FORM 6-K
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
Report of Foreign Private Issuer
Pursuant to Rule 13a-16 or 15d-16 of
The Securities Exchange Act of 1934
For the Month of August 2010
Commission File Number: 1-6784
Panasonic Corporation
Kadoma, Osaka, Japan
Indicate by check mark whether the registrant files or will file annual reports under cover Form 20-F or Form 40-F.
Form 20-F x Form 40-F ¨
Indicate by check mark if the registrant is submitting the Form 6-K in paper as permitted by Regulation S-T Rule 101 (b)(1):
Indicate by check mark if the registrant is submitting the Form 6-K in paper as permitted by Regulation S-T Rule 101 (b)(7):
This Form 6-K consists of:
2. | News release issued on August 20, 2010, by the registrant, announcing the additional information regarding Commencement of Tender Offer for Shares of Common Stock of Panasonic Electric Works. |
3. | News release issued on August 20, 2010, by the registrant, announcing the additional information regarding Commencement of Tender Offer for Shares of Common Stock of SANYO. |
4. | News release issued on August 20, 2010, by the registrant, announcing to strengthen PDP production in China |
SIGNATURE
Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.
Panasonic Corporation | ||
By: | /s/ MASAHITO YAMAMURA | |
Masahito Yamamura, Attorney-in-Fact | ||
General Manager of Investor Relations | ||
Panasonic Corporation |
Dated: August 23, 2010
[English summary with full translation of consolidated financial information]
Quarterly Report filed with the Japanese government
pursuant to the Financial Instruments and Exchange
Law of Japan
For the three months ended
June 30, 2010
Panasonic Corporation
Osaka, Japan
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Disclaimer Regarding Forward-Looking Statements
This quarterly report 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 quarterly report 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 Groups 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 quarterly report. 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 U.S. Securities Exchange Act of 1934 and its other filings.
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 possibility of the Panasonic Group incurring additional costs of raising funds, because of changes in the fund raising environment; 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 including the acquisition of all shares of Panasonic Electric Works Co., Ltd. and SANYO Electric Co., Ltd. through tender offers and share exchanges; 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 goodwill, deferred tax assets and uncertain tax positions; future changes or revisions to accounting policies or accounting rules; as well as natural disasters including earthquakes, prevalence of infectious diseases throughout the world 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 Panasonics latest annual report on Form 20-F, which is on file with the U.S. Securities and Exchange Commission.
Note: | Certain information previously filed with the SEC in other reports is not included in this English translation. |
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I | Corporate Information |
(1) | Consolidated Financial Summary |
Yen (millions), except per share amounts | |||||||||
Three months ended June 30, 2010 |
Three months ended June 30, 2009 |
Year ended March 31, 2010 |
|||||||
Net sales |
2,161,126 | 1,595,458 | 7,417,980 | ||||||
Income (loss) before income taxes |
84,330 | (51,765 | ) | (29,315 | ) | ||||
Net income (loss) |
47,738 | (61,356 | ) | (170,667 | ) | ||||
Net income (loss) attributable to Panasonic Corporation |
43,678 | (52,977 | ) | (103,465 | ) | ||||
Total Panasonic Corporation shareholders equity |
2,650,733 | 2,746,253 | 2,792,488 | ||||||
Total equity |
3,545,942 | 3,158,547 | 3,679,773 | ||||||
Total assets |
8,351,031 | 6,610,242 | 8,358,057 | ||||||
Panasonic Corporation shareholders equity per share of common stock (yen) |
1,280.34 | 1,326.29 | 1,348.63 | ||||||
Net income (loss) per share attributable to Panasonic Corporation common shareholders, basic (yen) |
21.10 | (25.58 | ) | (49.97 | ) | ||||
Net income (loss) per share attributable to Panasonic Corporation common shareholders, diluted (yen) |
| | | ||||||
Panasonic Corporation shareholders equity / total assets (%) |
31.7 | 41.5 | 33.4 | ||||||
Net cash provided by operating activities |
144,884 | 70,016 | 522,333 | ||||||
Net cash provided by (used in) investing activities |
19,387 | (83,287 | ) | (323,659 | ) | ||||
Net cash provided by (used in) financing activities |
(69,499 | ) | 81,424 | (56,973 | ) | ||||
Cash and cash equivalents at end of period |
1,169,237 | 1,041,126 | 1,109,912 | ||||||
Total employees (persons) |
384,816 | 288,933 | 384,586 |
Notes: | 1. | The Companys consolidated financial statements are prepared in conformity with U.S. generally accepted accounting principles (U.S. GAAP). | ||
2. | SANYO Electric Co., Ltd. (SANYO) and its subsidiaries became the Companys consolidated subsidiaries in December 2009. As a result, total assets increased by 2,046,130 million yen, after deducting the Companys investment in SANYO from the total assets acquired on acquisition date. The operating results of SANYO and its subsidiaries after January 2010 are included in the Companys consolidated financial statements. | |||
3. | Diluted net income (loss) per share attributable to Panasonic Corporation common shareholders has been omitted because the Company did not have potential common shares that were outstanding for the period. |
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(2) | Principal Businesses |
The Panasonic Group is comprised primarily of the parent Panasonic Corporation and 671 consolidated subsidiaries in and outside of Japan, operating in close cooperation with each other. As a comprehensive electronics manufacturer, Panasonic is engaged in production, sales and service activities in a broad array of business areas.
The Company strengthens the unity of all employees throughout the group and ultimately enhances the value of the Panasonic brand globally. The Company will continue its tireless efforts to generate ideas that brighten the lives of people everywhere in order to contribute to a better future both for the Earth and for the further development of society.
The Companys business segment classifications consist of six segments, namely, Digital AVC Networks, Home Appliances, PEW and PanaHome, Components and Devices, SANYO, and Other. Digital AVC Networks includes video and audio equipment, and information and communications equipment. Home Appliances includes household equipment. PEW and PanaHome includes electrical supplies, home appliances, building materials and equipment, and housing business. Components and Devices includes general electronic components, semiconductors, electric motors and batteries. SANYO includes solar cells, lithium-ion batteries, and optical pickups. Other includes FA equipment and other industrial equipment. The Company restructured the motor business on April 1, 2010. Accordingly, the motor business transferred to Home Appliances from Component and Devices.
For production, Panasonic adopts a management system that takes charge of each product in the Company or its affiliates. In recent years, the Company has been enhancing production capacity at its overseas affiliates to further develop global business. Meanwhile, in Japan, Panasonics products are sold through sales channels at its domestic locations, each established according to products or customers. The Company also sells directly to large-scale consumers, such as the government and corporations.
For exports, sales are handled mainly through sales subsidiaries and agents located in their respective countries.
Certain products produced at domestic affiliates are purchased by the Company and sold through the same sales channels as products produced by the Company itself. Additionally, products produced at overseas affiliates are sold mainly through sales subsidiaries in respective countries.
Meanwhile, most import operations are carried out internally, and the Company aims to expand them to promote international economic cooperation.
Certain PEW, PanaHome and SANYO products are sold on a proprietary basis in Japan and overseas.
During the three months ended June 30, 2010, there were no major changes in principal businesses and affiliated companies.
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(3) | Changes in Affiliated Companies |
During the three months ended June 30, 2010, there were no major changes in affiliated companies.
Hitachi Displays, Ltd. (Hitachi Displays) conducted a corporate split on June 30, 2010 to establish IPS Alpha Support Co., Ltd (IPS Alpha Support). IPS Alpha Support assumed Hitachi Displays entire shareholding of 50.02% shares of IPS Alpha Technology, Ltd. (IPS Alpha), the Companys subsidiary. Also, Hitachi Displays transferred a majority of shares of IPS Alpha Support to the Company. As a result of these transactions, adding to its existing shareholding of 44.98%, Panasonic has 95% of the voting rights in IPS Alpha. There were no major changes in affiliated companies as a result of this transaction as IPS Alpha has been a Companys subsidiary according to the provisions of Accounting Standards Codification (ASC) 810, Consolidation.
On July 30, 2010, SANYO transferred its entire shareholding of SANYO Electric Logistics Co., Ltd. to LS Holding Co., Ltd.
(4) | Number of Employees (as of June 30, 2010) |
1. Consolidated: |
384,816 persons | |||
2. Parent-alone: |
42,167 persons |
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II | The Business |
(1) | Operating Results |
During the first quarter under review, the global economic recovery continued led by China and Asian countries, despite credit uncertainties in Europe. In this business condition, Panasonic launched a new midterm management plan called Green Transformation 2012 (GT12) in the beginning of fiscal 2011.
Consolidated group sales for the first quarter increased 35% to 2,161,126 million yen, from the first quarter of fiscal 2010 (a year ago), growing sales in all segments.
Regarding earnings, operating profit* for the first quarter was 83,838 million yen, compared with a loss of 20,183 million yen a year ago. This result was due mainly to strong sales, streamlining of material cost and fixed cost reduction, offsetting severe price competition, appreciation of yen and rising prices of raw materials. Pre-tax income for the first quarter was 84,330 million yen, compared with a loss of 51,765 million yen a year ago. Accordingly, net income for the first quarter was 47,738 million yen, compared with a loss of 61,356 million yen a year ago, and net income attributable to Panasonic Corporation was 43,678 million yen, compared with a loss of 52,977 million yen a year ago.
* | In order to be consistent with generally accepted financial reporting practices in Japan, operating profit, a non-GAAP measure, is presented as net sales less cost of sales and selling, general and administrative expenses. The Company believes that this is useful to investors in comparing the Companys financial results with those of other Japanese companies. |
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(2) | Operating Results by Segment |
The following information shows the operating results by business segment for the first quarter. The Company restructured the motor business on April 1, 2010. Accordingly, segment information for Home Appliances and, Component and Devices in the fiscal 2010 first quarter are reclassified to conform to the presentation for fiscal 2011.
Digital AVC Networks
Sales in this segment amounted to 831,722 million yen, an increase of 8% compared with a year ago. Despite sales decline of mobile phones, this was due primarily to strong sales of flat-panel TVs, Blu-ray Disc recorders and automotive electronics. Operating profit significantly improved to 27,851 million yen from operating loss of 13,602 million yen a year ago. This was due mainly to sales increase and comprehensive streamlining efforts.
Home Appliances
Sales in this segment amounted to 322,781 million yen, an increase of 5% compared with a year ago, due mainly to favorable sales in air conditioners, compressors and microwave ovens. Operating profit amounted to 32,259 million yen, an increase of 73% compared a year ago, due mainly to favorable sales and comprehensive streamlining efforts.
PEW and PanaHome
Sales in this segment amounted to 391,258 million yen, an increase of 9% compared with a year ago. Regarding Panasonic Electric Works Co., Ltd. (PEW) and its subsidiaries, sales increased mainly in devices such as electrical construction materials and automation controls. For PanaHome Corporation and its subsidiaries, the recovery in Japanese housing market conditions and sales promotion of detached housing led overall sales increased. Operating profit amounted to 8,348 million yen, increased from an operating loss of 7,805 million yen a year ago, due mainly to improvement in sales.
Components and Devices
Sales in this segment amounted to 236,265 million yen, an increase of 11% compared with a year ago. Strong sales of general electronic components, semiconductors and batteries contributed to this double-digit growth. Operating profit improved significantly to 11,847 million yen from an operating loss of 9,744 million yen a year ago. This was due mainly to sales improvement and fixed cost reduction.
SANYO
Sales in this segment totaled 412,984 million yen. Sales of solar cells, car-related equipments such as car navigation systems, and optical pickups were strong with economic stimulus programs in several countries and continuing demand expansion for PCs. Operating profit resulted in 5,009 million yen, even after incurring the expenses such as amortization of intangible assets recorded at acquisition.
Other
Sales in this segment totaled 275,427 million yen, up 35% compared with a year ago, due mainly to significantly strong sales in factory automation equipment. Operating profit also improved significantly to 12,750 million yen, compared with an operating loss of 884 million yen a year ago.
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(3) | Assets, Liabilities and Equity |
The Companys consolidated total assets as of June 30, 2010 decreased by 7,026 million yen to 8,351,031 million yen, compared with 8,358,057 million yen at the end of the fiscal 2010. This was due mainly to decrease of 89,169 million yen in investment and advances by decline of market value in investments, despite an increase of 62,216 million yen in inventories experiencing seasonality.
With regard to liabilities, total liabilities amounted to 4,805,089 million yen, an increase of 126,805 million yen compared with the end of fiscal 2010. This was due mainly to the issuance of short-term bonds.
