MEL.L Regulatory News (MEL)

4 Feb 2008 07:46

Mitsubishi Electric Corporation04 February 2008 MITSUBISHI ELECTRIC ANNOUNCES CONSOLIDATED FINANCIAL RESULTS FOR THE THIRD QUARTER OF FISCAL 2008 Tokyo, February 4, 2008 - Mitsubishi Electric Corporation (President and CEO:Setsuhiro Shimomura) announced today its financial results for the thirdquarter, ending December 31, 2007, of the current fiscal year ending March 31,2008 (fiscal 2008). Fiscal 2008, 3rd Quarter Consolidated Financial ResultsNet sales: 911.9 billion yen (5% increase from same quarter last year)Operating income: 63.8 billion yen (Unchanged from same quarter last year)Income before income taxes: 57.9 billion yen (11% decrease from same quarter last year)Net income: 42.3 billion yen (Unchanged from same quarter last year) The business environment during the third quarter of fiscal 2008 saw generalstrengthening undertones in the global economy with continued strength mainly inChina and other strong economies, despite a globally increasing financialuncertainty due to subprime loan related issues, in addition to a stronger senseof stagnation in the U.S.A. The Japanese economy as well saw general steadydevelopment based mainly on overseas demand, despite deferred construction ofbuildings caused by revision of building standards law. Under these circumstances, third quarter net sales rose 5% compared to the sameperiod of the previous fiscal year to 911.9 billion yen due to increased revenuein the Energy and Electric Systems, Industrial Automation Systems and HomeAppliances segments. Despite decreased profit in the Information andCommunication Systems segment compared to the same quarter last year, operatingincome was 63.8 billion yen, on par with the same quarter last year due toincreased profit in the Industrial Automation Systems and Home Appliancessegments. While income before income taxes decreased by 11% compared to the same quarterlast year to 57.9 billion yen due to losses involving sale of subsidiaries'stocks and etc, net income was 42.3 billion yen, on par with the same quarterlast year, due to both decreases in income taxes and improvement of investmentprofit in equity method companies. Consolidated Financial Results by Business Segment Energy and Electric Systems Total sales: 216.2 billion yen (6% increase from same quarter last year)Operating income: 13.6 billion yen (1.2 billion yen decrease from same quarter last year) The social infrastructure systems business saw increases in sales from the samequarter last year due to expansions in the electric equipment for rolling stockbusiness, despite a decrease in orders from the same quarter last year due todecreases in large overseas orders in the power generation business. Buildingsystem business experienced increases in both orders and sales from the samequarter last year due to increases of elevators and escalators in large domesticmetropolitan projects as well as increases in initiatives in the Middle East andIndia. As a result, total sales for this segment increased by 6% from the same quarterlast year, and operating income decreased by 1.2 billion yen from the samequarter last year due to fluctuant natures among sales orders, etc. Industrial Automation Systems Total sales: 255.8 billion yen (8% increase from same quarter last year)Operating income: 39.8 billion yen (2.3 billion yen increase from same quarter last year) Factory automation systems business experienced increases in both orders andsales from the same quarter last year, upheld by buoyant demands for domesticfactory automation machinery and active capital investments in China and otheroverseas markets. The automotive equipment business saw increases in both orders and sales fromthe same quarter last year due to strong development in global production ofJapanese multinational automotive manufacturers. As a result, total sales for this segment increased by 8% compared to the samequarter last year. Operating income rose by 2.3 billion yen compared to the samequarter last year due to increase in sales, etc. Information and Communication Systems Total sales: 129.6 billion yen (7% decrease from same quarter last year)Operating income (loss): (1.1 billion yen) (6.0 billion yen worse from same quarter last year) The telecommunications equipment business saw decreases in both orders and salesfrom the same period of the previous fiscal year due to decreases in mobilehandsets. The information system service business saw an increase in sales from the sameperiod of the previous fiscal year due to expansions in the system integrationbusiness and the IT infrastructure service business, etc. The electronic systemsbusiness saw decreases in both sales and orders from the same period last yeardue to a decrease in satellite-related business, etc. As a result, total sales for this segment showed a decrease of 7% from the sameperiod last year. Operating income was 6.0 billion yen worse from the sameperiod last year due to decreases in sales of mobile handsets, etc. Electronic Devices Total sales: 47.7 billion yen (4% increase from same quarter last year)Operating income: 2.8 billion yen (0.1 billion yen increase from same quarter last year) The semiconductor business saw increases in both orders and sales from the samequarter last year due to increases in orders for power modules for industrialmachinery and consumer use mainly for air conditioners and red laser diodes forrecordable DVD players, etc. The liquid crystal business saw an increase in orders from the same quarter lastyear due to increases in industrial and consumer use products, despite adecrease in sales from the same quarter last year due to decreases in productsfor use in amusement facilities. As a result, total sales for this segment increased by 4% from the same quarterof the previous fiscal year. Operating income increased by 0.1 billion yen fromthe same quarter of the previous fiscal year due to increased sales, etc. Home Appliances Total sales: 229.2 billion yen (9% increase from same quarter last year)Operating income: 15.1 billion yen (4.9 billion yen increase from same quarter last year) The home appliance business saw a 9% increase in sales from the same quarterlast year due to increases in air conditioners and solar power generationsystems for the overseas market, etc. Operating income increased by 4.9 billion yen from the same quarter last year due to increased sales, etc. OthersTotal sales: 160.5 billion yen (5% increase from same quarter last year)Operating income: 3.3 billion yen (Unchanged from same quarter last year) Sales increased by 5% from the same quarter last year mainly in our affiliatedcompanies involved in such activities as material procurement and engineering,etc. Operating income was unchanged from the same quarter last year. Fiscal 2008, First 9 Months Consolidated Financial Results Net sales: 2,801.6 billion yen (5% increase from same quarter last year)Operating income: 193.0 billion yen (23% increase from same quarter last year)Income before income taxes: 187.5 billion yen (27% increase from same quarter last year)Net income: 133.9 billion yen (36% increase from same quarter last year) Consolidated net sales for the first 9 months of fiscal 2008 rose 5% compared tothe same period of the previous fiscal year to 2,801.6 billion yen due toincreased revenue in the Energy and Electric Systems, Industrial AutomationSystems and Home Appliances segments, etc. Operating income increased 23% fromthe same period last year to 193.0 billion yen due to increased profit in theEnergy and Electric Systems and Home Appliances segments, etc. Income before income taxes increased 27% compared to the same period last yearto 187.5 billion yen and net income increased 36% compared to the same periodlast year to 133.9 billion yen. Financial Standing Assets, Liabilities, and Shareholders' Equity The company's total assets increased from the end of the previous fiscal year by66.9 billion yen to 3,519.1 billion yen. While accounts receivables decreased by114.8 billion yen due to accelerated collection of our credits, inventoryincreased by 179.5 billion yen due to increase in unrealized sales, etc. The balance of outstanding debts increased by 1.5 billion yen from the end ofthe