From April 1, 2013
To June 30, 2013

August 5, 2013
Funai Electric Co., Ltd.

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

Current Year First Quarter

From April 1, 2012
to June 30, 2012

From April 1, 2013
to June 30, 2013

Amount%Amount%%Net Sales

Rate ofincrease or
decrease%%

40,020100.050,520

100.0

26.2

(947)

(2.4)

(1,715)(3.4)－

Ordinary Income (Loss)(2,060)

(5.1)

113

0.2

－

Net Income (Loss) before Taxes
and Other Adjustments(2,130)

(5.3)

51

0.1

－

Net Loss after Tax(1,848)

(4.6)

(18)

(0.0)

－

Operating Loss

Net Loss per Share(54.17)(0.54)

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 3‐Month Period ended June 30, 2013
August 5, 2013

Listed company name:

Funai Electric Co., Ltd.

Securities Code: 6839
Tokyo Stock Exchange
and Osaka Securities Exchange, First Section(URL http://www.funai.jp/ )Representative: President and CEO
Tomonori Hayashi
Keichi Ikegami
Inquiries: General Manager, Accounting Department
Scheduled date of Quarterly Report; August 8, 2013
Scheduled date of Commencement of Annual Dividend Payment; －Quarterly Financial Results Supplementation: Yes
Quarterly Financial Results Seminar: Yes

TEL: (072) 870‐4395

1. First Quarter Consolidated Results for the Period Ending March 2014 (April 1, 2013 – June 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%(1,715)50,520
26.2
(18)
113
－
－
－
1st Quarter FY2013
40,020(39.0)(947)(1,848)(2,060)－－－
1st Quarter FY2012(Reference) Comprehensive Income 1st Quarter FY 2013 ended June 30, 2013
2,447 million yen (－%)
1st Quarter FY 2012 ended June 30, 2012 (3,790) million yen (－%)
Net Income Per Shareon a Fully Diluted BasisYen－－

Net Income
Per ShareYen
1st Quarter FY2013
1st Quarter FY2012(0.54)(54.17)(2) Consolidated Financial Position
Net Assets

Total Assetsst

1 Quarter FY2013
Fiscal Year 2012
(Reference) Equity

Net Assets
Per Share

Equity Ratio

Million yen
Million yen
122,470
197,814
121,398
194,524
1st Quarter FY 2013 ended June 30, 2013
Fiscal Year 2012 ended March 31, 2013

Yen%
3,556.38
3,520.11

61.3
61.7
121,340 million yen
120,103 million yen

2. Dividends
Dividend per Sharest

1 Quarternd

2 Quarteryen
Fiscal Year 2012－

Fiscal Year 2013－

Fiscal Year 2013
(Projection)

3rd Quarter

yen
0.00

－
st

Year‐Endyen

Annual
yen

yen

－

35.00

35.00

－

－

－

(Note) Revision of Annual Dividends Forecast in this 1 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
Million yen%