Panasonic Corporation shareholders equity decreased by 141,755 million yen, compared with the end of fiscal 2010, to 2,650,733 million yen. This result was due primarily to deterioration in accumulated other comprehensive income (loss) influenced by appreciation of yen and decline of market value in investments, and decrease in capital surplus influenced by the acquisition of noncontrolling interests of the Companys subsidiaries. Noncontrolling interests increased by 7,924 million yen to 895,209 million yen, due primarily to the additional acquisition, despite yen appreciation.
(4) | Cash Flows |
Cash flows from operating activities
Net cash provided by operating activities in the fiscal 2010 first quarter totaled 144,884 million yen, an increase of 74,868 million yen from a year ago. This was due primarily to an increase of quarterly net income improved from net loss a year ago, despite an increase in inventories.
Cash flows from investing activities
Net cash provided by investing activities in the fiscal 2010 first quarter amounted to 19,387 million yen, compared with cash outflow of 83,287 million yen a year ago. This was due primarily to increase of proceeds from disposition of investments and advances, and proceeds from disposals of tangible fixed assets.
Cash flows from financing activities
Net cash used in financing activities in the fiscal 2010 first quarter amounted to 69,499 million yen, compared with cash inflow of 81,424 million yen a year ago. This was due mainly to a decrease of proceeds by issuing short-term bonds and expenditures on purchasing noncontrolling interests of the Companys subsidiaries.
All these activities associated with the effect of exchange rate fluctuations, resulted in cash and cash equivalents of 1,169,237 million yen as of June 30, 2010, up 59,325 million yen, compared with the end of the last fiscal year (March 31, 2010).
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(5) | Research and Development |
Panasonics R&D expenditures for the first quarter of fiscal 2010 totaled 133,688 million yen. There were no significant changes in R&D activities for the period.
(6) | Risk Factors |
There were no risks newly identified during the three months ended June 30, 2010. However, there were significant changes with regard to the Risk Factors stated in the annual report of the prior fiscal year as follows.
Alliances with, and strategic investments in, third parties, and mergers and acquisitions undertaken by Panasonic, may not produce positive or expected results
Panasonic develops its businesses by forming alliances or joint ventures with, and making strategic investments in, other companies, including investments in start-up companies. Furthermore, the strategic importance of partnering with third parties is increasing. In some cases, such partnerships are crucial to Panasonics goal of introducing new products and services, but Panasonic may not be able to successfully collaborate or achieve expected synergies with its partners. Furthermore, Panasonic does not control these partners, who may make decisions regarding their business undertakings with Panasonic that may be contrary to Panasonics interests. In addition, if these partners change their business strategies, Panasonic may fail to maintain these partnerships. Panasonic, Panasonic Electric Works (PEW) and SANYO Electric Co., Ltd. (SANYO) resolved, at their respective meetings of the Boards of Directors held on July 29, 2010, to pursue a plan of Panasonics acquisition of all shares of PEW and SANYO in order to make them wholly-owned subsidiaries of Panasonic (the Acquisitions) by around April 2011 by way of tender offers and, thereafter, share exchanges. Panasonic resolved, at its above-mentioned Board of Directors meeting, to commence the tender offers for the shares of PEW and SANYO at a purchase price of 1,110 yen per share of PEW common stock and 138 yen per share of SANYO common stock during a tender offer period from August 23, 2010 through October 6, 2010. In the event that Panasonic does not acquire all of the PEW and SANYO shares anticipated to be purchased through the tender offers, Panasonic is thereafter anticipated to implement share exchanges in order to complete the Acquisitions by around April 2011. However, Panasonic may not be able to promptly complete the Acquisitions or realize the business reorganization which is scheduled thereafter. Furthermore, even if Panasonic completes the Acquisitions, Panasonic may fail to sufficiently achieve the expected results of the Acquisitions, such as promotion of rapid decision-making and maximization of group synergies.
Note: | The forward-looking statements in the above information are based on our belief as of the filing date of this quarterly report. |
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(7) | Others |
1. Shelf registration in Japan for future equity offerings
On July 29, 2010, the Companys Board of Directors resolved to file a Shelf Registration Statement in Japan for offerings of its shares of common stock, the number of which is expected to be principally in the range of its own shares to be disposed of.
Type of securities to be offered: Common stock of Panasonic Corporation
Planned issuance period: Within one year commencing from the effective date of the Shelf Registration Statement (from August 12, 2010 until August 11, 2011)
Offering method: Public offering in Japan*
Planned amount of issuance: Up to JPY 500 billion
Use of proceeds: To repay short-term interest-bearing debt
* | The number of shares to be offered is expected to be principally in the range of its own shares to be disposed of. |
Pursuant to this resolution, the Company filed the Shelf Registration Statement in Japan on July 29, 2010.
2. An increase in the maximum amount of short-term bonds
On July 29, 2010, the Companys Board of Directors resolved to increase the maximum amount of outstanding short-term bonds issued and to be issued by the Company from 300 billion yen to 500 billion yen, and the total maximum amount of outstanding short-term notes issued and to be issued by certain overseas consolidated subsidiaries from 2 billion U.S. dollars to 4 billion U.S. dollars, in order to flexibly meet its short-term financial requirements.
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III | Property, Plant and Equipment |
(1) | Major Property, Plant and Equipment |
During the three months ended June 30, 2010, there were no significant changes in major property, plant and equipment.
(2) | Plan of the Purchase and Retirement of Major Property, Plant and Equipment |
During the three months ended June 30, 2010, there were no significant changes in plan of the purchase and retirement of major property, plant and equipment from the last fiscal year. During the three months ended June 30, 2010, the Company does not have any current plans to purchase, expand, refurbish, retire and dispose major property, plant and equipment.
During the three months ended June 30, 2010, the Company invested a total of 98,650 million yen in property, plant and equipment, with an emphasis on production facilities in such priority business areas as flat-panel TVs and batteries. The breakdown of capital investment by business segment is as follows:
Business Segment |
Yen (millions) |
|||
Digital AVC Networks |
45,899 | |||
Home Appliances |
5,525 | |||
PEW and PanaHome |
9,799 | |||
Components and Devices |
20,388 | |||
SANYO |
15,902 | |||
Other |
433 | |||
Subtotal |
97,946 | |||
Corporate |
704 | |||
Total |
98,650 | |||
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IV | Shares and Shareholders |
(1) | Shares of Common Stock Issued as of June 30, 2010: 2,453,053,497 shares |
The common stock of the Company is listed on the Tokyo, Osaka and Nagoya stock exchanges in Japan. In the United States, the Companys American Depositary Shares (ADSs) are listed on the New York Stock Exchange.
(2) | Amount of Common Stock (Stated Capital) as of June 30, 2010: 258,740 million yen |
(3) | Stock Price |
The following table sets forth the monthly reported high and low market prices per share of the Companys common stock on the Tokyo Stock Exchange for the three months of fiscal 2011:
Yen | ||||||||
April | May | June | ||||||
High |
1,480 | 1,348 | 1,288 | |||||
Low |
1,345 | 1,123 | 1,104 |
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V | Financial Statements |
Index of Consolidated Financial Statements of Panasonic Corporation and Subsidiaries:
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PANASONIC CORPORATION
AND SUBSIDIARIES
June 30 and March 31, 2010
Yen (millions) | ||||||
Assets |
June 30, 2010 | March 31, 2010 | ||||
Current assets: |
||||||
Cash and cash equivalents |
1,169,237 | 1,109,912 | ||||
Time deposits |
86,385 | 92,032 | ||||
Trade receivables: |
||||||
Notes |
76,850 | 74,283 | ||||
Accounts (Note 12) |
1,106,918 | 1,134,915 | ||||
Allowance for doubtful receivables |
(24,625 | ) | (24,158 | ) | ||
Net trade receivables |
1,159,143 | 1,185,040 | ||||
Inventories (Note 2) |
975,862 | 913,646 | ||||
Other current assets (Notes 12 and 13) |
556,331 | 505,418 | ||||
Total current assets |
3,946,958 | 3,806,048 | ||||
Investments and advances (Notes 3 and 13) |
547,593 | 636,762 | ||||
Property, plant and equipment (Note 5): |
||||||
Land |
385,976 | 391,394 | ||||
Buildings |
1,751,581 | 1,767,674 | ||||
Machinery and equipment |
2,232,063 | 2,303,633 | ||||
Construction in progress |
117,024 | 128,826 | ||||
4,486,644 | 4,591,527 | |||||
Less accumulated depreciation |
2,589,539 | 2,635,506 | ||||
Net property, plant and equipment |
1,897,105 | 1,956,021 | ||||
Other assets: |
||||||
Goodwill |
920,655 | 923,001 | ||||
Intangible assets (Note 5) |
593,341 | 604,865 | ||||
Other assets |
445,379 | 431,360 | ||||
Total other assets |
1,959,375 | 1,959,226 | ||||
8,351,031 | 8,358,057 | |||||
See accompanying Notes to Consolidated Financial Statements.
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PANASONIC CORPORATION
AND SUBSIDIARIES
Consolidated Balance Sheets
June 30 and March 31, 2010
Yen (millions) | ||||||
Liabilities and Equity |
June 30, 2010 | March 31, 2010 | ||||
Current liabilities: |
||||||
Short-term debt, including current portion of long-term debt |
406,882 | 299,064 | ||||
Trade payables: |
||||||
Notes |
62,328 | 59,608 | ||||
Accounts (Note 12) |
1,010,959 | 1,011,838 | ||||
Total trade payables |
1,073,287 | 1,071,446 | ||||
Accrued income taxes |
40,098 | 39,154 | ||||
Accrued payroll |
163,567 | 149,218 | ||||
Other accrued expenses |
853,722 | 826,051 | ||||
Deposits and advances from customers |
72,612 | 64,046 | ||||
Employees deposits |
9,983 | 10,009 | ||||
Other current liabilities (Notes 12 and 13) |
367,078 | 356,875 | ||||
Total current liabilities |
2,987,229 | 2,815,863 | ||||
Noncurrent liabilities: |
||||||
Long-term debt (Note 13) |
1,008,100 | 1,028,928 | ||||
Retirement and severance benefits |
424,971 | 435,799 | ||||
Other liabilities |
384,789 | 397,694 | ||||
Total noncurrent liabilities |
1,817,860 | 1,862,421 | ||||
Equity: |
||||||
Panasonic Corporation shareholders equity: |
||||||
Common stock (Note 6) |
258,740 | 258,740 | ||||
Capital surplus |
1,127,206 | 1,209,516 | ||||
Legal reserve |
93,797 | 93,307 | ||||
Retained earnings |
2,382,322 | 2,349,487 | ||||
Accumulated other comprehensive income (loss): |
||||||
Cumulative translation adjustments |
(410,781 | ) | (352,649 | ) | ||
Unrealized holding gains (losses) of available-for-sale securities (Note 3) |
(910 | ) | 40,700 | |||
Unrealized gains of derivative instruments (Note 12) |
7,077 | 1,272 | ||||
Pension liability adjustments |
(136,026 | ) | (137,555 | ) | ||
Total accumulated other comprehensive income (loss) |
(540,640 | ) | (448,232 | ) | ||
Treasury stock, at cost (Note 6) |
(670,692 | ) | (670,330 | ) | ||
Total Panasonic Corporation shareholders equity |
2,650,733 | 2,792,488 | ||||
Noncontrolling interests (Note 10) |
895,209 | 887,285 | ||||
Total equity (Note 10) |
3,545,942 | 3,679,773 | ||||
Commitments and contingent liabilities (Notes 4 and 14) |
||||||
8,351,031 | 8,358,057 | |||||
See accompanying Notes to Consolidated Financial Statements.
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PANASONIC CORPORATION
AND SUBSIDIARIES
Consolidated Statements of Operations
Three months ended June 30, 2010 and 2009
Yen (millions) | ||||||
Three months ended June 30 | ||||||
2010 | 2009 | |||||
Revenues, costs and expenses: |
||||||
Net sales |
2,161,126 | 1,595,458 | ||||
Cost of sales (Note 12) |
(1,570,787 | ) | (1,170,871 | ) | ||
Selling, general and administrative expenses |
(506,501 | ) | (444,770 | ) | ||
Interest income |
2,769 | 2,913 | ||||
Dividends received |
3,058 | 3,417 | ||||
Other income (Notes 11 and 12) |
14,982 | 9,145 | ||||
Interest expense |
(7,381 | ) | (6,045 | ) | ||
Other deductions (Notes 5, 11 and 12) |
(12,936 | ) | (41,012 | ) | ||
Income (loss) before income taxes |
84,330 | (51,765 | ) | |||
Provision for income taxes |
38,337 | 7,752 | ||||
Equity in earnings (losses) of associated companies |
1,745 | (1,839 | ) | |||
Net income (loss) (Note 10) |
47,738 | (61,356 | ) | |||
Less net income (loss) attributable to noncontrolling interests (Note 10) |
4,060 | (8,379 | ) | |||
Net income (loss) attributable to Panasonic Corporation (Note 10) |
43,678 | (52,977 | ) | |||
Yen | ||||||
Net income (loss) per share attributable to Panasonic Corporation common shareholders (Note 8): |
||||||
Basic |
21.10 | (25.58 | ) | |||
Diluted |
| |
See accompanying Notes to Consolidated Financial Statements.