previous fiscal year to 642.6 billion yen, with a reduction of its ratio tototal assets down to 18.3% (an improvement by 0.3 point compared to the end ofthe previous fiscal year). Trade payables also decreased by 30.3 billion yen,while retirement and severance benefits increased by 33.2 billion yen due to anincrease in deficiency of pension funds, etc. brought on by a decline in stockprice, etc. Shareholders' equity increased by 56.9 billion yen compared to the previousfiscal year to 1,116.1 billion yen, with an improvement in ratio ofshareholders' equity to total assets of 1.0 point compared to the previousfiscal year to 31.7%. Retained earnings increased by 108.1 billion yen due to a133.9 billion yen net income and a dividend payment of 25.7 billion yen.Accumulated other comprehensive income decreased by 51.1 billion yen due to adecline in stock prices, etc. Cash Flow Free cash flow increased by 10.8 billion yen compared to the same quarter of theprevious fiscal year to 66.1 billion yen (outflow) owing to the decrease in cashflows from operating activities. Cash flows from financing activities were 42.0billion yen (inflow) resulting from debt procurement and dividend payment. Cash flows from operating activities for the first 9 months of fiscal 2008decreased by 30.3 billion yen compared to the same period of the previous fiscalyear to 98.9 billion yen (inflow) due to an increase in inventories, despite anincrease in net income. Cash flows from investing activities for the first 9months of fiscal 2008 decreased by 25.0 billion yen compared to the same periodof the previous fiscal year to 86.9 billion yen (outflow) due to decreases inloan receivables, etc. Consequently, free cash flow reached revenues of 11.9billion yen. Cash flows from financing activities were 23.6 billion yen(outflow) due to dividend payment, etc. Forecast for Fiscal 2008 (ending March 31, 2008) Net sales: 3,970 billion yen (3% increase year-on-year)Operating income: 233 billion yen (Unchanged year-on-year)Income before income taxes: 210 billion yen (14% increase year-on-year)Net income: 148 billion yen (20% increase year-on-year) A sense of financial uncertainty is getting obvious globally from the outset ofthe year. Under such circumstances, the forecast for fiscal 2008 might beassessed along with the ongoing planning for the following fiscal year, andtherefore remains currently unchanged from that stated on October 29, 2007,announced with the Half-Year Results. Note: The forecast of results above is based on assumptions deemed reasonable bythe Company at the present time, and actual results may differ significantlyfrom forecasts. Please refer to the cautionary statement on the last page. Consolidated Financial Results Summary 1. Fiscal 2008, 3rd Quarter Consolidated Financial Results (In billions of yen except where noted) FY '08 3rd Q (A) FY '07 3rd Q (B) (Oct. 1, 2007 - (Oct. 1, 2006 - A/B (%) Dec. 31, 2007) Dec. 31, 2006) Net sales 911.9 871.5 105Operating income 63.8 63.5 100Income before incometaxes 57.9 64.9 89Net income 42.3 42.1 100Basic net income pershare 19.72 yen 19.64 yen 100 2. Fiscal 2008, First 9 Months Consolidated Financial Results (In billions of yen except where noted) FY '08 9 months (A) FY '07 9 months (B) (Apr. 1, 2007 - (Apr. 1, 2006 - A/B (%) Dec. 31, 2007) Dec. 31, 2006) Net sales 2,801.6 2,663.5 105Operating income 193.0 157.1 123Income before incometaxes 187.5 147.4 127Net income 133.9 98.6 136Basic net income pershare 62.39 yen 45.96 yen 136 Note: 1) Consolidated financial charts made according to U.S. GAAP. 2) Company has 149 consolidated subsidiaries. 