November12, 2008
Funai Electric Co., Ltd.

Second Quarter (April-September) Consolidated Financial Summary
for the Period Ending March 2009
Current Year Second Quarter

Previous Year Second Quarter

From April 1, 2008
To September 30, 2008

From April 1, 2007
To September 30, 2007

AmountAmountPercent

Million yen%

Percent% increaseor decrease
from thesame periodof theprevious
consolidated
fiscal year％

Million yen％

144,659

100.0

156,317

100.0

△7.5

Operating Income

4,320

3.0

2,069

1.3

108.8

Ordinary Income

5,992

4.1

5,053

3.2

18.6

4,546

3.1

3,681

2.4

23.5

4,736

3.3

△4,245△2.7―△12,102△8.4△4,245△2.7―

Net Sales

Net Income before Taxes andOther Adjustments※
Net Income after tax※※
Net Income /Loss after Tax

Net Income/Loss per Share△ 354.97△124.52※ For the purpose of comparison the Net Income/Loss after Tax before the deduction of Income taxes for 16.8
billion yen for prior periods is recorded.
※※ Supplementary tax assessment based on rectification notice to Funai Electric Co., Ltd. for anti-tax havensystem in HK for 16.8 billion yen for the period of March 2005 to March 2007 was posted as a cost of income
taxes for prior periods in 1Q consolidated income statement of FY2008.
Notes:
Includes 13 consolidated subsidiaries and 2 affiliated companies accounted for by the equity method.

Member, Financial Accounting Standards Foundation

Financial Report for the 6-Month Period ended September 30, 2008
November 12, 2008

Listed company name:

Funai Electric Co., Ltd.

Securities Code: 6839
Tokyo Stock Exchange
and Osaka Securities Exchange, First Sections(URL http://www.funai.jp/ )Inquiries: Representative’s
President and CEO
Tomonori Hayashi
position and name
Administrator’s
General Manager,
Hisao Fuke
position and nameAccounting Department
Scheduled date of Submission of Quarterly Report ; November 13,2008

TEL: (072) 870-4395

1. Second Quarter Consolidated Results for the Period Ending March 2009 (April 1, 2008 – September 30, 2008)(1) Consolidated Operating Results(% denotes year on year)
Ordinary Income
Net Income
Net Sales
Operating Income
2nd Quarter FY2008
2nd Quarter FY2007

nd

2 Quarter FY2008
2nd Quarter FY2007

Million yen%

Million yen

144,659
156,317

−
△4.2

4,320
2,069

Net Income
Per Share

Net Income
Per Shareon a Fully
Diluted Basis

Yen

Yen

△ 354.97△ 124.52%

Million yen−△ 80.0%Million yen− △12,102△58.9 △4,245

5,992
5,053

%

−
−

−
−

(2) Consolidated Financial Position
Shareholders’Equity Ratio

Net Assets

Total Assets
Million yen

Million yen

Net Assets
Per Share%Yen

2nd Quarter FY2008
Fiscal Year 2007

244,460
146,34559.6
224,415
158,356
70.3(Reference) Shareholders’ Equity
2nd Quarter FY2008 ended September 30, 2008
145,772million yen
Fiscal Year 2007 ended March 31, 2008
157,871 million yen

4,275.73
4,630.58

2. Dividends
Corresponding Period

Fiscal Year 2007
Fiscal Year 2008
Fiscal Year 2008
(Projection)stnd

1 Quarter

2 Quarter

yen
−

0.00

−

0.00

Dividend per Share
3rd QuarteryenYear end

Annual

yen
−

50.00

yen

50.00

yen

−

50.00

50.00

3. Forecast of Consolidated Results for the Full Year (April 1, 2008 - March 31, 2009)(% denotes year on year)

Net Sales
Full Year

Operating Income Ordinary Income

Net Income

Net Income
Per Share

Million yen%

Million yen%

Million yen%

Million yen%

Yen

340,000

22.7

6,000

−

8,000

−

△11,400−△334.38

Note:
Revision of Forecast of Consolidated Results for the Six month period and the Full Year in this 2ndQuarter;No.

4. Other Information(1) Changes in Consolidated Subsidiaries (Changes in Scope of Consolidation): Yes
Add:P&F USA Inc.
(2) Application of simplified accounting procedure and use of unique accounting procedure for preparation offinancial statements covering consolidated accounting for fiscal quarter : Yes
Note: Please refer to “Qualitative Information and Financial Statements”.
(3) Changes in Accounting Practices, Procedures and Presentation Methods for Consolidated Financial Results(1)Changes arising from revision of accounting standards: Yes(2)Changes arising from other factors: Yes
Note: Please refer to “Qualitative Information and Financial Statements”.
(4) Number of Shares Outstanding (Ordinary Shares)(1)Number of shares outstanding (including treasury stock) as of September 30, 2008; 36,104,196shares
as of March 31, 2008; 36,104,196shares(2)Number of shares of treasury stock as of September 30, 2008; 2,011,092shares
as of March 31, 2008; 2,011,003shares(3)The Average number in the quarter of outstanding shares on September 30, 2008; 34,093,138shareson September 30, 2007; 34,093,510shares

Disclaimer;This document contains forward-looking statements and projections regarding business performance
which are not historical facts. Please note that these statements are based on information relating to factorsthat may impact future business performance that was available for analysis at the time this document was
printed. These factors include industry trends relating to the business areas of Funai Electric Co., Ltd. or
the Funai Group, such as audio-visual devices and information communication equipment, the economic
conditions of both domestic and international markets, and fluctuations in currency exchange rates. Actual
performance may greatly differ from projections included in this document because of the impacts ofuncertainty in such areas as the competitive conditions of the electronics industry, market trends, currency
exchange rate, introduction and success of new products, and various other global conditions that may
affect the tax system and other systems.