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PANASONIC CORPORATION
AND SUBSIDIARIES
Consolidated Statements of Cash Flows
Three months ended June 30, 2010 and 2009
Yen (millions) | ||||||
Three months ended June 30 | ||||||
2010 | 2009 | |||||
Cash flows from operating activities: |
||||||
Net income (loss) (Note 10) |
47,738 | (61,356 | ) | |||
Adjustments to reconcile net income (loss) to net cash provided by operating activities: |
||||||
Depreciation and amortization |
89,249 | 65,895 | ||||
Net gain on sale of investments |
(3,733 | ) | (241 | ) | ||
Provision for doubtful receivables |
2,569 | 798 | ||||
Deferred income taxes |
121 | 21,511 | ||||
Write-down of investment securities (Note 11) |
537 | 529 | ||||
Impairment losses on long-lived assets (Notes 5) |
205 | 1,031 | ||||
Cash effects of change in: |
||||||
Trade receivables |
6,143 | (71,640 | ) | |||
Inventories |
(90,092 | ) | (21,235 | ) | ||
Other current assets |
(20,404 | ) | (26,625 | ) | ||
Trade payables |
19,805 | 74,520 | ||||
Accrued income taxes |
2,756 | (3,176 | ) | |||
Accrued expenses and other current liabilities |
91,557 | 79,634 | ||||
Retirement and severance benefits |
(9,602 | ) | (8,699 | ) | ||
Deposits and advances from customers |
7,618 | 7,601 | ||||
Other |
417 | 11,469 | ||||
Net cash provided by operating activities |
144,884 | 70,016 | ||||
Cash flows from investing activities: |
||||||
Proceeds from disposition of investments and advances |
54,464 | 31,809 | ||||
Increase in investments and advances |
(453 | ) | (1,827 | ) | ||
Capital expenditures |
(94,135 | ) | (102,526 | ) | ||
Proceeds from disposals of property, plant and equipment |
63,914 | 3,519 | ||||
(Increase) decrease in time deposits |
1,883 | 2,655 | ||||
Other |
(6,286 | ) | (16,917 | ) | ||
Net cash provided by (used in) investing activities |
19,387 | (83,287 | ) | |||
(Continued)
- 17 -
PANASONIC CORPORATION
AND SUBSIDIARIES
Consolidated Statements of Cash Flows
Three months ended June 30, 2010 and 2009
Yen (millions) | ||||||
Three months ended June 30 | ||||||
2010 | 2009 | |||||
Cash flows from financing activities: |
||||||
Increase (decrease) in short-term debt |
42,668 | 110,645 | ||||
Proceeds from long-term debt |
2,185 | | ||||
Repayments of long-term debt |
(37,802 | ) | (6,592 | ) | ||
Dividends paid to Panasonic Corporation shareholders (Notes 9 and 10) |
(10,353 | ) | (15,530 | ) | ||
Dividends paid to noncontrolling interests (Note 10) |
(5,031 | ) | (7,062 | ) | ||
Repurchase of common stock (Note 10) |
(374 | ) | (25 | ) | ||
Sale of treasury stock (Note 10) |
8 | 11 | ||||
Purchase of noncontrolling interests (Note 10) |
(60,778 | ) | (596 | ) | ||
Other |
(22 | ) | 573 | |||
Net cash provided by (used in) financing activities |
(69,499 | ) | 81,424 | |||
Effect of exchange rate changes on cash and cash equivalents |
(35,447 | ) | (894 | ) | ||
Net increase (decrease) in cash and cash equivalents |
59,325 | 67,259 | ||||
Cash and cash equivalents at beginning of period |
1,109,912 | 973,867 | ||||
Cash and cash equivalents at end of period |
1,169,237 | 1,041,126 | ||||
See accompanying Notes to Consolidated Financial Statements.
- 18 -
PANASONIC CORPORATION
AND SUBSIDIARIES
Notes to Consolidated Financial Statements
(1) | Summary of Significant Accounting Policies |
(a) | Description of Business |
Panasonic Corporation (hereinafter, the Company, including consolidated subsidiaries, unless the context otherwise requires) is one of the worlds leading producers of electronic and electric products. The Company currently offers a comprehensive range of products, systems and components for consumer, business and industrial use based on sophisticated electronics and precision technology, expanding to building materials and equipment, and housing business.
Sales by product category for the three months ended June 30, 2010 were as follows: Digital AVC Networks36%, Home Appliances14%, PEW and PanaHome*16%, Components and Devices9%, SANYO*19%, and Other6%. A sales breakdown by geographical market was as follows: Japan49%, North and South America13%, Europe10%, and Asia and Others28%.
The Company is not dependent on a single supplier, and has no significant difficulty in obtaining raw materials from suppliers.
* | PEW stands for Panasonic Electric Works Co., Ltd. and PanaHome stands for PanaHome Corporation. SANYO stands for SANYO Electric Co., Ltd. |
(b) | Basis of Presentation of Consolidated Financial Statements |
The Company and its domestic subsidiaries maintain their books of account in conformity with financial accounting standards of Japan, and its foreign subsidiaries in conformity with those of the countries of their domicile.
The consolidated financial statements presented herein have been prepared in a manner and reflect adjustments which are necessary to conform with U.S. generally accepted accounting principles (U.S. GAAP).
- 19 -
(c) | Principles of Consolidation |
The consolidated financial statements include the accounts of the Company and its majority-owned, controlled subsidiaries. The Company also consolidates entities in which controlling interest exists through variable interests in accordance with the provisions of Financial Accounting Standards Board (FASB) Accounting Standards Codification (ASC) 810, Consolidation. Investments in companies and joint ventures over which we have the ability to exercise significant influence (generally through an voting interest of between 20% to 50%) are included in Investments and advances in the consolidated balance sheets. All significant intercompany balances and transactions have been eliminated in consolidation.
The Company has 671 consolidated subsidiaries and 238 associated companies under equity method as of June 30, 2010.
(d) | Use of Estimates |
The preparation of consolidated financial statements requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the consolidated financial statements, and the reported amounts of revenues and expenses during the reporting period. Actual results could differ from those estimates. Significant estimates and assumptions are reflected in valuation and disclosure of revenue recognition, allowance for doubtful receivables, valuation of inventories, impairment of long-lived assets, environmental liabilities, valuation of deferred tax assets, uncertain tax positions, employee retirement and severance benefit plans, and assets acquired and liabilities assumed by business combinations.
- 20 -
(e) | Adoption of New Accounting Pronouncements |
On April 1, 2010, the Company adopted Accounting Standards Update (ASU) 2009-16, Accounting for Transfers of Financial Assets. ASU2009-16 removes the concept of a qualifying special-purpose entity (QSPE) from ASC 860, Transfers and Servicing, and the exception from applying ASC 810 to QSPEs, thereby requiring transferors of financial assets to evaluate whether to consolidate transferees that previously were considered QSPEs. ASU 2009-16 also clarifies ASC 860s sale-accounting criteria pertaining to legal isolation and effective control and creates more stringent conditions for reporting a transfer of a portion of a financial asset as a sale. The adoption of ASU 2009-16 did not have a material effect on the Companys consolidated financial statements.
On April 1, 2010, the Company adopted ASU 2009-17, Improvements to Financial Reporting by Enterprises Involved with Variable Interest Entities. ASU 2009-17, which amends ASC 810, revises the test for determining the primary beneficiary of a Variable Interest Entities (VIE) from a primarily quantitative risks and rewards calculation based on the VIEs expected losses and expected residual returns to a primarily qualitative analysis based on identifying the party or related-party (if any) with the power to direct the activities that most significantly impact the VIEs economic performance and the obligation to absorb losses of, or the right to receive benefits from, the VIE that could potentially be significant to the VIE. The adoption of ASU 2009-17 did not have a material effect on the Companys consolidated financial statements.
- 21 -
(2) | Inventories |
Inventories at June 30 and March 31, 2010 are summarized as follows:
Yen (millions) | ||||
June 30, 2010 | March 31, 2010 | |||
Finished goods |
530,805 | 497,153 | ||
Work in process |
174,335 | 159,699 | ||
Raw materials |
270,722 | 256,794 | ||
975,862 | 913,646 | |||
(3) | Investments in Securities |
In accordance with ASC 320, InvestmentsDebt and Equity Securities, the Company classifies its existing marketable equity securities other than investments in associated companies and all debt securities as available-for-sale.
The cost, fair value, net unrealized holding gains (losses) of available-for-sale securities included in short-term investments, and investments and advances at June 30 and March 31, 2010 are as follows:
Yen (millions) | |||||||
June 30, 2010 | |||||||
Cost | Fair value | Net unrealized holding gains (losses) |
|||||
Noncurrent: |
|||||||
Equity securities |
274,295 | 306,185 | 31,890 | ||||
Corporate and government bonds |
3,896 | 3,998 | 102 | ||||
Other debt securities |
567 | 565 | (2 | ) | |||
278,758 | 310,748 | 31,990 | |||||
- 22 -
Yen (millions) | ||||||
March 31, 2010 | ||||||
Cost | Fair value | Net unrealized holding gains (losses) | ||||
Noncurrent: |
||||||
Equity securities |
275,579 | 379,358 | 103,779 | |||
Corporate and government bonds |
3,894 | 3,961 | 67 | |||
Other debt securities |
568 | 585 | 17 | |||
280,041 | 383,904 | 103,863 | ||||
The carrying amount of the Companys held-to-maturity securities totaled 1,954 million yen at March 31, 2010.
The carrying amounts of the Companys cost method investments totaled 27,725 million yen and 22,039 million yen at June 30 and March 31, 2010, respectively.
- 23 -
(4) | Leases |
The Company has operating leases for certain land, buildings, and machinery and equipment. Future minimum lease payments under operating leases at June 30, 2010 are as follows:
Yen (millions) | ||
Due within 1 year |
75,716 | |
Due after 1 year within 2 years |
51,202 | |
Due after 2 years within 3 years |
36,207 | |
Due after 3 years within 4 years |
26,452 | |
Due after 4 years within 5 years |
4,820 | |
Thereafter |
3,766 | |
Total minimum lease payments |
198,163 | |
(5) | Long-Lived Assets |
The Company periodically reviews the recorded value of its long-lived assets to determine if the future cash flows to be derived from these assets will be sufficient to recover the remaining recorded asset values. Impairment losses are included in other deductions in the consolidated statements of operations, and are not charged to segment profit.
The Company recognized impairment losses in the aggregate of 205 million yen of long-lived assets for the three months ended June 30, 2010.
Impairment losses for the three months ended June 30, 2010 mainly related to Digital AVC Networks segment.
The Company recognized impairment losses in the aggregate of 1,031 million yen of long-lived assets for the three months ended June 30, 2009.
Impairment losses for the three months ended June 30, 2009 mainly related to Components and Devices segment.
- 24 -
(6) | Number of Common Shares |
Number of common shares authorized and issued and number of treasury common shares as of June 30 and March 31, 2010 are as follows:
Number of shares | ||||
June 30, 2010 | March 31, 2010 | |||
Common stock: |
||||
Authorized |
4,950,000,000 | 4,950,000,000 | ||
Issued |
2,453,053,497 | 2,453,053,497 | ||
Treasury stock |
382,718,300 | 382,448,008 |
(7) | Panasonic Corporation Shareholders Equity per Share |
Panasonic Corporation shareholders equity per share as of June 30 and March 31, 2010 are as follows:
Yen | ||||
June 30, 2010 | March 31, 2010 | |||
Panasonic Corporation shareholders equity per share |
1,280.34 | 1,348.63 |
- 25 -
(8) | Net Income (Loss) per Share Attributable to Panasonic Corporation Common Shareholders |
A reconciliation of the numerators and denominators of the basic attributable to Panasonic Corporation common shareholders computation for three months June 30, 2010 and 2009 are as follows:
Yen (millions) | |||||
Three months ended June 30 | |||||
2010 | 2009 | ||||
Net income (loss) attributable to Panasonic Corporation common shareholders |
43,678 | (52,977 | ) | ||
Number of shares | |||||
Three months ended June 30 | |||||
2010 | 2009 | ||||
Average common shares outstanding |
2,070,402,824 | 2,070,636,858 | |||
Yen | |||||
Three months ended June 30 | |||||
2010 | 2009 | ||||
Net income (loss) per share attributable to Panasonic Corporation common shareholders: Basic |
21.10 | (25.58 | ) |
Diluted net income per share attributable to Panasonic Corporation common shareholders has been omitted because the Company did not have potentially dilutive common shares that were outstanding for the period, respectively.
