From April 1, 2013
To September 30, 2013

November 11, 2013
Funai Electric Co., Ltd.

Second Quarter (April‐September) Consolidated Financial Summary
for the Period Ending March 2014
(Million yen)Previous Year Second Quarter

Current Year Second Quarter

From April 1, 2012
to Septembr 30, 2012

From April 1, 2013
to September 30, 2013

AmountAmount%Rate ofincrease or
decrease

%

%

%

%

Net Sales

89,050100.0

120,570

100.0

35.4

Operating Income (Loss)(1,451)

(1.6)

567

0.5

－

Ordinary Income (Loss)(3,064)

(3.4)

2,163

1.8

－

Net Income (Loss) before Taxes
and Other Adjustments(3,234)

(3.6)

937

0.8

－

Net Income (Loss) after Tax(2,991)

(3.4)

612

0.5

－

Net Income (Loss) per Share(87.68)17.96

Notes: Includes 20 consolidated subsidiaries, 1 non‐consolidated subsidiary of equity method, 1 affiliated company ofequity method.

Member, Financial Accounting Standards Foundation

Financial Report for the 6‐Month Period ended September 30, 2013
November 11, 2013

Listed company name:

Funai Electric Co., Ltd.

Securities Code: 6839

Tokyo Stock ExchangeFirst Section(URL http://www.funai.jp/ )Representative: President and CEO
Tomonori Hayashi
Keichi Ikegami
Inquiries: General Manager, Accounting Department
Scheduled date of Quarterly Report; November 13, 2013
Scheduled date of Commencement of Annual Dividend Payment; －Quarterly Financial Results Supplementation: Yes
Quarterly Financial Results Seminar: Yes

TEL: (072) 870‐4395

1. Second Quarter Consolidated Results for the Period Ending March 2014 (April 1, 2013 – September 30, 2013)(1) Operating Results (Consolidated)(% denotes year on year)
Ordinary Income
Net Income
Net Sales
Operating Income
Million yen%
Million yen %Million yen%
Million yen%
567
120,570
35.4
612
2,163
－
－
－
2nd Quarter FY2013(1,451)89,050(36.7)(2,991)(3,064)－－－
2nd Quarter FY2012(Reference) Comprehensive Income 2nd Quarter FY 2013 ended September 30, 2013
2,614 million yen (－%)
2nd Quarter FY 2012 ended September 30, 2012 (5,893) million yen (－%)
Net Income Per Shareon a Fully Diluted BasisNet Income
Per Share

Yen

Yen
2nd Quarter FY2013
2nd Quarter FY2012

－
－

17.96
(87.68)(2) Consolidated Financial Position

2nd Quarter FY2013
Fiscal Year 2012
(Reference) Equity

Net Assets
Equity Ratio
Total Assets%
Million yen
Million yen
67.1
122,640
181,052
61.7
121,398
194,524
2nd Quarter FY 2013 ended September 30, 2013 121,504 million yen
Fiscal Year 2012 ended March 31, 2013
120,103 million yen

2. Dividends
Dividend per Sharest

1 Quarternd

2 Quarteryen

3rd Quarteryen

Fiscal Year 2012

－

0.00

Fiscal Year 2013

－

0.00

Fiscal Year 2013
(Projection)ndYear‐Endyen

Annual
yen

yen

－

35.00

35.00

－

－

－

(Note) Revision of Annual Dividends Forecast in this 2 Quarter: No
The dividend for FY 2013 has been undecided. The company’s dividend policy of DOE is unchanged.
Because of the high impact stemmed from the recent fluctuations in exchange rates give to the consolidated
net assets, the dividend is to be disclosed at the time of disclosure has become possible to public.

3. Forecast of Consolidated Results for the Fiscal Year ending March 2014 (April 1, 2013 ‐ March 31, 2014)(% denotes year on year)
Operating
Ordinary
Net Income
Net Sales
Net Income
IncomeIncomePer Share

