From April
1, 2010
To September 30, 2010

November 8, 2010
Funai Electric Co., Ltd.

Second Quarter (April-September) Consolidated Financial Summary
for the Period Ending March 2011
Previous Year Second Quarter

Current Year Second Quarter

From April 1, 2009
To September 30, 2009

From April 1, 2010
To September 30, 2010

AmountAmountPercent

Million yen%

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

Million yen％

Net Sales

167,095

100.0

154,084

100.0

△7.8

Operating Income

10,068

6.0

4,586

3.0

△54.4

Ordinary Income

9,588

5.7

4,776

3.1

△50.2

9,560

5.7

4,658

3.0

△51.3

7,309

4.4

3,885

2.5

△46.8

Net Income before Taxes andOther Adjustments

Net Income after Tax

Net Income per Share

214.41113.97

Notes:
Includes 13 consolidated subsidiaries and 1 non-consolidated subsidiary accounted for by the equity method.

Member, Financial Accounting Standards Foundation

Financial Report for the 6-Month Period ended September 30, 2010
November 8, 2010

Listed company name:

Funai Electric Co., Ltd.

Securities Code: 6839
Tokyo Stock Exchange
and Osaka Securities Exchange, First Sections(URL http://www.funai.jp/ )Representative: President and CEO
Tomonori Hayashi
Inquiries: General Manager,Business Finance HQ
Hisao Fuke
TEL: (072) 870-4395
Scheduled date of Securities Report to be filed to the Kinki Finance Bureau; November 12, 2010
Scheduled date of Commencement of Annual Dividend Payment –Quarterly Financial Results Supplementation : Yes
Quarterly Financial Results Seminar : Yes
1. Second Quarter Consolidated Results for the Period Ending March 2011 (April 1, 2010 – September 30, 2010)(1) Consolidated Operating Results(% denotes year on year)
Ordinary Income
Net Income
Net Sales
Operating Income
Million yennd

2 Quarter FY2010
2nd Quarter FY2009

%

△7.8
15.5

154,084
167,095%

Million yen

4,586 △54.4
10,068133.0%

Million yen

4,776 △50.2
9,588 60.0%

3,885 △46.8
7,309−

Net Income
Per Shareon a Fully
Diluted BasisNet Income
Per Share
2nd Quarter FY2010
2nd Quarter FY2009

Million yen

Yen

Yen

113.97214.41113.32212.96(2) Consolidated Financial Position
Shareholders’Equity Ratio

Net Assets

Total Assets
Million yen

Million yen

Net Assets
Per Share
%

Yen

nd

213,473
136,608
63.6
204,057
142,779
69.6(Reference) Shareholders’ Equity
2nd Quarter FY2010 ended September 30, 2 010 135,682 million yen
Fiscal Year 2009 ended March 31, 2010 141,991 million yen

3,978.83
4,164.86

2 Quarter FY2010
Fiscal Year End 2009

2. Dividends
Corresponding Period

Fiscal Year 2009
Fiscal Year 2010
Fiscal Year 2010
(Projection)

1st Quarter

Annual Dividend per Share
2nd Quarter
3rd Quarter
Year end

yen
−

0.00

yen

−

0.00

Annual

yen
−

40.00

yen

40.00

yen

−

40.00

40.00

(Note) Revision of Annual Dividends Forecast in this 2nd Quarter : No

3. Forecast of Consolidated Results for the Full Year (April 1, 2010 - March 31, 2011)(% denotes year on year)

Net Sales
Full Year

Million yen

Operating Income Ordinary Income%

320,000 1.6

Million yen%

9,000 △19.3

Million yen%

9,200 △21.3

Net Income
Million yen

Net Income
Per Share%

Yen

7,100 △31.3

208.21

Note:
Revision of Forecast of Consolidated Results for the Six month period or the Full Year in this 2nd Quarter : No.

4. Other Information(1) Changes in Consolidated Subsidiaries (Changes in Scope of Consolidation): No
Note: Refers to movements of specified subsidiaries that have resulted from any changes to the range ofconsolidated entities during the current quarterly accounting period.
(2) Application of simplified accounting procedure and use of unique accounting procedure for preparation offinancial statements covering consolidated accounting in this 2nd 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: Refers to changes to general rules and procedures as well as denotation methods for accounting
treatment in relation to the development of current quarter consolidated financial statements as referenced in
the section entitled, “Changes to Important Items that Form the Basis of the Development of the Quarterly
Consolidated Financial Statements”.
(4) Number of Shares Outstanding (Ordinary Shares)(1)Number of shares outstanding (including treasury stock) as of September 30, 2010; 36,112,596shares
as of March 31, 2010; 36,104,196shares(2)Number of shares of treasury stock as of September 30, 2010; 2,011,607shares
as of March 31, 2010; 2,011,531shares(3)The Average number in the quarter of outstanding shares on September 30, 2010; 34,093,790shareson September 30, 2009; 34,092,798shares※ The Recording of Implementation Conditions Regarding Quarterly Review ProceduresThis quarterly financial summary does not fall within the scope of the Quarterly Review Procedures referenced
in the Financial Instruments and Exchange Act. At the time of disclosure of the quarterly financial summary, theGroup was in the process of implementing the quarterly review procedures for its quarterly financial statements.

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.

