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Kyocera 6-K 2011

Documents found in this filing:

  1. 6-K
  2. Graphic
  3. Graphic
Form 6-K
Table of Contents

FORM 6-K

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D. C. 20549

Report of Foreign Private Issuer

Pursuant to Rule 13a-16 or 15d-16 under

the Securities Exchange Act of 1934

For the month of January 2011

Commission File Number: 1-07952

KYOCERA CORPORATION

6 Takeda Tobadono-cho, Fushimi-ku,

Kyoto 612-8501, Japan

Indicate by check mark whether the registrant files or will file annual reports under cover of Form 20-F or Form 40-F:

Form 20-F  x        Form 40-F  ¨

Indicate by check mark if the registrant is submitting the Form 6-K in paper as permitted by Registration S-T Rule 101(b)(1):  ¨

Indicate by check mark if the registrant is submitting the Form 6-K in paper as permitted by Registration S-T Rule 101(b)(7):  ¨


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SIGNATURE

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned, thereto duly authorized.

 

KYOCERA CORPORATION

/s/ SHOICHI AOKI

Shoichi Aoki
Director,
Managing Executive Officer and
General Manager of
Corporate Financial and Business Systems
Administration Group

Date: January 27, 2011


Table of Contents

Information furnished on this form:

EXHIBITS

 

Exhibit

    Number    

    
1.  

Consolidated Financial Results of Kyocera Corporation and its Subsidiaries for the Nine  Months Ended December 31, 2010


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LOGO

Consolidated Financial Results of Kyocera Corporation and its Subsidiaries

for the Nine Months Ended December 31, 2010

The consolidated financial information is prepared in accordance with accounting principles generally accepted in the United States of America.

1. Consolidated Financial Results for the Nine Months Ended December 31, 2010

 

(1) Consolidated results of operations

          (% of changes from previous period)   
      Net sales     Profit from operations     Income before income taxes     Net income attributable
to shareholders of
Kyocera Corporation
 
     Million yen      %     Million yen      %     Million yen      %     Million yen      %  

Nine months ended December 31, 2010

     956,914         24.4        119,769         215.1        133,136         306.7        93,717         407.1   

Nine months ended December 31, 2009

     768,920         (14.8     38,013         (43.5     32,739         (60.3     18,481         (67.4

 

     Net income  attributable
to shareholders of
Kyocera Corporation
per share -Basic
     Net income  attributable
to shareholders of
Kyocera Corporation
per share -Diluted
 
     Yen      Yen  

Nine months ended December 31, 2010

     510.67         510.67   

Nine months ended December 31, 2009

     100.70         100.70   

(2) Consolidated financial condition

 

     Total assets      Total equity      Kyocera Corporation
shareholders’ equity
     Kyocera  Corporation
shareholders’ equity
to total assets
     Kyocera  Corporation
shareholders’ equity
per share
 
     Million yen      Million yen      Million yen      %      Yen  

December 31, 2010

     1,860,875         1,428,842         1,368,966         73.6         7,459.71   

March 31, 2010

     1,848,717         1,407,262         1,345,235         72.8         7,330.14   

2. Dividends

 

     Dividends per share  
     End of
first quarter
     End of
second quarter
     End of
third quarter
     Year-end      Annual  
     Yen      Yen      Yen      Yen      Yen  

Year ended March 31, 2010

             60.00                 60.00         120.00   

Year ending March 31, 2011

             60.00                 60.00         120.00   

Note:

Dividends per share for the year ending March 31, 2011 are forecasts other than results at end of first, second and third quarters.

3. Consolidated Financial Forecast for the Year Ending March 31, 2011

(% of changes from previous year)

     Net sales      Profit from
operations
     Income before
income taxes
     Net income attributable
to shareholders of
Kyocera Corporation
     Net income attributable
to shareholders of
Kyocera Corporation
per share
 
     Million yen      %      Million yen      %      Million yen      %      Million yen      %      Yen  

Year ending March 31, 2011

     1,260,000         17.3         147,000         130.2         160,000         163.2         105,000         161.9         572.15   

Note:

Forecast of earnings per share attributable to shareholders of Kyocera Corporation is computed based on the diluted average number of shares outstanding during the nine months ended December 31, 2010.

 

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4. Others

(1) Increase or decrease in significant subsidiaries during the three months ended December 31, 2010: None.

(2) Adoption of concise quarterly accounting method or procedure: None.

(3) Changes in accounting principles, procedures, and financial statements’ presentation:

(i) Changes due to adoption of new accounting standards: Please refer to the accompanying “2. Other Information” on page 12.