(9) | Cash Dividends |
On May 7, 2010, the board of directors approved a year-end dividend of 5.0 yen per share, totaling 10,353 million yen on outstanding common stock as of March 31, 2010. The dividends, which became effective on May 31, 2010, were sourced out of retained earnings.
- 26 -
(10) | Equity |
The change in the carrying amount of Panasonic Corporation shareholders equity, noncontrolling interests and total equity in the consolidated balance sheets for the three months ended June 30, 2010 and 2009 are as follows:
Yen (millions) | |||||||||
Three months ended June 30, 2010 | |||||||||
Panasonic Corporation shareholders equity |
Noncontrolling interests |
Total equity | |||||||
Balance at April 1, 2010 |
2,792,488 | 887,285 | 3,679,773 | ||||||
Dividends paid to Panasonic Corporation shareholders |
(10,353 | ) | | (10,353 | ) | ||||
Dividends paid to noncontrolling interests |
| (5,031 | ) | (5,031 | ) | ||||
Repurchase of common stock |
(374 | ) | | (374 | ) | ||||
Sale of treasury stock |
8 | | 8 | ||||||
Equity transactions with noncontrolling interests |
(82,306 | ) | 24,029 | (58,277 | ) | ||||
Other |
| 17 | 17 | ||||||
Comprehensive income (loss): |
|||||||||
Net income |
43,678 | 4,060 | 47,738 | ||||||
Other comprehensive income (loss), net of tax: |
|||||||||
Translation adjustments |
(58,132 | ) | (13,313 | ) | (71,445 | ) | |||
Unrealized holding gains (losses) of available-for-sale securities |
(41,610 | ) | (2,052 | ) | (43,662 | ) | |||
Unrealized holding gains (losses) of derivative instruments |
5,805 | (22 | ) | 5,783 | |||||
Pension liability adjustments |
1,529 | 236 | 1,765 | ||||||
Total comprehensive income (loss) |
(48,730 | ) | (11,091 | ) | (59,821 | ) | |||
Balance at June 30, 2010 |
2,650,733 | 895,209 | 3,545,942 | ||||||
- 27 -
Yen (millions) | |||||||||
Three months ended June 30, 2009 | |||||||||
Panasonic Corporation shareholders equity |
Noncontrolling interests |
Total equity | |||||||
Balance at April 1, 2009 |
2,783,980 | 428,601 | 3,212,581 | ||||||
Dividends paid to Panasonic Corporation shareholders |
(15,530 | ) | | (15,530 | ) | ||||
Dividends paid to noncontrolling interests |
| (7,062 | ) | (7,062 | ) | ||||
Repurchase of common stock |
(25 | ) | | (25 | ) | ||||
Sale of treasury stock |
11 | | 11 | ||||||
Equity transactions with noncontrolling interests |
(392 | ) | (204 | ) | (596 | ) | |||
Other |
| 51 | 51 | ||||||
Comprehensive income (loss): |
|||||||||
Net income (loss) |
(52,977 | ) | (8,379 | ) | (61,356 | ) | |||
Other comprehensive income (loss), net of tax: |
|||||||||
Translation adjustments |
(2,692 | ) | 392 | (2,300 | ) | ||||
Unrealized holding gains of available-for-sale securities |
33,638 | 1,375 | 35,013 | ||||||
Unrealized holding gains of derivative instruments |
3,452 | 47 | 3,499 | ||||||
Pension liability adjustments |
(3,212 | ) | (2,527 | ) | (5,739 | ) | |||
Total comprehensive income (loss) |
(21,791 | ) | (9,092 | ) | (30,883 | ) | |||
Balance at June 30, 2009 |
2,746,253 | 412,294 | 3,158,547 | ||||||
- 28 -
(11) | Supplementary Information |
Included in other deductions for the three months ended June 30, 2010 and 2009 are as follows:
Yen (millions) | ||||
Three months ended June 30 | ||||
2010 | 2009 | |||
Expenses associated with the implementation of the early retirement programs in the domestic and overseas subsidiaries |
927 | 21,586 | ||
Write-down of investment securities |
537 | 529 | ||
Foreign exchange losses |
| 4,720 |
Foreign exchange gains included in other income for the three months ended June 30, 2010 are 809 million yen.
Net periodic benefit cost for three months ended June 30, 2010 and 2009 are 14,484 million yen and 17,935 million yen, respectively.
132,989 million yen of short-term bonds, which were newly issued during the three months ended June 30, 2010, are included in short-term debt, including current portion of long-term debt in the consolidated balance sheets as of June 30, 2010.
- 29 -
(12) | Derivatives and Hedging Activities |
The Company operates internationally, giving rise to significant exposure to market risks arising from changes in foreign exchange rates, interests rates and commodity prices. The Company assesses these risks by continually monitoring changes in these exposures and by evaluating hedging opportunities. Derivative financial instruments utilized by the Company to hedge these risks are comprised principally of foreign exchange contracts, interests rate swaps, cross currency swaps and commodity derivatives. The Company does not hold or issue derivative financial instruments for trading purpose.
The Company accounts for derivative instruments in accordance with ASC 815, Derivatives and Hedging. Amounts included in accumulated other comprehensive income (loss) at June 30, 2010 are expected to be recognized in earnings principally over the next twelve months. The maximum term over which the Company is hedging exposures to the variability of cash flows for foreign currency exchange risk is approximately five months.
The Company is exposed to credit risk in the event of non-performance by counterparties to the derivative contracts, but such risk is considered mitigated by the high credit rating of the counterparties.
- 30 -
The fair values of derivative instruments at June 30, 2010 are as follows:
Yen (millions) |
|||||||||
Asset derivatives |
Liability derivatives |
||||||||
Consolidated balance |
Fair value |
Consolidated balance |
Fair value |
||||||
Derivatives designated as hedging instruments under ASC 815: |
|||||||||
Foreign exchange contracts |
Other current assets | 15,611 | Other current liabilities | (54 | ) | ||||
Commodity futures |
Other current assets | 1,415 | Other current liabilities | (8,426 | ) | ||||
Total derivatives designated as hedging instruments under |
17,026 | (8,480 | ) | ||||||
Derivatives not designated as hedging instruments under ASC 815: |
|||||||||
Foreign exchange contracts |
Other current assets | 13,248 | Other current liabilities | (1,416 | ) | ||||
Cross currency swaps |
| | Other current liabilities | (895 | ) | ||||
Interest rate swaps |
Other current assets | 20 | | | |||||
Commodity futures |
Other current assets | 2,781 | Other current liabilities | (2,781 | ) | ||||
Total derivatives not designated as hedging instruments under |
16,049 | (5,092 | ) | ||||||
Total derivatives |
33,075 | (13,572 | ) | ||||||
- 31 -
The fair values of derivative instruments at March 31, 2010 are as follows:
Yen (millions) |
|||||||||
Asset derivatives |
Liability derivatives |
||||||||
Consolidated balance |
Fair value |
Consolidated balance |
Fair value |
||||||
Derivatives designated as hedging instruments under ASC 815: |
|||||||||
Foreign exchange contracts |
Other current assets | 415 | Other current liabilities | (1,971 | ) | ||||
Commodity futures |
Other current assets | 11,330 | Other current liabilities | (3,345 | ) | ||||
Total derivatives designated as hedging instruments under ASC 815 |
11,745 | (5,316 | ) | ||||||
Derivatives not designated as hedging instruments under ASC 815: |
|||||||||
Foreign exchange contracts |
Other current assets | 8,590 | Other current liabilities | (2,307 | ) | ||||
Cross currency swaps |
| | Other current liabilities | (283 | ) | ||||
Interest rate swaps |
Other current assets | 23 | | | |||||
Commodity futures |
Other current assets | 1,231 | Other current liabilities | (1,231 | ) | ||||
Total derivatives not designated as hedging instruments under ASC 815 |
9,844 | (3,821 | ) | ||||||
Total derivatives |
21,589 | (9,137 | ) | ||||||
- 32 -
The effect of derivative instruments on the consolidated statement of operations for the three months ended June 30, 2010 is as follows:
Yen (millions) |
|||||
Hedging instruments in ASC 815 fair value hedging relationships |
Location of gain or (loss) recognized in operations |
Amount of gain or (loss) recognized in operations |
|||
Commodity futures |
Other income (deductions) | (13,843 | ) | ||
Total |
(13,843 | ) | |||
Yen (millions) |
|||||
Related hedged items in hedging relationships |
Location of gain or (loss) recognized in operations |
Amount of gain or (loss) recognized in operations |
|||
Trade accounts receivable (payable) |
Other income (deductions) | 14,450 | |||
Total |
14,450 | ||||
Fair value hedges resulted in gains of 607 million yen of ineffectiveness.
Yen (millions) |
||||||||
Derivatives in ASC 815 cash flow hedging relationships |
Amount of gain (loss) recognized in OCI on derivative (effective portion) |
Location of gain (loss) |
Amount of gain (loss) reclassified from accumulated OCI into operations (effective portion) |
|||||
Foreign exchange contracts |
12,674 | Other income (deductions) | (1,840 | ) | ||||
Commodity futures |
(1,185 | ) | Cost of sales | 418 | ||||
Total |
11,489 | (1,422 | ) | |||||
Yen (millions) | ||||
Derivatives in ASC |
Location of gain (loss) recognized in (ineffective portion and amount excluded from effectiveness testing) |
Amount of gain (loss) recognized
in operations on derivative (ineffective portion and amount excluded from effectiveness testing) | ||
Foreign exchange contracts |
Other income (deductions) | 406 | ||
Commodity futures |
| | ||
Total |
406 | |||
Yen (millions) |
|||||
Derivatives not designated as hedging instruments under ASC 815 |
Location of gain (loss) recognized in operations on derivative |
Amount of gain (loss) recognized in operations on derivative |
|||
Foreign exchange contracts |
Other income (deductions) | 21,500 | |||
Cross currency swaps |
Other income (deductions) | (612 | ) | ||
Interest rate swaps |
Other income (deductions) | (3 | ) | ||
Commodity futures |
Other income (deductions) | 0 | |||
Total |
20,885 | ||||
- 33 -
The effect of derivative instruments on the consolidated statement of operations for the three months ended June 30, 2009 is as follows:
Yen (millions) |
|||||
Hedging instruments in hedging relationships |
Location of gain or (loss) recognized in operations |
Amount of gain or (loss) recognized in operations |
|||
Commodity futures |
Other income (deductions) | 11,248 | |||
Total |
11,248 | ||||
Yen (millions) |
|||||
Related hedged items in hedging relationships |
Location of gain or (loss) recognized in operations |
Amount of gain or (loss) recognized in operations |
|||
Trade accounts receivable (payable) |
Other income (deductions) | (10,832 | ) | ||
Total |
(10,832 | ) | |||
Fair value hedges resulted in gains of 416 million yen of ineffectiveness.
