Announcement of Financial Results:
Panasonic Reports Third-Quarter and Nine-Month Results

-Increased Business Restructuring Expenses Cause Net Loss;
Annual Forecast Revised Downward-

OSAKA, Japan--(BUSINESS WIRE)--Panasonic Corporation (NYSE:PC)(TOKYO:6752)("Panasonic") today reported its consolidated financial results for the third quarter and nine months ended December 31, 2011, of the current fiscal year ending March 31, 2012 (fiscal 2012).

"net income (loss) attributable to Panasonic Corporation"

Consolidated Third-quarter Results

Consolidated group sales for the third quarter decreased by 14% to 1,960.2 billion yen from 2,285.5 billion yen, compared with the same period a year ago. Of the consolidated group total, domestic sales amounted to 1,043.8 billion yen, down by 13% from 1,200.6 billion yen and overseas sales decreased to 916.4 billion yen, down by 16% from 1,084.9 billion yen.

Sales in the Japanese consumer electronics industry declined from the last fiscal year when there was rush demand as a result of the Japanese government's 'eco-point' stimulus package. Although there were signs of recovery with the normalization of the supply chain, which had been disrupted by the Great East Japan Earthquake, the Japanese economy as a whole was still severely affected by the shortage in electricity distribution after the disaster, the global economic slowdown, appreciation of the yen, and declining stock prices.

In the meantime, the global economy continued to slow down caused by the flooding in Thailand and the destabilization of the European finance market due to the government debt crisis, despite demand expansion in emerging markets including China.

In such a business environment, Panasonic has been working towards two themes, Paradigm Shift to Growth and Laying Foundations to be a Green Innovation Company, in the second year of its three-year midterm management plan called "Green Transformation 2012 (GT12)." This is the first step towards the 100th anniversary vision of becoming the "No.1 Green Innovation Company in the Electronics Industry."

Although the company pursued a streamlining program to reduce material and fixed costs, operating loss1 was 8.1 billion yen, compared with a profit of 95.3 billion yen a year ago. Pre-tax loss was 191.2 billion yen, compared with a profit of 82.7 billion yen a year ago. Net loss attributable to Panasonic Corporation amounted to 197.6 billion yen, compared with a profit of 40.0 billion yen a year ago.

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

Consolidated Nine-month Results

Consolidated group sales for nine months ended December 31, 2011 decreased by 10% to 5,965.4 billion yen, compared with 6,653.4 billion yen in the same period of fiscal 2011. Domestic sales amounted to 3,080.2 billion yen, down by 9% from 3,390.1 billion yen a year ago, while overseas sales decreased by 12% to 2,885.2 billion yen, down from 3,263.3 billion yen a year ago.

The company's operating profit for the nine months decreased to 39.5 billion yen, from 264.3 billion yen a year ago, due mainly to sales decline caused by the Great East Japan Earthquake and the flooding in Thailand. Price decline and appreciation of the yen also caused a decrease in profit. Pre-tax loss totaled 350.5 billion yen, compared with a pre-tax income of 227.3 billion yen a year ago, due mainly to the business restructuring expenses such as the implementation of early retirement programs and the impairment losses of fixed assets. Net income attributable to Panasonic Corporation turned to a loss of 333.8 billion yen from an income of 114.7 billion yen a year ago by incurring an adjustment to deferred tax assets and liabilities for changes in Japanese corporate tax rates as a provision for income taxes.

Consolidated Nine-month Breakdown by Business Segment

The company's nine-month consolidated sales and segment profit by business segment, compared with the amounts a year ago, are summarized as follows:

Digital AVC Networks

Sales decreased by 16% to 2,182.9 billion yen from 2,585.4 billion yen a year ago. Despite favorable sales of PCs, this result was due mainly to sales decline in flat-panel TVs and mobile phones. Segment loss amounted to 32.7 billion yen, compared with segment profit of 101.2 billion yen a year ago, due mainly to sales decrease and price decline.

Home Appliances

Sales increased by 1% to 979.2 billion yen, compared with 974.2 billion yen a year ago, due mainly to stable sales in air conditioners, washing machines and refrigerators. Segment profit was 78.6 billion yen, compared with 81.9 billion yen a year ago, due mainly to rising prices for raw materials.