Million yen %Million yen %Million yen %Yen

96,000
7.8
20 －
300 －
10 －
0.29
Six months ending Sep.30.2013－
202,000 5.2
200 －
500 －
100
2.93
Full Year
(Note) Revision of Forecast of Consolidated Results for the six month period or the Full Year in this 1st Quarter: No*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 1st 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 June 30, 2013; 36,130,796 shares
as of March 31, 2013; 36,130,796 shares
2. Number of shares of treasury stock as of June 30, 2013; 2,011,615 shares
as of March 31, 2013; 2,011,615 shares
3. The Average number of outstanding shares on June 30, 2013; 34,119,181 shareson June 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 first quarter of the current fiscal term, the economy of the United States, which is the Funai Group’s
principal market, almost overall continued to grow mode, despite the housing market slow at the quarter end, but
gradually as it benefited from improvements job situation and a recovery in personal consumption. The European
economy remained sluggish increasing in length, as the European Central Bank’s responses to the debt crisis failed
to dispel concerns entirely. Economic performance in China is also showed turning slow due to being actualized thefinancial risks and decreased of goods export. In Japan, the economic outlook has brightened as the prospect ofmonetary accommodation has prompted corrections to yen appreciation and bolstered sharp stock prices rising.
Within the consumer electronics industry, under these difficult conditions, global shipments of LCD TVs still slow
due to mainly slump in Europe and Japan, moreover, China is starting slow due to ended subsidies for promoting
energy efficiency at end‐May, and a new system has not been put in place, while demand for smartphones andtablet devices has grown sharply, in a changing role of the products that are driving the market.
As a result of the above factors, the Funai Group posted net sales of JPY 50,520 million, a 26.2% increase comparedwith the same period last year.
On the profit front, operating loss was JPY 1,715 million (the operating loss for the same period last year was JPY
947 million); ordinary income was JPY 113 million (the ordinary loss for the same period last year was JPY 2,060
million); and a net loss of JPY 18 million (the net loss for the same period last year was JPY 1,848 million).
Segment conditions by location were as follows:i) Japan
Sales of antennas and related devices remain stagnant, but sales of information equipment recorded increases
in revenues due to printer order increase. In addition, sales of DVD‐related equipment increased.
As a result, net sales were JPY 14,599 million, an increase of 14.6% year on year. Our segment loss (operatingloss) was JPY 1,322 million (the operating loss for this segment for the same period last year was JPY 39
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 that started selling on September 2012 contributed to the sales, and DVD‐related
equipment also increased as the result of healthy sales of Blu‐ray Disc players.
As a result, net sales amounting to JPY 34,413 million, an increase of 32.1% year on year. Our segment profit(operating profit) was JPY 102 million (the operating loss for this segment for the same period last year was JPY
130 million).
iii) Asia
Net sales came to JPY 886 million, an increase of 161.1% year on year. Our segment loss (operating loss) was
JPY 530 million (the operating loss for this segment for the same period last year was JPY 239 million).
iv) Europe
Sales of LCD TVs and DVD‐related products declined due to sluggish market conditions and tough competition.
As a result, net sales down 30.1% year on year, to JPY 621 million, and an segment loss (operating loss) of JPY 94
million (operating loss for the same period last year was JPY 43 million).

Sales by product segment were as follows:i) Audiovisual Equipment
In the audiovisual equipment sector, sales of DVD‐related equipment increased year on year due to revenue
growth of Blu‐ray Disc players and recorders. LCD TVs increased revenue because of strong sales in North
America and Mexican market
As a result, net sales of this equipment were JPY 37,971 million, an increase of 18.4% year on year.
ii) Information Equipment
In the information equipment sector, a decrease in printer orders resulted in net sales of JPY 4,862 million, an
increase of 82.9% year on year.
iii) Other Products
Although sales of antennas and related devices fell, sales of other products that not included in the above
categories increased due to contribution of the Philips branded audio accessories products.
As a result, net sales were JPY 7,686 million, an increase of 45.4% year on year.

(2) Qualitative Information Relating to Consolidated Financial Position
Our financial position at the end of first quarter is described below.
Total assets increased by JPY 3,290 million as compared to the end of the previous consolidated fiscal year. Thiswas mainly due to an increase of JPY 6,696 million, JPY 12,739 million and JPY 5,526 million in notes and accounts
receivable‐trade, raw materials and supplies, tangible fixed asset, and a decrease of JPY 23,787 million in cash anddeposits.
Total liabilities increased by JPY 2,218 million as compared to the end of the previous consolidated fiscal year. Thiswas mainly due to the JPY 2,104 million and JPY 1,200 million increases in short‐term loans payable, long‐termloans payable and decrease of JPY 1,518 million in income taxes payable.
Net assets increased by JPY 1,072 million as compared to the end of the previous consolidated fiscal year. This was
mainly due to an increase of JPY 2,351 million in the foreign currency translation adjustment account, and adecreased of JPY 1,212 million in retained earnings.
(3) Qualitative Information Relating to Consolidated Performance Forecasts:
We have not revised its consolidated operating results forecast released on May 7, 2013.
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 thisthird 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.