Yen (millions) |
||||||||
Derivatives in ASC 815 cash flow hedging relationships |
Amount of gain (loss) recognized in OCI on derivative (effective portion) |
Location of gain (loss) accumulated OCI into operations (effective portion) |
Amount of gain (loss) reclassified from accumulated OCI into operations (effective portion) |
|||||
Foreign exchange contracts |
(2,310 | ) | Other income (deductions) | (6,142 | ) | |||
Cross currency swaps |
(291 | ) | Other income (deductions) | (16 | ) | |||
Commodity futures |
771 | Cost of sales | (705 | ) | ||||
Total |
(1,830 | ) | (6,863 | ) | ||||
Yen (millions) |
|||||
Derivatives in ASC 815 cash flow hedging relationships |
Location of gain (loss) recognized in (ineffective portion and amount excluded |
Amount of gain (loss) recognized
in operations on derivative (ineffective portion and amount excluded from effectiveness testing) |
|||
Foreign exchange contracts |
Other income (deductions) | 64 | |||
Cross currency swaps |
| | |||
Commodity futures |
| | |||
Total |
64 | ||||
Yen (millions) |
|||||
Derivatives not designated as hedging instruments under ASC 815 |
Location of gain (loss) recognized in operations on derivative |
Amount of gain (loss) recognized in operations on derivative |
|||
Foreign exchange contracts |
Other income (deductions) | (4,617 | ) | ||
Cross currency swaps |
Other income (deductions) | 319 | |||
Commodity futures |
Other income (deductions) | 0 | |||
Total |
(4,298 | ) | |||
- 34 -
(13) | Fair Value |
The following methods and assumptions were used to estimate the fair value of each class of financial instruments for which it is practicable to estimate that value:
Cash and cash equivalents, Time deposits, Trade receivables, Short-term debt, Trade payables, Accrued expenses
The carrying amount approximates fair value because of the short maturity of these instruments.
Investments and advances
The fair value of investments and advances is estimated based on quoted market prices or the present value of future cash flows using appropriate current discount rates.
Long-term debt, including current portion
The fair value of long-term debt is estimated based on quoted market prices or the present value of future cash flows using appropriate current discount rates.
- 35 -
Derivative financial instruments
The fair value of derivative financial instruments, all of which are used for hedging purposes, is estimated based on unadjusted market prices or quotes obtained from brokers, which are periodically validated by pricing models using observable inactive market inputs.
The estimated fair values of financial instruments, all of which are held or issued for purposes other than trading, at June 30 and March 31, 2010 are as follows:
Yen (millions) | ||||||||||||
June 30, 2010 | March 31, 2010 | |||||||||||
Carrying amount |
Fair value |
Carrying amount |
Fair value |
|||||||||
Non-derivatives: |
||||||||||||
Assets: |
||||||||||||
Other investments and advances |
379,944 | 380,273 | 454,313 | 454,516 | ||||||||
Liabilities: |
||||||||||||
Long-term debt, including current portion |
(1,195,215 | ) | (1,221,478 | ) | (1,236,052 | ) | (1,250,048 | ) | ||||
Derivatives: |
||||||||||||
Other current assets: |
||||||||||||
Forward: |
||||||||||||
To sell foreign currencies |
22,551 | 22,551 | 3,511 | 3,511 | ||||||||
To buy foreign currencies |
6,308 | 6,308 | 5,494 | 5,494 | ||||||||
Interest rate swaps |
20 | 20 | 23 | 23 | ||||||||
Commodity futures: |
||||||||||||
To sell commodity |
3,698 | 3,698 | | | ||||||||
To buy commodity |
498 | 498 | 12,561 | 12,561 | ||||||||
Other current liabilities: |
||||||||||||
Forward: |
||||||||||||
To sell foreign currencies |
(1,445 | ) | (1,445 | ) | (2,390 | ) | (2,390 | ) | ||||
To buy foreign currencies |
(25 | ) | (25 | ) | (1,888 | ) | (1,888 | ) | ||||
Cross currency swaps |
(895 | ) | (895 | ) | (283 | ) | (283 | ) | ||||
Commodity futures: |
||||||||||||
To sell commodity |
(29 | ) | (29 | ) | (4,576 | ) | (4,576 | ) | ||||
To buy commodity |
(11,178 | ) | (11,178 | ) | | |
- 36 -
Limitations
Fair value estimates are made at a specific point in time, based on relevant market information and information about the financial instruments. These estimates are subjective in nature and involve uncertainties and matters of significant judgments and therefore cannot be determined with precision. Changes in assumptions could significantly affect the estimates.
ASC 820 defines fair value and establishes a fair value hierarchy that prioritizes the inputs to valuation techniques used to measure fair value. The three levels of the fair value hierarchy are as follows:
Level 1 | Quoted prices (unadjusted) in active markets for identical assets. | |
Level 2 | Quoted prices for similar assets or liabilities in active markets, quoted prices for identical or similar assets or liabilities in markets that are not active, inputs other than quoted prices that are observable, and inputs that are derived principally from or corroborated by observable market data by correlation or other means. | |
Level 3 | Unobservable inputs for the asset or liability. |
Assets and liabilities measured at fair value on a recurring basis
The following table presents assets and liabilities that are measured at fair value on a recurring basis at June 30 and March 31, 2010:
Yen (millions) | |||||||||||
June 30, 2010 | |||||||||||
Level 1 | Level 2 | Level 3 | Total | ||||||||
Assets: |
|||||||||||
Available-for-sale securities: |
|||||||||||
Equity securities |
306,185 | | | 306,185 | |||||||
Corporate and government bonds |
| 3,998 | | 3,998 | |||||||
Other debt securities |
| 565 | | 565 | |||||||
Total available-for-sale securities |
306,185 | 4,563 | | 310,748 | |||||||
Derivatives: |
|||||||||||
Foreign exchange contracts |
| 28,859 | | 28,859 | |||||||
Interest rate swaps |
| 20 | | 20 | |||||||
Commodity futures |
2,067 | 2,129 | | 4,196 | |||||||
Total derivatives |
2,067 | 31,008 | | 33,075 | |||||||
Total |
308,252 | 35,571 | | 343,823 | |||||||
Liabilities: |
|||||||||||
Derivatives: |
|||||||||||
Foreign exchange contracts |
| (1,470 | ) | | (1,470 | ) | |||||
Cross currency swaps |
| (895 | ) | | (895 | ) | |||||
Commodity futures |
(10,555 | ) | (652 | ) | | (11,207 | ) | ||||
Total derivatives |
(10,555 | ) | (3,017 | ) | | (13,572 | ) | ||||
Total |
(10,555 | ) | (3,017 | ) | | (13,572 | ) | ||||
- 37 -
Yen (millions) | |||||||||||
March 31, 2010 | |||||||||||
Level 1 | Level 2 | Level 3 | Total | ||||||||
Assets: |
|||||||||||
Available-for-sale securities: |
|||||||||||
Equity securities |
379,358 | | | 379,358 | |||||||
Corporate and government bonds |
| 3,961 | | 3,961 | |||||||
Other debt securities |
| 585 | | 585 | |||||||
Total available-for-sale securities |
379,358 | 4,546 | | 383,904 | |||||||
Derivatives: |
|||||||||||
Foreign exchange contracts |
| 9,005 | | 9,005 | |||||||
Interest rate swaps |
| 23 | | 23 | |||||||
Commodity futures |
12,561 | | | 12,561 | |||||||
Total derivatives |
12,561 | 9,028 | | 21,589 | |||||||
Total |
391,919 | 13,574 | | 405,493 | |||||||
Liabilities: |
|||||||||||
Derivatives: |
|||||||||||
Foreign exchange contracts |
| (4,278 | ) | | (4,278 | ) | |||||
Cross currency swaps |
| (283 | ) | | (283 | ) | |||||
Commodity futures |
(3,345 | ) | (1,231 | ) | | (4,576 | ) | ||||
Total derivatives |
(3,345 | ) | (5,792 | ) | | (9,137 | ) | ||||
Total |
(3,345 | ) | (5,792 | ) | | (9,137 | ) | ||||
The Companys existing marketable equity securities and commodity futures are included in Level 1, which are valued using an unadjusted quoted market price in active markets with sufficient volume and frequency of transactions.
Level 2 available-for-sale securities include all debt securities, which are valued using inputs other than quoted prices that are observable. Level 2 derivatives including foreign exchange contracts and commodity futures are valued using quotes obtained from brokers, which are periodically validated by pricing models using observable market inputs, such as foreign currency exchange rates and market prices for commodity futures.
Assets and liabilities measured at fair value on a nonrecurring basis
For three months ended June 30, 2010 and 2009, there were no circumstances that required any significant assets and liabilities that are not measured at fair value on an ongoing basis to be measured and recognized at fair value.
- 38 -
(14) | Commitments and Contingent Liabilities |
The Company provides guarantees to third parties mainly on bank loans provided to associated companies and customers. The guarantees are made to enhance their credit. For each guarantee provided, the Company is required to perform under the guarantee if the guaranteed party defaults on a payment. Also the Company sold certain trade receivables to independent third parties, some of which are with recourse. If the collectibility of those receivables with recourse becomes doubtful, the Company is obligated to assume the liabilities. At June 30, 2010, the maximum amount of undiscounted payments the Company would have to make in the event of default is 33,464 million yen. The carrying amount of the liabilities recognized for the Companys obligations as a guarantor under those guarantees at June 30 and March 31, 2010 was insignificant.
In connection with the sale and lease back of certain machinery and equipment, the Company guarantees a specific value of the leased assets. For each guarantee provided, the Company is required to perform under the guarantee if certain conditions are met during or at the end of the lease term. At June 30, 2010, the maximum amount of undiscounted payments the Company would have to make in the event that these conditions are met is 47,914 million yen. The carrying amount of the liabilities recognized for the Companys obligations as guarantors under those guarantees at June 30 and March 31, 2010 was insignificant.
The Company and certain subsidiaries are under the term of leasehold interest contracts for lands of domestic factories and have obligations for restitution on their leaving. The asset retirement obligations cannot be reasonably estimated because the durations of use of the leased assets are not specified and there are no plans to undertake relocation in the future. Therefore the Company did not recognize asset retirement obligations.
The Company and certain of its subsidiaries are subject to a number of legal proceedings including civil litigations related to tax, products or intellectual properties, or governmental investigations. Since November 2007, the Company and MT Picture Display Co., Ltd. (MTPD), a subsidiary of the Company, are subject to investigations by government authorities, including the Japan Fair Trade Commission, the U.S. Department of Justice and the European Commission, in respect of alleged antitrust violations relating to cathode ray tubes (CRTs). Subsequent to these actions by the authorities, a number of class action lawsuits have been filed in the U.S. and Canada against the Company and certain of its subsidiaries. In October 2009, the Japan Fair Trade Commission issued a cease and desist order against MTPD and assessed a fine against its three subsidiaries in South East Asia, but each named company filed for a hearing to challenge the orders which is currently subject to proceedings. Since February 2009, the Company is subject to investigations by government authorities, including the U.S. Department of Justice and the European Commission, in respect of alleged antitrust violations relating to compressors for refrigerator use. Subsequent to these actions by the authorities, a number of class action lawsuits have been filed in the U.S. and Canada against the Company and certain of its subsidiaries. The Company has been cooperating with the various governmental investigations. Depending upon the outcome of these different proceedings, the Company and certain of its subsidiaries may be subject to an uncertain amount of fines, and accordingly the Company has accrued for certain probable and reasonable estimated amounts for the fines. Other than those above, there are a number of legal actions against the Company and certain subsidiaries. Management is of the opinion that damages, if any, resulting from these actions will not have a material effect on the Companys consolidated financial statements.
- 39 -
(15) | Segment Information |
In accordance with the provisions of ASC 280, Segment Reporting, the segments reported below are the components of the Company for which separate financial information is available that is evaluated regularly by the chief operating decision maker of the Company in deciding how to allocate resources and in assessing performance.
Business segments correspond to categories of activity classified primarily by markets, products and brand names. Digital AVC Networks includes video and audio equipment, and information and communications equipment. Home Appliances includes household equipment. PEW and PanaHome includes electrical supplies, electric products, building materials and equipment, and housing business. Components and Devices includes electronic components, semiconductors, and batteries. SANYO includes solar cells, lithium-ion batteries, optical pickups, and others. Other includes electronic-parts-mounting machines, industrial robots and industrial equipment.
The company transferred its motor business to Home Appliances on April 1, 2010. Accordingly, segment information for Home Appliances and Components and Devices in fiscal 2010 are reclassified to conform to the presentation for fiscal 2011.
