months ended December 31  
     2009     2008  

Revenues, costs and expenses:

    

Net sales

   5,219,884      6,223,651   

Cost of sales (Note 13)

   (3,752,108   (4,468,001

Selling, general and administrative expenses

   (1,337,912   (1,501,134

Interest income

   8,876      20,684   

Dividends received

   6,183      10,847   

Other income (Note 13)

   30,567      42,424   

Interest expense

   (16,545   (16,349

Other deductions (Notes 6, 12, 13 and 14)

   (104,303   (167,966
            

Income before income taxes

   54,642      144,156   

Provision for income taxes

   69,856      91,420   

Equity in earnings (losses) of associated companies

   (1,263   (898
            

Net income (loss) (Note 11)

   (16,477   51,838   

Less net income (loss) attributable to noncontrolling interests (Note 11)

   (1,868   (13,538
            

Net income (loss) attributable to Panasonic Corporation (Note 11)

   (14,609   65,376   
            
     Yen  

Net income (loss) per share attributable to Panasonic Corporation common shareholders (Note 9):

    

Basic

   (7.06   31.40   

Diluted

   —        31.40   

 

See accompanying Notes to Consolidated Financial Statements.


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PANASONIC CORPORATION

AND SUBSIDIARIES

 

Consolidated Statements of Operations

 

Three months ended December 31, 2009 and 2008

 

     Yen (millions)  
     Three months ended December 31  
     2009     2008  

Revenues, costs and expenses:

    

Net sales

   1,886,588      1,879,940   

Cost of sales (Note 13)

   (1,328,571   (1,369,297

Selling, general and administrative expenses

   (457,010   (484,281

Interest income

   2,832      5,939   

Dividends received

   2,080      4,616   

Other income (Note 13)

   13,964      19,078   

Interest expense

   (4,979   (5,035

Other deductions (Notes 6, 12, 13 and 14)

   (33,809   (110,100
            

Income (loss) before income taxes

   81,095      (59,140

Provision for income taxes

   47,082      25,243   

Equity in earnings (losses) of associated companies

   786      (4,375
            

Net income (loss) (Note 11)

   34,799      (88,758

Less net income (loss) attributable to noncontrolling interests

   2,540      (25,642
            

Net income (loss) attributable to Panasonic Corporation

   32,259      (63,116
            
     Yen  

Net income (loss) per share attributable to Panasonic Corporation common shareholders (Note 9):

    

Basic

   15.58      (30.48

Diluted

   —        —     

 

See accompanying Notes to Consolidated Financial Statements.


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PANASONIC CORPORATION

AND SUBSIDIARIES

 

Consolidated Statements of Cash Flows

 

Nine months ended December 31, 2009 and 2008

 

     Yen (millions)  
     Nine months ended December 31  
     2009     2008  

Cash flows from operating activities:

    

Net income (loss) (Note 11)

   (16,477   51,838   

Adjustments to reconcile net income (loss) to net cash provided by operating activities:

    

Depreciation and amortization

   195,252      275,260   

Net gain on sale of investments

   (1,000   (15,546

Provision for doubtful receivables

   3,098      5,704   

Deferred income taxes

   41,482      41,164   

Write-down of investment securities (Note 12)

   6,074      19,449   

Impairment losses on long-lived assets (Notes 6 and 14)

   19,105      99,108   

(Increase) decrease in trade receivables

   (157,397   117,157   

(Increase) decrease in inventories

   36,662      (138,064

(Increase) decrease in other current assets

   9,699      (19,308

Increase (decrease) in trade payables

   130,648      (96,059

Increase (decrease) in accrued income taxes

   8,548      (41,128

Increase (decrease) in accrued expenses and other current liabilities

   15,508      (105,864

Increase (decrease) in retirement and severance benefits

   (10,106   (81,284

Increase (decrease) in deposits and advances from customers

   9,230      1,643   

Other

   15,833      9,832   
            

Net cash provided by operating activities

   306,159      123,902   
            

Cash flows from investing activities:

    

Purchase of short-term investments

   (6,369   —     

Proceeds from disposition of investments and advances

   45,204      105,671   

Increase in investments and advances

   (6,803   (31,270

Capital expenditures

   (306,728   (397,121

Proceeds from disposals of property, plant and equipment

   40,216      19,121   

(Increase) decrease in time deposits

   95,660      (26,018

Purchase of shares of a newly consolidated subsidiary (Note 2)

   (174,808   —     

Other

   (24,591   (25,934
            

Net cash used in investing activities

   (338,219   (355,551
            

 

(Continued)


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- 18 -

 

PANASONIC CORPORATION

AND SUBSIDIARIES

 

Consolidated Statements of Cash Flows

 

Nine months ended December 31, 2009 and 2008

 

     Yen (millions)  
     Nine months ended December 31  
             2009                     2008          

Cash flows from financing activities:

    

Increase (decrease) in short-term debt

   216,947      2,311   

Proceeds from long-term debt

   49,467      40,100   

Repayments of long-term debt

   (34,343   (66,782

Dividends paid to Panasonic Corporation shareholders
(Notes 10 and 11)

   (25,883   (83,364

Dividends paid to noncontrolling interests (Note 11)

   (12,146   (18,683

Repurchase of common stock (Note 11)

   (54   (72,351

Sale of treasury stock (Note 11)

   21      569   

Purchase of shares of previously consolidated subsidiaries
(Note 11)

   (10,885   —     

Other

   (75   (39
            

Net cash provided by (used in) financing activities

   183,049      (198,239
            

Effect of exchange rate changes on cash and cash equivalents

   (13,951   (60,803
            

Net increase (decrease) in cash and cash equivalents

   137,038      (490,691

Cash and cash equivalents at beginning of period

   973,867      1,214,816   
            

Cash and cash equivalents at end of period

   1,110,905      724,125   
            

 

See accompanying Notes to Consolidated Financial Statements.


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PANASONIC CORPORATION

AND SUBSIDIARIES

 

Notes to Consolidated Financial Statements

 

(1) Summary of Significant Accounting Policies

 

  (a) Description of Business

 

Panasonic Corporation (hereinafter, the “Company,” including consolidated subsidiaries, unless the context otherwise requires) is one of the world’s leading producers of electronic and electric products. The Company currently offers a comprehensive range of products, systems and components for consumer, business and industrial use based on sophisticated electronics and precision technology, expanding to building materials and equipment, and housing business.

 

Sales by product category for the nine months ended December 31, 2009 were as follows: Digital AVC Networks—46%, Home Appliances—16%, PEW and PanaHome—20%, Components and Devices—12% and Other—6%. A sales breakdown by geographical market was as follows: Japan—53%, North and South America—13%, Europe—11%, and Asia and Others—23%.