Qualitative Information and Financial Statements
1. Qualitative information relating to consolidated business performance
During the first half of the consolidated fiscal year (April 1, 2008 to September 30, 2008), the global economy
was seriously affected as the turmoil and restructuring of financial institutions, sharp drop in stock prices, andlarge fluctuations in exchange rates, which originated in the subprime loan problem caused by the collapse of the
housing bubble in the United States, spread to other countries. Personal consumption also was affected
substantially and was extremely sluggish. The construction and real estate sectors suffered in Japan as well,although the effects were less severe than in Europe and the United States. Because of a slowdown in exports to
the United States and other factors, Japan’s economy entered a recession, and personal consumption slowed under
the impact of rising prices for food products and energy as wages stagnated.
In Japan’s home electrical appliances industry, the competitive environment was severe, as the product cycle
characteristic of digital-related products has grown shorter and prices have continued to fall. During the first half,
demand continued to climb for LCD televisions, a growth product, but the rate of growth slowed amid concerns
over the negative affects of the economic deceleration in advanced countries, and a difficult business environment
continued as price competition intensified as well.
Given such conditions, the Funai Group saw sales of existing key products such as CRT TVs, DVD-related
products and printers in the information equipment segment decline substantially compared with the same periodof the previous year. On the other hand, the Company worked to expand sales centered on Blue-ray Disc players
and television set-top boxes (devices to convert digital signals into analog signals, enabling viewers to watch
terrestrial digital broadcasting on traditional analog televisions) for the U.S. market, which will terminate
terrestrial analog broadcasting in February 2009. In addition, the Company concluded a basic pact with global
appliance manufacturer Royal Philips Electronics (Philips) in April 2008 for a brand licensing agreement to sellthat company’s consumer LCD televisions in North America, and established P&F USA, Inc., a sales company toconduct this business, in June, and began selling Philips brand LCD televisions.
As a result, net sales for the first half of the consolidated fiscal year were JPY144,659 million.
The status for individual products indicates that in the audio-visual equipment category, sales for video andcathode ray tube television sets fell as the market size contracted significantly, as did sales of DVD-related
products, which are experiencing a turning point in terms of demand in the North American market. On the other
hand, in addition to Blu-ray Disc players and set-top box products for television sets in the U.S. market, sales ofPhilips-brand products in North America under our brand licensing agreement contributed to stronger LCD
television sales, and as a result net sales of audio-visual equipment rose to JPY103,739 million.
For information equipment, sales of digital still cameras increased as a recovery was seen in orders from OEM
partners, but net sales for our printers fell under the influence of a review implemented by OEM partners in
response to the fiercely competitive environment. As a result, net sales of information equipment were JPY27,754
million.
Net sales of receivers and other related electronic devices were JPY13,165 million.
With regard to earnings, operating income was JPY4,320 million, reflecting the contribution from sales of
television set-top boxes and Blu-ray Disc players, and ordinary income was JPY5,992 million. The net loss for the
first half was JPY12,102 million, reflecting in part the recognition of JPY16,838 million as “income taxes forprior periods” in conjunction with a revision of accounting treatment based on application of the taxation system
concerning tax havens.

2. Qualitative information relating to consolidated financial position
The financial position of Funai Electric Co., Ltd. at the end of the first half is discussed below.
Assets increased by JPY20,045 million compared with the end of the previous consolidated fiscal year. This
primarily reflected a decrease in cash and deposits of JPY17,977 million, and an increase in trade notes andaccounts receivable of JPY15,442 million and an increase of JPY33,276 million in inventories.
Liabilities increased by JPY32,056 million compared with the end of the previous consolidated fiscal year. This
mainly reflected an increase in trade notes and accounts payable of JPY26,915 million.
Net assets fell by JPY12,010 million compared with the end of the previous consolidated fiscal year. The primaryfactor for this decline was a decrease of JPY14,502 million in retained earnings.

3. Qualitative information relating to consolidated performance forecasts
Funai Electric Co., Ltd. has not revised its consolidated operating results forecast released on June 16, 2008.

Note: The aforementioned estimates are forward-looking statements about the future performance of Funai
Electric Co., Ltd. and are based on management's assumptions and beliefs in light of information currently
available, and involve known and unknown risks and uncertainties. Actual performance may vary fromthese forecasts due to rapid changes in economic conditions in the United States, our primary market, andother regions overseas, as well as rapid fluctuation in product prices.

4. Other(1) Important changes relating to subsidiaries and affiliates during the fiscal term (changes involving specificsubsidiaries that resulted in changes to the scope of consolidated accounting)From the current 2nd quarter P&F,USA Inc.(100% subsidiary) is added as a consolidated subsidiary.

(2) Application of simplified accounting procedure and use of unique accounting procedure for preparation offinancial statements covering consolidated accounting for fiscal quartera. Simplified accounting procedure
The amount of allowance for depreciation and amortization is calculated by distributing the applicableamount for the consolidated fiscal year over fiscal terms. This is because our company, as well as ourconsolidated domestic subsidiaries, adopt the diminishing balance or fixed percentage depreciation
method (except for buildings acquired on or after April 1, 1998 that do not include incidental facilities,
which are calculated using the fixed amount or straight line depreciation method).
b. Unique accounting procedure for preparation of consolidated financial statements for fiscal quarter
Expenses relating to taxes are calculated by applying the estimated effective tax rates on the before-tax
net profit for the fiscal quarter, through a practical estimation of the effective tax rates that will takeeffect after the application of the tax effect accounting for before-tax net profits of the consolidated fiscal
year, including this first fiscal quarter.
The corporate tax adjustment is included in the indicated corporate taxes.