(Takeover of a company by share acquisition)
The Funai Group reached an agreement with Royal Philips (headquarters, the Netherlands; NYSE: PHG; AEX: PHIA,
hereinafter, “PHILIPS”) to acquire all shares (hereinafter, the “Transaction”) in the company (hereinafter, the “NewCompany”) assuming operations (hereinafter, the “Operation”) of PHILIPS’ Lifestyle Entertainment Business (Note) in
January 29, 2013.
(Note) The Lifestyle Entertainment Business involves the development and design, sales and (partial) manufacture of the following
PHILIPS‐brand products.
(Audio Video Multimedia products)
Home Audio, Headphone, Speaker, In‐car Audio, Video related products, Portable Audio, Portable Video Player,Home Media Player etc.
(Home Communication products) DECT Phone(Accessories products) Batteries, Cables/Connectors, Storage Products, Power Solutions, Portable Chargers for Cell‐phone, Antennas etc.

The Transaction does not include the acquisition of business related to general‐purpose remote control equipment within
the Lifestyle Entertainment Business. In addition, as part of the Transaction, it has been agreed that the Optical Video
Business will transfer in 2017.

1. Reasons for acquiring the shares
In September 2008, the Funai Group entered into a brand licensing agreement maintaining responsibility for thesourcing, distribution, marketing and sales activities of PHILIPS consumer televisions in the United States andCanada. Following this, in July 2012 the Funai Group entered an agreement with PHILIPS involving the sale in the
United States, Canada and Mexico of products that PHILIPS designed and developed through the Operation.
We have positioned the “strengthening and expanding existing businesses,” “making forays into new markets” and“developing new businesses” as the three pillars of its growth strategy. To achieve this growth strategy, in addition
to reinforcing existing management resources we have searched for growth opportunities through businessalliances and M&A activities with other companies such as those outlined above.
The Transaction to assume the Operation will enable the Funai Group to expand the lineup of products that it
handles and expand its sales region to include Asia, South America and other emerging markets, as well as
advanced countries in Europe. We decided to acquire shares in the New Company, based on the belief that theacquisition would foster sustained growth of the Funai Group’s business.
2. Name of counterparty to the share acquisition
Royal Philips
3. Name of the new company (Note)i) Name : Not yet determined (Note)ii) Location : Not yet determined (Note)iii) Name and Position of Representative : Not yet determined (Note)iv) Capital : Not yet determined (Note)v) Businesses : Development, design, selling, and (partial) involvement in manufacturing of products of theoperation(Note) As the New Company is to be established in the first half of FY 2013, these decisions are not in place at present.

4. Schedulei) Conclusion of Share Transaction Agreementii) Expected Date of Share T r a n s f e r

January 29, 2013
Within 2013 (Note)(Note) The share transfer date is expected to be during 2013, after conforming items related to competition laws in various
regions, including most probably the United States, Germany, Ukraine, Russia, Poland, Turkey, and Taiwan.

5. Number of shares acquired, acquisition price and status of held shares before and after acquisitioni) Ratio of the number of shares held to the number of
0.0%
shares issued p r i o r t o t r a n s f e r(Ratio of voting rights: ― %)ii) Ratio of the number of shares acquired to the number 100%of shares issued
Shares of the New Company’s stock JPY 19,500 millioniii) Acquisition Price(Note 1,2)
Advisory fees, etc. (approximate amount) JPY 925 million(Note 1,3)
Total (approximate amount) JPY 20,425 millioniv)Ratio of the number of shares held to the number ofshares issued a f t e r t r a n s f e r

100.0%(Ratio of voting rights: 100.0%)(Note 1) These calculations assume an exchange rate of JPY 130 to the euro.
(Note 2) The acquisition price of the New Company’s shares is expected to be as indicated above.
However, this figure is expected to be adjusted based on the Operation’s cash and deposits, interest‐bearing liabilities,
tangible fixed assets, working capital as of the share transfer date.
(Note 3) Advisory fees, etc., are approximations. This total includes amounts for the payment of advisory fees for the services offinancial advisors, legal advisors, accounting advisors and tax advisors, as well as other costs related to the acquisition of
the New Company’s shares.