1. Qualitative Information Regarding Quarterly Financial Results(1) Qualitative Information Relating to Consolidated Business Performance
During the second quarter of the consolidated fiscal year, the U.S. market, which is one of Funai Electric’s key
markets, continued to remain flat. In particular, employment figures in the private sector remained weak as longterm unemployment increased. Further, the ending of tax cuts relating to residential house purchases in April of thisyear has contributed to the fall of the market and has been a barrier to economic recovery. Amid this environment,
consumers have become even more cautious when it comes to spending, and are shunning purchases of nonessential goods. At the same time, unit prices for household electronic goods remain on a downward path.
In the household electric appliances industry, demand for LCD televisions (one of Funai Electric’s main productlines) continued to increase on a global scale as LED-backlight equipped LCD televisions gained popularity,
growth was seen in emerging markets, government-backed measures to boost spending in Japan and China took
hold, and FIFA Football World Cup in South Africa drove demand in the European markets. On a negative note,however, demand during the Labor Day holidays in China was not as high as anticipated, and conditions in the
North America market remained tough as demand fell on a year-over-year basis.
As a result of the above factors, the Group posted net sales of JPY154,084 million (a fall of 7.8% from the same
period last year) for the second quarter of the consolidated fiscal year.
On the profit side, the Group posted operating income of JPY4,586 million (a fall of 54.4% from the same period
last year), ordinary income of JPY4,776 million (a fall of 50.2% from the same period last year), and a quarterly net
income of JPY3,885 million (a fall of 46.8% from the same period last year).

Segment conditions by location were as follows:i) Japan
In addition to the growth in sales of LCD televisions as a result of the positive effect of the “Eco-Point” program,sales of antennas and related devices increased as a result of the transition to digital terrestrial broadcasting.
Moreover, robust sales of Blu-Ray disc recorders introduced by the Group in the third-quarter of the previous
fiscal year, and the growth in sales of information equipment such as printers contributed to the Group posting
first quarter net sales of JPY76,203 million (a 45.4% increase from the same period last year) and first quarter
operating income of JPY5,315 million (a fall of 3.2% from the same period last year) for the Japan market.
ii) North America
No sales relating to TV set-top boxes1 (STBs) targeted for the U.S. market was generated during the quarter as
production for such devices were halted in June of last year. In addition to this, sales of DVD-related devices fellas compared to same period last year as demand for DVD players and Blu-Ray Disc players remained weak.
Also, the decline in consumer demand for LCD televisions (the Group’s core product in the market), and theresultant fall in the unit price for such products resulted in the Group posting first quarter net sales of JPY74,060(a fall of 33.5% from the same period last year) and a first-quarter operating loss of JPY1,253 (as compared to a
JPY4,371 million operating profit in the same period last year) in the North American market.
1

This product converted digital signals to analog signals, allowing users to view digital terrestrial broadcasts on
an existing analog television. In the United States, analog terrestrial broadcasting ended in June 2009.
iii) Asia
As a result of components and other sales, the Group posted first quarter net sales of JPY411 million (a 115.1%
increase from the same period last year) and first-quarter operating income of JPY2,489 million(a fall of 41.3%
from the same period last year) in the Asia (excluding Japan) market.
iv) Europe
Although there was a decline in DVD-related products, growth was achieved in the field of LCD televisions. As
a result, the Group posted first quarter net sales of JPY3,409 (a 9.0% increase from the same period last year)
and a first quarter operating loss of JPY504 million (as compared to a JPY906 million operating loss in the same
period last year) in the European market.

Sales by Product Segment were as follows:i) Audio-Visual Equipment
In the audio-visual equipment segment, the Group was able to increase the volume of LCD televisions unit soldbut due to intense price competition in the market, sales fell. In the field of DVD related products, despite the
top-line contribution of Blu-Ray disc recorders that were launched onto the market during the third quarter ofthe previous fiscal year, sales fell significantly from the same period last year. This was mainly because of thelack of sales generated by TV STBs in the US market after the Group’s decisions to halt production for suchdevices in June of last year and the marked decline in sales of DVD players and Blu-Ray disc players.

Consequently, first quarter net sales for this product segment fell to JPY100,274 million (a fall of 21.8% fromthe same period last year).
ii) Information Equipment
In the information equipment sector, an increase in orders for printers and other factors resulted in the Groupposting first quarter net sales of JPY36,044 million (a 35.9% increase from the same period last year).
iii) Others Products
Sales of other products that are not included in the above categories increased as strong demand for antennas
and related devices as a result of the transition to digital terrestrial broadcasting took hold. Consequently, theGroup posted sales of JPY17,765 million (a 44.0% increase from the same period last year) in this productsegment.
Note: As of the first quarter of the consolidated fiscal year, sales of antennas that were previously categorized underthe “Audio-Visual Equipment” segment has been transferred to the “Other Products” segment. Further, prior year
sales figures for “Audio-Visual Equipment” include the sale of antennas. For reference purposes, sales of antennas
during the second quarter of the previous fiscal year totaled JPY2,372 million.