- 40 -
By Business Segment
Information by business segment for the three months ended June 30, 2010 and 2009 is shown in the tables below:
Yen (millions) | ||||||
Three months ended June 30 | ||||||
2010 | 2009 | |||||
Sales: |
||||||
Digital AVC Networks: |
||||||
Customers |
816,864 | 763,092 | ||||
Intersegment |
14,858 | 10,213 | ||||
Total |
831,722 | 773,305 | ||||
Home Appliances: |
||||||
Customers |
275,862 | 257,988 | ||||
Intersegment |
46,919 | 48,644 | ||||
Total |
322,781 | 306,632 | ||||
PEW and PanaHome: |
||||||
Customers |
378,533 | 346,159 | ||||
Intersegment |
12,725 | 11,468 | ||||
Total |
391,258 | 357,627 | ||||
Components and Devices: |
||||||
Customers |
159,802 | 148,325 | ||||
Intersegment |
76,463 | 65,004 | ||||
Total |
236,265 | 213,329 | ||||
SANYO: |
||||||
Customers |
407,311 | | ||||
Intersegment |
5,673 | | ||||
Total |
412,984 | | ||||
Other: |
||||||
Customers |
122,754 | 79,894 | ||||
Intersegment |
152,673 | 124,824 | ||||
Total |
275,427 | 204,718 | ||||
Eliminations |
(309,311 | ) | (260,153 | ) | ||
Consolidated total |
2,161,126 | 1,595,458 | ||||
- 41 -
Yen (millions) | ||||||
Three months ended June 30 | ||||||
2010 | 2009 | |||||
Segment profit (loss): |
||||||
Digital AVC Networks |
27,851 | (13,602 | ) | |||
Home Appliances |
32,259 | 18,595 | ||||
PEW and PanaHome |
8,348 | (7,805 | ) | |||
Components and Devices |
11,847 | (9,744 | ) | |||
SANYO |
5,009 | | ||||
Other |
12,750 | (884 | ) | |||
Corporate and eliminations |
(14,226 | ) | (6,743 | ) | ||
Total segment profit |
83,838 | (20,183 | ) | |||
Interest income |
2,769 | 2,913 | ||||
Dividends received |
3,058 | 3,417 | ||||
Other income |
14,982 | 9,145 | ||||
Interest expense |
(7,381 | ) | (6,045 | ) | ||
Other deductions |
(12,936 | ) | (41,012 | ) | ||
Consolidated income (loss) before income taxes |
84,330 | (51,765 | ) | |||
Corporate expenses include certain corporate R&D expenditures and general corporate expenses.
- 42 -
By Geographical Area
Sales attributed to countries based upon the customers location for the three months ended June 30, 2010 and 2009 are as follows:
Yen (millions) | ||||
Three months ended June 30 | ||||
2010 | 2009 | |||
Sales: |
||||
Japan |
1,054,397 | 858,770 | ||
North and South America |
286,044 | 203,607 | ||
Europe |
223,823 | 167,136 | ||
Asia and Others |
596,862 | 365,945 | ||
Consolidated total |
2,161,126 | 1,595,458 | ||
United States included in North and South America |
238,017 | 175,574 | ||
China included in Asia and Others |
304,460 | 173,766 |
There are no individually material countries of which should be separately disclosed in North and South America, Europe, and Asia and Others, except for the United States of America and China.
Transfers between business segments or geographic segments are made at arms-length prices. There are no sales to a single external major customer for the three months ended June 30, 2010 and 2009.
- 43 -
(16) | Subsequent Events |
The Company resolved, at the board of directors meeting held on July 29, 2010, to pursue a plan to the Companys acquisition of all shares of PEW and SANYO (hereinafter collectively referred to as the Subsidiaries) in order to make them wholly-owned subsidiaries of the Company by around April 2011 by way of tender offers and, thereafter, share exchanges. In order to implement the acquisition of all shares of the Subsidiaries, the Company resolved, at its above-mentioned board of directors meeting, to simultaneously commence tender offers for common shares of the Subsidiaries. With respect to the tender offers, if the Company purchases all of the shares of the Subsidiaries eligible to be purchased, the maximum aggregate purchase amount is expected to be 818.4 billion yen.
# # #
FOR IMMEDIATE RELEASE
Media Contacts:
Akira Kadota (Japan) International PR (Tel: +81-3-6403-3040)
Panasonic News Bureau (Japan) (Tel: +81-3-3542-6205)
Jim Reilly (U.S.) (Tel: +1-201-392-6067)
Anne Guennewig (Europe) (Tel: +49-611-235-457) |
Investor Relations Contacts:
Makoto Mihara (Japan) Investor Relations (Tel: +81-6-6908-1121)
Yuko Iwatsu (U.S.) Panasonic Finance (America), Inc. (Tel: +1-212-698-1360)
Hiroko Carvell (Europe) Panasonic Finance (Europe) plc (Tel: +44-20-3008-6887) | |
Panasonic Announces Additional Information regarding Commencement of
Tender Offer for Shares of Common Stock of Panasonic Electric Works
Osaka, August 20, 2010Panasonic Corporation (NYSE: PC/TSE: 6752, the Tender Offeror or the Company) announced that it acquires all of the shares of common stock of Panasonic Electric Works Co., Ltd. (TSE: 6991, the Target) (excluding the treasury shares owned by the Target) through a tender offer (the Tender Offer) on July 29, 2010. The commencement of the Tender Offer was subject to, among others, the nonoccurrence of any events that would have a material adverse effect on achieving the purpose of the Tender Offer such, as a material change in the Targets or its subsidiaries management or assets. As the Company has confirmed that no events have occurred that would prevent the commencement of the Tender Offer, the Company announces that it has decided to implement the Tender Offer from August 23, 2010, as scheduled.
In addition, since the description of the press release Panasonic Announces Commencement of Tender Offer for Shares of Common Stock of Panasonic Electric Works dated July 29, 2010, has amendments, it has been amended as follows (the amendments are underlined):
- 2 -
1. Purpose of the Tender Offer
(1) Overview of the Tender Offer
(Prior to amendment)
The Company currently owns 51.00% (751,074,788 shares) of the aggregate number of issued shares of the Target (as of March 31, 2010: 383,049,035 shares). The Target is a consolidated subsidiary of the Company; however, a decision was made recently to acquire all of the issued shares of the Targets common stock (excluding the treasury shares owned by the Target) through the Tender Offer in order to make the Target the Companys wholly-owned subsidiary. With respect to the Tender Offer, no maximum or minimum number of shares scheduled to be purchased has been established. The Tender Offer shall be commenced subject to, among others, the nonoccurrence of any events which would have a material adverse effect on achieving the purpose of the Tender Offer such as a material change in the Targets or its subsidiaries management or assets.
(omitted)
(Post amendment)
The Company currently owns 51.00% (751,074,788 shares) of the aggregate number of issued shares of the Target (as of June 30, 2010: 383,049,035 shares). The Target is a consolidated subsidiary of the Company; however, a decision was made recently to acquire all of the issued shares of the Targets common stock (excluding the treasury shares owned by the Target) through the Tender Offer in order to make the Target the Companys wholly-owned subsidiary. With respect to the Tender Offer, no maximum or minimum number of shares scheduled to be purchased has been established.
(omitted)
(3) | Measures to Ensure the Fairness of the Tender Offer such as Measures to Ensure the Fairness of the Tender Offer Purchase Price, and Measures to Avoid Conflicts of Interest |
(i) | Procurement of a Valuation Report from an Independent, Third-Party Valuation Institution |
(Prior to amendment)
(omitted)
The Tender Offer Purchase Price of 1,110 yen per-share represents a premium of (i) 14.0% (rounded to the first decimal place; the same shall apply to indications of percentages hereinafter in this paragraph) over the closing price of the Targets shares of common stock of 974 yen in ordinary trading on the first section of the Tokyo Stock Exchange on July 28, 2010, which is the day immediately preceding the day on which the Company announced the commencement of the Tender Offer, (ii) 22.1% over the simple average closing price of 909 yen (rounded down to a whole number; the same shall apply to indications of prices in yen hereinafter in this paragraph) in ordinary trading in the previous one-month period (from June 29, 2010 to July 28, 2010), (iii) 17.1% over the simple average closing price of 948 yen in ordinary trading in the previous three-month period (from April 30, 2010 to July 28, 2010) or (iv) 7.6% over the simple average closing price of 1,032 yen in ordinary trading in the previous six-month period (from January 29, 2010 to July 28, 2010).
- 3 -
(Post amendment)
(omitted)
The Tender Offer Purchase Price of 1,110 yen per-share represents a premium of (i) 14.0% (rounded to the first decimal place; the same shall apply to indications of percentages hereinafter in this paragraph) over the closing price of the Targets shares of common stock of 974 yen in ordinary trading on the first section of the Tokyo Stock Exchange on July 28, 2010, which is the day immediately preceding the day on which the Company announced the commencement of the Tender Offer, (ii) 22.1% over the simple average closing price of 909 yen (rounded down to a whole number; the same shall apply to indications of prices in yen hereinafter in this paragraph) in ordinary trading in the previous one-month period (from June 29, 2010 to July 28, 2010), (iii) 17.1% over the simple average closing price of 948 yen in ordinary trading in the previous three-month period (from April 30, 2010 to July 28, 2010) or (iv) 7.6% over the simple average closing price of 1,032 yen in ordinary trading in the previous six-month period (from January 29, 2010 to July 28, 2010).
In addition, the Tender Offer Purchase Price represents a premium of (i) 0.5% over the closing price of the Targets shares of common stock of 1,105 yen in ordinary trading on the first section of the Tokyo Stock Exchange on August 20, 2010, which is the business day immediately preceding the commencement date of the Tender Offer, (ii) 4.7% over the simple average closing price of 1,060 yen in ordinary trading in the previous one-month period (from July 21, 2010 to August 20, 2010), (iii) 14.4% over the simple average closing price of 970 yen in ordinary trading in the previous three-month period (from May 21, 2010 to August 20, 2010) or (iv) 6.2% over the simple average closing price of 1,045 yen in ordinary trading in the previous six-month period (from February 22, 2010 to August 20, 2010).
- 4 -
2. Outline of the Tender Offer and Other Information
(4) Calculation Base, Etc. of Tender Offer Purchase Price
(i) | Basis of Calculation |
(Prior to amendment)
(omitted)
The Tender Offer Purchase Price of 1,110 yen per-share represents a premium of (i) 14.0% (rounded to the first decimal place; the same shall apply to indications of percentages hereinafter in this paragraph) over the closing price of the Targets shares of common stock of 974 yen in ordinary trading on the first section of the Tokyo Stock Exchange on July 28, 2010, which is the day immediately preceding the day on which the Company announced the commencement of the Tender Offer, (ii) 22.1% over the simple average closing price of 909 yen (rounded down to a whole number; the same shall apply to indications of prices in yen hereinafter in this paragraph) in ordinary trading in the previous one-month period (from June 29, 2010 to July 28, 2010), (iii) 17.1% over the simple average closing price of 948 yen in ordinary trading in the previous three-month period (from April 30, 2010 to July 28, 2010) or (iv) 7.6% over the simple average closing price of 1,032 yen in ordinary trading in the previous six-month period (from January 29, 2010 to July 28, 2010).
(Post amendment)
(omitted)
The Tender Offer Purchase Price of 1,110 yen per-share represents a premium of (i) 14.0% (rounded to the first decimal place; the same shall apply to indications of percentages hereinafter in this paragraph) over the closing price of the Targets shares of common stock of 974 yen in ordinary trading on the first section of the Tokyo Stock Exchange on July 28, 2010, which is the day immediately preceding the day on which the Company announced the commencement of the Tender Offer, (ii) 22.1% over the simple average closing price of 909 yen (rounded down to a whole number; the same shall apply to indications of prices in yen hereinafter in this paragraph) in ordinary trading in the previous one-month period (from June 29, 2010 to July 28, 2010), (iii) 17.1% over the simple average closing price of 948 yen in ordinary trading in the previous three-month period (from April 30, 2010 to July 28, 2010) or (iv) 7.6% over the simple average closing price of 1,032 yen in ordinary trading in the previous six-month period (from January 29, 2010 to July 28, 2010).
In addition, the Tender Offer Purchase Price represents a premium of (i) 0.5% over the closing price of the Targets shares of common stock of 1,105 yen in ordinary trading on the first section of the Tokyo Stock Exchange on August 20, 2010, which is the business day immediately preceding the commencement date of the Tender Offer, (ii) 4.7% over the simple average closing price of 1,060 yen in ordinary trading in the previous one-month period (from July 21, 2010 to August 20, 2010), (iii) 14.4% over the simple average closing price of 970 yen in ordinary trading in the previous three-month period (from May 21, 2010 to August 20, 2010) or (iv) 6.2% over the simple average closing price of 1,045 yen in ordinary trading in the previous six-month period (from February 22, 2010 to August 20, 2010).
