Presentation of Operating Results in 2ndQuarter (Apr.- Sep.) of FY 2010

November 9 , 2010
FUNAI ELECTRIC.,LTD.
Security code ６８３９0

Ⅰ. Briefing of the 1st Half Operating Results,Future Outlook and Emphasizing Measures

1. Briefing of the 1st Half of Operating Results
2. Macro Outlook of the 2nd Half
3. Projection of the 2nd Half and the Full Year
Operating Results
4. Emphasizing Measures from the 2nd Halfthrough Next Fiscal Year1

１．Briefing of the 1st Half of Operating Results ①(100 million yen)

Sales
Operating Income(Margin)

FY 2009

Forecast

FY 20101,670

1,7001,540

1007245（6.0%）（4.2%）（3.0%）

Sales

Short of projection

OperatingIncome

Short of projection（Changes from Forecast : 90.6%）

2

１．Briefing of the 1st Half of Operating Results ②TV Segment
Less than projection, mainly due to slump
in large size LCD TV

DVD Segment
Existing DVD : Less than projection
BD : In line with projection

Information Equip. Segment
Better than projection
3

２．Macro Outlook of the 2nd Half
Global economy progressing to bipolarization between advanced
country and emerging country, but untransparency increasing
U.S. economic outlook●Serious job climate ・・・ Remaining high unemployment rate and outstanding longterm jobless (in particular in middle income people)●Prolonged decline of housing market ・・・ Ending tax cut of house purchase led
the market downward again / increase in foreclosure
Shunning purchase of non-essential goods, untransparecny hanging
over year-end sales

Climate of other major market●Europe : Prolonged dull economy in increasing fiscal deficit (except exportoriented country)●Japan : Deteriorating economy dull to the yen and the gov’t subsidy runningout the steam

Risk factors in the market①Further decline of the U.S. Dollar③Rise of Chinese competitors②Unstable panel and material price4

３．Projection of the 2nd Half and the Full Year
Operating Results(100 million yen)

RevisedSales
Operating Income(Margin)

Results of 1H

Projection of 2H

Projection of FY

1,540

1,660

3,200

45

4590

（3.0%）（2.7%）（2.8%）

Revised assumption of forex rate（USD:¥90→¥83／Euro:¥122→¥113）
Sales revised from 3,500 yen to 3,200 yen, taking account of pricecompetition in LCD TV and other AVs.

5

Emphasizing Measures from the 2nd Half through4. Next Fiscal YearThorough and speedy execution of the following measures to restrengthen
competitiveness
CostSales●Rebuild procurement structure●Rebuild Philips business●Thoroughly pursue for cost down design

・Promotion of brand strategy
・Thorough marketing
・Strengthen client oriented products●Reinforce SCM*1 / Speed-up PSI*2●Reexamine process and system ofdevelopment＋Take overhospitality
business●Expansion of product line-up●Reinforce OEM / ODM business

Program for middle to long term growth
Reinforce new businessAcceleration of global development ofproduction and sales base●Internet・Communication relationship equip.

●Promotion of production base in Asia and Others●Reinforce market and sales diversification into
Europe・Japan・China・Latin America●Cable TV related equip.
*1 SCM: Supply Chain Management*2 PSI : Purchase Selling Inventory

6

Ⅱ Outline of Operating Results
1. Summary of Operating Results (Jul.(Jul.-Sep.)
2. Summary of Operating Results (Apr.(Apr.-Sep.)
3. Breakdown of Sales by Equipment
4. Sales of DVD related Equipment
5. Sales of Television related Equipment
6. Geographic Breakdown of Sales
7. Factor of Changes of Operating Income
8. Financial Conditions
9. Changes of Inventories
10. Capital Expenditures, Depreciation Expense and R&D Expenditures
Expenditures
11. Forecast of Operating Results of FY2010 ending March 2011
12. Forecast of Sales by Equipment of FY2010 ending March 2011

71．Summary of Operating Results (Jul.- Sep.)(100 million yen)

Changes From
Previous 2Q

FY 2010

FY 2009△103Net Sales

894791(△11.5%)

Operating Income

6320△43(7.1%)(2.6%)

5534(6.2%)(4.4%)

4134(4.6%)(4.4%)