 

Sales by product category for the three months ended December 31, 2009 were as follows: Digital AVC Networks—48%, Home Appliances—15%, PEW and PanaHome—19%, Components and Devices—12% and Other—6%. A sales breakdown by geographical market was as follows: Japan—53%, North and South America—13%, Europe—12%, and Asia and Others—22%.

 

The Company is not dependent on a single supplier, and has no significant difficulty in obtaining raw materials from suppliers.

 

  (b) Basis of Presentation of Consolidated Financial Statements

 

The Company and its domestic subsidiaries maintain their books of account in conformity with financial accounting standards of Japan, and its foreign subsidiaries in conformity with those of the countries of their domicile.

 

The consolidated financial statements presented herein have been prepared in a manner and reflect adjustments which are necessary to conform with U.S. generally accepted accounting principles (U.S. GAAP).


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- 20 -

 

  (c) Principles of Consolidation

 

The consolidated financial statements include the accounts of the Company and its majority-owned, controlled subsidiaries. The Company also consolidates entities in which controlling interest exists through variable interests in accordance with Financial Accounting Standards Board (FASB) Accounting Standards Codification (ASC) 810, “Consolidation.” Investments in companies and joint ventures over which we have the ability to exercise significant influence (generally through an voting interest of between 20% to 50%) are included in “Investments and advances” in the consolidated balance sheets. All significant intercompany balances and transactions have been eliminated in consolidation.

 

The Company has 691 consolidated subsidiaries and 237 associated companies under equity method as of December 31, 2009.

 

Effective April 1, 2009, the Company and certain of its domestic subsidiaries changed their depreciation method from the declining-balance method to the straight-line method. The Company believes that the straight-line method better reflects the pattern of consumption of the future benefits to be derived from those assets being depreciated and provides a better matching of costs and revenues over the assets’ estimated useful lives. Under the provisions of ASC 250, “Accounting Changes and Error Corrections,” a change in depreciation method is treated on a prospective basis as a change in estimate and prior period results have not been restated. The effect of the change in depreciation method for the nine months and three months ended December 31, 2009 was not material on the Company’s consolidated financial statements, respectively.

 

  (d) Use of Estimates

 

The preparation of consolidated financial statements requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the consolidated financial statements, and the reported amounts of revenues and expenses during the reporting period. Actual results could differ from those estimates. Significant estimates and assumptions are reflected in valuation and disclosure of revenue recognition, allowance for doubtful receivables, valuation of inventories, impairment of long-lived assets, environmental liabilities, valuation of deferred tax assets, uncertain tax positions, employee retirement and severance benefit plans, and assets acquired and liabilities assumed by business combinations.

 

Management evaluated the subsequent events through the date on which the Company’s consolidated financial statements were issued.


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  (e) Adoption of New Accounting Pronouncements

 

In June 2009, FASB issued ASC 105, “Generally Accepted Accounting Principles.” ASC 105 brings together in one place all authoritative generally accepted accounting principles that has been issued by a standard setter and ASC became the exclusive authoritative reference for nongovernmental U.S. GAAP. As a result, consolidated financial statements for the period ending after the effective date should contain Codification citations in place of any corresponding references to legacy accounting pronouncements. The Company adopted ASC 105 for the three months ended December 31, 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.

 

On April 1, 2009, the Company adopted ASC 820, “Fair Value Measurements and Disclosures” for all nonfinancial assets and liabilities. ASC 820 establishes a framework for measuring fair value, and expands disclosures about fair value measurements. The adoption of ASC 820 for all nonfinancial assets and liabilities did not have a material effect on the Company’s consolidated financial statements.

 

On April 1, 2009, the Company adopted ASC 805, “Business Combinations.” ASC 805 requires most identifiable assets, liabilities, noncontrolling interests (previously referred to as minority interests), and goodwill acquired in a business combination to be recorded at “full fair value.” On April 1, 2009, the Company adopted ASC 810, “Consolidation.” ASC 810 requires noncontrolling interests to be reported as a component of equity, which changes the accounting for transactions with noncontrolling interest holders. ASC 805 is applied to business combinations occurring after the effective date. ASC 810 is applied prospectively to all noncontrolling interests, including any that arose before the effective date and the disclosure requirement is applied retrospectively. As a result, the prior years’ consolidated financial statements have been reclassified.

 

On April 1, 2009, the Company adopted the provisions of determination of the useful life of intangible assets under ASC 350, “Intangibles—Goodwill and Other.” These provisions amend the factors that should be considered in developing renewal or extension assumptions used to determine the useful life of a recognized intangible asset under ASC 350. The adoption of these provisions did not have a material effect on the Company’s consolidated financial statements.

 

  (f) Reclassifications

 

Certain reclassifications have been made to the prior years’ consolidated financial statements in order to conform with the presentation used as of, and for the nine months and three months ended December 31, 2009.


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- 22 -

 

(2) Acquisition

 

On December 21, 2009, the Company acquired 50.2% of the voting rights of SANYO Electric Co., Ltd. (SANYO) through a tender offer to obtain a controlling interest in SANYO. The operating results of SANYO and its subsidiaries for the nine months and three months ended December 31, 2009 were not included in the Company’s consolidated financial statements.

 

SANYO focuses its efforts in manufacturing, sales, maintenance and services in the consumer, commercial, component and other businesses. As a result of this acquisition, the Company and SANYO believe that a strong collaborating relationship between the two companies will be established under the large business strategy as an united business group, and through this collaboration, great synergy will be generated, such as the further expansion in the solar business, reinforcement of competitiveness in the rechargeable battery business, strengthening of the financial and business position of SANYO through the application of the Company’s cost reduction know-how, and creation of a comprehensive solution business centered on the environment and energy.

 

The fair value of noncontrolling interests was measured based on the market price per share of SANYO as of the acquisition date. The fair value of the consideration paid for the controlling interests of SANYO and the noncontrolling interests as of the acquisition date is as follows:

 

     Yen (millions)

Fair value of consideration:

  

Cash

   403,780

Fair value of noncontrolling interests

   532,360
    

Total

   936,140
    

 

Due to the time constraint since the acquisition date, the initial accounting for certain assets and liabilities is incomplete and pro forma information has been omitted. Assets acquired and liabilities assumed reflected in the Company’s consolidated balance sheet as of December 31, 2009 were as follows:

 

     Yen (millions)

Cash and cash equivalents

   228,972

Other current assets

   651,735

Investments and advances

   106,062

Property, plant and equipment

   406,442

Goodwill and intangible assets

   993,106

Other assets

   48,596
    

Total assets acquired

   2,434,913
    

Current liabilities

   605,840

Noncurrent liabilities

   892,933
    

Total liabilities assumed

   1,498,773
    

Total net assets acquired

   936,140
    

 

Short-term receivables and advances of 364,117 million yen measured at the fair value were included in other current assets in the table above, and the fair value was measured by deducting allowance for doubtful receivables and advances of 6,356 million yen from their contractual amounts. Long-term receivables and advances of 10,999 million yen measured at the fair value were included in investments and advances, and the fair value was measured by deducting allowance for doubtful receivables and advances of 2,730 million yen from their contractual amounts.