(3) Changes to general rules and procedures, as well as denotation methods for accounting relating to the
preparation of consolidated financial statements for the fiscal quarter• Changes relating to items concerning accounting procedure standards
a. The “Accounting Standard for Statements of Fiscal Quarters” (Accounting Standard No. 12 of theFinancial Accounting Standards Foundation) and the “Guidelines for Accounting Standards relating toStatements of Fiscal Quarters” (Guideline No. 14 of the Financial Accounting Standards Foundation)
have been applied beginning with the current consolidated fiscal year. Furthermore, our consolidated
quarterly financial statements have been prepared according to the “Rules for Consolidated Statements of
Fiscal Quarters”.

b. Inventory assets
In the past, we calculated the values of inventory assets maintained for the purpose of ordinary sales
primarily according to the cost accounting method based on the periodic average method. Starting fromthis first quarter of the consolidated accounting period, the “Accounting Standards for Evaluation of
Inventory Assets” (Accounting Standard No. 9 of the Financial Accounting Standards Foundation; July 5,2006) became applicable, and calculations have since been conducted primarily using the cost accounting
method based on the periodic average method (with regard to the values entered on the balance sheet, thebook value cut down method based on the reduction in profitability).
This has little effect on profit and loss.

c. Application of “Handling of Accounting Procedure for Preparing Consolidated Financial Statements ofOverseas Subsidiaries in the Foreseeable Future”
The necessary amendments have been implemented for consolidated accounting by the application of the“Handling of Accounting Procedure for Preparing Consolidated Financial Statements of Overseas
Subsidiaries in the Foreseeable Future” (Practical Guide No. 18 of Financial Accounting Standards
Foundation; May 17, 2006) beginning from the first quarter of this fiscal term.
This has little effect on profit and loss.

d. Application of accounting standards relating to leasing transactions
In the past, accounting procedures based on the method relating to leasing transactions had been used forfinancing and leasing transactions that involved the transfer of ownership. Since the “AccountingStandard for Leasing Transactions” (Accounting Standard No. 13 of the Financial Accounting Standards
Foundation; June 17, 1993, as amended on March 30, 2007 by the First Committee of the BusinessAccounting Council) and the “Practical Guide for Accounting Standards relating to Leasing Transactions(Practical Guidelines on Accounting Standards for Lease Transactions No. 16 of the Financial
Accounting Standards Foundation; January 18, 1994 as amended on March 30, 2007 by the Accounting
System Committee of the Japanese Institute of Certified Public Accountants) became applicable to thefiscal quarter for consolidated financial statements of consolidated fiscal years from April 1, 2008, theseaccounting standards have been applied and accounting has been conducted using accounting proceduresfor ordinary sales transactions (except for those leasing transactions involving the transfer of ownershipthat started prior to the commencement of the application of lease accounting standards, for which themethod relating to leasing transactions continues to be implemented in accounting procedures).
Furthermore, a fixed amount depreciation method is used for calculating the depreciation andamortization of the leasing inventory relating to financing and leasing transactions that involve thetransfer of ownership, with the leasing term set as service years and the balance of value diminishing tozero.
This has no effect on profit and loss.

(4) Corrective action implemented based on the application of the Anti-Tax Haven Law
a. On June 28, 2005 we received a notice from the Osaka Regional Taxation Bureau regarding theimplementation of corrective action. This notice indicated a decision regarding our subsidiary inHong Kong, suggesting that it did not satisfy the conditions for exclusion from application of theAnti-Tax Haven Law. The notification furthermore indicated that the Osaka Regional Taxation
Bureau decided to incorporate the income generated by our subsidiary in Hong Kong into theincome of our company for the duration of three years, from April 1, 2001, to March 31, 2004, fortaxation purposes. We applied for an assessment by the Administrative Review Office of the Osaka
Regional Taxation Bureau on July 25, 2006, and filed an appeal to have the action cancelled with
the Osaka District Court on November 16, 2006, as we object to this corrective action.
Thereafter, on July 3, 2008, we received a written verdict on this case from the Administrative
Review Office of the Osaka Regional Taxation Bureau, which indicated that our assertion had been
dismissed. This arbitration is truly unfortunate and unacceptable. We intend to continue asserting
the validity of our position to the court in the future.
The additional tax amounts to JPY16,651 million (JPY19,184 million including incidental taxes),
including corporate, residential, and business taxes. We processed these amounts in the fiscal term
ending March 2007 as “retroactive corporate taxes,” since the accounting procedures relating to
additional tax amounts have been clarified through the amendment of the “Handling of Audits
Relating to Accounting Procedures and Disclosures for Taxes” (Report No. 63 of the Auditing andGuaranteeing Work Committee of the Japanese Institute of Certified Public Accountants) on March
8, 2007.