MarginOrdinary Income
MarginNet Income after tax
MarginAverage USD- JPY
Exchange Rate
Month End
Exchange Rate
(USD/JPY)

92.80

09/6
96.01

△21+14(※3)△785.02

09/9
90.21

（※1） Interest receivables +2 、Forex gain +12+22 (※2)

+14 (※1)

10/6
88.48

10/983.82（※2） Forex loss +22 （※3） less Income taxes +148

2．Summary of Operating Results (Apr.- Sep.)(100 million yen)

FY 2009

Forecast

FY 2010

1,670

1,700

1,540

Operating Income

10072

Margin

(6.0%)

Ordinary Income
MarginNet Sales

Average USD- JPY
Exchange Rate
Month End
Exchange Rate
(USD/JPY)△130△160（90.6％）

45△55△27(4.2%)(3.0%)+2 (※1)957047△48△23(5.7%)(4.1%)(3.1%)△9(※2)＋13(※4)735638△35△18(4.4%)(3.3%)(2.5%)

94.78

90.00+7 (※3)

＋4(※5)＋5(※6)

88.15

09/309/9

10/3

10/9

98.23

90.21

93.04

83.82

（※1） Interest receivables +3 、Forex loss △1（※2) Extraordinary loss △1, Income taxes △8Changes
FromProjection(△7.8%)Net Income after tax
MarginChanges
FromPrevious2Q（※3） Interest receivables △2 、Forex loss +9（※4) Extraordinary loss △1, Income taxes +14（※5） Interest receivables +1 、Forex loss +3（※6) Extraordinary loss △1, Income taxes +693．Breakdown of Sales by Equipment
AV Equipment
Information Equipment
Others(100 million yen)(100 million yen)

1,670

1,540

1,258

1,003

DVD ：462
T V ：796

DVD ：253
T V ：750

Comparison to Previous 2Q
AV Equipment： △255 （△20.3％）

DVD Equip.
T V Equip.

：：

△209
△ 46（△ 45.2％）（△ 5.8％）

Information Equipment： ＋ 95 （＋35.9％）

Others： ＋ 30 （＋20.4％）

Total： △130 （△ 7.8％）※ From FY2010 antenna set for North America is265※ 147

Previous 2Q(Apr.-Sep.)

360
177
Current 2Q(Apr.-Sep.)

classified in 'Others' from 'Others in TV related
equipment on Audio Visual Equipment' which wasclassified in FY2009.The sales amount of antenna set
for North America in the 2nd quarter in FY2009 was
2400 mil. yen.

10

4．Sales of DVD related Equipment
DVD Player Equipment
DVD Recorder Equipment

Blu-ray disc
Digital STB

462
157

DVD Players

DVD Recorders

・Demand in U.S. for DVD player and DVD recorder tracked themarket contraction.

Blu-ray disc・BRD recorder, newly launched the product,
contributed to sales, but less-than offset
decline of BRD player.

Digital STB

・Digital STB ended the life in the U.Smarket.
(100 million yen)

81

253
71

109

115

63
104
15Previous 2Q(Apr.-Sep.)

Current 2Q(Apr.-Sep.)

Comparison to Previous 2Q
DVD Player Equipment：△ 86 （△54.8％）

DVD Recorder Equipment：△ 18 （△22.2％）

Blu-ray disc：△5 （△ 4.6％）

Digital STB：△100 （△87.0％）

Total：△209 （△45.2％）
11

5．Sales of Television related Equipment
CRT TVLCD TV(100 million yen)

796
5LCD TV

750

・The overall sales declined due to sluggish demand, in particular
for large size in North America, though Japan increased backed upby ‘Eco-point’.
(100 million yen)Comparison to Previous 2Q
CRT TＶ：△ 5 （LCD TV： △ 41 （△5.2％）

Total： △ 46 （△5.8％）

791
750

Previous 2Q(Apr.-Sep.)−）

Current 2Q(Apr.-Sep.)

12

6. Geographic Breakdown of Sales
North America
EuropeAsia & Others
Japan

1,670

North America

1,540

・In addition to Digital STB ended the life in the U.S
market and DVD and LCD TV decreased.

Europe・DVD declined.

