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Mitsubishi Electric Announces Consolidated and Non-Consolidated Financial Half-Year Results for the Period of April 1, 2007- September 30, 2007

Posted on: Monday, 29 October 2007, 03:00 CDT

Mitsubishi Electric Corporation (President and CEO: Setsuhiro Shimomura) announced today its half-year financial results for the period of April 1, 2007- September 30, 2007 (fiscal 2008).

Consolidated Financial Results

Net sales:

1,889.7 billion yen

(5% increase from the same period last year)

Operating income:

129.1 billion yen

(38% increase from the same period last year)

Income before income taxes:

129.6 billion yen

(57% increase from the same period last year)

Net income:

91.5 billion yen

(62% increase from the same period last year)

Non-consolidated Financial Results

Net sales:

1,135.2 billion yen

(5% increase from the same period last year)

Operating income:

72.8 billion yen

(29% increase from the same period last year)

Ordinary profit:

84.1 billion yen

(33% increase from the same period last year)

Net income:

57.9 billion yen

(88% increase from the same period last year)

Management conditions during the first half of fiscal 2008 saw general steady development of the global economy mainly in China and Europe despite a stronger sense of stagnation in the U.S.A. While the yen saw continued weakness against other major currencies, the Japanese economy as well saw general steady development based mainly on overseas demand, despite a weakness in personal consumption.

Under these circumstances, consolidated net sales for this interim period grew 5% to 1,889.7 billion yen compared to the same period of the previous fiscal year, with increased sales in the Energy and Electric Systems, the Industrial Automation Systems, the Electronic Devices and the Home Appliances segments. Consolidated operating income increased 38% to 129.1 billion yen compared to the same period of the previous fiscal year due to increased profit in the Energy and Electric Systems, the Industrial Automation Systems and the Home Appliances segments.

CONSOLIDATED FINANCIAL RESULTS BY BUSINESS SEGMENT

Energy and Electric Systems

Total sales:

440.2 billion yen

(13% increase from the same period last year)

Operating income:

23.4 billion yen

(16.7 billion yen increase from the same period last year)

The social infrastructure systems business saw increases in both orders and sales compared to the same period of the previous fiscal year due to increases in overseas electric transmission and distribution related business as well as domestic power generation business in addition to expansion both domestically and abroad in electric equipment for rolling stock.

The building systems business experienced increases in both orders and sales compared to the same period of the previous fiscal year due to increases in domestic elevators and escalators for the retail industry and railroad companies as well as increases in initiatives in China and the Middle East.

As a result, total sales for this segment increased 13% from the same period of the previous fiscal year. Operating income increased by 16.7 billion yen from the same period of the previous fiscal year due to increased sales.

Industrial Automation Systems

Total sales:

491.7 billion yen

(5% increase from the same period last year)

Operating income:

66.8 billion yen

(1.6 billion yen increase from the same period last year)

The factory automation systems business saw little change in sales compared to the same period of the previous fiscal year, upheld by buoyant domestic demand for industrial machinery and active investments in China despite decreases in orders for domestic and overseas flat panel display related investments, etc.

The automotive equipment business saw an increase in both orders and sales compared to the same period of the previous fiscal year due to buoyant development in global production of Japanese multinational automotive manufacturers.

As a result, total sales for this segment increased by 5% compared to the same period of the previous fiscal year. Operating income increased by 1.6 billion yen compared to the same period of the previous fiscal year due to increases in sales, etc.

Information and Communication Systems

Total sales:

282.0 billion yen

(7% decrease from the same period last year)

Operating income:

0.5 billion yen

(4.7 billion yen decrease from the same period last year)

The telecommunications equipment business saw decreases in both orders and sales compared to the same period of the previous fiscal year due to a decrease in mobile handsets.

The information systems and services business saw an increase in sales from the same period of the previous fiscal year due to expansion of our system integration business.

The electronic systems business saw an increase in both orders and sales compared to the same period of the previous fiscal year due to expansion of our satellite related business.

As a result, total sales for this segment decreased 7% compared to the same period of the previous fiscal year. Operating income decreased by 4.7 billion yen compared to the same period of the previous fiscal year due to decreased in sales, etc.