(2) Qualitative Information Relating to Consolidated Financial Position
The financial condition of the Group at the end of the second quarter of consolidated fiscal year is as follows:
Total assets increased by JPY9,415 million as compared to the end of the previous consolidated fiscal year. Thiswas mainly due to an increase of JPY21,556 million and JPY6,491 million for Goods and Products and Raw
Materials and Inventories, respectively, and a decrease of JPY21,445 million in cash and cash equivalents.
Total liabilities increased by JPY15,587 million as compared to the end of the previous consolidated fiscal year.
This was mainly due to the JPY17,711 million increase in notes and accounts payables.
Net assets fell by JPY6,171 million as compared to the end of the previous consolidated fiscal year. This was
mainly due to the JPY8,791 million decrease in the foreign currency translation adjustment account.
(3) Qualitative Information Relating to Consolidated Performance Forecasts:
Please refer to the “Funai Reports Revised Forecast of Consolidated Operating Results” published on November 2,
2010 for information regarding earnings forecasts.
Note: Our performance forecasts include figures based on decisions according to the information available at thetime and include items that are subject to risks and uncertainties. Actual performance may vary from these
forecasts due to rapid changes in economic conditions in the United States, our primary market, and otherregions overseas, as well as rapid fluctuations in product prices.

2. Other Information(1) Summary of Changes to Major Subsidiaries
None to report with the exception of the fact that FUNAI ELECTRIC (POLSKA) Sp. z o.o., a consolidated
subsidiary, changed its name to FUNAI ELECTRIC EUROPE Sp. z o.o. as of July 1, 2010.
(2) Application of simplified accounting procedure and use of unique accounting procedure for preparation of financial
statements covering consolidated accounting for fiscal quarter
1. Simplified accounting procedure
The amount of allowance for depreciation and amortization is calculated by distributing the applicable amountfor the consolidated fiscal year over fiscal terms. This is because our company, as well as our consolidated
domestic subsidiaries, adopt the diminishing balance or fixed percentage depreciation method (except forbuildings 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).
2. 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 take effect after
the application of the tax effect accounting for before-tax net profits of the consolidated fiscal year, including
this second fiscal quarter.
The corporate tax adjustment is included in the indicated corporate taxes.
(3) Summary of Changes to General Rules and Procedures as well as Denotation Methods for Accounting Treatment
Changes Relating to Items Concerning Accounting Procedure Standards
1. Adoption of the “Accounting Standard for Equity Method Accounting of Investments” and the “Practical
Solution for the Unification of Accounting Policies Applied to Associated Companies Accounted for Using theEquity Method”

As of the current first quarter consolidated financial statements, the Group has adopted the AccountingStandard for Equity Method Accounting of Investments (Statement No. 16 of the Accounting Standard Boardof Japan dated March 10, 2008) and the Practical Solution for the Unification of Accounting Policies Applied
to Associated Companies Accounted for Using the Equity Method (Practical Issues Task Force No. 24 of the
Accounting Standard Board of Japan dated March 10, 2008). There is no impact to ordinary income or net
income before taxes and other adjustments for the current quarter as a result of this change.
2.

Adoption of Accounting Standards for Asset Retirement Obligations
As of the current first quarter consolidated financial statements, the Group has adopted the AccountingStandard for Asset Retirement Obligations (Statement No. 18 of the Accounting Standard Board of Japan dated
March 31, 2008) and the Implementation Guidance on the Accounting Standard for Asset Retirement
Obligations (Implementation Guidance No. 21 of the Accounting Standard Board of Japan dated March 31,2008). There is no impact to operating income, ordinary income, or net income before taxes and otheradjustments for the current quarter as a result of this change.

3.

Change in the Rate Applied for Currency Exchange Conversions
In the past, the Group applied TTS*1 or TTB*2 rates when carrying out foreign currency exchange conversions.
However, as of the second quarter of the consolidated fiscal year, the Group has decided to use TTM*3 rates
instead. This change to utilize TTM rates across all exchange conversions was made in order to ensure clarity
in every income category.
Due to this change, net sales, operating income and ordinary income figures for the second quarter year-to-dateconsolidated period has increased by JPY319 million, JPY418 million and JPY319 million, respectively, as
compared to the results if the rates utilized in the past were applied for exchange conversions. Further, thesecond quarter consolidated net income before taxes and other adjustments increased by JPY319 million ascompared to the results if the rates utilized in the past were applied for exchange conversions.
Please note that the new rates were not applied for the first quarter year-to-date consolidated period as theGroup’s systems were not updated until the second quarter. For reference, if the new rates were utilized during
the first quarter, net sales, operating income, ordinary income and first quarter net income before taxes andother adjustments would increase by JPY301 million, JPY382 million, JPY362 million and JPY362 million,
respectively.
The impact of this change at the segment level is noted in their respective sections.
*1 TTS : telegraphic transfer selling rate
*2 TTB : telegraphic transfer buying rate
*3 TTM : telegraphic transfer middle rate(4) Other
Corrective action implemented based on the application of the Anti-Tax Haven Law
1. 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 in Hong Kong,suggesting that it did not satisfy the conditions for exclusion from application of the Anti-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 the income of our company for the duration of three years,
from April 1, 2001, to March 31, 2004, for taxation 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 tohave 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 Officeof the Osaka Regional Taxation Bureau, which indicated that our assertion had been dismissed. This arbitrationis truly unfortunate and unacceptable. Currently, we are making every effort to assert the validity of ourposition to the court.
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 beenclarified through the amendment of the “Handling of Audits Relating to Accounting Procedures andDisclosures for Taxes” (Report No. 63 of the Auditing and Guaranteeing Work Committee of the JapaneseInstitute of Certified Public Accountants) on March 8, 2007.
2. On June 16, 2008 we received a notice from the Osaka Regional Taxation Bureau indicating their decision toincorporate the income generated by our subsidiary in Hong Kong into the income of our company for theduration of three years, from April 1, 2004, to March 31, 2007, for taxation purposes. In response, we applied
for an assessment by the Administrative Review Office of the Osaka Regional Taxation Bureau on August 6,
2008 and filed an appeal to have the action cancelled with the Osaka District Court on November 14, 2008.