b. On June 16, 2008 we received a notice from the Osaka Regional Taxation Bureau indicating theirdecision to incorporate the income generated by our subsidiary in Hong Kong into the income of ourcompany for the duration of three years, from April 1, 2004, to March 31, 2007, for taxation
purposes. This is due to their decision that our subsidiary in Hong Kong did not satisfy theconditions that would exclude it from application of the Anti-Tax Haven Law. We feel that thiscorrective action is both unfortunate and unacceptable, particularly as it was ordered while thepreviously implemented corrective action based on the application of the Anti-Tax Haven Law(dated June 28, 2005), is currently still being deliberated in the Osaka District Court. We therefore
applied for an assessment by the Administrative Review Office of the Osaka Regional Taxation
Bureau on August 6, 2008.
A provisional estimate for the additional tax, including corporate, residential, and business taxes,
amounts to JPY15,038 million (JPY16,838 million including incidental taxes). This amount has
been processed as expenses under the category of “retroactive corporate taxes” in this first fiscal
quarter of the consolidated fiscal term.
Since decisions regarding this tax system will be made according to the condition of overseas
subsidiaries at the time their individual fiscal years are completed, we can only offer reference
figures on this matter. The impact from the tax system in question on the income generated by our
subsidiary in Hong Kong, for the fiscal years following the fiscal year currently being investigated,
is estimated to be about JPY700 million, which includes the corporate, residential, and businesstaxes for the fiscal term ending March 2008. This resulted from a calculation that deducted theamount of dividends we received from our subsidiary in Hong Kong from the applicable income
for the period. Due to the aforementioned reason, however, the accounting procedure for the figure
relating to this effect has not yet been conducted.

5. Consolidated Financial Statements(1).Consolidated quartery balance sheets(Mil. Yen)
2nd Quarter FY2008(As of September 30, 2008)

Fiscal year 2007
(As of March 31, 2008)ASSETS;
Current Assets
Cash and deposits

50,096

68,074

Notes and accounts receivable-trade42,283

26,841

Merchandise and finished goods

55,721

21,123Work in process

1,996

1,292

Raw materials and supplies

10,644

12,668

Other

9,097

17,407

Allowance for doubtful accounts

△ 115

△ 286

Total current assets

169,724

147,122

Property, plant and equipment

15,802

16,772Intangible assets

5,656

6,222

Long-term loans receivable

41,57040,819Other

13,29914,520Allowance for doubtful accounts△1,593△ 1,041

Total investments and other assets

53,27754,297

Total noncurrent assets

74,73577,293

244,460

224,415

Notes and accounts payable-trade52,72625,811

Short-term loans payable

21,365

13,213

Income taxes payable

538

4,642

Provision

958

1,189

Other

19,13015,642

Total current liabilities

94,72060,499Provision

2,388

2,484

Other

1,006

3,075

Total noncurrent liabilities

3,394

5,559

98,11566,058

Noncurrent assets

Investments and other assets

TOTAL ASSETSLIABILITIES;Current Liabilities

Noncurrent liabilities

TOTAL LIABILITIES(Mil. Yen)
2nd Quarter FY2008(As of September 30, 2008)

Fiscal year 2007
(As of March 31, 2008)

NET ASSETS;
Shareholders' equity
Capital stock

31,28031,280Capital surplus

33,24533,245Retained earnings

115,310

129,812

Treasury stock△ 24,339△ 24,339

155,496

169,998

△400

△ 63

Foreign currency translation adjestment△ 9,322△ 12,063

Total valuation and translation adjestments△ 9,723△ 12,127

572

485

TOTAL NET ASSET

146,345

158,356

TOTAL LIABILITIES AND NET ASSETS

244,460

224,415

Total shareholders' equity
Valuation and translation adjustments
Valuation difference on avaiable-for-sale securities

Minority interests

(2).Consolidated quartely statements of income(Cumulative 2nd quarter from April 1 to September 30,2008)(Million yen)
2nd Quarter FY2008

Net sales( from April 1, 2008
to September 30, 2008 )144,659

Cost of sales

117,043

Gross profit

27,615

Selling, general and administrative expenses

23,294

Operating income

4,320

Non-operating income
Interest income

1,785

Dividends income

42

Foreign exchange gains

164

Other

432

Total non-operating income

2,424

Non-operating expenses
Interest expenses

174

Equity in losses of affiliates

121

Other

455

Total non-operating expenses

751

Ordinary income

5,992

Extraordinary income
Gain on prior period adjustment

357

Gain on sales of noncurrent assets

6

Other

109

Total extraordinary income

474

Extraordinary loss
Loss on disposal of noncurrent assets

41

Special sales promotion

850

Liquidation loss on affiliated company

656

Other

372

Total extraordinary loss

1,921

Income before income taxes and minority interests

4,546

Income taxes△277

Income taxes for prior periods

16,838

Total income taxes

16,561

Minority interests in income
Net income

87△ 12,102

(3).Consolidated quartely statements of cash flows(Million yen)
2nd Quarter FY2008( from April 1, 2008
to September 30, 2008 )Net cash provided by (used in) operating activities
Income before income taxes and minority interests

4,546

Depreciation and amortization

2,470

Increase(decrease) in allowance for doubtful accounts

375

Increase(decrease)in provision for retirement benefits△ 82Interest and dividends income△ 1,827

Interest expenses

174

Equity in (earnings) losses of affiliates

121

Loss (gain) on sales of property, plant and equipment

30

Loss (gain) on sales of investment securities△ 26

Loss (gain) on valuation of investment securities

45

Evaluation loss of affiliated company's equity

327

Decrease (increase) in notes and accounts receivable-trade△ 15,834

Decrease (increase) in inventories△ 33,765

Increase (decrease) in notes and accounts payable-trade28,140

Other, net

11,640Subtotal△3,663

Interest and dividends income received

1,660Interest expenses paid

△ 170

Income taxes paid

△ 4,445

Prior year's taxes paid

△ 16,838

Net cash provided by (used in) operating activities△ 23,457

Net cash provided by (used in) investment activities
Payments into time deposits
Repayments from time deposits
Purchase of property, plant and equipment
Proceeds from sales of property, plant and equipment△ 19,781
12,379△ 1,446
617