Full Year

Million yen%

229,000

19.3

Million yen %500－

Million yen %

2,100

－

Million yen %

100

－

Yen

2.93

(Note) Revision of Forecast of Consolidated Results for the six month period or the Full Year in this 2nd Quarter: Yes*Note(1) Changes in Consolidated Subsidiaries (Changes in Scope of Consolidation): Yes
New Subsidiary : Funai Electric Cebu, Inc.
(2) Application of simplified accounting procedure and use of unique accounting procedure for preparation offinancial statements covering consolidated accounting in this 2nd quarter: Yes(3) Changes in Accounting Practices, Procedures and Presentation Methods for Consolidated Financial Results
1. Changes arising from revision of accounting standards: No
2. Changes arising from other factors: No
3. Changes in accounting estimates: No
4. Restatement: No(4) Number of Shares Outstanding (Ordinary Shares)
1. Number of shares outstanding (including treasury stock) as of September 30, 2013; 36,130,796 shares
as of March 31, 2013; 36,130,796 shares
2. Number of shares of treasury stock as of September 30, 2013; 2,011,615 shares
as of March 31, 2013; 2,011,615 shares
3. The Average number of outstanding shares on September 30, 2013; 34,119,181 shareson September 30, 2012; 34,114,189 shares* 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, the Group 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) Explanation of Business Performance
During the second quarter of the current fiscal term, the economy of the United States, which is the Funai Group’s
mainstay market, almost overall continued to grow mode, despite improvements job situation slower than expected
and the housing market remains flat, but a recovery in personal consumption. The European economy bottoming
out, while the European Central Bank’s responses to the debt crisis to have several countermeasures. Economic
performance in China is also showed bottoming out due to increasing amount of the public investment. In Japan,
also continued modest recovering after the countermeasures of monetary easing at the Bank of Japan, due to apersonal consumption’s mind and increasing amount of the capital investments.
Within the consumer electronics industry, still under these difficult conditions, global shipments of LCD TVs stillslow due to mainly slump in US, Europe and Japan, moreover, China was continuously slow due to ended subsidies
for promoting energy efficiency at end‐May, and a new system has not been put in place, while demand forsmartphones and tablet devices has kept grown sharply, in a changing role of the products that are driving themarket.
As a result of the above factors, the Funai Group posted net sales of JPY 120,570 million, a 35.4% increase
compared with the same period last year.
On the profit front, operating income was JPY 567 million (the operating loss for the same period last year was JPY
1,451 million); ordinary income was JPY 2,163 million (the ordinary loss for the same period last year was JPY 3,064
million); and a net income of JPY 612 million (the net loss for the same period last year was JPY 2,991 million).
Segment conditions by location were as follows:i) Japan
Sales of information equipment recorded increases in revenues due to printer order increase. In addition, sales
of LCD TVs and DVD‐related equipment increased.
As a result, net sales were JPY 28,137 million, an increase of 23.1% year on year. Our segment income(operating income) was JPY 832 million (the operating loss for this segment for the same period last year was
JPY 501 million).
ii) North America
Revenues for LCD TVs increased year on year due to strong sales competitively priced products at a major massretailer in addition to expansion of sales in Mexican market. Additionally, the Philips branded audio andaccessories products contributed to the sales, and DVD‐related equipment also increased as the result ofhealthy sales of Blu‐ray Disc players.
As a result, net sales amounting to JPY 89,112 million, an increase of 38.6% year on year. Our segment income(operating income) was JPY 32 million (the operating loss for this segment for the same period last year was JPY
387 million).
iii) Asia
Funai Electric Cebu, Inc. which was acquired all shares from Lexmark International, Inc. started its operationand the ink cartridges contributed to the sales.
Net sales came to JPY 2,126 million, an increase of 401.6% year on year. Our segment income (operating
income) was JPY 369 million, a decrease of 26.4% year on year.
iv) Europe
Sales of LCD TVs and DVD‐related products declined due to sluggish market conditions.
As a result, net sales down 20.1% year on year, to JPY 1,193 million, and an segment loss (operating loss) of JPY
310 million (operating loss for the same period last year was JPY 176 million).

Sales by product segment were as follows:i) Audiovisual Equipment
In the audiovisual equipment sector, sales of LCD TVs increased revenue because of strong sales in North
America and Mexican market. Sales of DVD‐related equipment also increased year on year due to revenue
growth of Blu‐ray Disc players.
As a result, net sales of this equipment were JPY 93,893 million, an increase of 26.0% year on year.
ii) Information Equipment
In the information equipment sector, sales of printer increased due to increase in orders and ink cartridges
contributed to the sales.
As a result, net sales of JPY 10,730 million, an increase of 163.7% year on year.