Thereafter, on July 23, 2009, we received a written verdict on this case from the Administrative Review Officeof the Osaka Regional Taxation Bureau, which indicated that our assertion had been dismissed. The Company
deems this decision to be truly unfortunate and unacceptable, and we intend to continue asserting the validityof our position to the court in the future. At present, the Osaka District Court is reviewing the action in
conjunction with the previous action (dated June 28, 2005).
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 the tax system under action will be made according to the condition of the applicableoverseas subsidiaries at the time such subsidiaries’ fiscal years are completed, we can only offer reference
figures at this time. As such, in regard to the consolidated fiscal years following the year of the investigation(i.e., the fiscal years ending March 2008 and those thereafter), a calculation to assess the impact of theapplicable tax system on the income of the Hong Kong subsidiary was carried out. The calculated impact at theparent company level after deducting the dividend income received from the Hong Kong subsidiary for the
fiscal years ended March 2008 and 2009 was estimated to be JPY3,000 million including corporate, residential,
and business taxes. Due to the aforementioned reason, however, the accounting procedure for the figure
relating to this effect has not yet been conducted.

3. Consolidated Financial Statements(1).Consolidated quartery balance sheets(Mil. Yen)
2nd Quarter FY2010(As of September 30, 2010)

Fiscal year 2009
(As of March 31, 2010)ASSETS;
Current Assets
Cash and deposits

64,59986,045

Notes and accounts receivable-trade35,75135,154Merchandise and finished goods

42,406

20,850Work in process

2,387

1,510

Raw materials and supplies

22,54816,057

Others

9,329

7,717

Allowance for doubtful accounts

△ 151

△ 179

Total current assets

176,871

167,155

Property, plant and equipment

17,411

15,654

Intangible assets

4,151

4,874

Others15,34017,148

Allowance for doubtful accounts

△ 301

△ 775

Total investments and other assets

15,03816,373

Total noncurrent assets

36,601

36,902

213,473

204,057

Notes and accounts Payable-trade

49,01731,305

Short-term loans payable

4,435

6,338

Income taxes payable

1,574

1,799

Provision

1,749

2,306

Others

15,58014,457

Total current liabilities

72,35656,208300

566

Provision

2,390

2,428

Others

1,817

2,073

Total noncurrent liabilities

4,508

5,069

76,86561,277

Noncurrent assets

Investments and other assets

TOTAL ASSETSLIABILITIES;Current Liabilities

Noncurrent liabilities
Long-term loans receivable

TOTAL LIABILITIES(Mil. Yen)
2nd Quarter FY2010(As of September 30, 2010)

Fiscal year 2009
(As of March 31, 2010)

NET ASSETS;
Shareholders' equity
Capital stock

31,28831,280Capital surplus

33,25333,245Retained earnings

121,794

119,272

Treasury stock△ 24,341△ 24,340

161,996

159,457

413

470

Foreign currency translation adjestment△ 26,727△ 17,936

Total valuation and translation adjestments△ 26,314△ 17,465

Subscription rights to shares

75

62

Minority interests

850

726

TOTAL NET ASSET

136,608

142,779

TOTAL LIABILITIES AND NET ASSETS

213,473

204,057

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

(2).Concolidated quartely statements of income(Mil. Yen)
2nd Quarter FY2009

2nd Quarter FY2010( from April 1, 2009
to September 30, 2009 )
167,095( from April 1, 2010
to September 30, 2010 )
154,084

Cost of sales

133,083

128,995

Gross profit

34,01225,088Selling, general and administrative expenses

23,94320,501

Operating income

10,0684,586Interest income

446

260

Dividends income

23

16

Other

217

114

Total non-operating income

688

391

Interest expenses

43

35

Equity in losses of affiliates

30

12Foreign exchange loss

969

122

Other

125

30

1,168

201

9,588

4,776

Gain on sales of noncurrent assets

01

Profit on Sales of Investment Securities

34

-

Other

9

25

Total extraordinary income

43

27

Loss on disposal of noncurrent assets

56

10Liquidation loss on affiliated company

-

88

Other

15

45

Total extraordinary losses

72

144

Income before income taxes and minority interests

9,560

4,658

Income taxes

2,117

627

Loss before minority interests

-

4,031

Minority interests in income

132

145

7,309

3,885

Net sales

Non-operating income

Non-operating expenses

Total non-operating expenses
Ordinary income
Extraordinary income

Extraordinary loss

Net income/ loss

(3).Concolidated quartely statements of cash flows(Mil. Yen)
2nd Quarter FY2009

2nd Quarter FY2010( from April 1, 2009
to September 30, 2009 )( from April 1, 2010
to September 30, 2010 )Net cash provided by (used in) operating activities:
Income before income taxes and minority interests