Electronic Devices

Total sales:

95.1 billion yen

(4% increase from the same period last year)

Operating income:

6.0 billion yen

(1.1 billion yen decrease from the same period last year)

The semiconductors business saw an increase in both orders and sales compared to the same period of the previous fiscal year due to increases in power modules for consumer use mainly in air conditioners and industrial use as well as power amplifiers for mobile handsets, etc.

The liquid crystal business saw a decrease in both orders and sales compared to the same period of the previous fiscal year due to a decrease in small-sized products for consumer use, including mobile handsets, etc., despite an increase in medium-sized products for industrial machines.

As a result, total sales for the segment increased 4% compared to the same period of the previous fiscal year. Operating income decreased by 1.1 billion yen compared to the same period of the previous fiscal year due to decreased sales in the liquid crystal business, etc.

Home Appliances

Total sales:

516.4 billion yen

(11% increase from the same period last year)

Operating income:

38.4 billion yen

(22.9 billion yen increase from the same period last year)

The home appliances business saw an increase in sales of 11% compared to the same period of the previous fiscal year due to increased sales of electric hot water supply systems and other appliances for use in all electric powered homes for the domestic market as well as air conditioners and solar power generation systems for the overseas market.

Operating income increased by 22.9 billion yen compared to the same period of the previous fiscal year due to increased sales, etc.

Others

Total sales:

317.1 billion yen

(5% increase from the same period last year)

Operating income:

7.0 billion yen

(0.5 billion yen increase from the same period last year)

Sales increased 5% compared to the same period of the previous fiscal year mainly in our materials procurement and engineering affiliated companies, etc.

Operating income increased by 0.5 billion yen compared to the same period of the previous fiscal year due to increased sales, etc.

Fundamental dividend distribution policy

Our fundamental policy is to comprehensively promote improvement in shareholder profits from the viewpoint of appropriate profit distribution commensurate with earning performance of its respective fiscal year as well as the aspect of strengthening our financial standing through our internal reserves, with the ultimate goal of improving corporate value.

Dividend for the first half of fiscal 2008

With our financial standing and business performance continuing to improve, we will pay an interim retained earnings dividend of 6 yen per share for fiscal 2008. Payment of interim dividends will start on December 4, 2007. The year-end retained earnings dividend for fiscal 2008 is still undecided.

cf. Fiscal 2007 dividend was 10 yen per share (interim dividend of 4 yen per share and a year-end dividend of 6 yen per share)

FINANCIAL CONDITION (CONSOLIDATED BASIS)

Assets, Liabilities, and Shareholders' Equity

The company's total assets declined from the end of the previous fiscal year by 27.3 billion yen to 3,424.9 billion yen. While cash and cash equivalents increased by 14.3 billion yen, and inventory increased by 73.0 billion yen due to progress in work-in-processes, etc., accounts receivables decreased by 107.3 billion yen due to accelerated collection of our credits.

The balance of outstanding debts fell by 56.3 billion yen from the end of the previous fiscal year to 584.7 billion yen, with a reduction of its ratio to total assets down to 17.1% (an improvement by 1.5 point compared to the end of the previous fiscal year). Trade payables also decreased by 51.4 billion yen.

Shareholders' equity increased by 58.2 billion yen compared to the previous fiscal year to 1,117.4 billion, with an improvement in ratio of shareholders' equity to total assets of 1.9 points compared to the previous fiscal year to 32.6 percent. While accumulated other comprehensive income decreased by 20.3 billion yen due to a decline in stock prices, etc, retained earnings increased owing to a 91.5 billion yen net income despite a dividend payment of 12.8 billion yen.

Cash Flow

Cash flows from operating activities decreased by 21.4 billion yen compared to the same period of the previous fiscal year to 127.3 billion yen (inflow).

Cash flows from investing activities decreased by 26.9 billion yen compared to the same period of the previous fiscal year to 49.1 billion yen (outflow) due to decreases in loan receivables, etc. Consequently, free cash flow reached revenues of 78.1 billion yen.

Cash flows from financing activities were 65.7 billion yen (outflow) due to dividend payment and debt repayment.