iii) Other Products
Net sales were JPY 15,946 million, an increase of 52.6% year on year due to contribution of the Philips brandedaudio accessories products.
(2) Qualitative Information Relating to Consolidated Financial Position
Our financial position at the end of first quarter is described below.
Total assets decreased by JPY 13,472 million as compared to the end of the previous consolidated fiscal year. Thiswas mainly due to a decrease of JPY 27,442 million in cash and deposits, and an increase of JPY 7,024 million and
JPY 5,647 million in notes and accounts receivable‐trade, tangible fixed asset.
Total liabilities decreased by JPY 14,714 million as compared to the end of the previous consolidated fiscal year.
This was mainly due to a decrease of JPY 9,308 million and JPY 7,019 million in notes and accounts payable‐trade,short‐term loans payable, and an increase of JPY 1,125 million in long‐term loans payable.
Net assets increased by JPY 1,242 million as compared to the end of the previous consolidated fiscal year. This was
mainly due to an increase of JPY 1,870 million in the foreign currency translation adjustment account, and adecreased of JPY 581 million in retained earnings.
(3) Qualitative Information Relating to Consolidated Performance Forecasts:
Please refer to the “Funai Electric Announces Differences between Forecast and Actual Performance for the First
Six Months of the Fiscal Year, a Revision in Its Operating Performance Forecasts for the Full Fiscal Year, and theRecording of an Extraordinary Loss (Expenses Incurred on Business Restructuring)” published on November 11,
2013 for information regarding earnings forecasts.
Note: The operating results outlook is a forward‐looking statement about the future performance of the Company
and is based on management’s assumptions and beliefs in light of information currently available, andinvolves known and unknown risks and uncertainties. Various factors such as changes in economic conditions
overseas, especially in the main U.S. market, and severe price fluctuations may cause actual events andresults to differ materially from those anticipated in these statements.
2. Summary Information(1) Important changes relating to subsidiaries and affiliates during the fiscal term
The newly‐established Funai Electric Philippines Inc. has also been included within the scope of consolidation in thefirst quarter. In addition, we acquired all shares of manufacturing subsidiary where manufactures inkjet
printer‐related products located in Philippines from Lexmark International, Inc. And the newly‐established Funai
Electric Cebu, Inc. has also been included within the scope of consolidation.
(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 theapplication of the tax effect accounting for before‐tax net profits of the consolidated fiscal year, including thissecond fiscal quarter.
(3) Additional Information
About Anti‐Tax Haven Law
1. The Funai Group received a rectification notices from the Osaka Regional Taxation Bureau on June 28, 2005, andJune 16, 2008. The Bureau determined that our Hong Kong subsidiary does not meet the requirements for
exclusion under the anti‐tax haven system and the Hong Kong subsidiary’s income for the three fiscal years ended
March 31, 2002 through 2004, and the three years from March 31, 2005 through 2007, will be considered, andtaxed as, our income. We objected to this supplementary tax assessment, and filed petitions seeking a review ofthe decision with the Osaka Regional Tax Tribunal on July 25, 2006, and August 6, 2008. On July 3, 2008, and July23, 2009, we received written verdicts on this case from the Administrative Review Office of the Osaka Regional
Taxation Bureau, which indicated that our assertions had been dismissed. On November 16, 2006 and November
14, 2008, the Company filed suits in the Osaka District Court to overturn the supplementary tax assessment orders,and a hearing for consolidation of those actions was filed on November 26, 2008. The court dismissed the claimsof our Company on June 24, 2011. As the Company is unable to accept the Osaka District Court’s judgment, wefiled a notice of appeal at the Osaka Superior Court on July 7, 2011. With respect to this action, on July 20, 2012,
the court dismissed the claims of the Company. In response to this judgment, the company will promptly examine
the contents of the judgment. We intend to appeal this matter with the High Court.
The additional taxes of JPY 16,651 million (JPY 19,184 million including incidental taxes) and JPY 15,038 million(JPY 16,838 million including incidental taxes) include corporate, enterprise and residence taxes. In accordancewith the “Accounting Practices, Disclosure and Audit Treatment for Various Taxes” (Japanese Institute of Certified
Public Accountants, Auditing and Assurance Practice Committee, Audit Committee Report No. 63) we charged thetax assessments to income as “prior year’s taxes” in the fiscal year ended March 31, 2007, and the fiscal year
ended March 31, 2009.

2.

The Funai Group received a rectification notice from the Osaka Regional Taxation Bureau on June 29, 2011. The
Bureau determined that our Hong Kong subsidiary does not meet the requirements for exclusion under theanti‐tax haven system and the Hong Kong subsidiary’s income for the three fiscal years ended March 31, 2008
through 2010, will be considered, and taxed as our income. We objected to these supplementary tax assessments,and filed a petition with the Osaka Regional Tax Tribunal on August 25, 2011, to overturn the supplementary tax
assessment order. Thereafter, we received written verdicts on this case on July 24, 2012 indicating that ourassertions had been dismissed. We will continue to assert the validity of its arguments in the future.
The additional tax of JPY 825 million (JPY 935 million including incidental taxes) includes corporate, enterpriseand residence taxes. We charged the tax assessments to income as “prior year’s taxes” in the fiscal year ended
March 31, 2012.

3.

With regard to the actions The Funai Group filed with the Osaka District Court on June 28, 2005, and June 16,
2008, seeking the rescission of supplementary tax assessments, on June 24, 2011, a decision was reached in which
the court dismissed the claims of the Company. Accordingly, we treated this amount as an expense during the
fiscal year under review, which is the fiscal year ended March 31, 2012 following the year to which the assessment
was applied.