- 5 -
(5) Number of Share Certificates, Etc. Scheduled to be Purchased
(Prior to amendment)
Number of shares scheduled to be purchased |
Minimum number of shares scheduled to be purchased |
Maximum number of shares scheduled to be purchased | ||
356,913,031 shares |
Not applicable | Not applicable |
(omitted)
Note 2) |
The number of shares scheduled to be purchased (356,913,031 shares) is calculated by deducting the sum of the number of shares of the Target held by the Tender Offeror as of July 29,2010 (383,049,035 shares) and the number of treasury shares held by the Target as of March 31, 2010 as described in the securities report for the 104th term that was submitted by the Target on June 18, 2010 (11,112,722 shares), from the number of issued shares as of March 31, 2010, as described in the securities report for the 104th term that was submitted by the Target on June 18, 2010 (751,074,788 shares). |
(omitted)
(Post amendment)
Number of shares scheduled to be purchased |
Minimum number of shares scheduled to be purchased |
Maximum number of shares scheduled to be purchased | ||
356,913,031 shares |
Not applicable | Not applicable |
(omitted)
Note 2) |
The number of shares scheduled to be purchased (356,913,031 shares) is calculated by deducting the sum of the number of shares of the Target held by the Tender Offeror as of July 29, 2010 (383,049,035 shares) and the number of treasury shares held by the Target as of March 31, 2010 as described in the securities report for the 104th term that was submitted by the Target on June 18, 2010 (11,112,722 shares), from the number of issued shares as of June 30, 2010, as described in the first quarterly report for the 105th term that was submitted by the Target on August 6, 2010 (751,074,788 shares). |
(omitted)
- 6 -
(6) Change in Ownership Percentage of Share Certificates, Etc. as a Result of Tender Offer
(Prior to amendment)
Number of Voting Rights Represented by Share Certificates, Etc. Held by the Tender Offeror before the Tender Offer | 383,049 units | (Ownership Percentage of Share Certificates, Etc. before the Tender Offer: 51.77%) | ||
Number of Voting Rights Represented by Share Certificates, Etc. Held by Special Related Parties before the Tender Offer | Not determined yet | (Ownership Percentage of Share Certificates, Etc. before the Tender Offer: Not determined yet) | ||
Number of Voting Rights Represented by Share Certificates, Etc. Scheduled to be Purchased | 356,913 units | (Ownership Percentage of Share Certificates, Etc. after the Tender Offer: 100.00%) | ||
Total Number of Voting Rights of Shareholders, Etc. of the Target | 734,722 units |
(omitted)
Note 3) |
The Total Number of Voting Rights of Shareholders, Etc. of the Target is the total number of voting rights of all shareholders as of March 31, 2010 as described in the securities report for the 104th term that was submitted by the Target on June 18, 2010 (indicated therein as 1,000 shares per unit). However, since the shares less than one unit and cross-held shares are also subject to the Tender Offer, in calculating the Ownership Percentage of Share Certificates, Etc. before the Tender Offer and the Ownership Percentage of Share Certificates, Etc. after the Tender Offer, the total number of voting rights (739,962 units), corresponding to the number of shares (739,962,066 shares) obtained by deducting the number of treasury shares held by the Target as of March 31, 2010 as described in the securities report for the 104th term that was submitted by the Target on June 18, 2010 (11,112,722 shares), from the total number of shares issued as of March 31, 2010 as described in the securities report for the 104th term that was submitted by the Target on June 18, 2010 (751,074,788 shares), is used as the denominator. |
(omitted)
- 7 -
(Post amendment)
Number of Voting Rights Represented by Share Certificates, Etc. Held by the Tender Offeror before the Tender Offer | 383,049 units | (Ownership Percentage of Share Certificates, Etc. before the Tender Offer: 51.77%) | ||
Number of Voting Rights Represented by Share Certificates, Etc. Held by Special Related Parties before the Tender Offer | 4,813 units | (Ownership Percentage of Share Certificates, Etc. before the Tender Offer: 0.65%) | ||
Number of Voting Rights Represented by Share Certificates, Etc. Scheduled to be Purchased | 356,913 units | (Ownership Percentage of Share Certificates, Etc. after the Tender Offer: 100.00%) | ||
Total Number of Voting Rights of Shareholders, Etc. of the Target | 734,722 units |
(omitted)
Note 3) |
The Total Number of Voting Rights of Shareholders, Etc. of the Target is the total number of voting rights of all shareholders as of March 31, 2010 as described in the first quarterly report for the 105th term that was submitted by the Target on August 6, 2010 (indicated therein as 1,000 shares per unit). However, since the shares less than one unit and cross-held shares are also subject to the Tender Offer, in calculating the Ownership Percentage of Share Certificates, Etc. before the Tender Offer and the Ownership Percentage of Share Certificates, Etc. after the Tender Offer, the total number of voting rights (739,962 units), corresponding to the number of shares (739,962,066 shares) obtained by deducting the number of treasury shares held by the Target as of March 31, 2010 as described in the securities report for the 104th term that was submitted by the Target on June 18, 2010 (11,112,722 shares), from the total number of shares issued as of June 30, 2010 as described in the first quarterly report for the 105th term that was submitted by the Target on August 6, 2010 (751,074,788 shares), is used as the denominator. |
(omitted)
- 8 -
Disclaimer Regarding Forward-Looking Statements
This press release 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 press release 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 Groups 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 press release. 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 and its other filings.
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 possibility of the Panasonic Group incurring additional costs of raising funds, because of changes in the fund raising environment; 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 including the acquisition of all shares of Panasonic Electric Works Co., Ltd. and SANYO Electric Co., Ltd. through tender offers and share exchanges; 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 goodwill, deferred tax assets and uncertain tax positions; future changes or revisions to accounting policies or accounting rules; as well as natural disasters including earthquakes, prevalence of infectious diseases throughout the world 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 Panasonics latest annual report on Form 20-F, which is on file with the U.S. Securities and Exchange Commission.
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FOR IMMEDIATE RELEASE
Media Contacts:
Akira Kadota (Japan) International PR (Tel: +81-3-6403-3040)
Panasonic News Bureau (Japan) (Tel: +81-3-3542-6205)
Jim Reilly (U.S.) (Tel: +1-201-392-6067)
Anne Guennewig (Europe) (Tel: +49-611-235-457) |
Investor Relations Contacts:
Makoto Mihara (Japan) Investor Relations (Tel: +81-6-6908-1121)
Yuko Iwatsu (U.S.) Panasonic Finance (America), Inc. (Tel: +1-212-698-1360)
Hiroko Carvell (Europe) Panasonic Finance (Europe) plc (Tel: +44-20-3008-6887) | |
Panasonic Announces Additional Information regarding Commencement of
Tender Offer for Shares of Common Stock of SANYO
Osaka, August 20, 2010Panasonic Corporation (NYSE: PC/TSE: 6752, the Tender Offeror or the Company) announced that it acquires all of the shares of common stock of SANYO Electric Co., Ltd. (TSE: 6764, the Target) (excluding the treasury shares owned by the Target) through a tender offer (the Tender Offer) on July 29, 2010. The commencement of the Tender Offer was subject to, among others, the nonoccurrence of any events that would have a material adverse effect on achieving the purpose of the Tender Offer, such as a material change in the Targets or its subsidiaries management or assets. As the Company has confirmed that no events have occurred that would prevent the commencement of the Tender Offer, the Company announces that it has decided to implement the Tender Offer from August 23, 2010, as scheduled.
In addition, since the description of the press release Panasonic Announces Commencement of Tender Offer for Shares of Common Stock of SANYO dated July 29, 2010, has amendments, it has been amended as follows (the amendments are underlined):
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1. Purpose of the Tender Offer
(1) Overview of the Tender Offer
(Prior to amendment)
The Company currently owns 50.05% (3,082,309,227 shares) of the aggregate number of issued shares of the Target (as of March 31, 2010: 6,158,053,099 shares). The Target is a consolidated subsidiary of the Company; however, a decision was made recently to acquire all of the issued shares of the Targets common stock (excluding the treasury shares owned by the Target) through the Tender Offer in order to make the Target the Companys wholly-owned subsidiary. With respect to the Tender Offer, no maximum or minimum number of shares scheduled to be purchased has been established. The Tender Offer shall be commenced subject to, among others, the nonoccurrence of any events which would have a material adverse effect on achieving the purpose of the Tender Offer such as a material change in the Targets or its subsidiaries management or assets.
(omitted)
(Post amendment)
The Company currently owns 50.05% (3,082,309,227 shares) of the aggregate number of issued shares of the Target (as of June 30, 2010: 6,158,053,099 shares). The Target is a consolidated subsidiary of the Company; however, a decision was made recently to acquire all of the issued shares of the Targets common stock (excluding the treasury shares owned by the Target) through the Tender Offer in order to make the Target the Companys wholly-owned subsidiary. With respect to the Tender Offer, no maximum or minimum number of shares scheduled to be purchased has been established.
(omitted)
(3) | Measures to Ensure the Fairness of the Tender Offer such as Measures to Ensure the Fairness of the Tender Offer Purchase Price, and Measures to Avoid Conflicts of Interest |
(i) | Procurement of a Valuation Report from an Independent, Third-Party Valuation Institution |
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(Prior to amendment)
(omitted)
The Tender Offer Purchase Price of 138 yen per-share represents a premium of (i) 16.9% (rounded to the first decimal place; the same shall apply to indications of percentages hereinafter in this paragraph) over the closing price of the Targets shares of common stock of 118 yen in ordinary trading on the first section of the Tokyo Stock Exchange on July 28, 2010, which is the day immediately preceding the day on which the Company announced the commencement of the Tender Offer, (ii) 21.1% over the simple average closing price of 114 yen (rounded down to a whole number; the same shall apply to indications of prices in yen hereinafter in this paragraph) in ordinary trading in the previous one-month period (from June 29, 2010 to July 28, 2010), (iii) 9.5% over the simple average closing price of 126 yen in ordinary trading in the previous three-month period (from April 30, 2010 to July 28, 2010) or (iv) 0.7% over the simple average closing price of 137 yen in ordinary trading in the previous six-month period (from January 29, 2010 to July 28, 2010).
(Post amendment)
(omitted)
The Tender Offer Purchase Price of 138 yen per-share represents a premium of (i) 16.9% (rounded to the first decimal place; the same shall apply to indications of percentages hereinafter in this paragraph) over the closing price of the Targets shares of common stock of 118 yen in ordinary trading on the first section of the Tokyo Stock Exchange on July 28, 2010, which is the day immediately preceding the day on which the Company announced the commencement of the Tender Offer, (ii) 21.1% over the simple average closing price of 114 yen (rounded down to a whole number; the same shall apply to indications of prices in yen hereinafter in this paragraph) in ordinary trading in the previous one-month period (from June 29, 2010 to July 28, 2010), (iii) 9.5% over the simple average closing price of 126 yen in ordinary trading in the previous three-month period (from April 30, 2010 to July 28, 2010) or (iv) 0.7% over the simple average closing price of 137 yen in ordinary trading in the previous six-month period (from January 29, 2010 to July 28, 2010).
In addition, the Tender Offer Purchase Price represents a premium of (i) 0.7% over the closing price of the Targets shares of common stock of 137 yen in ordinary trading on the first section of the Tokyo Stock Exchange on August 20, 2010, which is the business day immediately preceding the commencement date of the Tender Offer, (ii) 5.3% over the simple average closing price of 131 yen in ordinary trading in the previous one-month period (from July 21, 2010 to August 20, 2010), (iii) 9.5% over the simple average closing price of 126 yen in ordinary trading in the previous three-month period (from May 21, 2010 to August 20, 2010) or (iv) 1.5% over the simple average closing price of 136 yen in ordinary trading in the previous six-month period (from February 22, 2010 to August 20, 2010).
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2. Outline of the Tender Offer and Other Information
(4) Calculation Base, Etc. of Tender Offer Purchase Price
(i) | Basis of Calculation |
(Prior to amendment)
(omitted)
The Tender Offer Purchase Price of 138 yen per-share represents a premium of (i) 16.9% (rounded to the first decimal place; the same shall apply to indications of percentages hereinafter in this paragraph) over the closing price of the Targets shares of common stock of 118 yen in ordinary trading on the first section of the Tokyo Stock Exchange on July 28, 2010, which is the day immediately preceding the day on which the Company announced the commencement of the Tender Offer, (ii) 21.1% over the simple average closing price of 114 yen (rounded down to a whole number; the same shall apply to indications of prices in yen hereinafter in this paragraph) in ordinary trading in the previous one-month period (from June 29, 2010 to July 28, 2010), (iii) 9.5% over the simple average closing price of 126 yen in ordinary trading in the previous three-month period (from April 30, 2010 to July 28, 2010) or (iv) 0.7% over the simple average closing price of 137 yen in ordinary trading in the previous six-month period (from January 29, 2010 to July 28, 2010).