3) This report is unaudited. CONSOLIDATED PROFIT AND LOSS STATEMENT 1. Fiscal 2008, 3rd Quarter (In millions of yen) FY '08 3rd Q FY '07 3rd Q (Oct. 1, 2007 - (Oct. 1, 2006 - Dec. 31, 2007) Dec. 31, 2006) (A) % of total (B) % of total A-B A/B(%) Net sales 911,913 100.0 871,533 100.0 40,380 105Cost of sales 654,182 71.7 624,617 71.7 29,565 105Selling, general andadministrative expenses 193,897 21.3 183,340 21.0 10,557 106Operating income 63,834 7.0 63,576 7.3 258 100Other income 6,690 0.7 7,667 0.9 (977) 87Interest and dividends 4,191 0.4 2,883 0.3 1,308 145Other 2,499 0.3 4,784 0.6 (2,285) 52Other expenses 12,621 1.4 6,313 0.7 6,308 200Interest 2,961 0.3 2,180 0.2 781 136Other 9,660 1.1 4,133 0.5 5,527 234Income before income taxes 57,903 6.3 64,930 7.5 (7,027) 89Income taxes 19,548 2.1 26,058 3.0 (6,510) 75Equity in earnings ofaffiliated companies 3,984 0.4 3,291 0.3 693 121Net income 42,339 4.6 42,163 4.8 176 100 2. Fiscal 2008, First 9 Months (In millions of yen) FY '08 9 months FY '07 9 months (Apr. 1, 2007 - (Apr. 1, 2006 - Dec. 31, 2007) Dec. 31, 2006) (A) % of total (B) % of total A-B A/B(%) Net sales 2,801,658 100.0 2,663,515 100.0 138,143 105Cost of sales 2,014,787 71.9 1,936,459 72.7 78,328 104Selling, general andadministrative expenses 593,845 21.2 569,874 21.4 23,971 104Operating income 193,026 6.9 157,182 5.9 35,844 123Other income 20,678 0.7 24,228 0.9 (3,550) 85Interest and dividends 11,904 0.4 9,208 0.3 2,696 129Other 8,774 0.3 15,020 0.6 (6,246) 58Other expenses 26,117 0.9 34,006 1.3 (7,889) 77Interest 7,383 0.2 7,256 0.3 127 102Other 18,734 0.7 26,750 1.0 (8,016) 70Income before income taxes 187,587 6.7 147,404 5.5 40,183 127Income taxes 64,988 2.3 59,708 2.2 5,280 109Equity in earnings ofaffiliated companies 11,326 0.4 10,959 0.4 367 103Net income 133,925 4.8 98,655 3.7 35,270 136 CONSOLIDATED BALANCE SHEET (In millions of yen) FY '08 FY '07 FY '07 (C) 3rd Q (A) 3rd Q (B) (ending (ending A - B (ending A - C Dec. 31, Dec. 31, Mar. 31, 2007) 2006) 2007) (Assets)Current assets 2,089,579 1,942,432 147,147 2,050,500 39,079Cash and cash equivalents 331,469 269,310 62,159 342,640 (11,171)Short-term investments 5,704 5,601 103 16,258 (10,554)Trade receivables 777,450 732,759 44,691 891,271 (113,821)Inventories 699,773 651,992 47,781 520,238 179,535Prepaid expenses and other current assets 275,183 282,770 (7,587) 280,093 (4,910)Long-term trade receivables 2,657 3,753 (1,096) 3,711 (1,054)Investments 575,682 570,639 5,043 571,458 4,224Net property, plant and equipment 609,458 602,700 6,758 605,285 4,173Other assets 241,764 245,709 (3,945) 221,277 20,487Total assets 3,519,140 3,365,233 153,907 3,452,231 66,909(Liabilities and shareholders' equity)Current liabilities 1,524,555 1,429,838 94,717 1,529,838 (5,283)Bank loans and current portion of long-term debt 272,259 240,972 31,287 253,141 19,118Trade payables 709,229 675,373 33,856 739,585 (30,356)Other current liabilities 543,067 513,493 29,574 537,112 5,955Long-term debt 370,352 425,894 (55,542) 387,941 (17,589)Retirement and severance benefits 393,959 425,930 (31,971) 360,713 33,246Other fixed liabilities 52,371 12,856 39,515 54,169 (1,798)Minority interests 61,724 59,758 1,966 60,361 1,363Shareholders' equity 1,116,179 1,010,957 105,222 1,059,209 56,970Common stock 175,820 175,820 - 175,820 -Capital surplus 210,888 210,924 (36) 210,910 (22)Retained earnings 740,170 607,578 132,592 632,003 108,167Accumulated other comprehensive income (loss) (10,193) 17,116 (27,309) 40,932 (51,125)Treasury stock at cost (506) (481) (25) (456) (50)Total liabilities and shareholders' equity 3,519,140 3,365,233 153,907 3,452,231 66,909Balance of Debts 642,611 666,866 (24,255) 641,082 1,529Accumulated other comprehensive income (loss): Foreign currency translation adjustments 33,884 23,810 10,074 32,088 1,796 Pension liability adjustments (90,356) - (90,356) (59,723) (30,633) Minimum pension liability adjustments - (72,562) 72,562 - - Unrealized gains (losses) on securities 46,348 65,852 (19,504) 68,578 (22,230) Unrealized gains (losses) on derivative instruments (69) 16 (85) (11) (58) CONSOLIDATED CASH FLOW STATEMENT 1. Fiscal 2008, 3rd Quarter (In millions of yen) FY '08 3rd Q (A) FY '07 3rd Q (B) (Oct. 1, 2007 (Oct. 1, 2006 A - B -Dec. 31, 2007) -Dec. 31, 2006) I Cash flows from operating activities 1 Net income 42,339 42,163 176 2 Adjustments to reconcile net income to net cash provided by operating activities (1) Depreciation of tangible fixed assets and other 33,979 32,965 1,014 (2) Decrease in trade receivables 6,785 13,986 (7,201) (3) Decrease (increase) in inventories (106,042) (101,732) (4,310) (4) Increase