FORECAST FOR FISCAL 2008 (ending March 31, 2008)

The global economy is expected to slow down slightly due to a persistent sense of stagnation in the U.S. economy, etc., and the domestic economy is also expected to show a gradual slow down. Management environments will not necessarily be optimistic either with concerns of increasing and high-persistent petroleum and material prices, as well as risks from stronger yen and sub prime loan issues spreading throughout the actual economy, etc.

Under these circumstances, the Mitsubishi Electric Group will continue to increase and strengthen profitability in each business segment. In addition, we are committed to implementing various company wide measures toward improving business performance and financial standing. The growth strategies will be steadfastly adhered to in the interest of maintaining sustainable growth.

With the Home Appliances segment's buoyancy in air conditioners overseas and expansions in the Industrial Automation Systems and the Energy and Electric Systems segments, our business performance is expected to exceed our previous forecast. Therefore, we will modify the consolidated and non-consolidated earnings forecast for fiscal 2008 from the announcement on April 27, 2007.

Consolidated earnings forecast for fiscal 2008 (previous forecast)

Net sales:

3,970.0 billion yen

(3,940.0 billion yen)

(3% increase from the same period last year)

Operating income:

233.0 billion yen

(200.0 billion yen)

(No changes from the same period last year)

Income before income taxes:

210.0 billion yen

(185.0 billion yen)

(14% increase from the same period last year)

Net income:

148.0 billion yen

(125.0 billion yen)

(20% increase from the same period last year)

Non-consolidated earnings forecast for fiscal 2008 (previous forecast)

Net sales:

2,430.0 billion yen

(2,430.0 billion yen)

(3% increase from the same period last year)

Operating income:

120.0 billion yen

(110.0 billion yen)

(6% decrease from the same period last year)

Ordinary profit:

127.0 billion yen

(105.0 billion yen)

(3% decrease from the same period last year)

Net income:

86.0 billion yen

(75.0 billion yen)

(106% increase from the same period last year)

MANAGEMENT POLICY

Fundamental Management Policy

Based on its corporate statement "Changes for the Better", the Mitsubishi Electric Group hopes to build a better tomorrow by contributing to the creation of new societies, industries and lifestyles.

Keeping this corporate approach in mind, Mitsubishi Electric will establish a solid business foundation and implement sustainable growth through a three point balanced management of "Growth,""Profitability & Efficiency" and "Soundness".

Mitsubishi Electric will also work to further enhance its corporate value by becoming a conglomerate of highly competitive electric-electronic businesses with a synergistic unity, capable of responding to the expectations of customers, shareholders, and all of our stakeholders.

Management Targets

The Mitsubishi Electric Group has established three management targets that it continuously aims to achieve: an operating income ratio of 5% or more, ROE of 10% or more, and a interest-bearing debt ratio of 15% or less.

Management Target

Ratio of operating income to net sales

5% or more

ROE

10% or more

Ratio of interest-bearing debt to total assets

15% or less

Corporate Agenda

Based on its three point balanced management of "Growth,""Profitability & Efficiency" and "Soundness", the Mitsubishi Electric Group will continuously improve by strengthening quality, cost competitiveness, and intellectual property as well as productivity, R&D, and sales capabilities. We will also strengthen our two-tiered growth strategy VI1 strategy, 'making strong businesses stronger', and AD2 strategy, 'reinforcing solutions businesses centered on strong businesses'. While also restructuring business segments in response to changing business environments, we strive to create a management base that will continue to strengthen and improve our business performance.

Specifically, with an objective of strengthening our integrated "Craftsmanship", we will strengthen our development and productivity in software and hardware, and continue to streamline our productivity with measures like Just In Time production. From the very first stages of design and development, we will promote cost reduction activities that respond to material price hikes and exert quality consciousness. We will utilize human resources to enhance competitiveness, and engage in activities such as streamlining our human resources structure from a mid- and long-term perspective. We will improve our financial standing by further pursuing such measures as inventory reduction. Also, we will further promote 'Global Integration' to build an optimal business structure both in global terms and for the entire corporate Group. In business development in overseas markets, we will pay intensive attention on managing associated risks. Finally, we will enhance our operational structure to manage various businesses, through integration and coordination among various aspects, including research, development, procurement, production, sales and services etc.