6. Method of procuring funds
Costs for this acquisition are all to be funded through resources on hand.

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

1st Quarter FY2013(As of June 30, 2013)ASSETS;
Current Assets
Cash and deposits

67,81344,026

Notes and accounts receivable‐trade33,19339,889Merchandise and finished goods

34,54732,430Work in process

2,095

1,623

Raw materials and supplies

18,99731,737

Other

8,332

8,441

Allowance for doubtful accounts

(178)

(197)

164,802

157,951

Tangible fixed assets

16,67522,202Intangible fixed assets

3,107

7,038

10,131

10,819Allowance for doubtful accounts

(192)

(196)

Total investments and other assets

9,938

10,62329,721

39,863

194,524

197,814

Notes and accounts payable‐trade39,17838,750

Short‐term loans payable

12,981

15,086

Income taxes payable

1,690

172

Provision

1,188

1,443

Other

14,412

14,769Total current liabilities

69,45270,222－

1,200

Provision

2,008

2,240

Other

1,663

1,680

Total noncurrent liabilities

3,672

5,121

73,12575,343

Total current assets
Noncurrent assets

Investment and other assets
Other

Total noncurrent assets
TOTAL ASSETSLIABILITIES;Current Liabilities

Noncurrent liabilities
Long‐term loans payable

TOTAL LIABILITIES(Units : Million Yen)
Fiscal year 2012
(As of March 31, 2013)

1st Quarter FY2013(As of June 30, 2013)

NET ASSETS;
Shareholders' equity
Capital stock

31,30731,307

Capital surplus

33,27233,272Retained earnings

101,135

99,923

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

Total shareholders' equity

141,374

140,162451

549

Foreign currency translation adjestment(21,722)(19,370)

Total accumulated other comprehensive income(21,271)(18,821)

122

124

Minority interests

1,173

1,005

Total net asset

121,398

122,470

194,524

197,814

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

Subscription right to shares

TOTAL LIABILITIES AND NET ASSETS

(2). Consolidated Quartely Statements of Income and Consolidated Quartely Statement ofComprehensive Income(Consolidated Quartely Statements of Income)(Units : Million Yen)
1st Quarter FY2012

1st Quarter FY2013( from April 1, 2012
to June 30, 2012)( from April 1, 2013
to June 30, 2013)

Net sales

40,02050,520

Cost of sales

32,936

43,200Gross profit

7,084

7,320

Selling, general and administrative expenses

8,031

9,035

Operating loss

(947)

(1,715)Interest income

69

47

Dividends income

1514Foreign exchange gains

－

1,899

Other

120

30

Total non‐operating income

205

1,991

Interest expenses

21

67

Equity in losses of affiliates

9

23

1,265

－

21

71

1,318

162

(2,060)113

Gain on disposal of noncurrent assets

10

Total extraordinary income

10Loss on valuation of investment securities

64

60

Other

7

2

Total extraordinary loss

71

63

(2,130)

51

(288)

55

Loss before minority interests(1,842)(4)

Minority interests in income

6

13(1,848)(18)

Non‐operating income

Non‐operating expenses

Foreign exchange losses
Other
Total non‐operating expenses
Ordinary income / loss
Extraordinary income

Extraordinary loss

Income / loss before income taxes
Income taxes

Net loss(Consolidated Quartely Statement of Comprehensive Income)Loss before minority interest adjustment(Units : Million Yen)