3. Consolidated Financial Statements(1) Consolidated Quarterly Balance Sheets(Units : Million Yen)
Fiscal year 2012
(As of March 31, 2013)

2nd Quarter FY2013(As of September 30, 2013)ASSETS;
Current Assets
Cash and deposits

67,81340,370Notes and accounts receivable‐trade33,19340,218Merchandise and finished goods

34,547

34,205Work in process

2,095

1,794

Raw materials and supplies

18,997

16,601

Other

8,332

8,764

Allowance for doubtful accounts

(178)

(165)

164,802141,789

Tangible fixed assets

16,67522,323

Intangible fixed assets

3,107

6,986

10,131

10,145

Allowance for doubtful accounts

(192)

(192)

Total investments and other assets

9,938

9,953

Total current assets
Noncurrent assets

Investment and other assets
Other

Total noncurrent assets

29,721

39,262

194,524

181,052

Notes and accounts payable‐trade39,17829,870

Short‐term loans payable

12,981

5,962

Income taxes payable

1,690

401

Provision

1,188

1,311

Other

14,412

15,622

Total current liabilities

69,45253,168－

1,125

Provision

2,008

2,251

Other

1,663

1,866

Total noncurrent liabilities

3,672

5,243

73,12558,411TOTAL ASSETSLIABILITIES;Current Liabilities

Noncurrent liabilities
Long‐term loans payable

TOTAL LIABILITIESFiscal year 2012
(As of March 31, 2013)

2nd Quarter FY2013(As of September 30, 2013)

NET ASSETS;
Shareholders' equity
Capital stock

31,30731,307

Capital surplus

33,27233,272Retained earnings

101,135

100,554

Treasury stock(24,341)(24,341)

Total shareholders' equity

141,374

140,793451

563

Foreign currency translation adjestment(21,722)(19,852)

Total accumulated other comprehensive income(21,271)(19,289)

122

127

1,173

1,009

121,398

122,640

194,524

181,052

Accumulated other comprehensive income
Valuation difference on avaiable‐for‐sale securities

Subscription right to shares
Minority interests
Total net asset
TOTAL LIABILITIES AND NET ASSETS

(2) Consolidated Quarterly Statements of Income and Consolidated Quarterly Statement ofComprehensive Income(Consolidated Quarterly Statements of Income)(Units : Million Yen)
2nd Quarter FY2012

2nd Quarter FY2013( from April 1, 2012
to September 30, 2012)( from April 1, 2013
to September 30, 2013)

Net sales

89,050120,570

Cost of sales

73,615100,961

Gross profit

15,435

19,608Selling, general and administrative expenses

16,887

19,040Operating income (loss)(1,451)

567

Interest income

140

70

Dividends income

22

23

Foreign exchange gains

－

1,851

Other

198

59

Total non‐operating income

361

2,004

Interest expenses

51

103

Equity in losses of affiliates

35

55

Foreign exchange losses

1,730

－

－

147

157

101

1,974

407

(3,064)

2,163

Gain on disposal of noncurrent assets

30Gain on negative goodwill－

8

Total extraordinary income

38

Non‐operating income

Non‐operating expenses

Payment compensation cost
Other
Total non‐operating expenses
Ordinary income (loss)
Extraordinary income

Extraordinary loss
Expenses incurred on business restructuring－

Loss on valuation of investment securities

164

70

9

15

173

1,234

(3,234)

937

(255)

305

(2,979)

631

11

19

(2,991)612

Other
Total extraordinary loss
Income (loss) before income taxes
Income taxes
Income (loss) before minority interests
Minority interests in income
Net income (loss)

*1

1,149

(Consolidated Quarterly Statement of Comprehensive Income)

Income (loss) before minority interest adjustment(Units : Million Yen)

2nd Quarter FY2012

2nd Quarter FY2013( from April 1, 2012
to September 30, 2012)( from April 1, 2013
to September 30, 2013)(2,979)

631

15

112

(2,935)

1,828

5

41

(2,914)

1,982(5,893)

2,614

Comprehensive income attributable to owners of parent(5,900)2,595Comprehensive income attributable to minority interests

6

19

Other comprehensive Income
Valuation difference on avaiable‐for‐sale securities
Foreign currency translation adjestment
Share of other comprehensive income of associates
accounted for using equity method
Total other comprehensive Income
Comprehensive income(Breakdown)(3) Consolidated quarterly statements of cash flows(Units : Million Yen)
2nd Quarter FY2012

2nd Quarter FY2013( from April 1, 2012
to September 30, 2012 )( from April 1, 2013
to September 30, 2013 )Net cash provided by (used in) operating activities
Income before income taxes and minority interests(3,234)937

Depreciation and amortization

2,885

3,217

Increase(decrease) in allowance for doubtful accounts

(100)

(23)

Increase(decrease)in provision for retirement benefits

(47)

(10)

Interest and dividends income

(163)

(93)

Interest expenses

51

103

Equity in (earnings) losses of affiliates

35

55

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

(2)

(0)

164

70

Decrease (increase) in notes and accounts receivable‐trade(6,683)(5,355)Decrease (increase) in inventories(8,117)

4,964

Increase (decrease) in notes and accounts payable‐trade

9,378(11,948)

Other, net

1,382

1,092

Subtotal(4,451)(6,991)

Interest and dividends income received

137

120

Interest expenses paid

(50)

(179)

Income taxes paid

(225)

(1,028)

Income taxes refund

338

522

Loss (gain) on valuation of investment securities

Income taxes for prior periods paid
Net cash provided by (used in) operating activities‐(4,251)*1(1,171)(8,725)

Net cash provided by (used in) investment activities
Payments into time deposits(21,550)－