9,560

4,658

Depreciation and amortization

2,785

3,032

Increase(decrease) in allowance for doubtful accounts

△ 750

△ 27

Increase(decrease)in provision for retirement benefits

38

△ 13

△ 470

△ 276

Interest expenses

43

35

Equity in losses of affiliates

30

12Loss on sales of property, plant and equipment

1

△1

△ 34

-

4

-

Increase in notes and accounts receivable-trade△ 10,897△ 5,349

Increase in inventories△ 17,633△ 33,409

25,40523,766

Interest and dividends income

Gain on sales of investment securities
Loss on valuation of investment securities

Increase (decrease) in notes and accounts payable-trade
Other, net

6,023

565

Subtotal

14,105△ 7,005

579

201

△ 42

△ 35

Income taxes paid

△ 2,499△ 1,500

Income taxes refund

1,737

41

Net cash provided by (used in) operating activities

13,879△ 8,299△ 45,410△ 24,544

Interest and dividends income received
Interest expenses paid

Net cash provided by (used in) investment activities:
Payments into time deposits
Repayments from time deposits

55,82551,055△ 2,448△ 4,543

196

27

Purchase of intangible assets

△ 606

△ 39

Purchase of investment securities

△ 28

△ 54

184

-

Other, net

△ 19

15

Net cash provided by (used in) investment activities

7,692

21,916

Purchase of property, plant and equipment
Proceeds from sales of property, plant and equipment

Proceeds from sales of investment securities

Net cash provided by (used in) financing activities:△ 10,647△ 1,397

Increase of long-term loans payable

600-

Repayment of long-term loans payable

△ 433

△ 266

-

13

△ 1,363△ 1,363

Net decrease in short-term loans payable

Proceeds from issue of stock option
Cash dividends paid

△ 48

△ 110

Net cash provided by (used in) financing activities△ 11,892△ 3,124

Effect of exchange rate change on cash and cash equivalents△ 1,746△ 1,581Net increase (decrease) in cash and cash equivalents

7,932

8,911

Cash and cash equivalents at beginning of period

40,18034,063-△ 59

48,11342,914

Other, net

Decrease in cash and cash equivalents due to exclusion from consolidation

Cash and cash equivalents at end of period

(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

Previous Second Quarter (April 1, 2009 - September 30, 2009)
Asia(Units: Million Yen)
EuropeTotal

Elimination Consolidated

Japan

N. America

Sales to outside customers

52,426111,349

191

3,128

167,095−

167,095

Inter-segment sales

98,561

24

104,2621

202,850(202,850)

−

Total

150,988

111,373

104,4543,129

369,946(202,850)

167,095

5,490

4,371

4,237

△906

13,194(3,125)

10,068Net Sales

Operating

IncomeLosses(△)

c;andOverseas sales

Previous Second Quarter (April 1, 2009 - September 30, 2009)
N. America
Overseas sales

124,905(Units: Million Yen)
Asia

Europe3,662

14,953

Other
4,474

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

Total
147,995
167,095

74.8

2.2

8.9

2.7

88.6

[Segment Information]
1. Summary of Reporting Segments
The Group’s reporting segments are based on those units within the Group where separate financial
information is available and where the Chief Executive Officer (Representative Director, President andExecutive Officer) of the Group periodically deliberates over matters such as the distribution ofmanagement resources and financial performance of such segments.
The Group’s main business is to manufacture and sell electrical equipment and devices. Within Japan,such functions are the responsibility of DX Antenna Co., Ltd. Overseas, the areas of the United States,
Asia and Europe are managed by Funai Corporation, Inc. (North America), P&F USA, Inc. (North
America), Funai Electric (H.K.) Ltd. (Asia), Funai Electric (Polska) Sp.z o.o (Europe), and other locallydomiciled entities. Each locally domiciled entity is an independently managed unit that engages inbusiness activities after formulating comprehensive strategies on the products to carry in the region.
Consequently, the Group is comprised of location-specific segments that are based on its manufacturing
and sales structure and have established “Japan”, “North America”, “Asia” and “Europe” as its four
reporting segments.
2.

Information Regarding Net Sales and Profit/Loss Conditions by Reporting Segment
First Quarter Consolidated Fiscal Period – Year to Date (April 1, 2010 to June 30, 2010)

Current Second Quarter (April 1, 2010 - September 30, 2010)(Units: Million Yen)

Asia

EuropeTotal

Elimination Consolidated

Japan

N. America

Sales to outside customers

76,20374,060411

3,409

154,084−

154,084

Inter-segment sales

86,394

1

119,9363

206,335(206,335)

−

Total

162,597

74,062

120,348

3,412

360,420(206,335)

154,084

Net Sales

Operating

Incomeand

5,315△1,253
2,489
△504
6,047
(1,460)4,586
Losses(△)
Note:
1. The negative JPY1,460 million adjustment amount under segment income includes items such as the
JPY20 million relating to the cancellation of inter-segment transactions, JPY506 million of overall
Group expenses that are not apportioned to each reporting segment, and the JPY975 million negative
adjustment relating to inventory assets. Overall Group expenses are comprised of generaladministrative expenses that do not belong to a specific reporting segment.
2. Segment income has been adjusted to operating income noted on the first quarter consolidated
income statement.
3. As stated in the “Additional Information” section, in the past, the Group applied TTS or TTB rates
when carrying out foreign currency exchange conversions. However, as of the second quarter of theconsolidated fiscal year, the Group has decided to use TTM rates instead. As compared to the results
if the rates utilized in the past were applied for exchange conversions, the segment income for“Japan” has increased by JP319 million for the second quarter year-to-date consolidated fiscal period.