in trade payables 21,952 19,796 2,156 (5) Other, net (27,373) (26,588) (785) Net cash provided by (used in) operating activities (28,360) (19,410) (8,950)II Cash flows from investing activities 1 Capital expenditure (31,326) (25,061) (6,265) 2 Proceeds from sale of property, plant and equipment 619 1,012 (393) 3 Purchase of short-term investments and investment securities (12,700) (3,568) (9,132) 4 Proceeds from sale of short-term investments and investment securities 7,872 7,648 224 5 Other, net (2,278) (15,976) 13,698 Net cash used in investing activities (37,813) (35,945) (1,868)I+ II Free cash flow (66,173) (55,355) (10,818)III Cash flows from financing activities 1 Proceeds from long-term debt 60,358 15,100 45,258 2 Repayment of long-term debt (56,365) (105,534) 49,169 3 Increase in bank loans, net 50,985 71,253 (20,268) 4 Dividends paid (12,879) (8,586) (4,293) 5 Purchase of treasury stock (38) (45) 7 6 Reissuance of treasury stock 6 15 (9) Net cash provided by (used in) financing activities 42,067 (27,797) 69,864IV Effect of exchange rate changes on cash and cash equivalents (1,432) 5,407 (6,839)V Net increase (decrease) in cash and cash equivalents (25,538) (77,745) 52,207VI Cash and cash equivalents at beginning of period 357,007 347,055 9,952VII Cash and cash equivalents at the end of period 331,469 269,310 62,159 2. Fiscal 2008, First 9 Months (In millions of yen) FY '08 FY '07 9 months (A) 9 months (B) (Apr. 1, 2007 - (Apr. 1, 2006 - A - B Dec. 31, 2007) Dec. 31, 2006) I Cash flows from operating activities 1 Net income 133,925 98,655 35,270 2 Adjustments to reconcile net income to net cash provided by operating activities (1) Depreciation of tangible fixed assets and other 93,138 100,878 (7,740) (2) Decrease in trade receivables 117,757 119,962 (2,205) (3) Decrease (increase) in inventories (176,452) (150,648) (25,804) (4) Increase (decrease) in trade payables (31,159) (43,024) 11,865 (5) Other, net (38,266) 3,505 (41,771) Net cash provided by operating activities 98,943 129,328 (30,385)II Cash flows from investing activities 1 Capital expenditure (94,495) (95,296) 801 2 Proceeds from sale of property, plant and equipment 2,378 4,037 (1,659) 3 Purchase of short-term investments and investment securities (28,992) (18,754) (10,238) 4 Proceeds from sale of short-term investments and investment securities 21,599 23,050 (1,451) 5 Other, net 12,562 (25,058) 37,620 Net cash used in investing activities (86,948) (112,021) 25,073I+ II Free cash flow 11,995 17,307 (5,312)III Cash flows from financing activities 1 Proceeds from long-term debt 61,688 32,200 29,488 2 Repayment of long-term debt (66,068) (145,539) 79,471 3 Increase in bank loans, net 6,522 71,584 (65,062) 4 Dividends paid (25,758) (19,317) (6,441) 5 Purchase of treasury stock (133) (95) (38) 6 Reissuance of treasury stock 61 114 (53) 7 Other, net - 2,107 (2,107) Net cash provided by (used in) financing activities (23,688) (58,946) 35,258IV Effect of exchange rate changes on cash and cash equivalents 522 6,435 (5,913)V Net increase (decrease) in cash and cash equivalents (11,171) (35,204) 24,033VI Cash and cash equivalents at beginning of period 342,640 304,514 38,126VII Cash and cash equivalents at the end of period 331,469 269,310 62,159 CONSOLIDATED SEGMENT INFORMATION 1. Fiscal 2008, 3rd Quarter 1) Sales and Operating Income by Business Segment (In millions of yen) FY '08 3rd Q FY '07 3rd Q (Oct. 1, 2007 - Dec. 31, 2007) (Oct. 1, 2006 - Dec. 31, 2006) Sales Operating Sales Operating A/B Business Segment income income (%) (A) % of total (loss) (B) % of total Energy and Electric Systems 216,255 20.8 13,611 203,265 20.6 14,817 106Industrial Automation Systems 255,897 24.6 39,803 236,632 23.9 37,423 108Information and Communication Systems 129,651 12.5 (1,126) 139,370 14.1 4,912 93Electronic Devices 47,782 4.6 2,874 46,134 4.7 2,764 104Home Appliances 229,202 22.1 15,138 210,941 21.3 10,145 109Others 160,554 15.4 3,371 152,412 15.4 3,283 105Subtotal 1,039,341 100.0 73,671 988,754 100.0 73,344 105Eliminations and Other (127,428) - (9,837) (117,221) - (9,768) - Consolidated Total 911,913 - 63,834 871,533 - 63,576 105 *Note: Inter-segment sales are included in the above chart. 