Repayments from time deposits

32,835

13,129Purchase of property, plant and equipment(2,128)(3,012)41

0Purchase of intangible assets(150)(3,807)Purchase of investment securities

(111)

(244)

Proceeds from sales of investment securities

308

－

-

(5,534)(1,264)

(1)

3

(316)

7,984

213

587

(7,562)

Proceeds from sales of property, plant and equipment

Payment for acquisition of shares of newly consolidated subsidiaries

Payments for loan receivables
Other, net
Net cash provided by (used in) investment activities
Net cash provided by (used in) financing activities
Net increase (decrease) in short‐term loans payable
Repayment of long‐term loans payable
Cash dividends paid
Other, net
Net cash provided by (used in) financing activities

‐

1,500

(1,705)(1,194)

(39)

(476)

(1,157)(7,733)

Effect of exchange rate change on cash and cash equivalents

(950)

1,323

Net increase (decrease) in cash and cash equivalents

1,625(14,922)

Cash and cash equivalents at beginning of period

36,56750,23833－

38,22635,315

Increase in cash and cash equivalents from newly consolidated subsidiaries

Cash and cash equivalents at end of period

(4) Notes of Consolidated Quarterly Financial Statements(Notes for Continuing Enterprises)
Not Applicable(Notes of remarkable changes in Shareholders Equity)
Not Applicable(Consolidated quarterly statements of income)Second Quarter Consolidated Fiscal Period – Year to Date (April 1, 2012 to September 30, 2013)*1 Expenses incurred on business restructuring stem mainly from costs incurred due to the shrinking of theoverseas LED business, principally including an inventory valuation loss of JPY 217 million, an impairment loss
on investment in subsidiaries and associated companies of JPY 646 million and impairment losses of JPY 255
million.
(Consolidated quarterly statements of cash flows)
Second Quarter Consolidated Fiscal Period – Year to Date (April 1, 2012 to September 30, 2013)*1 During the first six months of the fiscal year, a consolidated subsidiary, FUNAI EUROPE GmbH, received fromthe German tax authorities a request for correction in with regard to transfer pricing taxation on transactions
with Funai Electric, as well as with another consolidated subsidiary, FUNAI ELECTRIC EUROPE Sp.z o.o. A
supplementary tax assessment was accordingly paid.

(Information by Segment)[Segment Information]
Ⅰ.Second Quarter Consolidated Fiscal Period – Year to Date (April 1, 2012 to September 30, 2012)
Information Regarding Net Sales and Profit/Loss Conditions by Reporting Segment(Units: Million Yen)Japan

N. America

Asia

Europe

Total

Adjustments Consolidated(Note 1)
(Note 2)Net Sales(1) Outside customers(2) Inter‐segment sales

22,861
67,97464,2710424
68,0771,494
089,050136,051－(136,051)

89,050－Total

90,83564,271

68,501

1,494

225,102(136,051)

89,050

(501)

(387)

502

(176)

(563)

(888)

(1,451)

Segment Income (Loss)

Note:
1. JPY ‐888 million adjustment amount under segment loss includes items such as the JPY 14 million relating to thecancellation of inter‐segment transactions, JPY ‐433 million of overall Group expenses that are not apportioned
to each reporting segment, and the JPY ‐468 million negative adjustment relating to inventory assets. Overall
Group expenses are comprised of general administrative expenses that do not belong to a specific reporting
segment.
2. Segment loss has been adjusted to operating loss noted on the second quarter consolidated income statement.

Ⅱ. Second Quarter Consolidated Fiscal Period – Year to Date (April 1, 2013 to September 30, 2013)
Information Regarding Net Sales and Profit/Loss Conditions by Reporting Segment(Units: Million Yen)Japan

N. America

Asia

Europe

Total

Adjustments Consolidated(Note 1)
(Note 2)Net Sales(1) Outside customers(2) Inter‐segment sales

28,13775,38989,1120

2,126
83,2071,193
0120,570
158,597－(158,597)

120,570－

Total

103,526

89,11285,334

1,194

279,167(158,597)

120,570

832

32

369

(310)

924

(356)

567

Segment Income (Loss)