(ii) Changes due to other than adoption of new accounting standards: None.

(4) Number of shares (common stock):

(i) Number of shares issued:

 

191,309,290 shares at December 31, 2010    191,309,290 shares at March 31, 2010

(ii) Number of treasury stock:

 

7,794,759 shares at December 31, 2010    7,788,351 shares at March 31, 2010

(iii) Average number of shares outstanding:

 

183,518,395 shares in the nine months ended December 31, 2010    183,525,500 shares in the nine months ended December 31, 2009

Presentation of Situation of Review Procedure

The consolidated financial information included in this Form 6-K is out of scope of review procedure under the Financial Instruments and Exchange Law of Japan. Review procedure under the Financial Instruments and Exchange Law of Japan has not been completed at the date of submission of this Form 6-K.

Instruction for Forecasts and Other Notes

With regard to premise of forecasts set forth elsewhere in this Form 6-K, please refer to the accompanying “Forward-Looking Statements” on page 11.

 

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Accompanying Information

1. Business Results, Financial Condition and Prospects

(1)  Business Results for the Nine Months Ended December 31, 2010

Economic Situation and Business Environment

For the nine months ended December 31, 2010 (“the nine months”), the U.S. economy showed evident signs of a recovery relative to the nine months ended December 31, 2009 (“the previous nine months”) due to improvements in personal consumption and capital investment. The European economy recovered solidly, particularly in Germany, due to an increase in exports supported by depreciation of the Euro. This allayed fears of an economic slowdown in Europe due to a heightened financial insecurity triggered by financial crises in Greece and Ireland. The Asian economy led by China continued to achieve high growth. The Japanese economy was robust due to increases in capital investment and exports, mainly to Asia, coupled with moderate improvement in personal consumption due in part to government economic stimulus packages.

In the digital consumer equipment market, which is the principal market for Kyocera Corporation and its consolidated subsidiaries (“Kyocera Group” or “Kyocera”), production activities continued to expand compared with the previous nine months. Demand for mobile phone handsets, including smartphones, increased steadily and outweighed an inventory adjustment for certain types of notebook personal computers and flat panel TVs which commenced from the latter of the three months ended September 30, 2010.

Consolidated Financial Results

The yen’s average exchange rates for the nine months were ¥87 to the U.S. dollar and ¥113 to the Euro, marking appreciation of ¥7 (approximately 7%) and ¥20 (approximately 15%), respectively, compared with the previous nine months. As a result, net sales and income before income taxes for the nine months were down approximately ¥51 billion and ¥22 billion, respectively, compared with the previous nine months.

In spite of the yen’s appreciation, sales in the Components Business increased compared with the previous nine months, as a result of growth in component demand for products such as digital consumer equipment, industrial machinery and automobiles, combined with favorable demand for solar cells and modules backed by subsidy policies in Japan and overseas. Sales in the Equipment Business also increased due to growth in sales number of mobile phone handsets and printers and multifunction peripherals in Japan and overseas. As a result, net sales for the nine months increased by ¥187,994 million to ¥956,914 million compared with ¥768,920 million for the previous nine months.

In addition to an increase in sales, efforts to reduce costs and improve productivity in each business resulted in a considerable improvement in profit. Consequently, profit from operations for the nine months increased by ¥81,756 million to ¥119,769 million compared with ¥38,013 million for the previous nine months. Income before income taxes increased by ¥100,397 million to ¥133,136 million compared with ¥32,739 million for the previous nine months. This was due in part to the absence of an impairment loss of ¥19,987 million on its investment in WILLCOM, Inc., recorded for the previous nine months, in addition to an increase in profit from operations. As a result, net income attributable to shareholders of Kyocera Corporation for the nine months increased by ¥75,236 million to ¥93,717 million compared with ¥18,481 million for the previous nine months.

 

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     Nine months ended December 31,      Increase
(Decrease)
 
     2009      2010     
     Amount      %      Amount      %      Amount      %  
     (Yen in millions, except per share amounts and exchange rates)  

Net sales

   ¥ 768,920         100.0       ¥ 956,914         100.0       ¥ 187,994         24.4   

Profit from operations

     38,013         4.9         119,769         12.5         81,756         215.1   

Income before income taxes

     32,739         4.3         133,136         13.9         100,397         306.7   

Net income attributable to shareholders of Kyocera Corporation

     18,481         2.4         93,717         9.8         75,236         407.1   

Diluted earnings per share attributable to shareholders of Kyocera Corporation

     100.70                 510.67                           

Average US$ exchange rate

     94                 87                           

Average Euro exchange rate

     133                 113                           

Consolidated Results by Reporting Segment

i) Components Business:

Sales in the Components Business for the nine months increased by ¥130,156 million to ¥523,231 million compared with ¥393,075 million for the previous nine months. Operating profit for the nine months increased by ¥68,032 million to ¥93,336 million from ¥25,304 million for the previous nine months. The operating profit ratio was 17.8%.