In addition, we will be committed to enhance Corporate Social Responsibility (CSR) efforts based on the Corporate Mission3 and Seven Guiding Principles4. Especially, in terms of legal and ethical compliances, we will enrich our internal educational efforts and intensively implement internal control measures, as a priority task over the entire consolidated group of Mitsubishi Electric Corporation. We will also promote environmental initiatives to prevent global warming, create a recycling-based society and etc.

Steadily executing the above strategy, the Mitsubishi Electric Group will work to further enhance its corporate value.

1VI, the first two letters of 'Victory'

2AD, the first two letters of 'Advance'

3Corporate Mission: The Mitsubishi Electric Group will continually improve its technologies and services through creativity, and at the same time contribute to society.

4These principles are:

Trust. Establish relationships with all stakeholders based on strong mutual trust and respect,

Quality. Provide the best products and services with unsurpassed quality,

Technology. Pioneer new markets by promoting research and development,

Citizenship. As a global player, contribute to the development of communities and society as a whole,

Ethics. Honor high ethical standards in all endeavors,

Environment. Respect nature, and strive to protect and improve the global environment,

Growth. Assure fair earnings to build a foundation for future growth.

CONSOLIDATED AND NON-CONSOLIDATED FINANCIAL RESULTS

1.  CONSOLIDATED HALF-YEAR RESULTS

(In billions of yen except where noted)

FY '08 1st half

(A)

FY '07 1st half

(B)

A/B

(%)

FY '07

Net sales

1,889.7

1,791.9

105

3,855.7

Operating income

129.1

93.6

138

233.0

Income before

income taxes

129.6

82.4

157

184.7

Net income

91.5

56.4

162

123.0

Basic net income

per share

42.67 yen

26.32 yen

162

57.34

Note:     

1) Consolidated financial charts made according to U.S. GAAP.

2) Company has 148 consolidated subsidiaries.

FY '08 1st half: Apr. 1, 2007 -- Sept. 30, 2007

FY '07 1st half: Apr. 1, 2006 -- Sept. 30, 2006

FY '07: Apr. 1, 2006 -- Mar. 31, 2007

2.  NON-CONSOLIDATED HALF-YEAR RESULTS

(In billions of yen except where noted)

FY '08 1st half

(A)

FY '07 1st half

(B)

A/B

(%)

FY '07

Net sales

1,135.2

1,082.0

105

2,363.6

Operating income

72.8

56.4

129

127.3

Ordinary profit

84.1

63.5

133

131.4

Net income

57.9

30.8

188

41.6

Dividend per share

6 yen

(Interim dividend)

4 yen

(Interim dividend)

150

Annual dividend 10 yen

[Term-end biannual dividend

6 yen]

Net incomeper share

27.00 yen

14.37 yen

188

19.42 yen

FY '08 1st half: Apr. 1, 2007 -- Sept. 30, 2007

FY '07 1st half: Apr. 1, 2006 -- Sept. 30, 2006

FY '07: Apr. 1, 2006 -- Mar. 31, 2007

CONSOLIDATED PROFIT AND LOSS STATEMENT

(In millions of yen)

FY '08

1st half

FY '07

1st half

FY '07

(A)

% of total

(B)

% of total

A - B

A/B (%)

% of total

Net sales

1,889,745

100.0

1,791,982

100.0

97,763

105

3,855,745

100.0

Cost of sales

1,360,605

72.0

1,311,842

73.2

48,763

104

2,831,309

73.5

Selling, general

and administrative expenses

399,948

21.2

386,534

21.6

13,414

103

791,434

20.5

Operating income

129,192

6.8

93,606

5.2

35,586

138

233,002

6.0

Other income

13,988

0.8

16,561

0.9

(2,573)

84

40,745

1.1

Interest and

dividends

7,713

0.4

6,325

0.4

1,388

122

12,281

0.3

Other

6,275

0.4

10,236

0.5

(3,961)

61

28,464

0.8

Other expenses

13,496

0.7

27,693

1.5

(14,197)

49

88,971

2.3

Interest

4,422

0.2

5,076

0.3

(654)

87

9,375

0.2

Other

9,074

0.5

22,617

1.2

(13,543)

40

79,596

2.1

Income before income taxes

129,684

6.9

82,474

4.6

47,210

157

184,776

4.8

Income taxes

45,440

2.5

33,650

1.8

11,790

135

80,203

2.1

Equity in earnings of affiliated

companies

7,342

0.4

7,668

0.4

(326)