 

Accrued warranty costs of 4,253 million yen were included in current liabilities in the table above.


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- 23 -

 

(3) Inventories

 

Inventories at December 31 and March 31, 2009 are summarized as follows:

 

     Yen (millions)
     December 31, 2009    March 31, 2009

Finished goods

   544,582    439,747

Work in process

   171,593    129,949

Raw materials

   263,173    201,441
         
   979,348    771,137
         

 

 

(4) Investments in Securities

 

In accordance with ASC 320, “Investments—Debt and Equity Securities,” the Company classifies its existing marketable equity securities other than investments in associated companies and all debt securities as available-for-sale, in principle.

 

The cost, fair value, net unrealized holding gains (losses) of available-for-sale securities included in short-term investments, and investments and advances at December 31 and March 31, 2009 are as follows:

 

     Yen (millions)
     December 31, 2009
     Cost    Fair value    Net unrealized
holding gains
(losses)

Current:

        

Bonds

   6,560    6,560    —  
              
   6,560    6,560    —  
              

Noncurrent:

        

Equity securities

   281,654    373,752    92,098

Bonds

   4,286    4,514    228

Other debt securities

   556    566    10
              
   286,496    378,832    92,336
              


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- 24 -

 

     Yen (millions)
     March 31, 2009
     Cost    Fair value    Net unrealized
holding gains
(losses)

Current:

        

Bonds

   1,972    1,998    26
              
   1,972    1,998    26
              

Noncurrent:

        

Equity securities

   269,735    284,356    14,621

Bonds

   4,290    4,395    105

Other debt securities

   5,492    5,515    23
              
   279,517    294,266    14,749
              

 

The carrying amount of the Company’s held-to-maturity securities totaled 1,954 million yen at December 31, 2009. The carrying amounts of the Company’s cost method investments totaled 27,287 million yen and 40,755 million yen at December 31 and March 31, 2009, respectively.


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- 25 -

 

(5) Leases

 

The Company has operating leases for certain land, buildings, and machinery and equipment. Future minimum lease payments under operating leases at December 31, 2009 are as follows:

 

     Yen (millions)

Due within 1 year

   72,164

Due after 1 year within 2 years

   43,383

Due after 2 years within 3 years

   20,296

Due after 3 years within 4 years

   11,080

Due after 4 years within 5 years

   7,565

Thereafter

   4,380
    

Total minimum lease payments

   158,868
    

 

 

(6) Long-Lived Assets

 

The Company periodically reviews the recorded value of its long-lived assets to determine if the future cash flows to be derived from these assets will be sufficient to recover the remaining recorded asset values. Impairment losses are included in other deductions in the consolidated statements of operations, and are not charged to segment profit.

 

The Company recognized impairment losses in the aggregate of 19,105 million yen and 11,546 million yen of long-lived assets for the nine months and three months ended December 31, 2009, respectively.

 

The Company recorded the impairment losses of manufacturing facilities related to overseas lighting business for the three months ended December 31, 2009. The Company decided to aggregate manufacturing facilities of the lighting business in overseas and estimated that the carrying amounts of the assets would not be recovered through future cash flows. The fair value of the assets was determined based on discounted estimated future cash flows expected to result from their use and eventual disposition.

 

The Company recorded the impairment losses of buildings and machineries related to domestic battery business for the three months ended December 31, 2009. In relation to the acquisition of SANYO, the Company has to transfer a part of its battery business within one year, and estimated that the carrying amounts of the assets would not be recovered through future cash flows. The fair value of the assets was determined based on discounted estimated future cash flows expected to result from their use and eventual disposition.

 

The Company recorded the impairment losses of manufacturing facilities related to overseas motor business for the three months ended September 30, 2009. The Company decided to divest one of its motor business as part of the motor business structural reform and estimated that the carrying amounts of the assets would not be recovered through future cash flows. The fair value of the assets was determined based on discounted estimated future cash flows expected to result from their use and eventual disposition.

 

Impairment losses for the nine months ended December 31, 2009 of 6,903 million yen, 10,865 million yen and 1,337 million yen related to “Home Appliances,” “Components and Devices” and the remaining segments, respectively. Impairment losses for the three months ended December 31, 2009 of 6,144 million yen, 4,899 million yen and 503 million yen related to “Home Appliances,” “Components and Devices” and the remaining segments, respectively.


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- 26 -

 

The Company recognized impairment losses in the aggregate of 99,108 million yen and 94,555 million yen of property, plant and equipment for the nine months and three months ended December 31, 2008, respectively.

 

The Company recorded the impairment losses of certain buildings, machineries and finite-lived intangible assets in the domestic liquid crystal display panel manufacturing facilities for the three months ended December 31, 2008. As a result of a substantial price decline due to the significant market downturn, the Company estimated that the carrying amounts would not be recoverable through future cash flows. The fair value of buildings, machineries and finite-lived intangible assets was determined through an appraisal and the discounted estimated cash flows expected to result from the use of the assets. The Company recorded the impairment losses of certain buildings, land and other assets related to its electric device manufacturing facility for the three months ended December 31, 2008. As a result of the factory closing, the Company estimated that the carrying amounts would not be recoverable through future cash flows expected to result from their eventual disposition. The fair value of buildings and land was determined through an appraisal.

 

The Company recorded the impairment losses of certain buildings due to the closing of domestic manufacturing facilities related to home appliances for the three months ended September 30, 2008. The Company decided to take down buildings used in the manufacturing facilities and to clear and sell land. The fair value of building was determined based on the discounted future cash flows. The Company recorded the impairment losses due to the closing of domestic manufacturing facilities for the three months ended June 30, 2008. As a result of the closing, certain buildings and land became unused and the Company recorded the impairment losses. The fair value of land was determined through an appraisal. The fair value of buildings was determined based on the discounted future cash flows expected to result from their eventual disposition.

 

Impairment losses for the nine months ended December 31, 2008 of 91,227 million yen, 1,594 million yen, 3,141 million yen, 1,702 million yen and 1,444 million yen related to “Digital AVC Networks,” “Home Appliances,” “Components and Devices,” “Corporate and eliminations” and the remaining segments, respectively. Impairment losses for the three months ended December 31, 2008 of 90,629 million yen, 191 million yen, 3,141 million yen and 594 million yen related to “Digital AVC Networks,” “Home Appliances,” “Components and Devices” and the remaining segments, respectively.