1) Fine Ceramic Parts Group

Demand for main products such as semiconductor fabrication equipment parts and automotive parts increased significantly due to expanded production in various industrial machinery and automotive markets. Demand for components for digital consumer equipment also grew. As a result, overall sales in this reporting segment for the nine months increased compared with the previous nine months. Operating profit improved substantially from an operating loss for the previous nine months.

2) Semiconductor Parts Group

Kyocera aimed for sales expansion by aggressively enhancing production capacity for ceramic packages for crystal and SAW devices and CMOS/CCD image sensors in response to growing demand for mobile phone handsets and digital cameras, etc., as well as an increase in the number of components incorporated into popular advanced products, such as smartphones. Furthermore, demand for organic packages, primarily for servers, also grew steadily. As a result, overall sales in this reporting segment for the nine months increased compared with the previous nine months. Operating profit increased substantially compared with the previous nine months due to sales growth and enhanced productivity.

3) Applied Ceramic Products Group

In the solar energy business, sales increased compared with the previous nine months due to efforts to expand production capacity and to enhance Kyocera’s sales networks in Japan and overseas to meet rising global demand for solar cells and modules. In addition, sales in the cutting tool business also increased substantially compared with the previous nine months due to rising demand in Japan and Asia reflecting expanded production in automotive related markets. As a result, sales and operating profit in this reporting segment for the nine months increased compared with the previous nine months.

 

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4) Electronic Device Group

As a result of production expansion for digital consumer equipment such as mobile phone handsets, as well as in various industrial markets, demand for electronic components such as capacitors and timing devices showed a trend towards expansion overall. In addition, sales of thin film components increased significantly compared with the previous nine months in line with Kyocera’s acquisition of thin film transistor (TFT) liquid crystal display (LCD) business of Yasu facility from Sony Mobile Display Corporation in June 2010. As a result, overall sales in this reporting segment increased compared with the previous nine months despite the adverse impact of the yen’s appreciation. Operating profit increased substantially compared with the previous nine months due to sales growth and enhanced productivity.

ii) Equipment Business:

Sales in the Equipment Business for the nine months increased by ¥50,253 million to ¥352,321 million compared with ¥302,068 million for the previous nine months. Operating profit for the nine months increased by ¥11,081 million to ¥19,379 million from ¥8,298 million for the previous nine months. The operating profit ratio was 5.5%.

1) Telecommunications Equipment Group

Sales in this reporting segment for the nine months increased compared with the previous nine months due to growth in sales of mobile phone handsets in Japan, coupled with the results of aggressive measures to expand sales in overseas markets which included new product launches. Operating loss was reduced significantly from the previous nine months as a result of structural reforms executed in the year ended March 31, 2010 as well as an increase in sales.

2) Information Equipment Group

Despite the adverse effect of the yen’s appreciation, a moderate recovery in information technology investment by customers both in Japan and overseas culminated in sales volume increase in Europe and Japan, particularly for multifunction peripherals. As a result, sales in this reporting segment for the nine months increased compared with the previous nine months. Operating profit increased compared with the previous nine months due to sales growth for mid-speed printers and multifunction peripherals and an improvement in productivity.

iii) Others:

Sales at Kyocera Communication Systems Co., Ltd. increased over the previous nine months due to a moderate recovery in information technology investment in the corporate sector. In addition, as the semiconductor market recovered, demand for molding compounds for semiconductor encapsulation increased, which led to an increase in sales at Kyocera Chemical Corporation compared with the previous nine months. As a result, overall sales in this reporting segment for the nine months increased by ¥12,680 million to ¥102,433 million compared with ¥89,753 million for the previous nine months. Operating profit increased by ¥3,660 million to ¥7,567 million from ¥3,907 million for the previous nine months due to sales growth and cost reductions.