Purchase of intangible assets△ 139

Purchase of investment securities△ 245

Proceeds from sales of investment securities

1,137

Other, net△ 44

Net cash provided by (used in) investment activities△ 7,522Net cash provided by (used in) financing activities
Net increase (decrease) in short-term loans payable

7,954

Repayment of long-term loans payable△ 1,086

Cash dividends paid

△ 1,704

Other, net△ 10

Net cash provided by (used in) financing activities

5,153

Effect of exchange rate change on cash and cash equivalents

198

Net increase (decrease) in cash and cash equivalents△ 25,628

Cash and cash equivalents at beginning of period

57,100Cash and cash equivalents at end of period

31,471

(4) Notes for Continuing Enterprises
Not Applicable(5) Information by Segmenta;Operating Segment Information
The Funai Group concentrates on the single business segment of manufacture and sales of electric products.

Therefore, we make no distinction between operating segments.

b;

Geographic Segment Information
Current Second Quarter (April 1, 2008 – September 30, 2008)
Asia(Units: Million Yen)
EuropeTotal

Elimination Consolidated

Japan

N. America

Sales to outside customers

62,281

74,814322

7,239

144,659−

144,659

Inter-segment sales

80,974

13

113,39714

194,399(194,399)

−

Total

143,256

74,828

113,720

7,253

339,058(194,399)

144,659

1,814

1,666

3,607

△ 1,6445,443(1,123)

4,320

Net Sales

Operating

IncomeLosses(△)

c;andOverseas sales
Current Second Quarter (April 1, 2008 - September 30, 2008)
N. America

Overseas sales

100,026(Units:Million Yen)
Asia

Europe4,138

19,506

Other
3,052

Consolidated sales
Ratio of overseas sales to consolidated sales (%)

Total
126,723
144,659

69.1

2.9

13.5

2.1

87.6

Reference Previous 2Q Consolidated Financial Statements(1) Previous second Quarter consolidated statements of income (April1,2007-September30,2007)(Unit:million yen)Previous 2Q(from April 1,2007
to September30,2007)
AmountNet sales

156,317

Cost of sales

130,876

Selling, general and administrative expenses

23,371

Operating income

2,069

Non-operating income:Interest income

2,924

Exchange gain

452

Others188

Non-operating income

3,565

Non-operating expenses:
Interest expenses

312

Investment loss on equity method

37

Others230

Non-operating expenses

581

Ordinary income

5,053

Extraordinary income
Profit on sales of investment securities
OthersExtraordinary income
Extraordinary losses
Allowance for liquidation loss onaffiliated company transfer
Others

343
4
347

942
777

Extraordinary losses

1,720

Income before income taxes

3,681

Corporate income taxes,inhabitant taxes andenterprise taxes

7,178

Income tax adjustments

733

Minority shareholder's interests

14

Net income/loss after tax△ 4,245

(2).Previous second quarter consolidated statements of cash flows(April 1,2007 -September 30,2007)(Million yen)Previous 2Q（from April 1, 2007
to September 30, 2007 )Amount1.Net cash provided by (used in) operating activities
Income before income taxes and minority interests
Depreciation and amortization
Increase in allowance for doubtful accounts
Decrease in provision for retirement benefits
Interest and dividends income
Interest expenses
Equity in losses of affiliates
Loss on sales of property,plant and equipment
Loss on sales of investment securities
Decrease in notes and accounts receivable-trade
Increase in inventories
Increase in notes and accounts payable-trade
Other, net
SubtotalInterest and dividends income received
Interest expenses paid
Income taxes paid
Net cash provided by (used in) operating activities
2.Net cash provided by (used in) investment activities
Payments into time deposits
Proceeds from sales of property,plant and equipment
Purchase of intangible assets
Purchase of investment securities
Proceeds from sales of investment securities
Payments for loan receivables
Collection of loan receivables
Other, net
Net cash provided by (used in) investment activities
3.Net cash provided by (used in) financing activities
Net increase (decrease) in short-term loans payable
Repayment of long-term loans paybable
Proceeds from issue of stock option
Purchase of fractional shares
Cash dividends paid
Other, net
Net cash provided by (used in) financing activities
4.Effect of exchange rate change on cash and cash equivalents
5.Net increase (decrease) in cash and cash equivalents
6.Cash and cashequivalents at beginning of period
7.Net increase in cash and cash equivalents due to the changeof fiscal year end in consolidated subsidiaries
8.Cash and cash equivalents at eand of period

3,681
3,401
81
△ 101
△ 2,979
312
37
△0
10
△ 3,780△ 2,122
6,704
3,108
8,354
3,006
△ 305
△ 2,219
8,835△ 3,101
53
△ 213
△ 301
861
△ 230
26
△ 112
△ 3,017△ 2,245△ 362
2△1△ 1,875△1△ 4,482275
1,610
83,3207,284
92,214

(3) Information by Segmenta;Operating Segment Information
The Funai Group concentrates on the single business segment of manufacture and sales of electric products.
Therefore, we make no distinction between operating segments.

b;

Geographic Segment Information
Previous Second Quarter (April 1, 2007 – September 30, 2007)
Japan

N. America(1)Sales to outside customers

81,831

61,223(2)Inter-segment sales

59,056

Total
Operating expenses

Asia(Units:MillionYen)
Elimination Consolidated

Europe

Total

1,002

12,259156,317−156,317−

115,703−

174,759(174,759)−

140,887

61,223

116,705

12,259331,077(174,759)