96

18,507

0.5

Net income

91,586

4.8

56,492

3.2

35,094

162

123,080

3.2

FY '08 1st half: Apr. 1, 2007 -- Sept. 30, 2007

FY '07 1st half: Apr. 1, 2006 -- Sept. 30, 2006

FY '07: Apr. 1, 2006 -- Mar. 31, 2007

CONSOLIDATED BALANCE SHEETS

(In millions of yen)

FY ' 08 1st half (A)

(ending Sept. 30, 2007)

FY ' 07

(B)

(ending March 31, 2007)

A -- B

(Assets)

Current assets

1,999,238

2,050,500

(51,262)

Cash and cash equivalents

357,007

342,640

14,367

Short-term investments

5,500

16,258

(10,758)

Trade receivables

784,507

891,271

(106,764)

Inventories

593,292

520,238

73,054

Prepaid expenses and other current assets

258,932

280,093

(21,161)

Long-term trade receivables

3,120

3,711

(591)

Investments

585,126

571,458

13,668

Net property, plant and equipment

609,475

605,285

4,190

Other assets

227,955

221,277

6,678

Total assets

3,424,914

3,452,231

(27,317)

(Liabilities and shareholders' equity)

Current liabilities

1,477,313

1,529,838

(52,525)

Bank loans and current portion of long-term debt

235,021

253,141

(18,120)

Trade payables

688,133

739,585

(51,452)

Other current liabilities

554,159

537,112

17,047

Long-term debt

349,754

387,941

(38,187)

Retirement and severance benefits

362,632

360,713

1,919

Other fixed liabilities

54,141

54,169

(28)

Minority interests

63,588

60,361

3,227

Shareholders' equity

1,117,486

1,059,209

58,277

Common stock

175,820

175,820

-

Capital surplus

210,891

210,910

(19)

Retained earnings

710,710

632,003

78,707

Accumulated other comprehensive income (loss)

20,542

40,932

(20,390)

Treasury stock at cost

(477)

(456)

(21)

Total liabilities and shareholders' equity

3,424,914

3,452,231

(27,317)

Balance of Debts

584,775

641,082

(56,307)

Accumulated other comprehensive income (loss):

Foreign currency translation adjustments

34,579

32,088

2,491

Pension liability adjustments

(69,192)

(59,723)

(9,469)

Unrealized gains on securities

55,184

68,578

(13,394)

Unrealized gains (losses) on derivative

instruments

(29)

(11)

(18)

CONSOLIDATED CASH FLOW STATEMENT

 (In millions of yen)

FY '08

1st half

(A)

FY '07

1st half

(B)

A -- B

FY '07

Ⅰ

Cash flows from operating activities

1

Net income

91,586

56,492

35,094

123,080

2

Adjustments to reconcile net income to net cash provided by operating activities

(1) Depreciation of tangible fixed assets and other

59,159

67,913

(8,754)

141,514

(2) Decrease in deferred income taxes

1,957

4,502

(2,545)

9,553

(3) Decrease (increase) in trade receivables

110,972

105,976

4,996

(35,474)

(4) Decrease (increase) in inventories

(70,410)

(48,916)

(21,494)

(15,954)

(5) Decrease in prepaid expenses and other assets

7,266

11,708

(4,442)

964

(6) Increase (decrease) in trade payables

(53,111)

(62,820)

9,709

19,252

(7) Increase (decrease) in other liabilities

(2,917)

15,210

(18,127)

44,382

(8) Other, net

(17,199)

(1,327)

(15,872)

(12,687)

Net cash provided by operating activities

127,303

148,738

(21,435)

274,630

Ⅱ

Cash flows from investing activities

1

Capital expenditure

(63,169)

(70,235)

7,066

(140,557)

2

Proceeds from sale of property, plant and equipment

1,759

3,025

(1,266)

4,782

3

Purchase of short-term investments and investment securities

(16,292)

(15,186)

(1,106)

(24,115)

4

Proceeds from sale of short-term investments and investment securities

13,727

15,402

(1,675)

28,163

5

Other, net

14,840

(9,082)

