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Financial Results for Third Quarter and Nine Months of Fiscal 2009 (ended December 31, 2008) Q&A Summary

Q Please tell us how many employees does the Company plan to reduce in Japan and overseas, respectively.
A We plan to reduce 15,000 employees worldwide, half in Japan and half overseas. The number of employees to be reduced in Japan includes that of temporary employees.
Q Please tell us in detail about postponement of commencing mass production in IPS Alpha plant in Himeji (LCD), Japan and the fifth domestic PDP plant in Amagasaki.
A Commencement of mass production in Himeji plant was originally planned to be in January 2010, but it is postponed to July 2010. In Amagasaki plant, commencement of mass production was originally planned to be in May 2009, but it is postponed to January 2010.
Q Is there any change in capital and business alliance with SANYO Electric Co., Ltd. (SANYO)? When will Panasonic implement tender offer purchase?
A I cannot mention the details of specific businesses yet, but the batteries business, the growing business, is highly expected to create synergies. We have not changed our view of capital and business alliance with SANYO at all. Regarding implementation of tender offer purchase, we need to assure that it does not violate antitrust laws in advance. We have started to prepare for applying to respective authorities in 11 countries for approval. Panasonic will announce its progress by the end of this February.
Q In the former business restructuring in fiscal 2002, Panasonic removed the negative factors in a year and achieved a V-shaped recovery. This time, however, the outlook of the business environment is uncertain. Will you continue to implement further business restructuring?
A After fiscal 2002, Panasonic have, in principle, continued the business restructuring in each domain company, according to the management scale. We will continue to further implement business restructuring initiatives for the growth and development. However, business restructuring does not necessarily mean the reduction of employees. Panasonic will clarify growing businesses and the businesses to withdraw from, and streamline its manufacturing sites including the reassignment and reduction of the number of employees.
Q According to the revised forecast of financial results for fiscal 2009, operating loss in the fourth quarter is expected to be 190 billion yen. If the severe economic condition continues in the next fiscal year, operating loss is expected even with positive effects of business restructuring. Do you have a confidence in restoring profitability?
A In fact, operating loss of close to 200 billion yen is expected for the fourth quarter, mainly because of sales decrease. Changes in sales totaled 750 billion yen (100 billion yen in the third quarter and 650 billion yen in the fourth quarter.) from the revised forecast of financial results for fiscal 2009 announced on November 27, 2008. Sales decrease in B to B business occupies 60% of the total sales, amounting to 480 billion yen. We are going to make a plan for boosting profitability on condition that this situation continues in next fiscal year ahead. In consideration of the current severe sales condition as well as the effects of foreign exchange rates, we expect a decrease of 300 billion yen, in an operating profit basis, in the next fiscal year. In order to offset the negative effects, we expect 100 billion yen as an effect resulting from business restructuring expenses (345 billion yen.) Remaining 200 billion yen will be covered by cost reduction efforts such as restructuring initiatives, emergency countermeasures and cost reduction activities.
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 Panasonic and its Group companies (the Panasonic 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 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 Q&A. 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.
  The risks, uncertainties and other factors referred to above include, but are not limited to, economic conditions, particularly consumer spending and corporate capital expenditures in the United States, Europe, Japan, China and other Asian countries; volatility in demand for electronic equipment and components from business and industrial customers, as well as consumers in many product and geographical markets; currency rate fluctuations, notably between the yen, the U.S. dollar, the euro, the Chinese yuan, Asian currencies and other currencies in which the Panasonic Group operates businesses, or in which assets and liabilities of the Panasonic Group are denominated; the ability of the Panasonic Group to respond to rapid technological changes and changing consumer preferences with timely and cost-effective introductions of new products in markets that are highly competitive in terms of both price and technology; the possibility of not achieving expected results on the alliances or mergers and acquisitions; the ability of the Panasonic Group to achieve its business objectives through joint ventures and other collaborative agreements with other companies; the ability of the Panasonic Group to maintain competitive strength in many product and geographical areas; the possibility of incurring expenses resulting from any defects in products or services of the Panasonic Group; the possibility that the Panasonic Group may face intellectual property infringement claims by third parties; current and potential, direct and indirect restrictions imposed by other countries over trade, manufacturing, labor and operations; fluctuations in market prices of securities and other assets in which the Panasonic Group has holdings or changes in valuation of long-lived assets, including property, plant and equipment and good will, and deferred tax assets and uncertain tax positions; 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 Panasonic Group. The factors listed above are not all-inclusive and further information is contained in Panasonic latest annual report on Form 20-F, which is on file with the U.S. Securities and Exchange Commission.

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