156,317

139,560

64,092

114,129

12,520330,303(176,055)

154,248

1,327△2,869

2,576

△260

774

1,295

2,069

Net Sales

Operating

IncomeLosses(△)

c;andOverseas sales
Previous Second Quarter (April 1, 2007 – September 30, 2007)
N. America

Net Sales

102,340(Units:MillionYen)
Asia
3,640

Europe28,933

Other
2,527

Operating expenses
Ratio of overseas sales to consolidated sales (%)

Total
137,441
156,317

65.5

2.3

18.5

1.6

87.9

Detailed Statement of Net Sales by Equipment Type and Region
PeriodClassification(Units: Million Yen)

Current Year Second Quarter

Previous Year Second Quarter

From April 1, 2008

From April 1, 2007

To September 30, 2008

To September 30, 2007

AmountAmountPercent

By Equipment Type％

Percent% increase or
decrease fromthe same periodof the previous
consolidated
fiscal year
Percent％％

Audiovisual Equipment

103,73971.7

98,06262.7

5.8

Information Equipment

27,75419.2

45,265

29.0

△38.7

Other Equipment

13,1659.1

12,9898.3

1.4

144,659

100.0

156,317

100.0

△7.5

％

％

Total

％
17,935

12.4

18,876

12.1

△ 5.0

N. America

100,026

69.1

102,340

65.5

△2.3

Europe19,506

13.5

28,933

18.5

△32.6

Asia

4,138

2.9

3,640

2.3

13.7

Other Areas

3,052

2.1

2,527

1.6

20.8

Subtotal

126,723

87.6

137,441

87.9

△7.8

144,659

100.0

156,317

100.0

△7.5

Japan

By Region

ExportTotal(Note) Main Products by Equipment Type
Equipment
Audiovisual Equipment

Main Products
VCRs, DVD Players, DVD Recorders, Televisions, LCD Televisions,Blu-ray Disc Players

Information Equipment

Printers, Digital Still Cameras

Other Equipment

Receiver-Related Electronic Equipment

(Reference) Change in Operating Results for the Most Recent Quarter
Fiscal Period Ending March 2009 (Consolidated)
First Quarter

Second Quarter

Third Quarter

Fourth Quarter

April - June 2008

July - Sept 2008

Oct - Dec 2008

Jan - March 2009

Million Yen

Million Yen

Million Yen

Million Yen

Net Sales

59,44985,209−−Gross Profit

12,336

15,278−−Operating Income

988

3,332

−

−

Ordinary Income

4,448

1,544

−

−

Quarterly Net Income Before
Taxes and Other Adjustments

3,967

579

−

−

△13,779

1,676

−

−

Quarterly Net Income/LossYen

Quarterly Net Income per Share△404.16

Fully Diluted Quarterly Net
Income per Share

−

−

Yen

49.18
−

−

Million Yen

Million Yen

Total Assets

227,888

Net Assets

147,591

Yen

−

−

−

−

−

−

−

−

Million Yen

Million Yen

244,460−−

146,345

−

−

Yen

Yen

Yen

4,275.73−−

First Quarter

Second Quarter

Third Quarter

Fourth Quarter

April - June 2007

July - Sept 2007

Oct - Dec 2007

Jan - March 2008

Yen

Net Assets per ShareYen

4,312.60

Fiscal Period Ended March 2008 (Consolidated)

Million Yen

Million Yen

Million Yen

Million Yen

Net Sales

77,361

78,95569,572

51,277Gross Profit

12,64012,801

10,245

9,611

Operating Income

1,172

896

△ 784

△ 3,690

Ordinary Income

4,480

573

731

△ 5,824

Quarterly Net Income Before
Taxes and Other Adjustments

4,463

△ 782

1,066

△ 2,237

Quarterly Net Income/Loss

1,342△5,5881,221△ 2,353

Yen

Quarterly Net Income per Share
Fully Diluted Quarterly Net
Income per Share

39.38
−

−

Yen

△163.90
−

−

Yen

35.83
−

−

Yen

△ 69.02−−

Million Yen

Million Yen

Million Yen

Million Yen

Total Assets

285,315

283,967

255,714

224,415Net Assets

189,221

176,825

176,876

158,356

Yen

Net Assets per Share

5,538.48

Yen

5,175.32

Yen

5,176.88

Yen

4,630.58

from 2008.4.1
to 2008.9.30

Page
1. Summary of 2Q Financial Statements（Consolidated）

1(1) Operating Results, Financial Conditions

1(2) Profitability and Per Share Data etc.

1(3) Capital Expenditures, Depreciation, R&D Expenses

1(4) Cash Flow2

2. Operating Activities（Consolidated）

2(1) Sales by Equipment

2(2) Sales by Area in Equipment

3(3) Sales by Equipment in Areas

3

3. Summary of 2Q (Jul.-Sep.)Financial Statements(Consolidated)

4(1) Operating Results

4(2) Sales by Equipment

4

FUNAI ELECTRIC CO.,LTD1. Summary of Second Quarter Operating Results (Consolidated)①Operating Results,Financial Conditions(Units:100million yen,%)
FY2008Full-Year(Projections)

FY20072Q
AmountFull-Year%

Change Amount

1,563 100.0 △ 4.2

Net Sales%

2Q
Change Amount

2,771 100.0 △ 30.1%

Change Amount

1,446 100.0 △ 7.5%

Change3,400 100.0

22.7

Operating Income20

1.3 △ 80.0

△ 24 △ 0.9

−

43

3.0

108.8

60

1.8

−

Ordinary Income50

3.2 △ 58.9△

0 △ 0.0

−

59

4.1

18.6

80

2.4

−

3.3

1.7

−

Net Income after Tax※△ 42 △ 2.7−△ 53 △ 1.9

−

47

−

58

−

Net Income/Loss after Tax△ 42 △ 2.7−△ 53 △ 1.9−△ 121 △ 8.4−△ 114 △ 3.4

Total Assets

2,839

−

−

2,244

−

−

2,444

−

−

−

−

−

Net Assets

1,768

−

−

1,583

−

−

1,463

−

−

−

−

−

※For the purpose of comparison the Net Income/Loss after Tax before the deduction of Income taxes for 16.8billion yen for prior periods
is recorded.