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- 27 -

 

(7) Number of common shares

 

Number of common shares authorized and issued and number of treasury common shares as of December 31 and March 31, 2009 are as follows:

 

     Number of shares
     December 31, 2009    March 31, 2009

Common stock:

     

Authorized

   4,950,000,000    4,950,000,000

Issued

   2,453,053,497    2,453,053,497

Treasury stock

   382,436,852    382,411,876

 

 

(8) Panasonic Corporation Shareholders’ Equity per Share

 

Panasonic Corporation shareholders’ equity per share as of December 31 and March 31, 2009 are as follows:

 

     Yen
     December 31, 2009    March 31, 2009

Panasonic Corporation shareholders’ equity per share

          1,334.50           1,344.50


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- 28 -

 

(9) Net Income (Loss) per Share Attributable to Panasonic Corporation Common Shareholders

 

A reconciliation of the numerators and denominators of the basic and diluted net income (loss) per share attributable to Panasonic Corporation common shareholders computation for the nine months ended December 31, 2009 and 2008 are as follows:

 

     Yen (millions)
     Nine months ended December 31
     2009     2008

Net income (loss) attributable to Panasonic Corporation common shareholders

   (14,609   65,376
     Number of shares
     Nine months ended December 31
     2009     2008

Average common shares outstanding

   2,070,628,077      2,081,891,996

Dilutive effect:

    

Stock options

     722
      

Diluted common shares outstanding

     2,081,892,718
      
     Yen
     Nine months ended December 31
     2009     2008

Net income (loss) per share attributable to Panasonic Corporation common shareholders:

    

Basic

   (7.06   31.40

Diluted

   —        31.40


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- 29 -

 

A reconciliation of the numerators and denominators of the basic and diluted net income (loss) per share attributable to Panasonic Corporation common shareholders computation for the three months ended December 31, 2009 and 2008 are as follows:

 

     Yen (millions)  
     Three months ended December 31  
     2009    2008  

Net income (loss) attributable to Panasonic Corporation common shareholders

   32,259    (63,116
     Number of shares  
     Three months ended December 31  
     2009    2008  

Average common shares outstanding

   2,070,619,530    2,070,776,256   
     Yen  
     Three months ended December 31  
     2009    2008  

Net income (loss) per share attributable to Panasonic Corporation common shareholders:

     

Basic

   15.58    (30.48

Diluted

   —      —     

 

Diluted net income per share attributable to Panasonic Corporation common shareholders for the nine months and three months ended December 31, 2009, and for the three months ended December 31, 2008 has been omitted because the Company did not have potentially dilutive common shares that were outstanding for the period.

 

(10) Cash Dividends

 

On May 15, 2009, the board of directors approved a year-end dividend of 7.5 yen per share, totaling 15,530 million yen on outstanding common stock as of March 31, 2009. The dividends, which became effective on June 1, 2009, were sourced out of retained earnings.

 

On October 30, 2009, the board of directors approved an interim dividend of 5 yen per share, totaling 10,353 million yen on outstanding common stock as of September 30, 2009. The dividends, which became effective on November 30, 2009, were sourced out of retained earnings.


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- 30 -

 

(11) Equity

 

The change in the carrying amount of Panasonic Corporation shareholders’ equity, noncontrolling interests and total equity in the consolidated balance sheets for the nine months ended December 31, 2009 and 2008 are as follows:

 

     Yen (millions)  
   Nine months ended December 31, 2009  
   Panasonic Corporation
shareholders’ equity
    Noncontrolling
interests
    Total equity  

Balance at April 1, 2009

   2,783,980      428,601      3,212,581   

Dividends paid to Panasonic Corporation shareholders

   (25,883   —        (25,883

Dividends paid to noncontrolling interests

   —        (12,146   (12,146

Repurchase of common stock

   (54   —        (54

Sale of treasury stock

   21      —        21   

Purchase of shares of previously consolidated subsidiaries

   (8,139   (2,746   (10,885

Purchase of shares of a newly consolidated subsidiary

   —        532,360      532,360   

Other

   —        454      454   

Comprehensive income (loss):

      

Net income (loss)

   (14,609   (1,868   (16,477

Other comprehensive income (loss), net of tax:

      

Translation adjustments

   (22,467   (3,558   (26,025

Unrealized holding gains (losses) of available-for-sale securities

   45,105      1,075      46,180   

Unrealized holding gains (losses) of derivative instruments

   5,295      60      5,355   

Pension liability adjustments

   (19   (1,758   (1,777
                  

Total comprehensive income (loss)

   13,305      (6,049   7,256   
                  

Balance at December 31, 2009

   2,763,230      940,474      3,703,704   
                  


Table of Contents

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     Yen (millions)  
     Nine months ended December 31, 2008  
     Panasonic Corporation
shareholders’ equity
    Noncontrolling
interests
    Total equity  

Balance at April 1, 2008, prior to adjustment

   3,742,329      514,620      4,256,949   

Effects of changing the pension plan measurement date pursuant to the provisions of ASC 715, net of tax

   (77,298   (3   (77,301
                  

Balance at April 1, 2008, as adjusted

   3,665,031      514,617      4,179,648   

Dividends paid to Panasonic Corporation shareholders

   (83,364   —        (83,364

Dividends paid to noncontrolling interests

   —        (18,683   (18,683

Repurchase of common stock

   (72,351   —        (72,351

Sale of treasury stock

   569      —        569   

Purchase of shares of previously consolidated subsidiaries

   —        (2,040   (2,040

Other

   1      181      182   

Comprehensive income (loss):

      

Net income (loss)

   65,376      (13,538   51,838   

Other comprehensive income (loss), net of tax:

      

Translation adjustments

   (159,256   (21,089   (180,345

Unrealized holding gains (losses) of available-for-sale securities

   (100,246   (2,551   (102,797

Unrealized holding gains (losses) of derivative instruments

   (4,878   (55   (4,933

Pension liability adjustments

   2,406      527      2,933   
                  

Total comprehensive income (loss)

   (196,598   (36,706   (233,304
                  

Balance at December 31, 2008

   3,313,288      457,369      3,770,657   
                  

 

On April 1, 2008, the Company adopted the provisions of ASC 715, “Compensation—Retirement Benefits” regarding the change in the measurement date of postretirement benefit plans. In conformity with the provisions, the Company and certain subsidiaries changed the measurement date to March 31 for those postretirement benefit plans with a December 31 measurement date. With the change in the measurement date, beginning balance of Panasonic Corporation shareholders’ equity and noncontrolling interests at April 1, 2008 has been adjusted.

