Matsushita Reports Second Quarter and First Half Results / Sales and Operating Profit Decline, Net Income Rises (PART TWO)

OSAKA, Japan (PROTEXT) - ... * To conform to a revision in Japanese corporate accountingstandards, local enterprise tax previously included in selling,general and administrative expenses has been transferred toprovision for income taxes for the fiscal first half endedSeptember 30, 1999, without retroactive restatement for priorperiods. For the first-half period a year ago, the localenterprise tax totaled 3.5 billion yen. ** Net income per common share, basic

Six Months Ended

Six Months Ended

Sept. 30, 1999

Sept. 30, 1998

17.79 yen

3.68 yen *** See notes to parent-alone financial statements.

Matsushita Electric Industrial Co., Ltd.

(Parent Alone)

Balance Sheet *

Sept. 30, 1999

With Comparative Figures for March 31, 1999

Yen (millions)

As of

As of Assets

Sept. 30, 1999

March31,1999 Current assets: Cash

Y647,893

Y633,932 Trade receivables

(notes and accounts)

587,691

651,676 Inventories

207,864

210,786 Other current assets

200,137

110,184 Total current assets

1,643,586

1,606,579 Fixed assets:

Tangible fixed assets

340,097

343,808

Intangibles

11,519

12,046

Investments and advances

2,315,462

2,203,426 Total fixed assets

2,667,078

2,559,281 Total assets

Y4,310,664

Y4,165,861 Liabilities and Shareholders' Equity Current liabilities:

Trade payables

(notes and accounts)

Y520,285

Y574,640 Accrued income taxes

23,245

38,190 Other current liabilities

648,854

645,514 Total current liabilities

1,192,385

1,258,345 Long-term debt and employee

retirement and severance benefits 536,505

531,101 Total liabilities

1,728,891

1,789,447 Shareholders' equity:

Capital

209,554

209,444

Statutory reserves

292,200

292,085

Retained earnings

2,080,019

1,874,884 Total shareholders' equity

2,581,773

2,376,413 Total liabilities and

shareholders' equity

Y4,310,664

Y4,165,861 * See notes to parent-alone financial statements.

Matsushita Electric Industrial Co., Ltd.

(Parent Alone)

Sales Breakdown *

Yen (billions)

Six Months Ended

Six Months EndedPercentage

Sept. 30, 1999

Sept. 30, 1998 1999/1998 Consumer products

Video and audio

equipment

Y350.0

Y423.8

83%

Home appliances and

household equipment 400.8

436.7

92% Subtotal

750.9

860.5

87% Industrial products

Information and

communications

equipment

625.4

668.9

94%

Industrial equipment 240.0

236.6

101%

Subtotal

865.5

905.6

96% Components

584.1

545.9

107% Total

Y2,200.7

Y2,312.1

95%

Domestic sales 1,432.5

1,456.1

98%

Exports

768.1

856.0

90% * Amounts less than one-tenth of a billion yen have beenomitted. Prior period figures may differ slightly with previouslyreleased statements.

Notes to parent-alone financial statements:

1.

In accordance with the Regulations concerningCorporate Financial Statements under the Japanese CommercialCode, amounts less than 1 million yen have been omitted in theaccompanying parent alone financial statements. The sum of thesubtotals may differ from the actual total.

2.

Beginning the fiscal first half ended September 30,1999, tax effect accounting was applied in accordance with therevised Japanese corporate accounting standards, withoutretroactive restatement for prior periods. The Year 2000 Issue 1. State of readiness

(1)

Policy

The Company recognizes the "Year 2000 issue (Y2K)" aspotentially one of the most important business problems from theview points of products and services provided to the customersand our internal information systems, production facilities andbusiness continuity.

Therefore, Matsushita has been implementingcorporate-wide projects to resolve any potential issues arisingfrom Y2K.

(2) Project

Steps to deal with Y2K began in fiscal year 1996, andsince July 1997 have expanded to all segments of our corporatestructures. In June 1998, management started the MatsushitaGroup-wide project "Group-Wide Council Towards Readiness for theYear 2000 Issue." The Council investigates the state of theCompany's products, internal information systems, manufacturingfacilities, raw materials and parts suppliers, and otherinfrastructure such as buildings and other facilities. Itidentifies potential problems, collects information on the statusof readiness, implements and advances corrective measures, andregularly reports to management on progress. The Council conferswith management regarding appropriate measures to be institutedand engages in various educational activities both within theMatsushita Group and with related parties. The Council is headedby the Executive Vice President of the Company in charge ofcorporate planning. Management also established in July 1999 a"Corporate Risk Management Headquarters" to set-up a MatsushitaGroup-wide control system to deal with potential risks arisingfrom Y2K.

(3)

State of readiness

The Company had almost completed all conceivablepreventive measures by the end of September 1999. The followingis a breakdown of each relevant section.

The Company's products

By the end of March 1999, measures to notify allrelevant customers of any required corrected actions werepractically finished. The Company had almost completed thecorrective measures requested by customers by the end ofSeptember 1999. Through its Internet home page, the Companysupplies customers with detailed information regarding relevantproducts. It intends to promote this activity through Company-wide collaboration.

Corporate information system

Overseas and domestic system adjustments andreinstallation were started in fiscal 1996. Verification testswere almost completed by the end of September 1999.

Production facilities

The Company finalized its investigation of productionand automated warehouses and had completed all-necessary measuresby the end of September 1999. In accordance with Japanesecustoms, the Company ceases operations during the year end andNew Year's season. It is also preparing contingency plans at alllevels of the Company for the possibility of disconnection withinthe Matsushita infrastructure.

Infrastructure such as raw material supply chains,buildings and related facilities, etc. The Company has beenmonitoring the present status of its supply sources, propertyowners, and other relevant parties and promoting completion oftheir respective corrective plans.

2. Costs

Costs required to be Y2K compliant with respect tointernal information systems and production facilities aredifficult to calculate. Most measures are mainly handled by theCompany's information systems department as part of their routineoperation. The cost of outside sources used to modify, enhance,or replace existing systems is estimated at approximately 19billion yen. A substantial portion of this has already beenrealized as expense on the Group's financial statements for theyear ended September 1999 and on previous statements.

3. Contingency plans

Preparing for the worst case scenario, the Companyestablished contingency plans and internal systems to deal withcustomers, internal information systems, raw materials and otherissues by the end of July 1999. Since the end of September 1999,the heads of each Business Unit and project members have beenconducting final checks and contingency training. A total of9,000 staff members in the Customer Support Center and relateddepartments will be standing by during the year end/beginning. 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 from those stated inthe forward-looking statements. Furthermore, as the Group'soperations encompass many different countries, there is noassurance that the Year 2000 issue will be addressed with 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. ots Original Text Service: Matsushita ElectricIndustrial Co., Ltd. Internet: http://www.newsaktuell.deContact: Akihiro Takei of Panasonic Finance (America), Inc. 212-371-5447

Subscribers please note that material bearing the slug"PROTEXT" is not part of CTK's news service and is not to bepublished under the "CTK" slug. Protext is a commercial serviceproviding distribution of press releases from clients, who areidentified in the text of Protext reports and who bear fullresponsibility for their contents.

PROTEXT