 

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Net Sales by Reporting Segment

 

     Nine months ended December 31,     Increase
(Decrease)
 
     2009     2010    
     Amount     %     Amount     %     Amount     %  
     (Yen in millions)  

Fine Ceramic Parts Group

   ¥ 36,387        4.7      ¥ 56,251        5.9      ¥ 19,864        54.6   

Semiconductor Parts Group

     99,641        13.0        132,640        13.9        32,999        33.1   

Applied Ceramic Products Group

     111,510        14.5        150,500        15.7        38,990        35.0   

Electronic Device Group

     145,537        18.9        183,840        19.2        38,303        26.3   
                                                

Total Components Business

     393,075        51.1        523,231        54.7        130,156        33.1   

Telecommunications Equipment Group

     131,408        17.1        175,768        18.4        44,360        33.8   

Information Equipment Group

     170,660        22.2        176,553        18.4        5,893        3.5   
                                                

Total Equipment Business

     302,068        39.3        352,321        36.8        50,253        16.6   

Others

     89,753        11.7        102,433        10.7        12,680        14.1   

Adjustments and eliminations

     (15,976     (2.1     (21,071     (2.2     (5,095       
                                                

Net sales

   ¥ 768,920        100.0      ¥ 956,914        100.0      ¥ 187,994        24.4   
                                                
Operating Profit (Loss) by Reporting Segment   
     Nine months ended December 31,     Increase
(Decrease)
 
     2009     2010    
     Amount     %*     Amount     %*     Amount     %  
     (Yen in millions)  

Fine Ceramic Parts Group

   ¥ (2,567          ¥ 8,466        15.1      ¥ 11,033          

Semiconductor Parts Group

     10,447        10.5        28,405        21.4        17,958        171.9   

Applied Ceramic Products Group

     10,909        9.8        23,194        15.4        12,285        112.6   

Electronic Device Group

     6,515        4.5        33,271        18.1        26,756        410.7   
                                                

Total Components Business

     25,304        6.4        93,336        17.8        68,032        268.9   

Telecommunications Equipment Group

     (6,426            (954            5,472          

Information Equipment Group

     14,724        8.6        20,333        11.5        5,609        38.1   
                                                

Total Equipment Business

     8,298        2.7        19,379        5.5        11,081        133.5   

Others

     3,907        4.4        7,567        7.4        3,660        93.7   
                                                

Operating profit

     37,509        4.9        120,282        12.6        82,773        220.7   

Corporate

     13,425               14,118               693        5.2   

Equity in earnings (losses) of affiliates and unconsolidated subsidiaries

     (18,195            128               18,323          

Adjustments and eliminations

     0               (1,392            (1,392       
                                                

Income before income taxes

   ¥ 32,739        4.3      ¥ 133,136        13.9      ¥ 100,397        306.7   
                                                
* % to net sales of each corresponding segment

 

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Net Sales by Geographic Area

1) Japan

Sales in the Telecommunications Equipment Group increased due to solid sales of mobile phone handsets, and sales increased in the solar energy business in the Applied Ceramic Products Group. Furthermore, sales in the Electronic Device Group and the Semiconductor Parts Group grew mainly for digital consumer equipment. As a result, sales for Japan for the nine months increased compared with the previous nine months.

2) United States of America

Sales in the Telecommunications Equipment Group increased, due to an increase in sales volume of mobile phone handsets through new products introduction. Sales in the Electronic Device Group also increased due to an increase in component demand for digital consumer equipment, as well as in various industrial markets. As a result, sales for the United States of America for the nine months increased compared with the previous nine months.

3) Asia

Sales in the Semiconductor Parts Group and the Electronic Device Group increased significantly due to an increase in component demand for digital consumer equipment. Sales in the cutting tool business in the Applied Ceramic Products Group also increased due to a production expansion in automotive related markets. As a result, sales for Asia for the nine months increased compared with the previous nine months.

4) Europe

Sales in the solar energy business in the Applied Ceramic Products Group increased. Sales in the Electronic Device Group increased due to an increase in component demand for digital consumer equipment, as well as in various industrial markets. As a result, sales for Europe for the nine months increased compared with the previous nine months.

5) Others

Sales in the Semiconductor Parts Group, the Electronic Device Group increased and sales in the Information Equipment Group also increased. As a result, sales for Others for the nine months increased compared with the previous nine months.

 

     Nine months ended December 31,      Increase
(Decrease)
 
     2009      2010     
     Amount      %      Amount      %      Amount      %  
     (Yen in millions)  

Japan

   ¥ 330,167         42.9       ¥ 424,512         44.4       ¥ 94,345         28.6   

United States of America

     128,159         16.7         166,428         17.4         38,269         29.9   

Asia

     126,670         16.5         161,641         16.9         34,971         27.6   

Europe

     147,068         19.1         158,843         16.6         11,775         8.0   

Others

     36,856         4.8         45,490         4.7         8,634         23.4   
                                                     

Net sales

   ¥ 768,920         100.0       ¥ 956,914         100.0       ¥ 187,994         24.4   
                                                     

 

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(2)  Consolidated Financial Condition

Consolidated Cash Flows

Cash and cash equivalents at December 31, 2010 decreased by ¥84,919 million to ¥228,207 million from ¥313,126 million at March 31, 2010.