 

Comprehensive income (loss) for the three months ended December 31, 2009 and 2008 amounted to an income of 78,956 million yen and a loss of 367,589 million yen, respectively. Comprehensive income (loss) for the three months ended December 31, 2009 and 2008 includes “Net income (loss)” in the amount of an income of 34,799 million yen and a loss of 88,758 million yen, and increases (decreases) in “Accumulated other comprehensive income (loss)” totaled an increase of 44,157 million yen and a decrease of 278,831 million yen, respectively.


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(12) Supplementary Information

 

Included in other deductions for the nine months and three months ended December 31, 2009 and 2008 are as follows:

 

     Yen (millions)  
     Nine months ended December 31  
             2009                    2008          

Expenses associated with the implementation of the early retirement programs in the domestic and overseas subsidiaries

   24,436    2,493   

Write-down of investment securities

   6,074    19,449   

Foreign exchange losses

   6,420    4,496   
     Yen (millions)  
     Three months ended December 31  
     2009    2008  

Expenses associated with the implementation of the early retirement programs in the domestic and overseas subsidiaries

   1,742    1,900   

Write-down of investment securities

   3,215    1,701   

Foreign exchange losses (gains)

   1,230    (5,929

 

Net periodic benefit cost for the nine months ended December 31, 2009 and 2008 are 53,338 million yen and 33,240 million yen, respectively. Net periodic benefit cost for the three months ended December 31, 2009 and 2008 are 17,468 million yen and 11,080 million yen, respectively.

 

210,000 million yen of short-term bonds, which were newly issued during the nine months ended December 31, 2009, are included in short-term debt, including current portion of long-term debt in the consolidated balance sheets as of December 31, 2009.


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(13) Derivatives and Hedging Activities

 

The Company operates internationally, giving rise to significant exposure to market risks arising from changes in foreign exchange rates and commodity prices. The Company assesses these risks by continually monitoring changes in these exposures and by evaluating hedging opportunities. Derivative financial instruments utilized by the Company to hedge these risks are comprised principally of foreign exchange contracts, cross currency swaps and commodity derivatives. The Company does not hold or issue derivative financial instruments for trading purpose.

 

The Company accounts for derivative instruments in accordance with ASC 815, “Derivatives and Hedging.” Amounts included in accumulated other comprehensive income (loss) at December 31, 2009 are expected to be recognized in earnings principally over the next twelve months. The maximum term over which the Company is hedging exposures to the variability of cash flows for foreign currency exchange risk is approximately five months.

 

The Company is exposed to credit risk in the event of non-performance by counterparties to the derivative contracts, but such risk is considered mitigated by the high credit rating of the counterparties.


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The fair values of derivative instruments at December 31, 2009 are as follows:

 

    

Yen (millions)

 
    

Asset derivatives

  

Liability derivatives

 
    

Consolidated balance

sheet location

   Fair
value
  

Consolidated balance

sheet location

   Fair
value
 

Derivatives designated as hedging instruments under ASC 815:

           

Foreign exchange contracts

   Other current assets    904    Other current liabilities    (862

Commodity futures

   Other current assets    8,010    Other current liabilities    (5,072
                 

Total derivatives designated as
hedging instruments under
ASC 815

      8,914       (5,934
                 

Derivatives not designated as hedging
instruments under ASC 815:

           

Foreign exchange contracts

   Other current assets    3,429    Other current liabilities    (268

Cross currency swaps

   Other current assets    1,568    —      —     

Commodity futures

   Other current assets    916    Other current liabilities    (916
                 

Total derivatives not designated as
hedging instruments under
ASC 815

      5,913       (1,184
                 

Total derivatives

      14,827       (7,118
                 


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The fair values of derivative instruments at March 31, 2009 are as follows:

 

    

Yen (millions)

 
    

Asset derivatives

  

Liability derivatives

 
    

Consolidated balance
sheet location

   Fair
value
  

Consolidated balance

sheet location

   Fair
value
 

Derivatives designated as hedging instruments under ASC 815:

           

Foreign exchange contracts

   Other current assets    2,299    Other current liabilities    (9,094

Cross currency swaps

   Other current assets    275    —      —     

Commodity futures

   Other current assets    9,285    Other current liabilities    (53,050
                 

Total derivatives designated as hedging instruments under ASC 815

      11,859       (62,144
                 

Derivatives not designated as hedging instruments under ASC 815:

           

Foreign exchange contracts

   Other current assets    204    Other current liabilities    (808

Cross currency swaps

   Other current assets    1,260    —      —     

Commodity futures

   Other current assets    4,670    Other current liabilities    (4,670
                 

Total derivatives not designated as hedging instruments under ASC 815

      6,134       (5,478
                 

Total derivatives

      17,993       (67,622
                 


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The effect of derivative instruments on the consolidated statement of operations for the nine months ended December 31, 2009 is as follows:

 

Yen (millions)

Derivatives in ASC 815 fair value

hedging relationships

 

Location of gain (loss) recognized in

operations on derivative

 

Amount of gain (loss) recognized in

operations on derivative

Commodity futures

  Other income (deductions)   36,264
     

Total

    36,264
     

 

Yen (millions)

 

Derivatives in ASC

815 cash flow

hedging relationships

   Amount of gain (loss)
recognized in OCI on
derivative
(effective portion)
   

Location of gain (loss)

reclassified from

accumulated OCI

into operations

(effective portion)

   Amount of gain (loss)
reclassified from
accumulated OCI
into operations
(effective portion)
 

Foreign exchange contracts

   1,541      Other income (deductions)    (3,690

Cross currency swaps

   (291   Other income (deductions)    (16

Commodity futures

   3,359      Cost of sales    (498
               

Total

   4,609         (4,204
               

 

Yen (millions)

 

Derivatives in ASC

815 cash flow

hedging relationships

  

Location of gain (loss) recognized in

operations on derivative

(ineffective portion and amount excluded

from effectiveness testing)

   Amount of gain (loss) recognized in
operations on derivative
(ineffective portion and amount excluded from
effectiveness testing)
 

Foreign exchange contracts

   Other income (deductions)    1,166   

Cross currency swaps

   —      —     

Commodity futures

   —      —     
         

Total

      1,166   
         

Yen (millions)

 

Derivatives not designated

as hedging instruments

under ASC 815

  

Location of gain (loss)

recognized in operations

on derivative

   Amount of gain (loss)
recognized in operations
on derivative
 

Foreign exchange contracts

   Other income (deductions)    (7,561

Cross currency swaps

   Other income (deductions)    308   

Commodity futures

   Other income (deductions)    0   
         

Total

      (7,253
         


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The effect of derivative instruments on the consolidated statement of operations for the three months ended December 31, 2009 is as follows:

 

Yen (millions)

Derivatives in ASC 815 fair value

hedging relationships

 

Location of gain (loss) recognized in

operations on derivative

 

Amount of gain (loss) recognized in
operations on derivative

Commodity futures

  Other income (deductions)   13,521
     

Total

    13,521
     

 

Yen (millions)

Derivatives in ASC

815 cash flow

hedging relationships

   Amount of gain (loss)
recognized in OCI on
derivative
(effective portion)
   

Location of gain (loss)

reclassified from

accumulated OCI

into operations

(effective portion)

   Amount of gain (loss)
reclassified from
accumulated OCI
into operations
(effective portion)

Foreign exchange contracts

   (1,451   Other income (deductions)    2,082

Cross currency swaps

   —        —      —  

Commodity futures

   603      Cost of sales    522
             

Total

   (848      2,604
             

 

Yen (millions)

Derivatives in ASC

815 cash flow

hedging relationships

  

Location of gain (loss) recognized in

operations on derivative

(ineffective portion and amount excluded

from effectiveness testing)

   Amount of gain (loss) recognized in
operations on derivative
(ineffective portion and amount excluded
from effectiveness testing)

Foreign exchange contracts

   Other income (deductions)    532

Cross currency swaps

   —      —  

Commodity futures

   —      —  
       

Total

      532
       

Yen (millions)

Derivatives not designated

as hedging instruments

under ASC 815

  

Location of gain (loss)
recognized in operations

on derivative

   Amount of gain (loss)
recognized in operations
on derivative

Foreign exchange contracts

   Other income (deductions)    1,159

Cross currency swaps

   Other income (deductions)    955

Commodity futures

   Other income (deductions)    0
       

Total

      2,114
       


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(14) Fair Value

 

The following methods and assumptions were used to estimate the fair value of each class of financial instruments for which it is practicable to estimate that value:

 

Cash and cash equivalents, Time deposits, Trade receivables, Short-term debt, Trade payables, Accrued expenses

 

The carrying amount approximates fair value because of the short maturity of these instruments.

 

Short-term investments

 

The fair value of short-term investments is estimated based on quoted market prices.

 

Investments and advances

 

The fair value of investments and advances is estimated based on quoted market prices or the present value of future cash flows using appropriate current discount rates.

 

Long-term debt, including current portion

 

The fair value of long-term debt is estimated based on quoted market prices or the present value of future cash flows using appropriate current discount rates.


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- 39 -

 

Derivative financial instruments

 

The fair value of derivative financial instruments, all of which are used for hedging purposes, are estimated by obtaining quotes from brokers.

 

The estimated fair values of financial instruments, all of which are held or issued for purposes other than trading, at December 31 and March 31, 2009 are as follows:

 

     Yen (millions)  
     December 31, 2009     March 31, 2009  
     Carrying
amount
    Fair
value
    Carrying
amount
    Fair
value
 

Non-derivatives:

        

Assets:

        

Short-term investments

   6,560      6,560      1,998      1,998   

Other investments and advances

   500,696      501,004      424,237      423,223   

Liabilities:

        

Long-term debt, including current portion

   (1,218,756   (1,237,636   (697,653   (698,502

Derivatives:

        

Other current assets:

        

Forward:

        

To sell foreign currencies

   1,764      1,764      —        —     

To buy foreign currencies

   2,569      2,569      2,503      2,503   

Cross currency swaps

   1,568      1,568      1,535      1,535   

Commodity futures:

        

To sell commodity

   44      44      13,955      13,955   

To buy commodity

   8,882      8,882      —        —     

Other current liabilities:

        

Forward:

        

To sell foreign currencies

   (4   (4   (9,902   (9,902

To buy foreign currencies

   (1,126   (1,126   —        —     

Cross currency swaps

   —        —        —        —     

Commodity futures:

        

To sell commodity

   (5,988   (5,988   —        —     

To buy commodity

   —        —        (57,720   (57,720


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Limitations

 

Fair value estimates are made at a specific point in time, based on relevant market information and information about the financial instruments. These estimates are subjective in nature and involve uncertainties and matters of significant judgments and therefore cannot be determined with precision. Changes in assumptions could significantly affect the estimates.

 

ASC 820 defines fair value and establishes a fair value hierarchy that prioritizes the inputs to valuation techniques used to measure fair value. The three levels of the fair value hierarchy are as follows:

 

Level 1 —    Quoted prices (unadjusted) in active markets for identical assets.
Level 2 —    Quoted prices for similar assets or liabilities in active markets, quoted prices for identical or similar assets or liabilities in markets that are not active, inputs other than quoted prices that are observable, and inputs that are derived principally from or corroborated by observable market data by correlation or other means.
Level 3 —    Unobservable inputs for the asset or liability.

 

The following table presents assets and liabilities that are measured at fair value on a recurring basis at December 31 and March 31, 2009:

 

     Yen (millions)  
     December 31, 2009  
     Level 1     Level 2     Level 3    Total  

Assets:

         

Available-for-sale securities:

         

Equity securities

   373,752      —        —      373,752   

Bonds

   —        11,074      —      11,074   

Other debt securities

   —        566      —      566   

Derivatives

   8,926      5,901      —      14,827   
                       

Total

   382,678      17,541      —      400,219   
                       

Liabilities:

         

Derivatives

   (5,072   (2,046   —      (7,118
                       

Total

   (5,072   (2,046   —      (7,118
                       


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- 41 -

 

     Yen (millions)  
     March 31, 2009  
     Level 1     Level 2     Level 3    Total  

Assets:

         

Available-for-sale securities:

         

Equity securities

   284,356      —        —      284,356   

Bonds

   —        6,393      —      6,393   

Other debt securities

   —        5,515      —      5,515   

Derivatives

   9,285      8,708      —      17,993   
                       

Total

   293,641      20,616      —      314,257   
                       

Liabilities:

         

Derivatives

   (57,720   (9,902   —      (67,622
                       

Total

   (57,720   (9,902   —      (67,622
                       

 

The Company’s existing marketable equity securities and commodity futures are included in Level 1, which are valued using an unadjusted quoted market price in active markets with sufficient volume and frequency of transactions. Level 2 available-for-sale securities include all debt securities, which are valued using inputs other than quoted prices that are observable. Foreign exchange contracts and commodity futures included in Level 2 derivatives are valued using quotes obtained from brokers, which are periodically validated by pricing models using observable market inputs, such as foreign currency exchange rates and interest rates.


