Fiscal 2008 Third Quarter Financial Results (ended December 2007) Q&A Summary

<Financial Results>
Q How does Matsushita evaluate the latest nine-month results of fiscal 2008, the first year of the mid-term management plan GP3?
A With regard to the nine-month results, negative effects from price declines mainly in digital products were offset by rationalization and reduction of fixed costs, and an increase in sales boosted overall profits. In addition, there are signs of progress in the phase change towards growth, including double-digit growth of overseas sales in white goods.
Q Why did the fiscal 2008 full-year financial forecast remain unchanged?
A Matsushita did not change the full-year financial forecast in consideration of the downturns of consumer spending in the U.S., a delay in housing construction starts in Japan and rising prices for raw materials. The announced forecast of operating profit is expected to be achieved. Regarding this as the minimum target, Matsushita aims to achieve the internal target of 500 billion yen.
Q Please tell us the reason why sales growth in Japan and the U.S. was slow, compared with double-digit sales growth in Europe, China and Asia. What initiatives will Matsushita take to increase sales in Japan and the U.S.?
A In Japan, sales of MEW and PanaHome were largely influenced by the delay in housing construction starts. Sales of audio and video equipment and optical disc drives for PCs were also sluggish. However, housing construction starts is expected to recover gradually from the fourth quarter. Sales of video equipment is also expected to improve with favorable sales of new HD camcorders, although it is expected to take a little while for the recovery in sales of optical disc drives for PCs. In the U.S., Matsushita made big changes in its sales organizational structure in the third quarter, and has placed importance on local mass retailers, as well as nationwide mass retailers. Matsushita also expanded its sales channels to Wal-Mart and Target. In addition to the current campaigns of plasma TVs, Matsushita newly adopted tie-up campaigns with digital cameras and blu-ray disc players. Furthermore, Matsushita changed the advertising policy from a standard style throughout the U.S. to a tailored approach with each business partner. At the same time, Matsushita actively carried out local-oriented marketing tailored to regional characteristics, including Plasma Roadshow. These and other efforts are gradually leading to favorable results, thereby improving sales from the third quarter in the U.S.
Q What products boosted overall profits for the third quarter and the nine months, respectively?
A Operating profit to sales ratio exceeded 7% in the three segments: AVC Networks, Home Appliances, and Components and Devices. In these three segments, favorable sales were recorded particularly in TVs, digital cameras and DVDs; air conditioners, washing machines and compressors; and general electronic components, respectively.
Q How does Matsushita plan to achieve the target of improving return on equity (ROE) to 8% in the next fiscal year?
A Business domains will strive to improve Capital Cost Management (CCM) by enhancing profitability and improving asset turnover ratio. Meanwhile, the Corporate Head Office will strive to increase interest income, while improving effective tax rates.
<Flat-panel TVs>
Q Does Matsushita have any plans to change the full-year sales forecast for flat-panel TVs (consisting of 5 million units of plasma TVs and 4 million units of LCD TVs)?
A In the U.S., sales of plasma TVs for the first half were lower by approximately 500 thousand units compared with the original plan, due mainly to the delay in the introduction of full-HD models to July 2007. However, Matsushita completed the full-model lineups by late September, and sales in the second fiscal half have been favorable to date. Since Matsushita puts more emphasis on profitability than on improving the sales volume by reducing prices, sales of plasma TVs could be just under 5 million units. Meanwhile, sales volume of LCD TVs may be 10 to 15% less than the forecast, due mainly to the difficulty in the procurement of LCD panels. With regard to sales amounts, however, sales of flat-panel TVs totaled 708.4 billion yen for the nine-month period, and are expected to exceed 900 billion yen for the full fiscal year, compared with the initial forecast of 884 billion yen.
Q How much is the growth rate of plasma TVs by region?
A In Japan, the sales amount of plasma TVs slightly decreased, while the sales volume was approximately 1.2 times that of the previous year. Overseas, compared with the previous year's results the sales amounts were approximately 1.1 times in the U.S., 2.1 times in Middle and South America, 1.4 times in Europe, 1.5 times in Asia, and double the amount in China,.