Japan・‘Eco-point’ contributed to increase in LCD TV,antennas and related devices and BD recorder.
(100 million yen)Comparison to Previous 2Q
1,249(75％)

149 (9％)81 (5％)
191 (11％)

Previous 2Q(Apr.-Sep.)

885(57％)

North America

Europe146 (10％)138 (9％)：△364 （△29.1％）：△3 （△ 2.3％）

Asia & Others：＋ 57 （＋70.4％）

Japan：＋180 （＋94.4％）

Total：△130 （△ 7.8％）371(24％)Current 2Q(Apr.-Sep.)

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7． Factor of Changes of Operating Income《Comparison to 2009/9》《Comparison to the original projection in May》

Sales
decrease△17＊ Add-value=Sales - (Cost of sales + selling expenses)

Add-value
deteriorated＊
Salesdecrease
Add-value△48100Operating
Income△18 deteriorated＊

Decreaseof general
expenses

Decreaseof general
expenses

1072

△2617

Operating
Income4545

Operating
IncomeOperating
IncomePrevious
2Q

Current
2Q

OriginalProjection

FY 2010
Results(Apr.-Sep.)(Apr.-Sep.)(Apr.-Sep.)(Apr.-Sep.)14

8．Financial Conditions（100 million yen）

Cash / Deposit

Assets

Accounts
Receivables

899

2,040

2,134
645

860
357

364

351

458

384

Fixed Assets
and Others

419

445

459

Trade Payables

486

490

Accounts Payables
and Others

295

313
300

Inventories

Liabilities
andNet Assets

2,140

Net Assets

1,359

1,427673

278

1,366

Comparison to 2009/9
Assets△254

・Accounts Receivables△・Inventories＋ 215

・Fixed Assets and Others＋ 40

Liabilities
・Trade Payables
・Accounts Payables
and Others（Shareholders’ Equity Ratio

2,140
2009/92,134

2010/3

2010/96

・Cash / Deposit

Net Assets
2,040△7△ 13＋4△ 17＋763.6％）

15

9．Changes of Inventories
Finished products
Work in process

673(100 million yen)(100 million yen)Comparison to 2009/9458

424384299

Finished products＋125Work in process＋ 90

208249159

176

2009/92010/3

2010/91.5months

1.7months

2.6months〈Inventories Turnover〉
16

Capital Expenditures, Depreciation Expenseand R&D Expenditures

10.

2Q

Full Year

CapitalExpenditures

Depreciation
ExpenseR&DExpenditures＋16＋2△3（100 million yen）

CapitalExpenditures

Depreciation
Expense（100 million yen）

160

160

140

140

120

120

100

100

80

80

134

60

60

R&D
Expenditures

147

40

40

45

20

29

68

66 63
2020

43

43

47

2200

2009/9 20010/9

2009/9 2010/9

2009/9 2010/9

2010/3 2011/3(Projection）

2010/3 2011/3（Projection）

2010/3 2011/3（Projection）

17

Forecast of Operating Results of FY2010

11. ending March 2011(100 million yen)

FY2009Results
Net Sales

Original
Forecast

Revision ofForecast

3,149

3,500

3,200111130(3.5%)

Ordinary Income

ChangesFromOriginal
Forecast

Changes fromPrevious year

△300＋51(＋1.6%)（91.4％）

90△21△40(3.7%)(2.8%)+2 (※1)

116

12992

△24Margin(3.7%)(3.7%)(2.9%)△21 (※2)

Net Income after tax

103

10071

△32Margin(3.3%)(2.9%)(2.2%)

Operating Income
MarginAverage USD- JPY
Exchange Rate

92.60（※1） Interest receivables +4, Forex loss △1
Interest paybable △1（※2) Extraordinary loss △1,Income taxes △20

90.00△3(※3)＋3(※5)△37△8(※4)+8(※6)△2985.57（※3） Interest receivables △3（※4) Extraordinary loss △1, Extraordinary loss +8,
Income taxes △15（※5） Interest receivables +1, Forex loss +3
Other △1（※6) Extraordinary loss △1,
Income taxes +918

Forecast of Sales by Equipment of FY2010

12. ending March 2011
AV Equipment
Information Equipment
Others(100 million yen)Comparison to Previous year

3,500
3,200

3,149

2,299
DVD ： 699
T V ：1,600

AV Equipment

2,565
DVD ： 636
T V ：1,929

2,237
DVD ： 629
T V ：1,608

DVD Equip.
T V Equip.