Note:
1. JPY ‐356 million adjustment amount under segment income includes items such as the JPY 20 million relating tothe cancellation of inter‐segment transactions, JPY ‐399 million of overall Group expenses that are notapportioned to each reporting segment, and the JPY 22 million adjustment relating to inventory assets. Overall
Group expenses are comprised of general administrative expenses that do not belong to a specific reporting
segment.
2. Segment income has been adjusted to operating income noted on the second quarter consolidated income
statement.
(Relationships, etc., in the Corporate Combination)
Corporate Combination through Acquisition
1. Overview of the Corporate Combinationi)Name of other company and content of acquired businesses
Name of other company
Lexmark International, Inc. (hereinafter, “Lexmark”)
Content of acquired businesses Inkjet‐related technologies and assets, including patent rightsii) Reason for conducting the corporate combination
As a contract manufacturer, Funai has supplied inkjet hardware to Lexmark since July of 1997. Funai has
worked closely with Lexmark for around 16 years in developing printer hardware and has established a strong
relationship with Lexmark.
The acquisition of the IJ technology and assets enables Funai to start and grow our own inkjet business, not asa contract manufacturer of printer products (excluding lucrative supplies) any longer, with the inkjet patents,
manufacturing facilities and comprehensive R&D capabilities for the products (including supplies) related to
inkjet printers, the strong inkjet business platform which Lexmark has established for years. As a result, Funai
believes it will be able to expand its business going forward sustainably.
iii) Date of the corporate combination
April 30, 2013iv) Legal form of the corporate combination
Acquisition of patent rights and development facilities, and acquisition of shares in manufacturing subsidiaryv) Name of company after combination
Funai Electric Cebu, Inc.
vi) Percentage of voting rights acquired : 100%2.

Performance Period of Acquired Business Included in Quarterly Consolidated Income Statement for the Quarterly
Fiscal Period under Review
From May 1, 2013 to September 30, 20133.

Acquisition Cost and Content of Acquired Business
Consideration for acquisition
Expenses directly associated with acquisition
Acquisition cost

Cash
Advisory fees, etc(million yen)
10,036242
10,2784.

Amount of Goodwill Generated, Source of Generation, Amortization Method and Amortization Periodi) Amount of goodwill generated : JPY 8 millionii) Source of generation
Because the net amount of acquired assets and assumed liabilities exceeded the acquisition cost, thedifference was recorded as negative goodwill.

5.

Amounts of Assets Received and Liabilities Assumed on the Date of the Corporate Combination and Their Principal
Content(million yen)
544
Current asset
Noncurrent assets
10,397
10,942
Total asset
402
Current liability
252
Noncurrent liability
Total liability
655

6.

Allocation of Acquisition Cost
As the allocation of acquisition costs had not been completed as of the end of the second quarter under review,provisional accounting procedures were employed, based on the reasonable information available as of that date.

(Significant Subsequent Event)Funai Electric Co., Ltd. (hereinafter, “Funai”) reached an agreement with Koninklijke PHILIPS N.V. (hereinafter,“PHILIPS”) on January 29,2013 to acquire from PHILIPS all shares in a company that will hold the operations of the
PHILIPS’ Lifestyle Entertainment Business, but PHILIPS filed against Funai a petition for legal action to claim fordamages on the grounds of breach of contract by Funai and the petition has been served on it as of November 8, 2013by the International Chamber of Commerce.
As Funai believes that it has not breached the contract with PHILIPS, Funai intends to carefully review the details of thepetition and defend itself vigorously in the pending arbitration proceedings.
Following is the details of arbitration filed against Funai.
1. Institution and date of arbitration(1) Institution where petition for arbitration is filed: International Chamber of Commerce(2) Date of petition for arbitration: October 25, 2013
2. Petitioner of arbitration(1) Name : Koninklijke PHILIPS N.V.
(2) Location : Eindhoven, The Netherlands(3) Title & name of representative : Chief Executive Officer Frans van Houten
3. Details of petition and claimed amount for damages(1) Details of petition : A claim for damages on the grounds of breach of contract by Funai.
(2) Claimed amount : A specific claimed amount has not been stipulated.

from 2013.4.1
to 2013.9.30
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 Flow ･･･････････････････････････････････････････････････････

2

2. Operating Activities (Consolidated)(1) Slaes by Equipment ･･･････････････････････････････････････････････

2(2) Sales by Area in Equipment ････････････････････････････････････････

3(3) Sales by Equipment in Areas ･･･････････････････････････････････････

3

3. Summary of 2Q (July to September)Financial Statements(Consolidated)(1) Operating Results ･･････････････････････････････････････････････････

4(2) Sales by Equipment ･････････････････････････････････････････････････

4

１．Summary of 2Q (April to September) Financial Statements (Consolidated)(1) Operating Results, Financial Conditions
FY 20122Q (Apr. ‐ Sep.)

Full‐Year%%

AmountChange Amount

2Q (Apr. ‐ Sep.)
Change Amount%（Units : 100 million yen, %）FY 2013
Full‐Year (Projections)%

Change Amount

ChangeNet Sales

890

100.0

(36.7)

1,920

100.0

(22.0)

1,205

100.0

35.4

2,290

100.0

19.3

Operating Income (Loss)

(14)

(1.6)

－

(52)

(2.7)

－

5

0.5

－

5

0.2

－

Ordinary Income (Loss)

(30)

(3.4)

－

(3)

(0.2)

－

21

1.8

－

21

0.9

－

Net Income (Loss) after Tax

(29)

(3.4)

－

(85)

(4.4)

－

6

0.5

－

1

0.0

－

Total Assets

1,762

－

－

1,945

－

－

1,810

－

－

－

－

－

Net Assets

1,163

－

－

1,213

－

－

1,226

－

－

－

－

－

（※） Yen‐Dollars / Exchange rate
（Units : Yen / Dollars）
FY 2012FY 20132Q (Apr. ‐ Sep.)
Average Rate in each Period

Full‐Year
78.96

2Q (Apr. ‐ Sep.)
83.32

Full‐Year (Projections)
97.32

98.64

(2) Profitability and Per Share Data etc.
FY 2012FY 2013
14.9

16.3

Full‐Year (Projections)
16.2

(1.6)

(2.7)

0.5

0.2

(3.4)

(0.2)

1.8

0.9

（％）

17.3

Operating Income Ratio （％）

Ordinary Income Ratio （％）

Gross Profit Ratio

Shareholders' Equity Ratio （％）

2Q (Apr. ‐ Sep.)

