Financial Overview

(in millions of JPY)

	FY2010 (ended Mar. 2011)	FY2009	Rate of change	Remarks
Overall
Sales	8,692,672	7,417,980	17.2%	-
Operating income	305,254	190,453	60.3%	-
Net income	74,017	(103,465)	-	-
Digital AVC Networks Division
Sales	3,303,974	3,409,501	(3.1%)	-
Operating income	114,956	87,289	31.7%	-
Sanyo Electric Co., Ltd.
Sales	1,561,918	404,841	285.8%	-
Operating income	(8,033)	(730)	-	-

Partnership Agreements

-The Company and Tesla Motors, a U.S. electric vehicle manufacturer based in California, have signed an agreement on capital collaboration. The two companies have agreed on a 30 million USD(approx. 2.4 billion yen) investment in Tesla by Panasonic and joint sales of Tesla battery packs incorporating Panasonic battery cells. They will deepen cooperative relationships in areas of battery development and powertrain technologies with the aim of accelerating the market expansion of the electric vehicle. Tesla will also supply electric vehicle powertrains, including battery packs, to other automakers. (From an article in the Nikkan Jidosha Shimbun on November. 5, 2010)

Business Plans

-The Company announced its new midterm management plan through the fiscal year ending March 2013. It is targeting to achieve 10 trillion yen in overall sales and 5 percent in operating profit margin in the final year of the business plan. Highlighted in the plan is an energy systems business, which includes energy solutions that combine energy creation, energy storage and energy saving with energy management. It intends to increase sales in this sector from 540 billion yen in fiscal 2009 to 850 billion yen in fiscal 2012, out of which 500 billion yen is expected to be generated from the lithium-ion battery business. The Company aims to maintain the No. 1 position in the global market of lithium-ion batteries by collaboration with Sanyo Electric in cell development and introduction of production lines. (From an article in the Nikkan Jidosha Shimbun on May. 11, 2010)

-The Company is making full-scale inroads into the car air-conditioner business for automakers. Taking advantage of its technologies in household air-conditioning products, the major manufacturer of electric products will develop air-conditioner systems for use in next generation vehicles like electric and hybrid vehicles. Although it used to put its retro-fit air-conditioning units in the aftermarket in the early stages of motorization in 1950s, it has narrowed down the business to stay only a supplier of compressors to other air-conditioner makers. It has decided to re-enter the car air-conditioner business, expecting its technologies in household air conditioners can be used for development of such products as an electric compressor in the next generation vehicles. (From an article in the Nikkan Jidosha Shimbun on August. 24, 2010)

-The Company announced its business plan to increase sales at its car electronics division to 1 trillion yen by fiscal year 2015, up 50 percent from the amount it generated in fiscal year 2009. It aims to achieve this target by expanding sales of car navigation systems and audio equipment especially in China, India and other emerging markets. It will also explore new business opportunities in the area of electronic devices for environmentally friendly vehicles. The Company is poised to continue its sales expansion program, looking to raise the division’s sales further to 1.5 trillion yen by fiscal year 2018. (From an article in the Nikkan Jidosha Shimbun on February 23, 2011)

>>>Financial Forecast for the Next Fiscal Year (Sales, Operating Income etc.)

Business Restructuring

-The Company will transfer its automotive nickel-metal-hydride battery business handled at its Shonan Plant (Chigasaki City, Kanagawa Prefecture) to Hunan Corun New Energy Co., Ltd. in China. Assets to be transferred to the Chinese company include all manufacturing facilities as well as sales and R&D departments at the Shonan Plant. In addition, It will grant licenses allowing use of related intellectual property rights to Hunan Corun New Energy. The transfer of the business is a countermeasure aimed at addressing concerns raised by the Ministry of Commerce of the People’s Republic of China with regard to the continued competitive nature of the market after Sanyo Electric Co., Ltd. becomes a subsidiary of Panasonic. The Company will initially transfer the relevant assets to Shonan Energy Co., Ltd., its wholly owned subsidiary. All shares of Shonan Energy will thereafter be transferred to Hunan Corun New Energy. The transactions are scheduled to be completed within three months of January 31, 2011, the date of the agreement. (From an article in the Nikkan Jidosha Shimbun on February 3, 2011)

R&D Expenditure

(in millions of JPY)

	FY2010	FY2009	FY2008
Overall	527,798	476,903	517,913
Digital AVC Network	252,101	247,069	274,708
Sanyo Electric Co., Ltd.	61,825	16,779	-

R&D Structure (Automotive Systems Company)

Company	Location
Japan
-Automotive Electronics Development Center -Automotive Systems Development OfficePanasonic Corporation	-
-Business Development Center -Technology Management CenterAutomotive Systems Company	Yokohama
Panasonic ITS Co., Ltd.	Yokohama
Overseas
Panasonic Automotive Systems Company of America	Georgia, USA
Automotive Systems Europe Panasonic GmbH	Langen, Germany
Panasonic Automotive Systems Development Tianjin Co., Ltd.	Tianjin, China
Panasonic Automotive Systems Asia Pacific Co., Ltd.	Samutprakarn, Thailand

Capital Expenditure

(in millions of JPY)

	FY2010	FY2009	FY2008
Overall	403,778	385,489	494,368
Digital AVC Network	153,701	199,956	243,074
Sanyo Electric Co., Ltd.	87,246	31,174	-

New Equipment Installation (FY2011)

(in millions of JPY)

	Planned investment amount	Main purpose
Overall	320,000	-
Digital AVC Network	89,000	Expand production of PDPs (plasma display panels) and liquid crystal panels
Sanyo Electric Co., Ltd.	62,500	Launching or streamlining production of new products such as solar batteries, secondary batteries, secondary batteries for hybrid electric vehicles