Q What are the reasons for the recovery in sales of flat-panel TVs in the U.S.?
A Particularly in the U.S. there has been an increasing demand for larger-sized screen TVs. 50-inch and larger models account for approximately 46% of Matsushita's overall flat-panel TVs, while the industry average is approximately 21%. This led to an increase in profits. Matsushita will make further efforts in expanding the sales of 50-inch and larger models with high unit prices in order to achieve growth with higher profitability. Matsushita believes that its various initiatives to expand sales in the U.S. have also contributed to sales recovery.
Q It seems that procurement of panels for LCD TVs will remain difficult until the construction of the new plant in two years. What does Matsushita think about this?
A Although Matsushita intends to procure LCD panels mainly from IPS Alpha Technology, Ltd., as well as other companies.
Q What are the reasons for the sluggish growth in the sales volume of flat-panel TVs in Japan for the third quarter?
A Matsushita does not think that sales growth of flat-panel TVs is slowing down in Japan. The sales volume increased by approximately 20% from the previous year, maintaining the market share of approximately 30% in 37-inch and larger flat-panel TVs.
<Other>
Q Do the sales of high-end (high quality) products account for a large portion of overseas sales of white goods?
A In overseas markets, Matsushita is focusing on affluent customers, and strong sales are recorded mainly in high value-added products.
Q What is Matsushita's expectation of foreign exchange rates in the fourth quarter?
A Matsushita has already completed foreign exchange contracts at the rates of 112 yen per U.S. dollar [USD1 = JPY112], and 159 yen per euro [EUR1 = JPY159].
Q What are the reasons for the reduction in foreign-currency trading amounts in the U.S. dollar and euro?
A Matsushita is utilizing the exchange marry for foreign currency transactions, in which imports and exports are balanced out. By an increase in volume of imported materials or goods from overseas manufacturing companies, a larger portion of foreign currency trade amounts have been balanced out in this system. For the future, Matsushita aims to improve protection against exchange rate fluctuations.
Q From the effects of price hikes in raw materials, what is the weight of the effects of price hikes in crude oil?
A Matsushita's business performance is not very strongly influenced by price hikes in crude oil, however it is mainly influenced by price hikes in copper, nickel, and cobalt.
Disclaimer Regarding Forward-Looking Statements
  This Q&A 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 Matsushita and its Group companies (the Matsushita Group). To the extent that statements in this Q&A 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 Matsushita 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 Matsushita 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. Matsushita undertakes no obligation to publicly update any forward-looking statements after the date of this Q&A. Investors are advised to consult any further disclosures by Matsushita in its subsequent filings with the U.S. Securities and Exchange Commission pursuant to the Securities Exchange Act of 1934.
  The risks, uncertainties and other factors referred to above include, but are not limited to, economic conditions, particularly consumer spending and corporate capital expenditures in the United States, Europe, Japan, China and other Asian countries; volatility in demand for electronic equipment and components from business and industrial customers, as well as consumers in many product and geographical markets; currency rate fluctuations, notably between the yen, the U.S. dollar, the euro, the Chinese yuan, Asian currencies and other currencies in which the Matsushita Group operates businesses, or in which assets and liabilities of the Matsushita Group are denominated; the ability of the Matsushita 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 ability of the Matsushita Group to achieve its business objectives through joint ventures and other collaborative agreements with other companies; the ability of the Matsushita 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 Matsushita Group; the possibility that the Matsushita 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 Matsushita Group has holdings or changes in valuation of long-lived assets, including property, plant and equipment and goodwill, and deferred tax assets; future changes or revisions to accounting policies or accounting rules; as well as natural disasters including earthquakes and other events that may negatively impact business activities of the Matsushita Group. The factors listed above are not all-inclusive and further information is contained in Matsushita's latest annual report on Form 20-F, which is on file with the U.S. Securities and Exchange Commission.

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