(Additional Information)
As of the current first quarter consolidated fiscal period, the Group has adopted the Revised AccountingStandard for Disclosures about Segments of an Enterprise and Related Information (Statement No. 17 of the
Accounting Standard Board of Japan dated March 27, 2009) and the Implementation Guidance on the
Accounting Standard for Disclosures about Segments of an Enterprise and Related Information(Implementation Guidance No. 20 of the Accounting Standard Board of Japan dated March 21, 2008).

(6) Notes of remarkable changes in Shareholders Equity:
Not Applicable4. Other Information
Detailed Statement of Net Sales by Equipment Type and Region
PeriodClassification(Units: Million Yen)

Previous Year Second Quarter

Current Year Second Quarter

From April 1, 2009

From April 1,2010

To September 30, 2009

To September 30, 2010

AmountAmountPercent

By Equipment Type％

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

Audiovisual Equipment

128,24876.7

100,274

65.1

△21.8

Information Equipment

26,51415.9

36,04423.4

35.9

Other Equipment

12,332

7.4

17,76511.5

44.0

167,095

100.0

154,084

100.0

△7.8

％

％

Total

％
Japan

By Region

19,10011.4

37,12224.1

94.4

N. America

124,905

74.8

88,502

57.4

△29.1

Europe14,953

8.9

14,617

9.5

△2.3

Asia

3,662

2.2

5,391

3.5

47.2

Other Areas

4,474

2.7

8,449

5.5

88.9

Subtotal

147,995

88.6

116,961

75.9

△21.0

167,095

100.0

154,084

100.0

△7.8

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

Main Products
LCD Television, DVD Player, DVD Recorder,
Blu-ray Disc Player, Blu-ray Disc Recorder

Information Equipment

Printer

Other Equipment

Receiver-Related Electronic Equipment

From FY2010 antenna set for North America is classified in 'Others' from 'Others in Audio Visual Equipment'
which was classified in FY2009.The sales amount of antenna set for North America in the 2nd quarter in FY2009
was 2,372mil.yen.

(Reference) Change in Operating Results for the Most Recent Quarters
Fiscal Period Ending March 2011 (Consolidated)
First Quarter

Second Quarter

Third Quarter

Fourth Quarter

April - June 2010

July - Sept 2010

Oct - Dec 2010

Jan - March 2011

Million Yen

Million Yen

Million Yen

Million Yen

Net Sales

74,95879,125−−Gross Profit

13,02012,068−−Operating Income

2,518

2,068

−

−

Ordinary Income

1,284

3,491

−

−

Quarterly Net Income Before
Taxes and Other Adjustments

1,196

3,462

−

−

433

3,452

−

−

Quarterly Net Income/Loss

Yen

Yen

Yen

Yen

Quarterly Net Income per Share

12.71

101.26−−−−

Fully Diluted Quarterly Net
Income per Share

12.62

100.76−−−−

Million Yen

Million Yen

Million Yen

Million Yen

Total Assets

217,597

213,473−−

Net Assets

136,964

136,608

−

−

Yen

Yen

Yen

3,978.83−−

First Quarter

Second Quarter

Third Quarter

Fourth Quarter

April - June 2009

July - Sept 2009

Oct - Dec 2009

Jan - March 2010

Yen

Net Assets per Share

3,991.75

Fiscal Period Ended March 2010 (Consolidated)

Million Yen

Million Yen

Million Yen

Million Yen

Net Sales

77,66889,42680,977

66,838Gross Profit

15,23918,772

13,726

9,731

Operating Income

3,706

6,362

1,477

△ 398

Ordinary Income

4,081

5,506

2,453

△ 358

Quarterly Net Income Before
Taxes and Other Adjustments

4,106

5,453

2,449

△ 1,131

Quarterly Net Income/Loss

3,171

4,138

1,846

1,172

Yen

Yen

Yen

Yen

Quarterly Net Income per Share

93.01

121.40

54.16

34.39

Fully Diluted Quarterly Net
Income per Share

92.42

120.53

53.73

34.14

Million Yen

Million Yen

Million Yen

Million Yen

Total Assets

210,089

214,067

216,613204,057

Net Assets

136,253

135,948

139,813

142,779

Yen

Yen

3,970.00

4,080.52

Yen

Net Assets per Share

3,981.10

Yen

4,164.86

from 2010.4.1
to 2010.9.30

Page
1. Summary of 2Q (April to September) Financial Statements （Consolidated）(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）(1) Sales by Equipment

2(2) Sales by Area in Equipment

3(3) Sales by Equipment in Areas3

3. 2Q (July to September) Operating Activities (Consolidated)(1) Operating Results

4(2) Sales by Equipment

4

FUNAI ELECTRIC CO.,LTD1. Summary of Second Quarter Operating Results (Consolidated)(1) Operating Results, Financial Conditions（Units：100million yen, %）FY20092Q
AmountNet Sales%