（※） Yen-Dollars /exchange rate
(Units:Yen / Dollars)
FY2008Full-Year(Projections)106.22100.00FY2007Full-Year

2Q

Average Rate in each Period

2Q
113.80119.19②Profitability and Per Share Data etc.
FY20072Q

Full-Year

FY2008Full-Year(Projections)
19.1
16.2

2Q

Gross Profit Ratio

(%)

16.3

16.3

Operating Income Ratio

(%)

1.3

△ 0.9

3.0

1.8

Ordinary Income Ratio

(%)

3.2

△ 0.0

4.1

2.4

Shareholder's Equity Ratio

(%)

62.1

70.3

59.6

-

Net Assets Per share(yen)

5,175.32

4,630.58

4,275.73-

Net Income Per Share(yen)△ 124.52△ 157.71△ 354.97△ 334.38

Return On Assets

(%)

△ 1.5

△ 2.2

△ 4.6

-

Return On shareholder's Equity

(%)

△ 2.3

△ 3.1

△ 7.5

-

2,966

2,628

2,659

-

Number of Total Employees③Capital Expenditures,Depreciation,R&D Expenses
FY20072Q
AmountChange37

Capital Expenditures

2Q

Full-Year
AmountChange49

19.4

Amount△ 9.3

ChangeAmount%to Sales

Full-Year
Change Amount%to Sales

Amount13 △ 64.9

FY2007
2Q(Units:100million yen,%)
FY2008Full-Year(Projections)

2Q
Change Amount%to Sales

Change73

49.0

FY2008Full-Year(Projections)
Change Amount%to Sales

ChangeDepreciation Expenses

28

1.8 △ 17.6

48

1.7 △ 32.4

18

1.2 △ 35.7

57

1.7

18.8

R&D

77

4.9

147

5.3

67

4.6 △ 13.0

154

4.5

4.8

4.1

−1−

5.0

④CashFlow(Units:100million yen,%)
FY2008Full-Year(Projections)