1st Quarter FY2012

1st Quarter FY2013( from April 1, 2012
to June 30, 2012 )( from April 1, 2013
to June 30, 2013 )(1,842)

(4)

(70)

100

(1,892)

2,325

14

26

(1,948)2,451(3,790)2,447

Comprehensive income attributable to owners of parent(3,794)2,431

Comprehensive income attributable to minority interests

3

15

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 Income(Notes for Continuing Enterprises)
Not Applicable(Notes of remarkable changes in Shareholders Equity)
Not Applicable(Information by Segment)[Segment Information]
Ⅰ.First Quarter Consolidated Fiscal Period – Year to Date (April 1, 2012 to June 30, 2012)
Information Regarding Net Sales and Profit/Loss Conditions by Reporting Segment(Units: Million Yen)Japan
Net Sales(1) Outside customers

N. America

Asia

Europe

Total

Adjustments Consolidated(Note 1)
(Note 2)(2) Inter‐segment sales

12,743
28,233

26,0490339
29,430888
040,02057,663－(57,663)

40,020－Total

40,976

26,04929,770888

97,683(57,663)

40,020

(39)

(130)

(239)

(43)

(452)

(494)

(947)

Segment Loss

Note:
1. The negative JPY 494 million adjustment amount under segment loss includes items such as the JPY ‐0 million
relating to the cancellation of inter‐segment transactions, JPY ‐222 million of overall Group expenses that are notapportioned to each reporting segment, and the JPY ‐272 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 loss has been adjusted to operating loss noted on the first quarter consolidated income
statement.

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

N. America

Asia

Europe

Total

Adjustments Consolidated(Note 1)
(Note 2)(2) Inter‐segment sales

14,59927,46334,4130886
33,824621
050,52061,288－(61,288)

50,520－Total

42,062

34,41334,710621

111,809(61,288)

50,520

Segment Income (Loss)(1,322)

102

(530)

(94)

(1,844)129(1,715)Note:
1. JPY 129 million adjustment amount under segment loss includes items such as the JPY 0 million relating to thecancellation of inter‐segment transactions, JPY ‐197 million of overall Group expenses that are not apportioned
to each reporting segment, and the JPY 326 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 loss has been adjusted to operating loss noted on the first quarter consolidated income statement.

(Relationships, etc., in the Corporate Combination)
First Quarter of the Fiscal Year Ending March 31, 2014 (April 1, 2013, to June 30, 2013)
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 June 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)
10,036251
10,2884.

Amount of Goodwill Generated, Source of Generation, Amortization Method and Amortization Periodi) Amount of goodwill generated : JPY 1 millionii) Source of generation
Because the acquisition cost exceeded the net amount of acquired assets and assumed liabilitiesiii) Amortization method and amortization period : One‐time write‐off, as not financially significant

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 first quarter under review,provisional accounting procedures were employed, based on the reasonable information available as of that date.

from 2013.4.1
to 2013.6.30
Page
1. Summary of 1Q 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

１．Summary of 1Q Financial Statements (Consolidated)(1) Operating Results, Financial Conditions（Units : 100 million yen, %）FY 2013
Full‐Year (Projections)

FY 2012
1Q
AmountFull‐Year%%

Change Amount

1Q
Change Amount%%

Change Amount

ChangeNet Sales

400

100.0

(39.0)

1,920

100.0

(22.0)

505

100.0

26.2

2,020

100.0

5.2

Operating Income (Loss)

(9)

(2.4)

－

(52)

(2.7)

－

(17)

(3.4)

－

2

0.1

－

Ordinary Income (Loss)

(20)

(5.1)

－

(3)

(0.2)

－

1

0.2

－

5

0.2

－

Net Income (Loss) after Tax

(18)

(4.6)

－

(85)

(4.4)

－

(0)

(0.0)