23,922

(23,872)

Net cash used in investing activities

(49,135)

(76,076)

26,941

(155,599)

&8545; Free cash flow

78,168

72,662

5,506

119,031

Ⅲ

Cash flows from financing activities

1

Proceeds from long-term debt

1,330

17,100

(15,770)

32,200

2

Repayment of long-term debt

(9,703)

(40,005)

30,302

(154,250)

3

Increase (decrease) in bank loans, net

(44,463)

331

(44,794)

50,496

4

Dividends paid

(12,879)

(10,731)

(2,148)

(19,317)

5

Purchase of treasury stock

(95)

(50)

(45)

(132)

6

Reissuance of treasury stock

55

99

(44)

162

7

Other, net

-

2,107

(2,107)

2,107

Net cash provided by (used in) financing activities

(65,755)

(31,149)

(34,606)

(88,734)

Ⅳ

Effect of exchange rate changes on cash and cash equivalents

1,954

1,028

926

7,829

Ⅴ

Net increase in cash and cash equivalents

14,367

42,541

(28,174)

38,126

Ⅵ

Cash and cash equivalents at beginning of period

342,640

304,514

38,126

304,514

Ⅶ

Cash and cash equivalents at end of period

357,007

347,055

9,952

342,640

FY '08 1st half: Apr. 1, 2007 -- Sept. 30, 2007

FY '07 1st half: Apr. 1, 2006 -- Sept. 30, 2006

FY '07: Apr. 1, 2006 -- Mar. 31, 2007

CONSOLIDATED SEGMENT INFORMATION

1. Sales and Operating Income by Business Segment

(In millions of yen)

Business Segment

FY '08 1st half

FY '07 1st half

A/B (%)

FY '07

Sales (A)

Opera

-ting income

Sales (B)

Opera

-ting income

Sales

Operating income

% of total

% of total

% of total

Energy and Electric

Systems

440,295

20.5

23,451

391,305

19.4

6,713

113

951,065

21.9

49,310

Industrial Automation Systems

491,747

23.0

66,846

466,294

23.1

65,159

105

956,930

22.1

126,227

Information and

Communi

-cation Systems

282,092

13.2

551

304,937

15.1

5,292

93

688,004

15.9

20,803

Electronic Devices

95,194

4.4

6,075

91,637

4.5

7,206

104

185,911

4.3

12,141

Home Appliances

516,435

24.1

38,410

464,979

23.0

15,437

111

921,948

21.3

36,644

Others

317,139

14.8

7,036

300,817

14.9

6,478

105

630,510

14.5

15,169

Subtotal

2,142,902

100.0

142,369

2,019,969

100.0

106,285

106

4,334,368

100.0

260,294

Elimin

-ations and

Other

(253,157)

-

(13,177)

(227,987)

-

(12,679)

-

(478,623)

-

(27,292)

Consoli

-dated Total

1,889,745

-

129,192

1,791,982

-

93,606

105

3,855,745

-

233,002

*Note: Inter-segment sales are included in the above chart.

FY '08 1st half: Apr. 1, 2007 -- Sept. 30, 2007

FY '07 1st half: Apr. 1, 2006 -- Sept. 30, 2006

FY '07: Apr. 1, 2006 -- Mar. 31, 2007

2.  Sales and Operating Income by Location

(In millions of yen)

Location

FY '08 1st half

FY '07 1st half

A/B

(%)

FY '07

Sales (A)

Opera

-ting income

Sales (B)

Opera

-ting income

Sales

Opera

-ting income

Japan

1,594,732

93,915

1,539,185

74,369

104

3,346,100

191,274

North America

133,669

3,931

134,243

1,970

100

277,555

6,345

Asia

(excluding Japan)

286,060

24,165

231,887

14,610

123

482,363

31,057

Europe

198,448

10,824

143,933

5,715

138

299,401

11,041

Others

15,216

423

13,641

476

112

30,819

1,007

Subtotal

2,228,125

133,258

2,062,889

97,140

108

4,436,238

240,724

Elimina

-tions

(338,380)

(4,066)

(270,907)

(3,534)

-

(580,493)

(7,722)