Table of Contents

- 42 -

 

The following table presents assets and liabilities that are measured at fair value on a nonrecurring basis for the nine months and three months ended December 31, 2009:

 

     Yen (millions)
     Nine months ended December 31, 2009
     Total gains
(losses)
    Fair value
       Level 1    Level 2    Level 3    Total

Assets:

             

Investments in associated companies

   (3,203   1,058    —      0    1,058

Long-lived assets

   (19,105   —      —      1,832    1,832
     Yen (millions)
     Three months ended December 31, 2009
     Total gains
(losses)
    Fair value
       Level 1    Level 2    Level 3    Total

Assets:

             

Investments in associated companies

   (1,052   1,058    —      —      1,058

Long-lived assets

   (11,546   —      —      112    112

 

The Company classified most of assets described above in Level 3 as the Company used unobservable inputs to value these assets when recognizing impairment losses related to the assets. The fair value for the major assets was measured through estimated future cash flows. The Company classified certain investments in Level 1 as the Company used an unadjusted quoted market price in active markets as valuation inputs.


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(15) Commitments and Contingent Liabilities

 

The Company provides guarantees to third parties mainly on bank loans provided to associated companies and customers. The guarantees are made to enhance their credit. For each guarantee provided, the Company is required to perform under the guarantee if the guaranteed party defaults on a payment. Also the Company sold certain trade receivables to independent third parties, some of which are with recourse. If the collectibility of those receivables with recourse becomes doubtful, the Company is obligated to assume the liabilities. At December 31, 2009, the maximum amount of undiscounted payments the Company would have to make in the event of default is 56,385 million yen. The carrying amount of the liabilities recognized for the Company’s obligations as a guarantor under those guarantees at December 31 and March 31, 2009 was insignificant.

 

In connection with the sale and lease back of certain machinery and equipment, the Company guarantees a specific value of the leased assets. For each guarantee provided, the Company is required to perform under the guarantee if certain conditions are met during or at the end of the lease term. At December 31, 2009, the maximum amount of undiscounted payments the Company would have to make in the event that these conditions are met is 32,903 million yen. The carrying amount of the liabilities recognized for the Company’s obligations as guarantors under those guarantees at December 31 and March 31, 2009 was insignificant.

 

There are a number of legal actions against the Company and certain subsidiaries. Management is of the opinion that damages, if any, resulting from these actions will not have a material effect on the Company’s consolidated financial statements.

 

(16) Segment Information

 

In accordance with ASC 280, “Segment Reporting,” the segments reported below are the components of the Company for which separate financial information is available that is evaluated regularly by the chief operating decision maker of the Company in deciding how to allocate resources and in assessing performance.

 

Business segments correspond to categories of activity classified primarily by markets, products and brand names. “Digital AVC Networks” includes video and audio equipment, and information and communications equipment. “Home Appliances” includes household equipment. “PEW and PanaHome” includes electrical supplies, electric products, building materials and equipment, and housing business. “Components and Devices” includes electronic components, semiconductors, electric motors and batteries. “Other” includes electronic-parts-mounting machines, industrial robots and industrial equipment. The operating results of “SANYO” are not included in the segment information below.


Table of Contents

- 44 -

 

By Business Segment

 

Information by business segment for the nine months ended December 31, 2009 and 2008 is shown in the tables below:

 

     Yen (millions)  
     Nine months ended December 31  
             2009                     2008          

Sales:

    

Digital AVC Networks:

    

Customers

   2,547,466      3,006,051   

Intersegment

   30,699      34,138   
            

Total

   2,578,165      3,040,189   

Home Appliances:

    

Customers

   717,547      811,547   

Intersegment

   139,088      166,002   
            

Total

   856,635      977,549   

PEW and PanaHome:

    

Customers

   1,147,071      1,324,516   

Intersegment

   37,310      36,899   
            

Total

   1,184,381      1,361,415   

Components and Devices:

    

Customers

   530,208      655,348   

Intersegment

   226,571      293,123   
            

Total

   756,779      948,471   

Other:

    

Customers

   277,592      426,189   

Intersegment

   400,167      394,851   
            

Total

   677,759      821,040   

Eliminations

   (833,835   (925,013
            

Consolidated total

   5,219,884      6,223,651   
            

 

 


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- 45 -

 

     Yen (millions)  
     Nine months ended December 31  
             2009                     2008          

Segment profit:

    

Digital AVC Networks

   52,929      97,939   

Home Appliances

   59,655      65,072   

PEW and PanaHome

   21,627      46,145   

Components and Devices

   21,198      53,958   

Other

   8,262      28,888   

Corporate and eliminations

   (33,807   (37,486
            

Total segment profit

   129,864      254,516   
            

Interest income

   8,876      20,684   

Dividends received

   6,183      10,847   

Other income

   30,567      42,424   

Interest expense

   (16,545   (16,349

Other deductions

   (104,303   (167,966
            

Consolidated income before income taxes

   54,642      144,156   
            

 

Corporate expenses include certain corporate R&D expenditures and general corporate expenses.


Table of Contents

- 46 -

 

Information by business segment for the three months ended December 31, 2009 and 2008 is shown in the tables below:

 

     Yen (millions)  
     Three months ended December 31  
             2009                     2008          

Sales:

    

Digital AVC Networks:

    

Customers

   963,452      926,409   

Intersegment

   10,643      10,843   
            

Total

   974,095      937,252   

Home Appliances:

    

Customers

   244,200      235,877   

Intersegment

   45,333      56,160   
            

Total

   289,533      292,037   

PEW and PanaHome:

    

Customers

   396,030      420,720   

Intersegment

   14,627      12,032   
            

Total

   410,657      432,752   

Components and Devices:

    

Customers

   184,459      185,899   

Intersegment

   81,188      92,390   
            

Total

   265,647      278,289   

Other:

    

Customers

   98,447      111,035   

Intersegment

   133,216      111,370   
            

Total

   231,663      222,405   

Eliminations

   (285,007   (282,795
            

Consolidated total

   1,886,588      1,879,940   
            

 

 


Table of Contents

- 47 -

 

     Yen (millions)  
     Three months ended December 31  
             2009                     2008          

Segment profit (loss):

    

Digital AVC Networks

   40,181      (4,863

Home Appliances

   30,703      18,157   

PEW and PanaHome

   17,453      10,361   

Components and Devices

   19,855      4,983   

Other

   6,131      89   

Corporate and eliminations

   (13,316   (2,365
            

Total segment profit

   101,007      26,362   
            

Interest income

   2,832      5,939   

Dividends received

   2,080      4,616   

Other income

   13,964      19,078   

Interest expense

   (4,979   (5,035

Other deductions

   (33,809   (110,100
            

Consolidated income (loss) before income taxes

   81,095      (59,140
            

 

Corporate expenses include certain corporate R&D expenditures and general corporate expenses.