－

1

0.0

－

Total Assets

1,711

－

－

1,945

－

－

1,978

－

－

－

－

－

Net Assets

1,183

－

－

1,213

－

－

1,224

－

－

－

－

－

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

1Q

1Q

Full‐Year

Average Rate in each Period

83.32

79.80

Full‐Year (Projections)
96.00

99.23

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

1Q

Full‐Year

（％）

17.7

Operating Income Ratio （％）

Ordinary Income Ratio （％）

Gross Profit Ratio

Shareholders' Equity Ratio （％）

1Q

Full‐Year (Projections)
17.1

14.9

14.5

(2.4)

(2.7)

(3.4)

0.1

(5.1)

(0.2)

0.2

0.2

68.5

61.7

61.3

－

3,520.11

3,556.38－

Net Assets Per Share（yen）

3,436.82

Net Income Per Share（yen）(54.17)(250.38)(0.54)

2.93

Return on Assets

（％）

(1.0)

(4.6)

(0.0)

－

Return on Shareholders' Equity （％）

(1.5)

(7.0)

(0.0)

－

(3) Capital Expenditures, Depreciation, R&D Expenses（Units : 100 million yen, %）FY 2013
Full‐Year (Projections)

FY 2012
1Q
AmountChange8

Capital Expenditures

1Q

Full‐Year
Amount(33.3)

ChangeAmount32.5

53

Change72

800.0

Full‐Year%

Change122.6

118

FY 2013

FY 2012
1Q
AmountAmountChange Amount%

1Q
Change AmountFull‐Year (Projections)%

Change Amount%

ChangeDepreciation Expenses

10

2.5

(16.7)

40

2.1(18.4)

13

2.6

30.0

74

3.7

85.0

R&D

23

5.8

(14.8)

93

4.8(11.4)

22

4.4

(4.3)

103

5.1

10.8

－1－

(4) CashFlow（Units : 100 million yen）
FY 2012FY 2013

1Q

Full‐Year

1Q

Full‐Year (Projections)

Cash flows provided by operating activities

26

(80)

(155)

－

Income Before Income Taxes

(21)

(25)

0

－

Depreciation Expenses

14

52

15

－

Others

(170)

－

33

(107)

Cash flows used in investing activities

52

128

12

－

Free cash flows

78

48

(143)

－

Cash flows provided by financing activities

(23)

51

15

－

(5)

36

15

－

49

136

(112)

－

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

2．Operating Activities (Consolidated)(1) Sales by Equipment（Units : 100 million yen, %）FY 2013
Full‐Year (Projections)

FY 2012Full‐Year

1Q
AmountAudio Visual Equipment
DVD%

Change Amount%

1Q
Change Amount%

Change Amount%

Change32180.2(30.5)

1,557

81.1

(15.2)

379

75.2

18.4

1,587

78.6

1.9

38

9.5

(36.7)

184

9.6(16.0)

43

8.5

13.2

123

6.1

(33.2)

BD

38

9.5

(68.1)

1417.3(62.9)

42

8.4

10.5

159

7.9

12.8

LCD TV240

60.0(13.4)

1,199

62.5

(0.8)

286

56.7

19.2

1,261

62.4

5.2

Others

5

1.2

－

33

1.7

22.2

8

1.6

60.0

44

2.2

33.3

Information

Equipment

26

6.6(69.4)

119

6.2(60.1)

49

9.6

82.9

142

7.0

19.3

Others53

13.2(50.9)

244

12.7(25.3)

77

15.2

45.4

291

14.4

19.3

Total

400

100.0

(39.0)

1,920

100.0

(22.0)

505

100.0

26.2

2,020

100.0

5.2

－2－

(2) Sales by Areas in Equipment（Units : 100 million yen, %）FY 2013
Full‐Year (Projections)

FY 2012
1Q
AmountAudio Visual Equipment

Full‐Year%%

Change Amount

1Q
Change Amount%

Change Amount%

Change32180.2(30.5)