1) Cash flows from operating activities

Net cash provided by operating activities for the nine months increased by ¥4,470 million to ¥73,460 million from ¥68,990 million for the previous nine months. This was due mainly to an increase in net income.

2) Cash flows from investing activities

Net cash used in investing activities turned from ¥3,619 million of cash inflows for the previous nine months to ¥112,776 million of cash outflows for the nine months. This was due mainly to decreases in withdrawals of certificate deposits and time deposits as well as an increase in purchases of property, plant and equipment.

3) Cash flows from financing activities

Net cash used in financing activities for the nine months decreased by ¥7,382 million to ¥29,319 million from ¥36,701 million for the previous nine months. This was due mainly to decreases in payments of short-term borrowings and long-term debt.

 

     Nine months ended December 31,  
         2009             2010      
     (Yen in millions)  

Cash flows from operating activities

   ¥ 68,990      ¥ 73,460   

Cash flows from investing activities

     3,619        (112,776

Cash flows from financing activities

     (36,701     (29,319

Effect of exchange rate changes on cash and cash equivalents

     (6,522     (16,284

Net increase (decrease) in cash and cash equivalents

     29,386        (84,919

Cash and cash equivalents at beginning of period

     269,247        313,126   

Cash and cash equivalents at end of period

   ¥ 298,633      ¥ 228,207   

 

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(3)  Consolidated Forecasts for the Year Ending March 31, 2011

In the three months ending March 31, 2011, it is expected that strong demand for solar cells and modules will continue, although a full-scale recovery of component demand for digital consumer equipment requires some time. With such circumstances in mind, Kyocera Corporation has not changed its forecast of consolidated financial results for the year ending March 31, 2011 which was announced in October 2010.

The forecast of financial results for each reporting segment, however, has been revised as set forth on the following page in light of the financial results for the nine months and the forecast for the three months ending March 31, 2011.

Consolidated Forecasts for the Year Ending March 31, 2011

 

     Results for
the year ended
March 31, 2010
     Forecasts for
the year ending
March 31, 2011
announced on
October 28, 2010
     Increase
(Decrease)
 
     Amount      %      Amount      %      %  
     (Yen in millions, except per share amounts and exchange rates)  

Net sales

   ¥ 1,073,805         100.0       ¥ 1,260,000         100.0         17.3   

Profit from operations

     63,860         5.9         147,000         11.7         130.2   

Income before income taxes

     60,798         5.7         160,000         12.7         163.2   

Net income attributable to shareholders of Kyocera Corporation

     40,095         3.7         105,000         8.3         161.9   

Diluted earnings per share attributable to shareholders of Kyocera Corporation

     218.47                 572.15                   

Average US$ exchange rate

     93                 85                   

Average Euro exchange rate

     131                 112                   

Note:

Forecast of diluted earnings per share attributable to shareholders of Kyocera Corporation was computed based on the diluted average number of shares outstanding during the nine months.

 

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Consolidated Forecasts of Net Sales by Reporting Segment for the Year Ending March 31, 2011

 

     Results for
the year ended
March 31, 2010
    Forecasts for the year ending
March 31, 2011 announced on
    Increase
(Decrease)
to results
 
       October 28, 2010     January 27, 2011    
     Amount     %     Amount     %     Amount     %     %  
     (Yen in millions)  

Fine Ceramic Parts Group

   ¥ 53,056        5.0      ¥ 71,500        5.7      ¥ 74,000        5.9        39.5   

Semiconductor Parts Group

     140,507        13.1        172,000        13.6        174,000        13.8        23.8   

Applied Ceramic Products Group

     157,033        14.6        201,000        16.0        203,000        16.1        29.3   

Electronic Device Group

     199,939        18.6        237,500        18.8        240,000        19.0        20.0   
                                                        

Total Components Business

     550,535        51.3        682,000        54.1        691,000        54.8        25.5   

Telecommunications Equipment Group

     189,118        17.6        228,000        18.1        220,000        17.5        16.3   

Information Equipment Group

     232,365        21.6        236,000        18.7        237,000        18.8        2.0   
                                                        

Total Equipment Business

     421,483        39.2        464,000        36.8        457,000        36.3        8.4   

Others

     124,577        11.6        142,000        11.3        141,000        11.2        13.2   

Adjustments and eliminations

     (22,790     (2.1     (28,000     (2.2     (29,000     (2.3       
                                                        

Net sales

   ¥ 1,073,805        100.0      ¥ 1,260,000        100.0      ¥ 1,260,000        100.0        17.3   
                                                        