PEW and PanaHome

Sales increased by 3% to 1,322.8 billion yen from 1,280.5 billion yen a year ago. Regarding Panasonic Electric Works Co., Ltd. (PEW) and its subsidiaries, sales growth in environmentally-conscious products including LED lightings as well as housing/building-related business contributed to the overall sales increase, although sales declined in devices such as electronic equipment and automation controls. For PanaHome Corporation and its subsidiaries, favorable sales of housing construction mainly for detached housing led to its overall sales increase, despite the signs of slowdown in the Japanese housing market after the fall of 2011. Segment profit was 50.4 billion yen, decreased from 54.0 billion yen a year ago, due mainly to price decline and rising prices in raw materials.

Components and Devices

Sales decreased by 15% to 609.6 billion yen, compared with 713.8 billion yen a year ago. This result was due mainly to sluggish sales in semiconductors as well as declines in sales of general components and batteries. Segment loss was 17.3 billion yen, compared with segment profit of 29.1 billion yen a year ago, due mainly to sales decrease and price decline.

SANYO

Sales decreased by 20% to 974.1 billion yen, compared with 1,223.0 billion yen a year ago. Although sales of solar photovoltaic systems and cold-chain equipments were stable, sales of electronic components, home appliances, digital cameras, and TVs were sluggish. Sales decline owing to the semiconductor business transfer in fiscal 2011 also led to the overall sales decrease. A 47.0 billion yen of segment loss was recorded, compared with a segment profit of 0.4 billion yen a year ago, influenced by sales decrease, after incurring the expenses such as amortization of intangible assets recorded at the acquisition.

Other

Sales totaled 776.9 billion yen, down by 6% from 822.9 billion yen a year ago, due mainly to sales decline in factory automation equipment as well as components for group companies in Panasonic. Segment profit amounted to 32.0 billion yen, compared with 35.2 billion yen a year ago, due mainly to sales decrease.

Consolidated Financial Condition

Net cash used in operating activities for nine months ended December 31, 2011 amounted to 38.2 billion yen, due to incurring net loss and decrease in trade payables. Net cash used in investing activities amounted to 199.7 billion yen. This was due mainly to capital expenditures, offsetting proceeds from disposition of investments and advances as well as disposals of property, plant and equipment. Net cash used in financing activities was 15.7 billion yen, due mainly to repayments of long-term debt including bond redemption and dividend payment, despite the issuance of short-term bonds. Taking into consideration the effect of exchange rate fluctuations, cash and cash equivalents totaled 685.9 billion yen as of December 31, 2011, a decrease of 289.0 billion yen, compared with the end of the last fiscal year.

The company's consolidated total assets as of December 31, 2011 decreased by 822.0 billion yen to 7,000.9 billion yen from the end of fiscal 2011. This was due mainly to the appreciation of the yen and a decrease in cash and cash equivalents. A decrease in property, plant and equipment, and other assets by incurring impairment losses also caused a decrease in total assets. The company's consolidated total liabilities amounted to 4,604.6 billion yen, attributable primarily to the appreciation of the yen and a decrease in account payables. Panasonic Corporation shareholders' equity decreased 226.5 billion yen to 2,332.5 billion yen as of December 31, 2011. Despite an increase of Panasonic shareholder's equity by share exchanges for acquisition of all shares of PEW and SANYO, this was primarily due to a decrease in retained earnings by incurring net loss attributable to Panasonic Corporation and deterioration in accumulated other comprehensive income. Noncontrolling interests decreased by 323.5 billion yen to 63.8 billion yen, due mainly to the share exchanges as stated above.

Outlook for Fiscal 2012

Regarding the annual forecast for fiscal 2012, the company revised its previous sales forecast of 8,300.0 billion yen downward to 8,000.0 billion yen because of significant sales declines in mainly digital products. The primary causes of this are the global economic slowdown and instability in the financial markets due to the European debt crisis, as well as the extensive supply chain disruption caused by the flooding in Thailand occurred in October 2011. Operating profit is expected to be 30.0 billion yen, a decrease from the previous forecast of 130.0 billion yen. Although the company carried out streamlining efforts rigorously in this extreme situation, it is not expected that the company will be able to offset the decline in sales. Pre-tax loss is forecast to be 820.0 billion yen, a deterioration from the previous forecast of a loss of 430.0 billion yen, owing primarily to anticipated additional business restructuring expenses of 250.0 billion yen including goodwill impairment, and a write-down of investment securities affected by the stock market slump. Net loss attributable to Panasonic Corporation is expected to be 780.0 billion yen, a deterioration from the previous forecast of a loss of 420.0 billion yen mainly as a result of incurring an adjustment to deferred tax assets and liabilities for changes in Japanese corporate tax rates. Net loss attributable to Panasonic Corporation, per share is anticipated to be 337.33 yen, compared with the previous forecast of a loss of 181.64 yen.

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