1,670 100.0

FY2010Full-Year

Change Amount
15.5

%

2Q
Change Amount

3,149 100.0

4.0%

Full-Year (Projections)
Change Amount

1,540 100.0 △ 7.8%

3,200 100.0

Change
1.6

Operating Income

100

6.0

133.0

111

3.5

690.9

45

3.0 △ 54.4

90

2.8 △ 19.3

Ordinary Income

95

5.7

60.0

116

3.7

852.9

47

3.1 △ 50.292

2.9 △ 21.3

Net Income afterTax

73

4.4

−

103

3.3

−

38

2.5 △ 46.8

71

2.2 △ 31.3

Total Assets

2,140

−

−

2,040

−

−

2,134

−

−

−

−

−

Net Assets

1,359

−

−

1,427

−

−

1,366

−

−

−

−

−

（※） Yen−Dollars / exchange rate
（Units：Yen / Dollars）

FY2009FY2010Full-Year

2Q
94.78

Average Rate in each Period

Full-Year (Projections)

2Q
88.15

92.60

85.57

(2) Profitability and Per Share Data etc.
FY20092Q

FY20102Q

Full-Year

Full-Year (Projections)

(%)

20.4

18.2

16.3

15.6

Operating Income Ratio (%)

6.0

3.5

3.0

2.8

Ordinary Income Ratio (%)

5.7

3.7

3.1

2.9

Shareholders' Equity Ratio (%)

63.2

69.6

63.6

−

Net Assets Per Share (Yen)

3,970.00

4,164.86

3,978.83−

Net Income Per Share (Yen)

214.41302.97113.97208.21Gross Profit Ratio

Return On Asset

(%)

3.2

5.1

1.8

−

Return On Shareholders' Equity

(%)

5.2

7.5

2.9

−

Number of Total Employees （人）

2,447

2,553

3,126

−

(3) Capital Expenditures, Depreciation, R&D Expenses（Units：100million yen, %）FY20092Q
AmountCapital Expenditures

Full-Year
AmountChange29

FY20102Q
ChangeAmount43 △ 14.0

123.1

AmountChange45

FY20092Q

Full-Year (Projections)
Change
68

55.2

58.1

FY20102Q

Full-Year

Full-Year (Projections)

Amount% to Sales

Depreciation Expenses

20

1.2

11.1

43

1.4

19.4

22

1.4

10.0

R&D

66

4.0

△ 1.5

134

4.3

3.1

63

4.1 △ 4.5

Change Amount−1−% to Sales

Change Amount% to Sales

Change Amount% to Sales

Change

47

1.5

9.3

147

4.6

9.7

(4) Cash Flow
（Units：100million yen）
FY20092Q

FY2010Full-Year

Full-Year (Projections)

2Q

Cash flows provided by operating activities

138

36

△ 82

−

Income Before Income Taxes

95

108

46

−

Depreciation Expenses

27

57

30

−

Others16△ 129

Cash flows used in investing activities

76△

Free Cash flows

214
△

△ 118

Cash flows provided by financing activities

Effect of exchange rate changes△

on cash and cash equivalents
Net increase in cash andcash equivalents

17
△

79

△ 158

−

27

219

−

9

137

−

78

△ 31

−

4

△ 15

−

64

89

−

2. Operating Activities (Consolidated)(1) Sales by Equipment（Units：100million yen, %）FY2010FY20092Q
AmountAudio Visual Equipment

1,282

%
76.7

Full-Year
Change Amount
23.6

2,335

%
74.2

2Q
Change Amount%Full-Year (Projections)
Change Amount%

Change1.3

1,003

65.1 △ 21.8

2,237

69.9 △ 4.2

DVD

238

14.2 △ 0.4

386

12.3 △ 4.0

134

8.7 △ 43.7

261

8.2 △ 32.4

BD Players

109

6.5

43.4

189

6.0

54.9

104

6.7 △ 4.6

324

10.1

71.4

LCD Televisions

791

47.4

58.8

1,594

50.6

18.8

750

48.7 △ 5.2

1,608

50.2

0.9

Others144

8.6 △ 35.7

166

5.3 △ 62.3

15

1.0 △ 89.6

44

1.4 △ 73.5

Information Equipment265

15.9 △ 4.5

546

17.3

21.4

360

23.4

35.9

608

19.0

11.4

Others123

7.4 △ 6.3268

8.5 △ 1.5

177

11.5

44.0

355

11.1

32.5

3,200 100.0

1.6

Total

1,670 100.0

15.5

3,149 100.0

4.0

1,540 100.0 △ 7.8

Note:From FY2010 antenna set fot the North America is classified in 'Others' from 'Others in Audio Visual Equipment' which was classified in
FY2009.