546618※ 304317

355

OriginalForecast

Revision ofForecast

FY2009Results：：△ 70＋ 8（△ 10.0％）（＋ 0.5％）

Information Equipment： ＋ 62 （＋11.4％）

Others： ＋ 51 （＋16.8％）

Total： ＋ 51 （＋ 1.6％）

Changes from Original Forecast
AV Equipment
DVD Equip.
T V Equip.

608： △ 62 （△ 2.7％）： △ 328 （ 87.2％）：：△ 7△321（ 98.9％）（ 83.4％）

Information Equipment： △ 10 （ 98.4％）

Others： ＋ 38 （112.0％）

Total： △ 300 （ 91.4％）※The sales amount of antenna set for North America
in FY2009 was 3600 mil. yen.
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Ⅲ

Supplemental Data ①
Summary of Operating Results (Jul.(Jul.-Sep.)
1.
2.
3.

Breakdown of Sales by Equipment
Sales of Audio and Visual Equipment
Geographic Breakdown of Sales

20

1．Breakdown of Sales by Equipment
AV Equipment
Information Equipment
Others(100 million yen)(100 million yen)Comparison to Previous 2Q

894
791

AV Equipment
DVD Equip.
T V Equip.

663
DVD ：213
T V ：450

511
DVD ：123
T V ：388： △152 （△22.9％）：：△ 90△ 62（△ 42.3％）（△ 13.8％）

Information Equipment： ＋ 33 （＋21.2％）

Others： ＋ 16 （＋21.3％）

Total： △103 （△11.5％）※ The sales amount of antenna set for North America in156

189

※ 75

91

Previous 2Q(Jul.-Sep.)

Current 2Q(Jul.-Sep.)

the 2nd quarter in FY2009 was 1300 mil. yen.

21

2．Sales of Audio and Visual Equipment
CRT TVLCD TV

DVD Player Equipment
DVD Recorder Equipment
Blu-ray disc
Digital STB(100 million yen)

450

(100 million yen)

213

388

123

39

37
27
53

26
Previous 2Q(Jul.-Sep.)

388

448

77

71

2

Current 2Q(Jul.-Sep.)

6Previous 2Q(Jul.-Sep.)

Current 2Q(Jul.-Sep.)

22

3. Geographic Breakdown of Sales
North America
EuropeAsia & Others
Japan894(100 million yen)

791
660
(74％)

89 (10％)50 (5％)
95 (11％)

Previous 2Q(Jul.-Sep.)

475
(60％)

74 (9％)
71 (9％)

Comparison to Previous 2Q
North America：△185 （△ 28.0％）

Europe：△ 15 （△ 16.9％）

Asia & Others：＋ 21 （＋ 42.0％）

Japan：＋ 76 （＋ 80.0％）

Total：△103 （△ 11.5％）

171(22％)Current 2Q(Jul.-Sep.)

23

Ⅳ Supplemental Data ②
1. Quarterly Operating Summary of FY 2009, 2010
2.Quarterly Changes of Sales Amount by Equipment

24

1. Quarterly Operating Summary of FY 2009, 2010
(100million yen)

FY 2009

FY 2010

1Q

2Q

3Q

4Q

1Q

2Q

Net Sales

776894810

669749791

Operating Income

376314△32520(4.8%)(7.1%)(1.8%)(△0.6%)(3.4％)(2.6％)

4055

24△31234(5.3%)(6.2%)(3.0%)(△ 0.5%)(1.7％)(4.4％)

31411811434(4.1%)(4.6%)(2.3%)(1.8%)(0.6％)(4.4％)

MarginOrdinary Income
MarginNet Income After Tax
Margin25

2. Quarterly Changes of Sales Amount by Equipment
DVD Equipment

Television Equipment

Information Equipment

Others（100 million yen）

1,000

800

894
776

810
213

125

249

450

456

362

123

388

348

346

200

0

130

791

112

600

400

669

749

156

159

122

171

189

109
72

75

70

87

86

91

1Q

2Q

3Q

4Q

1Q

2Q

(09/6)(09/9)(09/12)(10/3)(10/6)(10/9)

26

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

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