Consolidated Forecasts of Operating Profit (Loss) by Reporting Segment for the Year Ending March 31, 2011   
     Results for
the year ended
March 31, 2010
    Forecasts for the year ending
March 31, 2011 announced on
    Increase
(Decrease)
to results
 
       October 28, 2010     January 27, 2011    
     Amount     %*     Amount     %*     Amount     %*     %  
     (Yen in millions)  

Fine Ceramic Parts Group

   ¥ (788          ¥ 11,000        15.4      ¥ 11,000        14.9          

Semiconductor Parts Group

     17,235        12.3        33,500        19.5        35,500        20.4        106.0   

Applied Ceramic Products Group

     19,858        12.6        29,500        14.7        29,500        14.5        48.6   

Electronic Device Group

     13,230        6.6        39,500        16.6        41,500        17.3        213.7   
                                                        

Total Components Business

     49,535        9.0        113,500        16.6        117,500        17.0        137.2   

Telecommunications Equipment Group

     (14,726            6,000        2.6        2,000        0.9          

Information Equipment Group

     22,091        9.5        24,500        10.4        24,500        10.3        10.9   
                                                        

Total Equipment Business

     7,365        1.7        30,500        6.6        26,500        5.8        259.8   

Others

     6,769        5.4        8,500        6.0        9,500        6.7        40.3   
                                                        

Operating profit

     63,669        5.9        152,500        12.1        153,500        12.2        141.1   

Corporate and others

     (2,871            7,500               6,500                 
                                                        

Income before income taxes

   ¥ 60,798        5.7      ¥ 160,000        12.7      ¥ 160,000        12.7        163.2   
                                                        
* % to net sales of each corresponding segment

 

10


Table of Contents

Forward-Looking Statements

Certain of the statements made in this document are forward-looking statements (within the meaning of Section 21E of the U.S. Securities and Exchange Act of 1934), which are based on our current assumptions and beliefs in light of the information currently available to us. These forward-looking statements involve known and unknown risks, uncertainties and other factors. Such risks, uncertainties and other factors include, but are not limited to the following lists:

 

(1) General economic conditions in our markets, which are primarily Japan, North America, Europe and Asia, particularly China;

 

(2) Unexpected changes in economic, political and legal conditions in countries where we operate;

 

(3) Our ability to develop, launch and produce innovative products, including meeting quality and delivery standards, and our ability to otherwise meet the advancing technological requirements of our customers, particularly in the highly competitive markets for ceramics, semiconductor parts and electronic components;

 

(4) Manufacturing delays or defects resulting from outsourcing or internal manufacturing processes which may adversely affect our production yields and operating results;

 

(5) Factors that may affect our exports, including a strong yen, political and economic instability, difficulties in collection of accounts receivable, decrease in cost competitiveness of our products, increases in shipping and handling costs, difficulty in staffing and managing international operations and inadequate protection of our intellectual property;

 

(6) Changes in exchange rates, particularly between the yen and the U.S. dollar and the Euro, respectively, in which we make significant sales;

 

(7) Exposure to credit risk on trade receivables due to customers’ worsening financial condition;

 

(8) Inability to secure skilled employees, particularly engineering and technical personnel;

 

(9) Insufficient protection of our trade secrets and intellectual property rights including patents;

 

(10) Our continuing to hold licenses to manufacture and sell certain of our products;

 

(11) The possibility that future initiatives and in-process research and development may not produce the desired results;

 

(12) The possibility that companies or assets acquired by us may not produce the returns or benefits, or bring in business opportunities, which we expect, and may require more cost than expected for integration;

 

(13) Events that may impact negatively on our markets or supply chain, including terrorist acts and outbreaks of disease or war;

 

(14) The occurrence of natural disasters, such as earthquakes, in locations where our manufacturing and other key business facilities are located;

 

(15) The possibility of future tightening of environmental laws and regulations in Japan and other countries which may increase our environmental liability and costs and expenses to observe the obligations;

 

(16) Fluctuations in the value of, and impairment losses on, securities and other assets held by us;

 

(17) The possibility that deferred tax assets may not be realized or additional liabilities for unrecognized tax benefits may be required; and

 

(18) Changes in accounting principles.

Such risks, uncertainties and other factors may cause our actual results, performance, achievements or financial condition to be materially different from any future results, performance, achievements or financial condition expressed or implied by these forward-looking statements. We undertake no obligation to publicly update any forward-looking statements included in this document.