Full‐Year

2Q (Apr. ‐ Sep.)

65.3

61.7

67.1

－

3,520.11

3,561.17－

Net Assets Per Share（yen）

3,375.08

Net Income Per Share（yen）(87.68)(250.38)

17.96

2.93

Return on Assets

（％）

(1.7)

(4.6)

0.3

－

Return on Shareholders' Equity （％）

(2.5)

(7.0)

0.5

－

4,838

4,776

4,976

－

Number of Total Employees(3) Capital Expenditures, Depreciation, R&D Expenses
FY 2012Full‐Year

2Q (Apr. ‐ Sep.)
AmountChange19

Capital Expenditures

Amount(17.4)

2Q (Apr. ‐ Sep.)

Change53

AmountChange92

32.5

AmountChange122384.2

FY 2012130.2

FY 20132Q (Apr. ‐ Sep.)

Full‐Year%%

Amount（Units : 100 million yen, %）FY 2013
Full‐Year (Projections)

Change Amount

2Q (Apr. ‐ Sep.)

Full‐Year (Projections)%%

Change Amount

Change Amount

ChangeDepreciation Expenses

20

2.2

(16.7)

40

2.1(18.4)

26

2.2

30.0

60

2.6

50.0

R&D

47

5.3

(13.0)

93

4.8(11.4)

43

3.6

(8.5)

93

4.1

－

－1－

(4) CashFlow（Units : 100 million yen）
FY 2013

FY 20122Q (Apr. ‐ Sep.)

Full‐Year

2Q (Apr. ‐ Sep.)

Full‐Year (Projections)

Cash flows provided by operating activities

(42)

(80)

(87)

－

Income Before Income Taxes

(32)

(25)

9

－

Depreciation Expenses

28

52

32

－

Others

(128)

－

(38)

(107)

Cash flows used in investing activities

79

128

2

－

Free cash flows

37

48

(85)

－

Cash flows provided by financing activities

(11)

51

(77)

－

(9)

36

13

－

16

136

(149)

－

Effect of exchange rate changes oncash and cash equivalents
Net increase in cash and cash
equivalents

2．Operating Activities (Consolidated)(1) Sales by Equipment
FY 20122Q (Apr. ‐ Sep.)

Full‐Year%%

AmountAudio Visual Equipment
DVD

Change Amount

2Q (Apr. ‐ Sep.)
Change Amount%（Units : 100 million yen, %）FY 2013
Full‐Year (Projections)

Change Amount%

Change745

83.7(26.3)

1,557

81.1

(15.2)

939

77.9

26.0

1,766

77.1

13.4

83

9.3

(33.1)

184

9.6(16.0)

81

6.7

(2.4)

158

6.9

(14.1)

BD

57

6.4

(74.1)

1417.3(62.9)

75

6.2

31.6

162

7.1

14.9

LCD TV

594

66.8

(9.5)

1,199

62.5

(0.8)

767

63.7

29.1

1,396

60.9

16.4

Others

11

1.2

－

33

1.7

22.2

16

1.3

45.5

50

2.2

51.5

Information

Equipment

41

4.6(77.6)

119

6.2(60.1)

107

8.9

163.7

185

8.1

55.5

Others104

11.7(50.9)

244

12.7(25.3)

159

13.2

52.6

339

14.8

38.9

Total

890

100.0

(36.7)

1,920

100.0

(22.0)

1,205

100.0

35.4

2,290

100.0

19.3

－2－

(2) Sales by Areas in Equipment

FY 20122Q (Apr. ‐ Sep.)