(Post amendment)
(omitted)
The Tender Offer Purchase Price of 138 yen per-share represents a premium of (i) 16.9% (rounded to the first decimal place; the same shall apply to indications of percentages hereinafter in this paragraph) over the closing price of the Targets shares of common stock of 118 yen in ordinary trading on the first section of the Tokyo Stock Exchange on July 28, 2010, which is the day immediately preceding the day on which the Company announced the commencement of the Tender Offer, (ii) 21.1% over the simple average closing price of 114 yen (rounded down to a whole number; the same shall apply to indications of prices in yen hereinafter in this paragraph) in ordinary trading in the previous one-month period (from June 29, 2010 to July 28, 2010), (iii) 9.5% over the simple average closing price of 126 yen in ordinary trading in the previous three-month period (from April 30, 2010 to July 28, 2010) or (iv) 0.7% over the simple average closing price of 137 yen in ordinary trading in the previous six-month period (from January 29, 2010 to July 28, 2010).
In addition, the Tender Offer Purchase Price represents a premium of (i) 0.7% over the closing price of the Targets shares of common stock of 137 yen in ordinary trading on the first section of the Tokyo Stock Exchange on August 20, 2010, which is the business day immediately preceding the commencement date of the Tender Offer, (ii) 5.3% over the simple average closing price of 131 yen in ordinary trading in the previous one-month period (from July 21, 2010 to August 20, 2010), (iii) 9.5% over the simple average closing price of 126 yen in ordinary trading in the previous three-month period (from May 21, 2010 to August 20, 2010) or (iv) 1.5% over the simple average closing price of 136 yen in ordinary trading in the previous six-month period (from February 22, 2010 to August 20, 2010).
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(5) Number of Share Certificates, Etc. Scheduled to be Purchased
(Prior to amendment)
Number of shares scheduled to be purchased |
Minimum number of shares scheduled to be purchased |
Maximum number of shares scheduled to be purchased | ||
3,059,465,509 shares | Not applicable | Not applicable |
(omitted)
Note 2) | The number of shares scheduled to be purchased (3,059,465,509 shares) is calculated by deducting the sum of the number of shares of the Target held by the Tender Offeror as of July 29, 2010 (3,082,309,227 shares) and the number of treasury shares held by the Target as of March 31, 2010 as described in the securities report for the 86th term that was submitted by the Target on June 23, 2010 (16,278,363 shares), from the number of issued shares as of March 31, 2010, as described in the securities report for the 86th term that was submitted by the Target on June 23, 2010 (6,158,053,099 shares). |
(omitted)
(Post amendment)
Number of shares scheduled to be purchased |
Minimum number of shares scheduled to be purchased |
Maximum number of shares scheduled to be purchased | ||
3,059,465,509 shares | Not applicable | Not applicable |
(omitted)
Note 2) | The number of shares scheduled to be purchased (3,059,465,509 shares) is calculated by deducting the sum of the number of shares of the Target held by the Tender Offeror as of July 29, 2010 (3,082,309,227 shares) and the number of treasury shares held by the Target as of March 31, 2010 as described in the securities report for the 86th term that was submitted by the Target on June 23, 2010 (16,278,363 shares), from the number of issued shares as of June 30, 2010, as described in the first quarterly report for the 87th term that was submitted by the Target on August 4, 2010 (6,158,053,099 shares). |
(omitted)
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(6) Change in Ownership Percentage of Share Certificates, Etc. as a Result of Tender Offer
(Prior to amendment)
Number of Voting Rights Represented by Share Certificates, Etc. Held by the Tender Offeror before the Tender Offer | 3,082,309 units | (Ownership Percentage of Share Certificates, Etc. before the Tender Offer: 50.19%) | ||
Number of Voting Rights Represented by Share Certificates, Etc. Held by Special Related Parties before the Tender Offer | Not determined yet | (Ownership Percentage of Share Certificates, Etc. before the Tender Offer: Not determined yet) | ||
Number of Voting Rights Represented by Share Certificates, Etc. Scheduled to be Purchased | 3,059,465 units | (Ownership Percentage of Share Certificates, Etc. after the Tender Offer: 100.00%) | ||
Total Number of Voting Rights of Shareholders, Etc. of the Target | 6,130,300 units |
(omitted)
Note 3) | The Total Number of Voting Rights of Shareholders, Etc. of the Target is the total number of voting rights of all shareholders as of March 31, 2010 as described in the securities report for the 86th term that was submitted by the Target on June 23, 2010 (indicated therein as 1,000 shares per unit). However, since the shares less than one unit and cross-held shares are also subject to the Tender Offer, in calculating the Ownership Percentage of Share Certificates, Etc. before the Tender Offer and the Ownership Percentage of Share Certificates, Etc. after the Tender Offer, the total number of voting rights (6,141,774 units), corresponding to the number of shares (6,141,774,736 shares) obtained by deducting the number of treasury shares held by the Target as of March 31, 2010 as described in the securities report for the 86th term that was submitted by the Target on June 23, 2010 (16,278,363 shares), from the total number of shares issued as of March 31, 2010 as described in the securities report for the 86th term that was submitted by the Target on June 23, 2010 (6,158,053,099 shares), is used as the denominator. |
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(omitted)
(Post amendment)
Number of Voting Rights Represented by Share Certificates, Etc. Held by the Tender Offeror before the Tender Offer | 3,082,309 units | (Ownership Percentage of Share Certificates, Etc. before the Tender Offer: 50.19%) | ||
Number of Voting Rights Represented by Share Certificates, Etc. Held by Special Related Parties before the Tender Offer | 5,552 units | (Ownership Percentage of Share Certificates, Etc. before the Tender Offer: 0.09%) | ||
Number of Voting Rights Represented by Share Certificates, Etc. Scheduled to be Purchased | 3,059,465 units | (Ownership Percentage of Share Certificates, Etc. after the Tender Offer: 100.00%) | ||
Total Number of Voting Rights of Shareholders, Etc. of the Target | 6,130,300 units |
(omitted)
Note 3) | The Total Number of Voting Rights of Shareholders, Etc. of the Target is the total number of voting rights of all shareholders as of March 31, 2010 as described in the first quarterly report for the 87th term that was submitted by the Target on August 4, 2010 (indicated therein as 1,000 shares per unit). However, since the shares less than one unit and cross-held shares are also subject to the Tender Offer, in calculating the Ownership Percentage of Share Certificates, Etc. before the Tender Offer and the Ownership Percentage of Share Certificates, Etc. after the Tender Offer, the total number of voting rights (6,141,774 units), corresponding to the number of shares (6,141,774,736 shares) obtained by deducting the number of treasury shares held by the Target as of March 31, 2010 as described in the securities report for the 86th term that was submitted by the Target on June 23, 2010 (16,278,363 shares), from the total number of shares issued as of June 30, 2010 as described in the first quarterly report for the 87th term that was submitted by the Target on August 4, 2010 (6,158,053,099 shares), is used as the denominator. |
(omitted)
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4. Other Matters
(2) Other Relevant information Necessary for Investors Decision of the Target
(Post amendment: Without changing the contents stated in prior to amendment, add a description of the following (v))
(Omitted)
(v) According to the press release announced by the Target on August 20, 2010 entitled Notice Concerning Dissolution of Subsidiary (SANYO GS Soft Energy Co., Ltd.) and Possible Inability to Collect Account Receivables, the Target resolved to end the business of its consolidated subsidiary, SANYO GS Soft Energy Co., Ltd. (a joint venture between the Target and GS Yuasa Corporation; the Targets investment ratio: 51%; hereinafter SGS), around the end of February 2011 and, thereafter, to promptly dissolve SGS and implement a special liquidation. In addition, in accordance with such dissolution, there arose the possible inability to collect the Targets account receivables against SGS (a short-term loan of 4 billion yen (estimate)). According to said press release, the influence of SGSs dissolution and the Targets inability to collect account receivables on the Targets consolidated business results is minor.
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Disclaimer Regarding Forward-Looking Statements
This press release 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 press release 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 Groups 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 press release. 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 and its other filings.
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 possibility of the Panasonic Group incurring additional costs of raising funds, because of changes in the fund raising environment; 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 including the acquisition of all shares of Panasonic Electric Works Co., Ltd. and SANYO Electric Co., Ltd. through tender offers and share exchanges; 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 goodwill, deferred tax assets and uncertain tax positions; future changes or revisions to accounting policies or accounting rules; as well as natural disasters including earthquakes, prevalence of infectious diseases throughout the world 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 Panasonics latest annual report on Form 20-F, which is on file with the U.S. Securities and Exchange Commission.
# # #
FOR IMMEDIATE RELEASE
Media Contacts:
Akira Kadota (Japan)
(Tel: +81-3-6403-3040)
Panasonic News Bureau (Japan)
(Tel: +81-3-3542-6205)
Panasonic to Strengthen PDP Production in China
- Panasonic will strengthen production of plasma display panels in China,
a rapidly growing flat-panel TV market -
Osaka, Japan August 20, 2010Panasonic Corporation (NYSE:PC/TSE:6752, Panasonic) announced today that the company will move a part of plasma display panel production facilities at its third domestic PDP plant in Amagasaki City, near Osaka, to Panasonic Plasma Display (Shanghai) Co., Ltd. (PPDS) in Shanghai, China, to better respond to robust demand for flat-panel TVs in China.
PPDS, established in January 2001 as a joint venture between Panasonic, then called Matsushita Electric Industrial Co., Ltd., and Shanghai City, commenced operations in December of the same year and has been engaged in production of plasma display panels and assembling TV sets. The company is producing the equivalent of 25,000 42-inch plasma display panels per month at its plant in Pudong New Area. To accommodate the additional production facility and maximize production efficiencies, PPDS plans to relocate to the nearby Pudong Jinqiao Development Zone. The new production facility plans to commence production with a monthly capacity equivalent to approximately 120,000 42-inch panels in April 2012. Panasonic intends to maximize production efficiency by further utilizing the integrated production system from plasma display panels to assembling TV sets.
The flat-panel TV market is expected to continue growing globally, exceeding 240 million sets in 2012. Chinas flat-panel TV market is likely to surpass 50 million units by that time, becoming the worlds largest. The demand for plasma TVs with large-screen and high picture quality is also expected to grow in China driven by digital TV broadcasting and increased consumer interest in Full HD 3D plasma TVs.
The build-up of PPDS will give Panasonic a stronger structure to meet the growing demand in China as well as enable Panasonic to improve the group-wide cost competitiveness, thereby Panasonic continues to push ahead with its growth strategy in the global flat-panel TV market.
Profile of PPDS
Current Site
Name | Panasonic Plasma Display (Shanghai) Co., Ltd. (PPDS) | |
Location | No. 1398 Jinsui Road, Jinqiao Export Processing Zone, Pudong New Area, Shanghai, 201206, China | |
Capital | US$165,000,000 | |
Joint Venture Partner | SVA Electron Co., Ltd. | |
Ownership Ratios | Panasonic Corporation: 26.0% Panasonic Corporation of China: 25.0% SVA Electron Co., Ltd.: 43.0% Shanghai Industrial Investment (Group) Co., Ltd.: 3.8% SVA (Group) Co., Ltd.: 2.2% | |
President | Chairman: Qiang Wang (President of Shanghai Yidian Holding (Group) Co., Ltd.) Managing Director: Daisuke Motomiya | |
Board of Directors | Panasonic: 3 members; China: 3 members | |
Business Operations | Manufacture and sales of plasma display panels, modules and assembly | |
Construction | January 20, 2001 | |
Production | Plasma display assembly commenced in December 2001 | |
Employees | Approximately 1,700 (as of end of March 2010) | |
Floor Space | Approximately 56,000 square meters (lot area: Approximately 81,000 square meters) |
New Site
New Location | Jinqiao Development Zone, Pudong, Shanghai | |
Construction | December 2010 (plan) | |
Production | April 2012 (plan) | |
Employees | Approximately 2,000 at the time of operation | |
Floor Space | Approximately 85,000 square meters (lot area: Approximately 100,000 square meters) |
About Panasonic
Panasonic Corporation is a worldwide leader in the development and manufacture of electronic products for a wide range of consumer, business, and industrial needs. Based in Osaka, Japan, the company recorded consolidated net sales of 7.42 trillion yen (US$79.4 billion) for the year ended March 31, 2010. The companys shares are listed on the Tokyo, Osaka, Nagoya and New York (NYSE: PC) stock exchanges. For more information on the company and the Panasonic brand, visit the companys website at http://panasonic.net.
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