Financial Announcements

• In view of employees' ever-diversifying attitudes toward work, Matsushita has introduced a Special Life Assistance Program for employees of the parent company and several principal subsidiaries in Japan. Under this program, the company provides an additional retirement allowance and other support to employees that choose early retirement for new careers outside of Matsushita. (Applicants for benefits under this Special Life Assistance Program totaled approximately 10,000.)
• Including employees participating in similar programs at other domestic subsidiaries, early retirees total approximately 13,000 persons, resulting in one-time expenses for the current fiscal year, ending March 31, 2002, of approximately 166 billion yen on a consolidated basis.
• As a consequence of this employment restructuring initiative, Matsushita currently expects a reduction of about 120 billion yen* in fixed costs for the next fiscal year, ending March 31, 2003 (fiscal 2003).

• In view of the current adverse business environment, beginning in April 2002, the company will reduce the monthly salaries of the Chairman and the President by 30%. Similarly, monthly salaries for all other Directors of the company will be reduced by 20%, and bonuses for all Directors will be eliminated.
• Furthermore, the company will cut the salaries of employees of manager level and above at the parent company and major subsidiaries in Japan by an average of some 15% in fiscal 2003.
• Mainly through such salary reductions, Matsushita expects to save some 50 billion yen* in personnel-related expenses during fiscal 2003.

• In order to maintain competitiveness and increase capital efficiency, the company will accelerate plans for the integration of several operating locations in Japan and overseas. This initiative is expected to result in an improvement in operating profit of approximately 25 billion yen* in fiscal 2003.
• Furthermore, through the unification of its liquid crystal display (LCD) business with that of Toshiba Corporation into a new joint venture company, Matsushita expects to improve operating profit by some 27 billion yen* in fiscal 2003.

• Manufacturing innovations: To enhance productivity, the company is promoting the introduction of the cell production method at its manufacturing locations.
• Inventory reduction: The company will strive to achieve a 10% reduction (compared with the end of fiscal 2002) in inventories by the end of fiscal 2003.
• Through these initiatives, the company forecasts a savings of approximately 15 billion yen* in fiscal 2003.

(1) Sweeping Business Structure Reforms

Matsushita aims to maximize overall corporate value by clarifying and reallocating responsibilities for groupwide subsidiaries and divisions, and implementing autonomously responsible management in the respective business domains.
The company has identified core business domains in each of the AVC Networks, Home Appliances, Industrial Equipment, and Components and Devices segments, and has begun laying the foundation for new growth strategies in each domain.
Actual business and organizational restructuring will be implemented through various projects on an ongoing basis, and in accordance with the following basic policies:

i)		Eliminate duplication of business lines and counterproductive competition within the Group.
ii)		Unify and concentrate R&D resources into strategic areas to achieve optimum results from a groupwide perspective.
iii)		Establish a totally integrated operational structure in each product domain, with full responsibility to customers for development, production and sales.

(2) Development and Promotion of "Victory 21" Products

Matsushita aims to increase its market share and enhance earnings capability by launching new lines of competitive products, which the company refers to as "Victory 21" products, in the high-volume segment of each product category.

Disclaimer Regarding Forward-Looking Statements

This document 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) that reflect the plans and expectations of Matsushita Electric Industrial Co., Ltd. ("MEI") and its group companies (collectively, the "Matsushita Group") in relation to the outcome of business restructuring and the growth strategy of the Matsushita Group in the fiscal year ending March 31, 2003. To the extent that statements in this document 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 them, and involve known and unknown risks, uncertainties, and other factors. Such risks, uncertainties, and other factors include, in particular, the factors set forth in "Item 3.D: Risk Factors" of MEI's Annual Report on Form 20-F dated July 24, 2001 which has been filed with the U.S. Securities and Exchange Commission. 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. MEI undertakes no obligation to publicly update any forward-looking statements after the date of this document.