Matsushita Reports Fiscal 1999 Annual Results; Sales

Matsushita Electric Industrial Co., Ltd.

(Parent Alone)

Sales Breakdown *

(Year ended March 31)

Yen (billions) Percentage

1999 1998 1999/1998 Consumer products Video and audio equipment Y795.6 Y835.0 95% Home appliances and household equipment 881.6 917.8 96% Subtotal 1,677.3 1,752.8 96% Industrial products Information and communications equipment 1,329.6 1,381.0 96% Industrial equipment 488.4 535.9 91% Subtotal 1,818.1 1,916.9 95% Components 1,102.0 1,204.7 91% Total Y4,597.5 Y4,874.5 94% Domestic sales 3,003.9 3,160.2 95% Exports 1,593.6 1,714.2 93% * Because figures are truncated, subtotals and totals may not add exactly. The Year 2000 Issue 1. State of readiness (1) Policy The Company recognizes the so-called "Year 2000 issue" as potentially one of the most important business problems from the point of maintaining continuity of business and customer services, and has thus been advancing corporate-wide projects to resolve any issues. (2) Project Although preliminary steps to deal with the issue started in fiscal year 1997, in July 1997 management issued a corporate release "Towards Readiness for the Year 2000 Issue" to all divisions and in June 1998 started the Matsushita Group-wide project "Group-Wide Council Towards Readiness for the Year 2000 Issue." In accordance with this project the Council investigates the state of the Company's products, internal information systems, manufacturing facilities, raw materials and parts, information infrastructure, other infrastructure such as buildings and other facilities to identify potential problems, and collects information on the status of readiness, implements and advances remedial measures, and regularly reports to the management on the state of progress. When needs arise, the Council confers with management as to the appropriate measures to be taken and engages in various educational activities both within the Group as well as for related parties. The Executive Vice President of the Company in charge of planning, information systems, distribution, industrial property, and corporate multimedia heads this Council. (3) State of readiness The Company's products Necessary notices to customers of the Company's products regarding required remedial measures had almost been completed by the end of March 1999. Remedial measures are being implemented depending upon the wishes of customers and it is anticipated that all necessary work will be completed by the end of September 1999. Corporate information system System adjustments or reinstallation were completed by September 1998. Verification tests are being conducted with the intent to complete the same in September 1999. Production facilities Measures are being taken and will be ready before the end of September 1999. Infrastructure such as raw material procurements, buildings, etc. Measures are being taken in cooperation with supply sources, landlords and other related parties. 2. Costs Costs required for measures taken for readiness for the Year 2000 issue with respect to internal information systems and production facilities are difficult to calculate as they are mainly handled by the Company's information systems department as part of their routine operation. The Group's payments to outside sources in relation to modifications of systems to deal with the Year 2000 issue and for the enhancement or replacement of existing systems are estimated to amount to approximately Y19 billion in total, of which about 80% were accounted for in the Group's financial statements for the year ended March 1999 or earlier. The Company does not expect the total costs for these measures to have a material adverse effect on its consolidated operations and financial results. 3. Contingency plans In order to prepare for a worst case scenario, the Company is establishing a contingency plan and internal systems to deal with any such contingency for such areas as customers of the Company's products, information systems, raw materials and others by the end of June 1999. Cautionary Statements In the foregoing statements the Company makes forward-looking statements with respect to the Year 2000 issue. However, this issue involves a number of outside parties and the effect, if any, of failure by one party or segment is likely to be widespread, and, therefore many aspects of the Company's Year 2000 project are outside of its control. These factors could cause the Group's actual results to differ materially from those stated in the forward- looking statements. Furthermore, as the Group's operations encompass many different countries, there is no assurance that the Year 2000 issue will be addressed at the same degree of attention in different parts of the world. Thus, there may be unforeseen problems in different countries. These factors make it impossible for the Company to ensure that it will avoid material adverse effects on its operations or business or insulate itself from third party liability arising from the Year 2000 issue. NOTE TO EDITORS: Dollar amounts for the most recent period only have been translated for convenience at the rate of U.S.$1.00 = 120 yen. ots Original Text Service: Matsushita Electric Industrial Co., Ltd. Internet: Contact: Akihiro Takei Panasonic Finance (America), Inc. Tel.: (in the USA) 212-371-5447

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