Consoli

-dated Total

1,889,745

129,192

1,791,982

93,606

105

3,855,745

233,002

*Note: Inter-segment sales are included in the above chart

FY '08 1st half: Apr. 1, 2007 -- Sept. 30, 2007

FY '07 1st half: Apr. 1, 2006 -- Sept. 30, 2006

FY '07: Apr. 1, 2006 -- Mar. 31, 2007

3.  Overseas Sales

(In millions of yen)

Location

FY '08 1st half

FY '07 1st half

FY '07

Sales (A)

% of total net sales

Sales (B)

% of total net sales

A/B (%)

Sales

% of total

net sales

North America

142,662

7.5

145,046

8.1

98

297,360

7.7

Asia

(excluding Japan)

275,254

14.6

230,809

12.9

119

470,886

12.2

Europe

216,991

11.5

165,315

9.2

131

340,121

8.8

Others

42,290

2.2

42,665

2.4

99

91,951

2.4

Total overseas sales

677,197

35.8

583,835

32.6

116

1,200,318

31.1

FY '08 1st half: Apr. 1, 2007 -- Sept. 30, 2007

FY '07 1st half: Apr. 1, 2006 -- Sept. 30, 2006

FY '07: Apr. 1, 2006-- Mar. 31, 2007

Cautionary Statement

The expectation of operating results herein and any associated statement to be made orally with respect to the Company's current plans, estimates, strategies and 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 words and similar expressions are intended to identify forward-looking statements which include but are not limited to projections of revenues, earnings, performance and production. While the statements herein are based on certain assumptions and premises that the Company trusts and considers to be reasonable under the circumstances to the date of announcement, you are requested to kindly take note that actual operating results are subject to change due to any of the factors as contemplated hereunder and/or any additional factor unforeseeable as of the date of this announcement. Such factors materially affecting the expectations expressed herein shall include but are not limited to the following:

(1) Important trends

The Mitsubishi Electric Group's operations may be affected by trends in the global economy, social conditions, laws, tax codes, and regulations.

(2) Foreign currency exchange rates

Fluctuations in foreign currency markets may affect Mitsubishi Electric's sales of exported products and purchases of imported materials that are denominated in U.S. dollars or euros, as well as its Asian production bases' sales of exported products and purchases of imported materials that are denominated in foreign currencies.

(3) Stock markets

A fall in stock market prices may cause Mitsubishi Electric to record devaluation losses on marketable securities, or cause an increase in retirement benefit obligations in accordance with a decline in the fair value of pension assets.

(4) Supply/demand balance for products and procurement conditions for materials and components

A decline in prices and shipments due to changes in the supply/demand balance may adversely affect mainly Mitsubishi Electric's Information and Communication Systems, Electronic Devices, and Home Appliances segments. In addition, an increase in material prices due to a worsening of material and component procurement conditions may adversely affect all of Mitsubishi Electric's operations.

(5) Fund procurement

An increase in interest rates, the yen interest rate in particular, would increase Mitsubishi Electric's interest expenses.

(6) Significant patent matters

Important patent filings, licensing, copyrights and patent-related disputes may adversely affect related businesses.

(7) Environmental matters

We may appropriate funds for losses or increase allowances to respond to regulation trends or outbreaks of issues related to the environment. This may impact manufacturing and all corporate activities of the Mitsubishi Electric Group.

(8) Quality of products and services

We may appropriate funds for losses from defective services or products, and the lowered reputation of the quality of all our products and services may affect the entire Mitsubishi Electric group.

(9) Litigation and other legal proceedings

The Mitsubishi Electric Group's operations may be affected by lawsuits or other legal 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 performance mainly 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 manufacturing activities, 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 of social 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 to both corporate clients and general consumers all over the world, Mitsubishi Electric Corporation (TOKYO:6503) is a recognized world leader in the manufacture, marketing and sales of electrical and electronic equipment used in information processing and communications, space development and satellite communications, consumer electronics, industrial technology, energy, transportation and building equipment. The company recorded consolidated group sales of 3,855.7 billion yen (US$ 32.7billion5) in the fiscal year ended March 31, 2007. For more information visit

http://global.mitsubishielectric.com

5At an exchange rate of 118 yen to the US dollar, the rate given by the Tokyo Foreign Exchange Market on March 31, 2007

Source: Business Wire

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