Full‐Year%%

AmountAudio Visual Equipment

Change Amount

2Q (Apr. ‐ Sep.)
Change Amount%（Units : 100 million yen, %）FY 2013
Full‐Year (Projections)

Change Amount%

Change745

83.7(26.3)

1,557

81.1

(15.2)

939

77.9

26.0

1,766

77.1

13.4

North America

616

69.2

(3.9)

1,213

63.2

(0.7)

753

62.4

22.2

1,326

57.9

9.3

Europe23

2.6(25.8)

43

2.2(35.8)

14

1.1(39.1)

28

1.2(34.9)

Asia and Others

31

3.4

106.7

117

6.1

172.1

86

7.2

177.4

237

10.4

102.6

Japan

75

8.5

(76.9)

184

9.6(63.4)

86

7.2

14.7

175

7.6

(4.9)

41

4.6

(77.6)

119

6.2(60.1)

107

8.9

163.7

185

8.1

55.5

15

1.7

(75.0)

53

2.8(48.5)

60

5.0

300.0

113

4.9

113.2

Europe4

0.4(89.5)

19

1.0(67.8)

25

2.1

525.0

45

2.0

136.8

Asia and Others

22

2.5

(72.2)

42

2.2(67.9)

20

1.7

(9.1)

24

1.0

(42.9)

Information Equipment
North America

Japan

0

0.0

－

5

0.2

(28.6)

2

0.1

－

3

0.2

(40.0)

Others104

11.7(50.9)

244

12.7(25.3)

159

13.2

52.6

339

14.8

38.9

Total

890

100.0

(36.7)

1,920

100.0

(22.0)

1,205

100.0

35.4

2,290

100.0

19.3

(3) Sales by Equipment in Areas

FY 20122Q (Apr. ‐ Sep.)

Full‐Year%%

AmountNorth America

Change Amount

644

72.4

Audio Visual Equipment

616

Information Equipment

15

OthersEurope2Q (Apr. ‐ Sep.)
Change Amount

(9.6)

1,333

69.4

69.2

(3.9)

1,213

1.7

(75.0)

53

13

1.5

8.3

%

（Units : 100 million yen, %）FY 2013
Full‐Year (Projections)

Change Amount

(0.6)

882

73.1

63.2

(0.7)

753

2.8

(48.5)

60

67

3.4

318.8

%

Change

36.8

1,590

69.4

62.4

22.2

1,326

57.9

9.3

5.0

300.0

113

4.9

113.2

69

5.7

430.8

151

6.6

125.4

19.3

27

3.0

(61.1)

62

3.2(50.8)

39

3.2

44.4

73

3.2

17.7

Audio Visual Equipment

23

2.6

(25.8)

43

2.2(35.8)

14

1.1(39.1)

28

1.2(34.9)

Information Equipment

4

0.4(89.5)

19

1.0(67.8)

25

2.1

525.0

45

2.0

136.8

Others

0

0.0

－

0

0.0

－

0

0.0

－

0

0.0

－

55

6.1

(44.4)

166

8.7

(8.3)

114

9.6

107.3

286

12.5

72.3

Asia and Others
Audio Visual Equipment

31

3.4

106.7

117

6.1

172.1

86

7.2

177.4

237

10.4

102.6

Information Equipment

22

2.5

(72.2)

42

2.2(67.9)

20

1.7

(9.1)

24

1.0

(42.9)

OthersJapan
Audio Visual Equipment2

0.2(60.0)

7

0.4

－

8

0.7

300.0

25

1.1

257.1

164

18.5

(68.7)

359

18.7(55.9)

170

14.1

3.7

341

14.9

(5.0)

75

8.5

(76.9)

184

9.6(63.4)

86

7.2

14.7

175

7.6

(4.9)

Information Equipment

0

0.0

－

5

0.2

(28.6)

2

0.1

－

3

0.2

(40.0)

Others89

10.0(54.6)

170

8.9(43.9)

82

6.8

(7.9)

163

7.1

(4.1)

890

100.0

(36.7)

1,920

100.0

(22.0)

1,205

100.0

35.4

2,290

100.0

19.3

Total

－3－

3．Summary of 2Q (July to September) Financial Statements (Consolidated)(1) Operating Results（Units : 100 million yen, %）FY 2012FY 2013

2Q (Jul. ‐ Sep.)

2Q (Jul. ‐ Sep.)%

AmountChange%AmountChange490

100.0(34.7)

700

100.0

42.9

Operating Income (Loss)

(5)

(1.0)

－

22

3.3

－

Ordinary Income (Loss)

(10)

(2.0)

－

20

2.9

－

Net Income (Loss) after Tax

(11)

(2.3)

－

6

0.9

－

Net Sales（※） Yen‐Dollars / Exchange rate
（Units : Yen / Dollars）
FY 2012FY 2013

2Q (Jul. ‐ Sep.)

2Q (Jul. ‐ Sep.)

Average Rate in each Period

78.12

98.06

(2) Sales by Equipment（Units : 100 million yen, %）FY 2012FY 2013

2Q (Jul. ‐ Sep.)

Audio Visual Equipment

2Q (Jul. ‐ Sep.)%

AmountChange%AmountChange424

86.5(22.9)

560

80.0

32.1

DVD

45

9.2

(29.7)

38

5.4(15.6)

BD

19

3.9

(81.2)

33

4.7

73.7

LCD TV

354

72.2

(6.6)

481

68.7

35.9

Others

6

1.2

－

8

1.2

33.3

Information

15

3.1

(84.2)

58

8.3

286.7

OthersEquipment

51

10.4

(51.4)

82

11.7

60.8

Total

490

100.0

(34.7)

700

100.0

42.9

－4－

（Company）

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