−2−

(2) Sales by Areas in Equipment（Units：100million yen, %）FY2010FY20092Q
AmountAudio Visual Equipment
North America
Europe%Full-Year
Change Amount%

2Q
Change Amount%Full-Year (Projections)
Change Amount%

Change

1,282

76.7

23.6

2,335

74.2

1.3

1,003

65.1 △ 21.8

2,237

69.9 △ 4.2

1,151

68.9

32.5

1,970

62.5 △ 0.1

714

46.3 △ 38.0

1,579

49.3 △ 19.8

3.3 △ 49.1

125

4.0 △ 40.8

49

3.2 △ 12.5

108

3.4 △ 13.6

56

Asia and Others

3

0.2

−

18

0.6

−

21

1.4

600.0

41

1.3

127.8

Japan

72

4.3

24.1

222

7.1

80.5

219

14.2

204.2

509

15.9

129.3

265

15.9 △ 4.5

546

17.3

21.4

360

23.4

35.9

608

19.0

11.4

North America

92

5.5 △ 26.4

185

5.9

6.3

140

9.1

52.2

196

6.1

5.9

Europe

92

5.5

12.2

177

5.6

18.8

97

6.3

5.4

178

5.6

0.6

Asia and Others

76

4.6

11.8

168

5.3

37.7

115

7.5

51.3

217

6.8

29.2

Japan

5

0.3

150.0

16

0.5

220.0

8

0.5

60.0

17

0.5

6.3

7.4 △ 6.3268

8.5 △ 1.5

177

11.5

44.0

355

11.1

32.5

3,200 100.0

1.6

Information Equipment

Others123

Total

1,670 100.0

15.5

3,149 100.0

4.0

1,540 100.0 △ 7.8(3) Sales by Equipment in Areas（Units：100million yen, %）FY2010FY20092Q
AmountNorth America%

Full-Year
Change Amount%

2Q
Change Amount%Full-Year (Projections)
Change Amount%

Change885

57.4 △ 29.1

1,828

57.1 △ 15.5

62.5 △ 0.1

714

46.3 △ 38.0

1,579

49.3 △ 19.8

5.9

6.3

140

9.1

52.2

196

6.1

5.9
488.9

1,249

74.8

24.9

2,164

68.7

Audio Visual Equipment

1,151

68.9

32.5

1,970

Information Equipment

92

5.5 △ 26.4

185

Others

6

0.4

0.1

0.0

9

0.3 △ 43.8

31

2.0

416.7

53

1.7

149

8.9 △ 23.3

305

9.7 △ 16.2

146

9.5 △ 2.3286

9.0 △ 6.2

Audio Visual Equipment56

3.3 △ 49.1

125

4.0 △ 40.8

49

3.2 △ 12.5

108

3.4 △ 13.6

Information Equipment

92

5.5

12.2

177

5.6

18.8

97

6.3

5.4

178

5.6

0.6

Others1

0.1 △ 66.7

3

0.1 △ 25.0

0

0.0

−

0

0.0

−

81

4.9

138

9.0

70.4

260

8.1

32.7

EuropeAsia and Others

12.5

196

6.2

48.5

Audio Visual Equipment

3

0.2

−

18

0.6

−

21

1.4

600.0

41

1.3

127.8

Information Equipment

76

4.6

11.8

168

5.3

37.7

115

7.5

51.3

217

6.8

29.2

Others2

0.1 △ 50.0

10

0.3

11.1

2

0.1

0.0

2

191

11.4

6.5

484

15.4

30.5

371

24.1

94.4

826

25.8

70.7

Audio Visual Equipment

72

4.3

24.1

222

7.1

80.5

219

14.2

204.2

509

15.9

129.3

Information Equipment

5

0.3

150.0

16

0.5

220.0

8

0.5

60.0

17

0.5

6.3

6.8 △ 4.2

246

7.8

1.7

144

9.4

26.3

300

9.4

22.0

3,149 100.0

4.0

3,200 100.0

1.6

Japan

OthersTotal

114

1,670 100.0

15.5

−3−

1,540 100.0 △ 7.8

0.0 △ 80.0

3. 2Q (July to September) Operating Activities (Consolidated)(1) Operating Results（Units：100million yen, %）Amount

FY2009FY20102Q （Jul.−Sep.）

2Q （Jul.−Sep.）%

ChangeAmount%ChangeNet Sales

894

100.0

4.9

791

100.0

△ 11.5

Operating Income

63

7.1

90.9

20

2.6

△ 67.5

Ordinary Income

55

6.2

256.6

34

4.4

△ 36.6Net Income afterTax

41

4.6

146.9

34

4.4

△ 16.6（※） Yen−Dollars / exchange rate
（Units：Yen / Dollars）
FY2009FY20102Q （Jul.−Sep.）

2Q （Jul.−Sep.）

92.80

Average Rate in each Period

85.02(2) Sales by Equipment（Units：100million yen, %）AmountAudio Visual Equipment
DVD

FY2009FY20102Q （Jul.−Sep.）

2Q （Jul.−Sep.）%

ChangeAmount%Change

676

75.6

9.0

511

64.6

△ 24.4116

13.0△ 16.564

8.1△ 44.8BD Players

71

7.9

29.1

53

6.7

△ 25.4

LCD Televisions

448

50.1

49.8

388

49.0

△ 13.4

Others41

4.6△ 67.76

0.8△ 85.4

Information Equipment

156

17.5

△ 8.2

189

23.9

21.2

Others

62

6.9

0.0

91

11.5

46.8

Total

894

100.0

4.9

791

100.0

△ 11.5−4−

（Company）

FUNAI ELECTRIC CO., LTD.
INVESTOR / PUBLIC RELATIONS DEPARTMENT
7-7-1 Nakagaito Daito city, Osaka 574-0013, JapanTEL 81-72-870-4395 ･ FAX 81-72-870-4613