2) Sales and Operating Income by Location (In millions of yen) FY '08 3rd Q FY '07 3rd Q (Oct. 1, 2007 - Dec. 31, 2007) (Oct. 1, 2006 - Dec. 31, 2006) Sales Operating Sales Operating A/B Location (A) income (B) income (%)Japan 776,724 45,801 750,613 51,740 103North America 73,288 2,851 70,772 2,355 104Asia (excluding Japan) 133,612 12,239 114,456 8,357 117Europe 88,323 3,098 71,096 3,379 124Others 8,746 632 9,455 559 93Subtotal 1,080,693 64,621 1,016,392 66,390 106Eliminations (168,780) (787) (144,859) (2,814) -Consolidated Total 911,913 63,834 871,533 63,576 105 *Note: Inter-segment sales are included in the above chart. 3) Overseas Sales (In millions of yen) FY '08 3rd Q FY '07 3rd Q (Oct. 1, 2007 - Dec. 31, 2007) (Oct. 1, 2006 - Dec. 31, 2006) Sales % of total Sales % of total A/B Location (A) net sales (B) net sales (%) North America 78,338 8.6 74,271 8.5 105Asia (excluding Japan) 121,174 13.3 110,784 12.7 109Europe 101,126 11.1 83,708 9.6 121Others 20,898 2.3 19,689 2.3 106Total overseas sales 321,536 35.3 288,452 33.1 111 2. Fiscal 2008, First 9 Months 1) Sales and Operating Income by Business Segment (In millions of yen) FY '08 9 months FY '07 9 months (Apr. 1, 2007 - Dec. 31, 2007) (Apr. 1, 2006 - Dec. 31, 2006) A/B Business Segment Sales Operating Sales Operating (%) (A) % of total income (B) % of total income (loss) Energy and Electric Systems 656,550 20.6 37,062 594,570 19.7 21,530 110Industrial Automation Systems 747,644 23.5 106,649 702,926 23.3 102,582 106Information and Communication Systems 411,743 13.0 (575) 444,307 14.8 10,204 93Electronic Devices 142,976 4.5 8,949 137,771 4.6 9,970 104Home Appliances 745,637 23.4 53,548 675,920 22.5 25,582 110Others 477,693 15.0 10,407 453,229 15.1 9,761 105Subtotal 3,182,243 100.0 216,040 3,008,723 100.0 179,629 106Eliminations and Other (380,585) - (23,014) (345,208) - (22,447) -Consolidated Total 2,801,658 - 193,026 2,663,515 - 157,182 105*Note: Inter-segment sales are included in the above chart. 2) Sales and Operating Income by Location (In millions of yen) (In millions of yen) FY '08 9 months FY '07 9 months (Apr. 1, 2007 - Dec. 31, 2007) (Apr. 1, 2006 - Dec. 31, 2006) A/B Location Sales (A) Operating Sales (B) Operating income income Japan 2,371,456 139,716 2,289,798 126,109 104North America 206,957 6,782 205,015 4,325 101Asia (excluding Japan) 419,672 36,404 346,343 22,967 121Europe 286,771 13,922 215,029 9,094 133Others 23,962 1,055 23,096 1,035 104Subtotal 3,308,818 197,879 3,079,281 163,530 107Eliminations (507,160) (4,853) (415,766) (6,348) -Consolidated Total 2,801,658 193,026 2,663,515 157,182 105*Note: Inter-segment sales are included in the above chart. 3) Overseas Sales (In millions of yen) FY '08 9 months FY '07 9 months (Apr. 1, 2007 - Dec. 31, 2007) (Apr. 1, 2006 - Dec. 31, 2006) A/B (%)Location Sales (A) % of total net sales Sales (B) % of total net sales North America 221,000 7.9 219,317 8.2 101Asia (excluding Japan) 396,428 14.0 341,593 12.8 116Europe 318,117 11.4 249,023 9.4 128Others 63,188 2.3 62,354 2.3 101Total overseas sales 998,733 35.6 872,287 32.7 114 Cautionary Statement The expectation of operating results herein and any associated statement to bemade orally with respect to the Company's current plans, estimates, strategiesand beliefs and any other statements that are not historical facts are forward-looking statements. Words such as "expects", "anticipates", "plans", "believes","scheduled", "estimated", "targeted" along with any variations of these wordsand similar expressions are intended to identify forward-looking statementswhich include but are not limited to projections of revenues, earnings,performance and production. While the statements herein are based on certainassumptions and premises that the Company trusts and considers to be reasonableunder the circumstances to the date of announcement, you are requested to kindlytake note that actual operating results are subject to change due to any of thefactors as contemplated hereunder and/or any additional factor unforeseeable asof the date of this announcement. Such factors materially affecting theexpectations expressed herein shall include but are not limited to thefollowing: 1) Important trends The Mitsubishi Electric Group's operations may be affected by trends in theglobal economy, social conditions, laws, tax codes, and regulations. 