 

11


Table of Contents

2. Other Information

Changes in accounting principles, procedures and financial statements’ presentation:

Recently Adopted Accounting Standards

Kyocera adopted the Financial Accounting Standards Board (FASB)’s Accounting Standards Update (ASU) No. 2009-16, “Accounting for Transfers of Financial Assets” on April 1, 2010. This accounting standard codified former Statement of Financial Accounting Standards (SFAS) No. 166, “Accounting for Transfers of Financial Assets, an amendment of FASB Statement No. 140” issued in June 2009 in the Accounting Standards Codification (ASC) 860, “Transfers and Servicing.” This accounting standard removes the concept of a qualifying special purpose entity from former SFAS No. 140 and removes the exception from applying former FASB Interpretation No. 46 (revised December 2003), Consolidation of Variable Interest Entities, to qualifying special purpose entities and establishes specific conditions for reporting a transfer of a portion of a financial asset as a sale. The adoption of this accounting standard did not have a material impact on Kyocera’s consolidated results of operations, financial condition and cash flows.

Kyocera adopted the ASU No. 2009-17, “Improvements to Financial Reporting by Enterprises Involved with Variable Interest Entities” on April 1, 2010. This accounting standard codified former SFAS No. 167, “Amendments to FASB Interpretation No. 46(R)” issued in June 2009 in the ASC 810, “Consolidation.” This accounting standard requires an enterprise to perform an analysis to identify the primary beneficiary of a variable interest entity and also requires ongoing reassessments of whether an enterprise is the primary beneficiary of a variable interest entity. The adoption of this accounting standard did not have a material impact on Kyocera’s consolidated results of operations, financial condition and cash flows.

 

12


Table of Contents

3. Consolidated Financial Statements

(1) CONSOLIDATED BALANCE SHEETS (Unaudited)

 

     December 31, 2010      March 31, 2010      Increase
(Decrease)
 
     Amount     %      Amount     %     
     (Yen in millions)  

Current assets:

            

Cash and cash equivalents

   ¥ 228,207         ¥ 313,126         ¥ (84,919

Investments in debt securities, current

     34,293           11,644           22,649   

Other short-term investments

     221,511           200,413           21,098   

Trade notes receivables

     19,302           16,421           2,881   

Trade accounts receivables

     209,827           190,903           18,924   

Less allowances for doubtful accounts and sales returns

     (4,059        (3,971        (88

Inventories

     210,349           177,361           32,988   

Advance payments

     70,019           52,316           17,703   

Deferred income taxes

     44,233           40,872           3,361   

Other current assets

     35,302           35,370           (68
                                          

Total current assets

     1,068,984        57.4         1,034,455        56.0         34,529   
                                          

Non-current assets:

            

Investments and advances:

            

Investments in and advances to affiliates and unconsolidated subsidiaries

     1,510           1,261           249   

Investments in debt and equity securities, long-term

     357,132           370,124           (12,992

Other long-term investments

     10,474           10,534           (60
                                          

Total investments and advances

     369,116        19.8         381,919        20.6         (12,803
                                          

Property, plant and equipment:

            

Land

     57,783           56,870           913   

Buildings

     284,539           290,516           (5,977

Machinery and equipment

     692,723           689,608           3,115   

Construction in progress

     8,665           8,842           (177

Less accumulated depreciation

     (799,119        (805,737        6,618   
                                          

Total property, plant and equipment

     244,591        13.2         240,099        13.0         4,492   
                                          

Goodwill

     63,326        3.4         67,602        3.6         (4,276

Intangible assets

     42,859        2.3         49,593        2.7         (6,734

Other assets

     71,999        3.9         75,049        4.1         (3,050
                                          

Total non-current assets

     791,891        42.6         814,262        44.0         (22,371
                                          

Total assets

   ¥ 1,860,875        100.0       ¥ 1,848,717        100.0       ¥ 12,158   
                                          

 

13


Table of Contents
     December 31, 2010     March 31, 2010     Increase
(Decrease)
 
     Amount     %     Amount     %    
     (Yen in millions)  

Current liabilities:

          

Short-term borrowings

   ¥ 3,341        ¥ 4,073        ¥ (732

Current portion of long-term debt

     9,935          13,456          (3,521

Trade notes and accounts payable

     100,497          89,750          10,747   

Other notes and accounts payable

     63,552          63,779          (227

Accrued payroll and bonus

     37,826          47,131          (9,305

Accrued income taxes

     21,703          15,602          6,101   

Other accrued liabilities

     23,978          26,800          (2,822

Other current liabilities

     36,097          28,721          7,376   
                                        

Total current liabilities

     296,929        15.9        289,312        15.7        7,617   
                                        

Non-current liabilities:

          

Long-term debt

     23,464          29,067          (5,603

Accrued pension and severance liabilities

     27,487          31,828          (4,341

Deferred income taxes

     70,585          75,619          (5,034

Other non-current liabilities

     13,568          15,629          (2,061
                                        

Total non-current liabilities

     135,104        7.3        152,143        8.2        (17,039
                                        

Total liabilities

     432,033        23.2        441,455        23.9        (9,422
                                        

Kyocera Corporation shareholders’ equity:

          

Common stock

     115,703          115,703            

Additional paid-in capital

     162,421          163,044          (623

Retained earnings

     1,239,817          1,168,122          71,695   

Accumulated other comprehensive income

     (98,297       (51,010       (47,287

Treasury stock, at cost

     (50,678       (50,624       (54
                                        

Total Kyocera Corporation shareholders’ equity

     1,368,966        73.6        1,345,235        72.8        23,731   
                                        

Noncontrolling interests

     59,876        3.2        62,027        3.3        (2,151
                                        

Total equity

     1,428,842        76.8        1,407,262        76.1        21,580   
                                        

Total liabilities and equity

   ¥ 1,860,875        100.0      ¥ 1,848,717        100.0      ¥ 12,158   
                                        
Note: Accumulated other comprehensive income is as follows:           
     December 31, 2010     March 31, 2010     Increase
(Decrease)
 
     (Yen in millions)  

Net unrealized gains on securities

   ¥          16,692      ¥          23,468      ¥ (6,776

Net unrealized gains (losses) on derivative financial instruments

   ¥          2      ¥          (82   ¥ 84   

Pension adjustments

   ¥          (96   ¥          1,053      ¥ (1,149

Foreign currency translation adjustments

   ¥          (114,895   ¥          (75,449   ¥ (39,446

 

14


Table of Contents

(2) CONSOLIDATED STATEMENTS OF INCOME (Unaudited)

 

     Nine months ended December 31,     Increase
(Decrease)
 
     2009     2010    
     Amount     %     Amount     %     Amount     %  
     (Yen in millions and shares in thousands, except per share amounts)  

Net sales

   ¥ 768,920        100.0      ¥ 956,914        100.0      ¥ 187,994        24.4   

Cost of sales

     572,776        74.5        672,363        70.3        99,587        17.4   
                                                

Gross profit

     196,144        25.5        284,551        29.7        88,407        45.1   

Selling, general and administrative expenses

     158,131        20.6        164,782        17.2        6,651        4.2   
                                                

Profit from operations

     38,013        4.9        119,769        12.5        81,756        215.1   

Other income (expenses):

            

Interest and dividend income

     11,821        1.6        11,687        1.2        (134     (1.1

Interest expense

     (2,188     (0.3     (1,673     (0.1     515          

Foreign currency transaction gains, net

     1,871        0.3        2,053        0.2        182        9.7   

Equity in earnings (losses) of affiliates and unconsolidated subsidiaries

     (18,195     (2.4     128        0.0        18,323          

Other, net

     1,417        0.2        1,172        0.1        (245     (17.3
                                                

Total other income (expenses)

     (5,274     (0.6     13,367        1.4        18,641          
                                                

Income before income taxes

     32,739        4.3        133,136        13.9        100,397        306.7   

Income taxes

     10,747        1.4        33,713        3.5        22,966        213.7   
                                                

Net income

     21,992        2.9        99,423        10.4        77,431        352.1   

Net income attributable to noncontrolling interests

     (3,511     (0.5     (5,706     (0.6     (2,195       
                                                

Net income attributable to shareholders of Kyocera Corporation

   ¥ 18,481        2.4      ¥ 93,717        9.8      ¥ 75,236        407.1   
                                                

Earnings per share:

            

Net income attributable to shareholders of Kyocera Corporation:

            

Basic

   ¥ 100.70        ¥ 510.67         

Diluted

   ¥ 100.70        ¥ 510.67         

Average number of shares of common stock outstanding:

            

Basic

     183,526          183,518         

Diluted

     183,526          183,518         

Note:

Basic earnings per share attributable to shareholders of Kyocera Corporation was computed based on the average number of shares of common stock outstanding during each period, and diluted earnings per share attributable to shareholders of Kyocera Corporation was computed based on the diluted average number of shares outstanding during each period.

(3) CAUTIONARY STATEMENT FOR PREMISE OF A GOING CONCERN

None.

(4) CAUTIONARY STATEMENT FOR SIGNIFICANT CHANGES IN EQUITY

None.

 

15

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