Matsushita Reports Fiscal 1999 Annual Results; Sales

and Earnings Impacted by Adverse Economic Conditions (Part 2/2) Osaka, Japan (PROTEXT) -

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 notadd exactly. The Year 2000 Issue 1. State of readiness (1) Policy The Company recognizes the so-called "Year 2000 issue" aspotentially one of the most important business problems from thepoint of maintaining continuity of business and customerservices, and has thus been advancing corporate-wide projects toresolve any issues. (2) Project Although preliminary steps to deal with the issue started infiscal year 1997, in July 1997 management issued a corporaterelease "Towards Readiness for the Year 2000 Issue" to alldivisions and in June 1998 started the Matsushita Group-wideproject "Group-Wide Council Towards Readiness for the Year 2000Issue." In accordance with this project the Council investigatesthe state of the Company's products, internal informationsystems, manufacturing facilities, raw materials and parts,information infrastructure, other infrastructure such asbuildings and other facilities to identify potential problems,and collects information on the status of readiness, implementsand advances remedial measures, and regularly reports to themanagement on the state of progress. When needs arise, theCouncil confers with management as to the appropriate measures tobe taken and engages in various educational activities bothwithin the Group as well as for related parties. The ExecutiveVice President of the Company in charge of planning, informationsystems, distribution, industrial property, and corporatemultimedia heads this Council. (3) State of readiness The Company's products Necessary notices to customers of the Company's productsregarding required remedial measures had almost been completed bythe end of March 1999. Remedial measures are being implementeddepending upon the wishes of customers and it is anticipated thatall necessary work will be completed by the end of September1999. Corporate information system System adjustments orreinstallation were completed by September 1998. Verificationtests are being conducted with the intent to complete the same inSeptember 1999. Production facilities Measures are being taken and will be ready before the end ofSeptember 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 Year2000 issue with respect to internal information systems andproduction facilities are difficult to calculate as they aremainly handled by the Company's information systems department aspart of their routine operation. The Group's payments to outsidesources in relation to modifications of systems to deal with theYear 2000 issue and for the enhancement or replacement ofexisting systems are estimated to amount to approximately Y19billion in total, of which about 80% were accounted for in theGroup's financial statements for the year ended March 1999 orearlier. The Company does not expect the total costs for thesemeasures to have a material adverse effect on its consolidatedoperations and financial results. 3. Contingency plans In order to prepare for a worst case scenario, the Company isestablishing a contingency plan and internal systems to deal withany such contingency for such areas as customers of the Company'sproducts, information systems, raw materials and others by theend of June 1999. Cautionary Statements In the foregoing statements the Company makes forward-lookingstatements with respect to the Year 2000 issue. However, thisissue involves a number of outside parties and the effect, ifany, of failure by one party or segment is likely to bewidespread, and, therefore many aspects of the Company's Year2000 project are outside of its control. These factors couldcause the Group's actual results to differ materially from thosestated in the forward- looking statements. Furthermore, as theGroup's operations encompass many different countries, there isno assurance that the Year 2000 issue will be addressed at thesame degree of attention in different parts of the world. Thus,there may be unforeseen problems in different countries. Thesefactors make it impossible for the Company to ensure that it willavoid material adverse effects on its operations or business orinsulate itself from third party liability arising from the Year2000 issue. NOTE TO EDITORS: Dollar amounts for the most recent periodonly have been translated for convenience at the rate ofU.S.$1.00 = 120 yen. ots Original Text Service: MatsushitaElectric Industrial Co., Ltd. Internet: http://www.newsaktuell.deContact: Akihiro Takei Panasonic Finance (America), Inc. Tel.:(in the USA) 212-371-5447

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