1,557

81.1

(15.2)

379

75.2

18.4

1,587

78.6

1.9

North America

258

64.5

(1.9)

1,213

63.2

(0.7)

288

57.1

11.6

1,161

57.5

(4.3)

Europe

14

3.5

(6.7)

43

2.2

(35.8)

8

1.6(42.9)

54

2.7

25.6

Asia and Others

9

2.2

28.6

117

6.1

172.1

32

6.4

255.6

197

9.7

68.4

Japan

40

10.0

(77.3)

184

9.6(63.4)

51

10.1

27.5

175

8.7

(4.9)

26

6.6

(69.4)

119

6.2(60.1)

49

9.6

82.9

142

7.0

19.3

9

2.3

(67.9)

53

2.8(48.5)

25

5.0

177.8

69

3.4

30.2

Europe1

0.3(93.3)

19

1.0(67.8)

11

2.1

1,000.0

36

1.8

89.5

Asia and Others

16

4.0

(61.0)

42

2.2(67.9)

11

2.1(31.3)

36

1.8(14.3)

Information Equipment
North America

Japan

0

0.0

－

5

0.2

(28.6)

2

0.4

－

1

0.0

(80.0)

Others53

13.2(50.9)

244

12.7(25.3)

77

15.2

45.4

291

14.4

19.3

Total

400

100.0

(39.0)

1,920

100.0

(22.0)

505

100.0

26.2

2,020

100.0

5.2

1Q

（Units : 100 million yen, %）FY 2013
Full‐Year (Projections)(3) Sales by Equipment in Areas

FY 2012
1Q
AmountNorth America

Full‐Year%

Change Amount

269

67.4

Audio Visual Equipment

258

Information Equipment

9

OthersEurope%Change Amount%

Change Amount

(0.6)

341

67.6

63.2

(0.7)

288

2.8

(48.5)

25

67

3.4

318.8

(9.6)

1,333

69.4

64.5

(1.9)

1,213

2.3

(67.9)

532

0.6(71.4)%

Change

26.6

1,368

67.7

57.1

11.6

1,161

57.5

(4.3)

5.0

177.8

69

3.4

30.2

28

5.5

1,300.0

138

6.8

106.0

2.6

15

3.8

(50.4)

62

3.2(50.8)

19

3.7

24.6

90

4.5

45.2

Audio Visual Equipment

14

3.5

(6.7)

43

2.2

(35.8)

8

1.6(42.9)

54

2.7

25.6

Information Equipment

1

0.3(93.3)

19

1.0(67.8)

11

2.1

1,000.0

36

1.8

89.5

Others

0

0.0

－

0

0.0

－

0

0.0

－

0

0.0

－

26

6.4

(49.0)

166

8.7

(8.3)

50

10.0

92.3

246

12.2

48.2

Audio Visual Equipment

9

2.2

28.6

117

6.1

172.1

32

6.4

255.6

197

9.7

68.4

Information Equipment

16

4.0

(61.0)

42

2.2(67.9)

11

2.1(31.3)

36

1.8(14.3)

Asia and Others

OthersJapan
Audio Visual Equipment

1

0.2(66.7)

7

0.4

－

7

1.5

600.0

13

0.7

85.7

90

22.4

(67.6)

359

18.7(55.9)

95

18.7

5.4

316

15.6

(12.0)

40

10.0(77.3)

184

9.6(63.4)

51

10.1

27.5

175

8.7

(4.9)

Information Equipment

0

0.0

－

5

0.2

(28.6)

2

0.4

－

1

0.0

(80.0)

Others50

12.4(49.0)

170

8.9(43.9)

42

8.2(16.0)

140

6.9(17.6)

400

100.0(39.0)

1,920

100.0

(22.0)

505

100.0

26.2

2,020

100.0

5.2

Total

－3－

（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