FY20072Q

Full-Year

2Q

Cash flows provided by operating activities

88

△ 137

△ 234

−

Income before Income Taxes

36

25

45

−

Depreciation Expenses

34

60

24

−

Others

18

△ 222

△ 303

−

△ 30

Cash flows used in investing activities

Free cash flows

△

△

94

△ 231

58

75

−

△ 309

−

Cash flows provided by financing activities

△ 44

△

81

51

−

Effect of exchange rate changes
on cash and cash equivalents

2

△

21

1

−

Net increase in cash and cash
equivalents

88

△ 335

△ 256

−

2. Operating Activities (Consolidated)①Sales by Equipment
FY20072Q
AmountAudio Visual Equipment

981%

Full-Year
Change Amount

62.7 △ 2.5

1,841

%

2Q
Change Amount

66.5 △ 33.5

1,037

%
71.7

(Units:100million yen,%)
FY2008Full-Year(Projections)
Change Amount

5.8

2,623

%
77.2

Change

42.5

VCRs

25

1.6 △ 39.0

45

1.6 △ 45.1

11

0.8 △ 56.020

0.6 △ 55.6

DVD

294

18.8 △ 8.7

524

18.9 △ 40.7

239

16.5 △ 18.7

453

13.3 △ 13.5

−

4

−

76

5.3

−

155

4.6

BD Players

0

0.0

0.2

Televisions

141

9.0 △ 51.7

256

9.2 △ 67.4

57

3.9 △ 59.6

LCD Televisions

450

28.8

897

32.4

498

34.4

95.7

15.6

10.7

90
1,533

ー

2.7 △ 64.8
45.1

70.9

PDP Televisions

4

0.2 △ 90.2

2

0.1 △ 97.8

0

0.0

−

0

0.0

−

Projectors

47

3.0 △ 32.970

2.5 △ 43.5

0

0.0

−

0

0.0

−

Others

20

1.3

43

1.6

156

10.8

680.0

372

10.9

765.1

Information Equipment452

29.0 △ 7.7

650

23.4 △ 30.3

277

19.2 △ 38.7

484

14.2 △ 25.5

Others130

8.3 △ 3.8

280

10.1

132

9.1

293

8.6

4.6

3,400 100.0

22.7

Total

100.0

1,563 100.0 △ 4.2

65.4

5.6

2,771 100.0 △ 30.1

−2−

1.4

1,446 100.0 △ 7.5

②Sales by Areas in Equipment
FY20072Q
Amount%Full-Year
Change Amount981

62.7 △ 2.5

1,841

North America

743

47.5 △ 2.4

Europe163

10.4

Audio Visual Equipment

Asia and Others

3

%

2Q
Change Amount

66.5 △ 33.5%

(Units:100million yen,%)
FY2008Full-Year(Projections)
Change Amount%

Change

1,037

71.7

5.8

2,623

77.2

42.5

65.3

59.7

1,391

50.2 △ 38.5

869

60.1

17.0

2,221

3.8

288

10.4 △ 15.8

110

7.6 △ 32.5

278

0.2 △ 40.03

0.1 △ 72.7

0

−

0

0.0

8.2 △ 3.5
0.0

−

72

4.6 △ 13.3

159

5.8

3.9

58

4.0 △ 19.4

124

3.7 △ 22.0

452

29.0 △ 7.7

650

23.4 △ 30.3

277

19.2 △ 38.7

484

14.2 △ 22.5

North America

271

17.4

4.6

403

14.5 △ 16.9

125

8.6 △ 53.9

222

6.5 △ 44.9

Europe124

7.9 △ 26.2

164

5.9 △ 49.582

5.7 △ 33.9

168

4.9

2.4

Asia and Others

56

3.6 △ 11.177

2.8 △ 37.4

68

4.7

21.4

92

2.7

19.5

1

0.1

Japan

Information Equipment

Japan

Others
Total

130

−

6

0.2

−

2

0.2

100.0

2

8.3 △ 3.8

280

10.1

5.6

132

9.1

1.4

293

1,563 100.0 △ 4.2

2,771 100.0 △ 30.1

1,446 100.0 △ 7.5

0.1 △ 66.7
8.6

4.6

3,400 100.0

22.7③Sales by Equipment in Areas
FY2007Full-Year

2Q
Amount%Change Amount%

2Q
Change Amount

1,024

65.5 △ 1.0

1,811

Audio Visual Equipment743

47.5 △ 2.4

1,391

50.2 △ 38.5

Information Equipment

271

17.4

403

14.5 △ 16.9

North America

4.6

65.3 △ 34.6%

(Units:100million yen,%)
FY2008Full-Year(Projections)
Change Amount%

Change69.1 △ 2.3

2,449

72.0

35.2

869

60.1

17.0

2,221

65.3

59.7

125

8.6 △ 53.9

222

1,000

6.5 △ 44.9

10

0.6 △ 23.1

17

0.6 △ 26.1

6

0.4 △ 40.06

0.2 △ 64.7

289

18.5 △ 13.7

456

16.5 △ 32.3

195

13.5 △ 32.6

449

13.2 △ 1.5

Audio Visual Equipment

163

10.4

3.8

288

10.4 △ 15.8

110

7.6 △ 32.5

278

8.2 △ 3.5

Information Equipment124

7.9 △ 26.2

164

5.9 △ 49.582

5.7 △ 33.9

1682

0.2 △ 80.04

0.2 △ 33.3

3

0.2

50.0

3

0.1 △ 25.0

OthersEuropeOthers

4.9

2.4

61

3.9 △ 12.9

91

3.3 △ 34.5

72

5.0

18.0

96

2.8

Audio Visual Equipment3

0.2 △ 40.03

0.1 △ 72.7

0

0.0

−

0

0.0

−

Information Equipment56

3.6 △ 11.177

2.8 △ 37.4

68

4.7

21.4

92

2.7

19.5

0.3

Asia and Others

5.5

0.0

11

0.4

120.0

4

100.0

4

0.1 △ 63.6

189

12.1 △ 2.4

413

14.9

7.7

179

12.4 △ 5.0

406

12.0 △ 1.7

Audio Visual Equipment72

4.6 △ 13.3

159

5.8

3.9

58

4.0 △ 19.4

124

3.7 △ 22.0

Information Equipment

1

0.1

−

6

0.2

−

2

0.2

100.0

2

0.1 △ 66.7

116

7.4

5.5

248

8.9

7.4

119

8.2

2.6

280

OthersJapan

Others
Total

2

0.1

1,563 100.0 △ 4.2

2,771 100.0 △ 30.1

−3−1,446 100.0 △ 7.5

8.2

12.9

3,400 100.0

22.7

３．Summary of Second Quarter(Jul.-Sep.)Financial Statements (Consolidated)① Operating Results(Units:100million yen,%)

FY2007

FY20082Q
Amount2Q%

ChangeAmount%Change790

100.0△ 21.4

852

100.0

7.9

Operating Income

91.1△ 88.6

33

3.9

271.9

Net Income

6

0.8△ 93.7

15

1.8

169.4

△ 56

△ 7.1

−

16

2.0

−

Net Sales

Net Income/Loss after Tax（※） Yen-Dollars /exchange rate

(Units:Yen / Dollars)
FY2007

FY20082Q

2Q
116.81

Average Rate in each Period

107.01② Sales by Equipment(Units:100million yen,%)

FY2007

FY20082Q
Amount2Q%

ChangeAmount%Change492

62.3△ 18.9

620

72.8

26.0

VCRs

12

1.5

△ 55.6

5

0.6△ 58.3

DVD

141

17.9

△ 26.2

139

16.3

△ 1.4

Audio Visual Equipment

BD Players

0

0.0

−

55

6.5

−

Televisions

42

5.3

△ 77.531

3.6△ 26.2LCD Televisions

247

31.3

58.3

299

35.1

21.1

PDP Televisions

4

0.5△ 77.80

0.0−

Projectors

26

3.3

8.3

0

0.0

−

OthersInformation Equipment

20

2.5

400.0

91

10.7

355.0

240

30.4

△ 26.6170

20.0△ 29.2Others58

7.3△ 18.3

62

7.2

6.9

Total

790

100.0

△ 21.4

852

100.0

7.9

−4−

（Company）

FUNAI ELECTRIC CO., LTD.
INVESTOR / PUBLIC RELATIONS DEPARTMENT
7-7-1 Nakagaito Daito city, Osaka 574-0013, JapanTEL 81-72-870-4395 ･ FAX 81-72-874-8027