2) Foreign currency exchange rates Fluctuations in foreign currency markets may affect Mitsubishi Electric's salesof exported products and purchases of imported materials that are denominated inU.S. dollars or euros, as well as its Asian production bases' sales of exportedproducts and purchases of imported materials that are denominated in foreigncurrencies. 3) Stock markets A fall in stock market prices may cause Mitsubishi Electric to recorddevaluation losses on marketable securities, or cause an increase in retirementbenefit obligations in accordance with a decline in the fair value of pensionassets. 4) Supply/demand balance for products and procurement conditions for materialsand components A decline in prices and shipments due to changes in the supply/demand balancemay adversely affect mainly Mitsubishi Electric's Information and CommunicationSystems, Electronic Devices, and Home Appliances segments. In addition, anincrease in material prices due to a worsening of material and componentprocurement conditions may adversely affect all of Mitsubishi Electric'soperations. 5) Fund procurement An increase in interest rates, the yen interest rate in particular, wouldincrease Mitsubishi Electric's interest expenses. 6) Significant patent matters Important patent filings, licensing, copyrights and patent-related disputes mayadversely affect related businesses. 7) Environmental matters We may appropriate funds for losses or increase allowances to respond toregulation trends or outbreaks of issues related to the environment. This mayimpact manufacturing and all corporate activities of the Mitsubishi ElectricGroup. 8) Quality of products and services We may appropriate funds for losses from defective services or products, and thelowered reputation of the quality of all our products and services may affectthe entire Mitsubishi Electric group. 9) Litigation and other legal proceedings The Mitsubishi Electric Group's operations may be affected by lawsuits or otherlegal proceedings against Mitsubishi Electric, its subsidiaries and/or equity-method affiliated companies. 10) Disruptive changes Disruptive changes in technology, development of products using new technology,timing of production, and market introduction may adversely affect performancemainly in Mitsubishi Electric's Information and Communication Systems,Electronic Devices, and Home Appliances segments. 11) Business restructuring The Mitsubishi Electric Group may record losses due to restructuring measures. 12) Natural disasters The Mitsubishi Electric Group's operations, particularly manufacturingactivities, may be affected by the occurrence of earthquakes, typhoons, tsunami,fires and other large-scale disasters. 13) Other significant factors The Mitsubishi Electric Group's operations may be affected by the outbreak ofsocial or political upheaval due to terrorism, war or other factors. About Mitsubishi Electric With over 80 years of experience in providing reliable, high-quality products toboth corporate clients and general consumers all over the world, MitsubishiElectric Corporation (TSE:6503) is a recognized world leader in the manufacture,marketing and sales of electrical and electronic equipment used in informationprocessing and communications, space development and satellite communications,consumer electronics, industrial technology, energy, transportation and buildingequipment. The company recorded consolidated group sales of 3,855.7 billion yen(US$ 32.7billion*) in the fiscal year ended March 31, 2007. For more informationvisit http://global.mitsubishielectric.com *At an exchange rate of 118 yen to the US dollar, the rate given by the TokyoForeign Exchange Market on March 31, 2007 ### This information is provided by RNS The company news service from the London Stock Exchange