 

 


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By Geographical Area

 

Sales attributed to countries based upon the customer’s location for the nine months ended December 31, 2009 and 2008 are as follows:

 

     Yen (millions)
     Nine months ended December 31
             2009                    2008        

Sales:

     

Japan

   2,780,897    3,134,067

North and South America

   675,034    840,670

Europe

   581,862    805,437

Asia and Others

   1,182,091    1,443,477
         

Consolidated total

   5,219,884    6,223,651
         

United States included in North and South America

   574,672    718,537

China included in Asia and Others

   562,886    713,128


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Sales attributed to countries based upon the customer’s location for the three months ended December 31, 2009 and 2008 are as follows:

 

     Yen (millions)
     Three months ended December 31
             2009                    2008        

Sales:

     

Japan

   1,004,850    1,023,420

North and South America

   250,452    256,055

Europe

   228,767    230,090

Asia and Others

   402,519    370,375
         

Consolidated total

   1,886,588    1,879,940
         

United States included in North and South America

   209,617    220,826

China included in Asia and Others

   186,736    180,838

 

There are no individually material countries of which should be separately disclosed in North and South America, Europe, and Asia and Others, except for the United States of America and China. Transfers between business segments or geographic segments are made at arms-length prices. There are no sales to a single external major customer.


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- 50 -

 

The following information shows sales and geographical profit which are attributed to geographic areas based on the country location of the Company or its subsidiaries for the nine months and three months ended December 31, 2009 and 2008. In addition to the disclosure requirements under ASC 280, the Company discloses this information as supplemental information in light of the disclosure requirements of the Japanese Financial Instruments and Exchange Law, which a Japanese public company is subject to:

 

     Yen (millions)  
     Nine months ended December 31  
             2009                     2008          

Sales:

    

Japan:

    

Customers

   2,977,935      3,436,462   

Intersegment

   1,107,805      1,366,838   
            

Total

   4,085,740      4,803,300   

North and South America:

    

Customers

   648,380      798,976   

Intersegment

   11,082      15,824   
            

Total

   659,462      814,800   

Europe:

    

Customers

   563,982      780,490   

Intersegment

   12,115      33,038   
            

Total

   576,097      813,528   

Asia and Others:

    

Customers

   1,029,587      1,207,723   

Intersegment

   701,420      821,995   
            

Total

   1,731,007      2,029,718   

Eliminations

   (1,832,422   (2,237,695
            

Consolidated total

   5,219,884      6,223,651   
            

Geographical profit (loss):

    

Japan

   95,590      204,046   

North and South America

   8,214      4,750   

Europe

   (22,050   (7,960

Asia and Others

   79,674      87,074   

Corporate and eliminations

   (31,564   (33,394
            

Consolidated total

   129,864      254,516   
            


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     Yen (millions)  
     Three months ended December 31  
             2009                     2008          

Sales:

    

Japan:

    

Customers

   1,068,930      1,105,717   

Intersegment

   377,960      372,782   
            

Total

   1,446,890      1,478,499   

North and South America:

    

Customers

   241,184      245,690   

Intersegment

   4,051      4,557   
            

Total

   245,235      250,247   

Europe:

    

Customers

   223,316      222,362   

Intersegment

   5,481      7,136   
            

Total

   228,797      229,498   

Asia and Others:

    

Customers

   353,158      306,171   

Intersegment

   228,679      226,308   
            

Total

   581,837      532,479   

Eliminations

   (616,171   (610,783
            

Consolidated total

   1,886,588      1,879,940   
            

Geographical profit (loss):

    

Japan

   81,809      11,179   

North and South America

   1,234      (6,657

Europe

   (3,171   (5,720

Asia and Others

   32,765      14,455   

Corporate and eliminations

   (11,630   13,105   
            

Consolidated total

   101,007      26,362   
            


Table of Contents

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By Business Field

 

In a phase of further growth for global excellence, the Company discloses three business fields in order to further clarify its business fields for investors. This represents a voluntary and supplementary disclosure by the Company to further enhance readers’ understanding of the Company’s strategy, financial condition and results of operations. This disclosure is not intended to substitute for the segment disclosures as required by ASC 280. The business fields are comprised of the Company’s five segments as follows:

 

Business fields

  

Business segments

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

 

     Yen (millions)  
     Nine months ended December 31  
             2009                     2008          

Sales:

    

Digital AVC Networks Solution:

    

Digital AVC Networks

   2,578,165      3,040,189   
            

Total

   2,578,165      3,040,189   

Solutions for the Environment and Comfortable Living:

    

Home Appliances

   856,635      977,549   

PEW and PanaHome

   1,184,381      1,361,415   
            

Total

   2,041,016      2,338,964   

Devices and Industry Solution:

    

Components and Devices

   756,779      948,471   

Other

   677,759      821,040   
            

Total

   1,434,538      1,769,511   

Eliminations

   (833,835   (925,013
            

Consolidated total

   5,219,884      6,223,651   
            

Profit (loss) by business field:

    

Digital AVC Networks Solution:

    

Digital AVC Networks

   52,929      97,939   
            

Total

   52,929      97,939   

Solutions for the Environment and Comfortable Living:

    

Home Appliances

   59,655      65,072   

PEW and PanaHome

   21,627      46,145   
            

Total

   81,282      111,217   

Devices and Industry Solution:

    

Components and Devices

   21,198      53,958   

Other

   8,262      28,888   
            

Total

   29,460      82,846   

Corporate and eliminations

   (33,807   (37,486
            

Consolidated total

   129,864      254,516   
            

 

 


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      Yen (millions)  
      Three months ended December 31  
      2009     2008  

Sales:

    

Digital AVC Networks Solution:

    

Digital AVC Networks

   974,095      937,252   
            

Total

   974,095      937,252   

Solutions for the Environment and Comfortable Living:

    

Home Appliances

   289,533      292,037   

PEW and PanaHome

   410,657      432,752   
            

Total

   700,190      724,789   

Devices and Industry Solution:

    

Components and Devices

   265,647      278,289   

Other

   231,663      222,405   
            

Total

   497,310      500,694   

Eliminations

   (285,007   (282,795
            

Consolidated total

   1,886,588      1,879,940   
            

Profit (loss) by business field:

    

Digital AVC Networks Solution:

    

Digital AVC Networks

   40,181      (4,863
            

Total

   40,181      (4,863

Solutions for the Environment and Comfortable Living:

    

Home Appliances

   30,703      18,157   

PEW and PanaHome

   17,453      10,361   
            

Total

   48,156      28,518   

Devices and Industry Solution:

    

Components and Devices

   19,855      4,983   

Other

   6,131      89   
            

Total

   25,986      5,072   

Corporate and eliminations

   (13,316   (2,365
            

Consolidated total

   101,007      26,362