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Kyocera 6-K 2013

Documents found in this filing:

  1. 6-K
  2. Graphic
  3. Graphic
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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 April 2013

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):  ¨


Table of Contents

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 Accounting Group

Date: April 25, 2013


Table of Contents

Information furnished on this form:

EXHIBITS

 

Exhibit
    Number    

   

1.

  Consolidated Financial Results of Kyocera Corporation and its Subsidiaries for the Year Ended March 31, 2013

2.

  Notice relating to Review of Dividend Payout Ratio and Dividend Forecast for the Year ending March 31, 2014

3.

  Notice relating to Partial Amendments to the Articles of Incorporation


Table of Contents

LOGO

Consolidated Financial Results of Kyocera Corporation and its Subsidiaries

for the Year Ended March 31, 2013

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 Year Ended March 31, 2013 (Fiscal 2013)

 

(1) Consolidated results of operations

          (% of change from previous year)   
      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              %      

Fiscal 2013

     1,280,054         7.5        76,926         (21.2     101,363         (11.8     66,473         (16.2

Fiscal 2012

     1,190,870         (6.0     97,675         (37.4     114,893         (33.3     79,357         (35.2

(Note) Comprehensive income:

205,727 million yen in the year ended March 31, 2013, 164.3% of change from previous year

77,850 million yen in the year ended March 31, 2012, (22.5)% of change from previous year

 

     Net income
attributable to
shareholders of
Kyocera Corporation
per share -Basic
     Net income
attributable to
shareholders of
Kyocera Corporation
per share -Diluted
     Ratio of net income
attributable to
shareholders of
Kyocera Corporation
to shareholders’ equity
     Ratio of income
before income taxes
to total assets
     Ratio of profit
from operations
to net sales
 
     Yen      Yen      %      %      %  

Fiscal 2013

     362.36         362.36         4.3         4.7         6.0   

Fiscal 2012

     432.58         432.58         5.5         5.8         8.2   

(Reference) Equity in losses of affiliates and unconsolidated subsidiaries:

(155) million yen in the year ended March 31, 2013

   (36) million yen in the year ended March 31, 2012

(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  

March 31, 2013

     2,282,853         1,714,942         1,646,157         72.1         8,973.83   

March 31, 2012

     1,994,103         1,534,241         1,469,505         73.7         8,010.65   

(3) Consolidated cash flows

 

     Operating activities      Investing activities     Financing activities     Cash and cash equivalents
at end of year
 
     Million yen      Million yen     Million yen     Million yen  

Fiscal 2013

     109,489         (66,142     (31,431     305,454   

Fiscal 2012

     109,065         (56,051     (50,769     273,288   

2. Dividends

 

    Dividends per share     Annual aggregate     Dividends to
net income
attributable to
    Dividends to  
    End of
first quarter
    End of
second quarter
    End of
third quarter
    Year-end      Annual     amount of
dividends
    shareholders of
Kyocera Corporation
    Kyocera  Corporation
shareholders’ equity
 
    Yen     Yen     Yen     Yen      Yen     Million yen     %     %  

Fiscal 2012

           60.00               60.00         120.00        22,013        27.7        1.5   

Fiscal 2013

           60.00               60.00         120.00        22,013        33.1        1.4   

Fiscal 2014 (forecast)

                                 160.00               30.6          

(Note) Dividends per share for the year ending March 31, 2014 are forecasted to be 160.00 yen on an annual basis.

3. Consolidated Financial Forecast for the Year Ending March 31, 2014 (Fiscal 2014)

(% of change from the 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  

Fiscal 2014

     1,400,000         9.4         140,000         82.0         150,000         48.0         96,000         44.4         523.33   

Forecast of earnings per share attributable to shareholders of Kyocera Corporation is computed based on the diluted average number of shares outstanding during the year ended March 31, 2013.

 

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Table of Contents

(Notes)

(1) Increase or decrease in significant subsidiaries during the year ended March 31, 2013: None.

(2) Changes in accounting policies:

(i) Changes due to adoption of new accounting standards: Please refer to the accompanying “(5) Basis of Preparation of Consolidated Financial Statements” on page 19.

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

(3) Number of shares (common stock):

(i) Number of shares issued:

 

191,309,290 shares at March 31, 2013    191,309,290 shares at March 31, 2012

(ii) Number of treasury stock:

 

7,869,470 shares at March 31, 2013    7,865,370 shares at March 31, 2012

(iii) Average number of shares outstanding:

 

183,441,877 shares in the year ended March 31, 2013    183,450,800 shares in the year ended March 31, 2012

(Reference) Outline of Non-Consolidated Results for Kyocera Corporation

The non-consolidated financial information is prepared in accordance with accounting principles generally accepted in Japan.

1. Non-consolidated Financial Results for the Year Ended March 31, 2013:

 

(1) Non-consolidated results of operations

        (% of change from previous year)   
    Net sales     Profit from operations     Recurring profit     Net income  
    Million yen     %     Million yen     %     Million yen     %     Million yen      %  

Fiscal 2013

    596,112        4.5        28,237        59.5        64,589        (3.9     52,527         5.4   

Fiscal 2012

    570,310        (13.4     17,699        (61.5     67,243        (26.3     49,828         (30.7

 

     Net income per share -Basic      Net income per share -Diluted  
     Yen      Yen  

Fiscal 2013

     286.34           

Fiscal 2012

     271.62           

(2) Non-consolidated financial condition

 

     Total assets      Net assets      Net assets to total assets      Net assets per share  
     Million yen      Million yen      %      Yen  

March 31, 2013

     1,648,295         1,344,538         81.6         7,329.59   

March 31, 2012

     1,458,971         1,219,897         83.6         6,649.97   

Presentation of Situation of Audit Procedure

The consolidated financial information included in this Form 6-K is out of scope of audit procedure under the Financial Instruments and Exchange Law of Japan. Audit 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

Cautionary Statement for Forecasts:

With regard to forecasts set forth above, please refer to the accompanying “Forward-Looking Statements” on page 9.

 

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Table of Contents

Accompanying Information

1. ANALYSIS OF BUSINESS RESULTS AND FINANCIAL CONDITION

(1) Analysis of Business Results

[Business Results for the Year Ended March 31, 2013]

Economic Situation and Business Environment

Despite increases in public investment and personal consumption, the Japanese economy weakened in the year ended March 31, 2013 (“fiscal 2013”) due primarily to a decrease in exports reflecting a slowdown from the second quarter (July 1 to September 30, 2012) in economies overseas, particularly in Europe and Asia, and to stagnant growth in capital investment in the corporate sector. With respect to the overseas economic environment, the U.S. economy expanded moderately on the back of growth in personal consumption and recovery in housing investment. On the other hand, the European economy remained in a recessionary phase due to the impact of the financial crisis. The slowdown in the Chinese economy intensified due mainly to weakening exports.

In the digital consumer equipment market, which is the principal market for Kyocera Corporation and its consolidated subsidiaries (“Kyocera Group” or “Kyocera”), shipment volume was slow overall for conventional mobile phone handsets, PCs and flat-screen TVs despite significant growth for smartphones and tablet PCs compared with the previous fiscal year ended March 31, 2012 (“fiscal 2012”). In contrast, the solar energy market in Japan expanded substantially due primarily to growth in demand in the residential sector and a sharp increase in demand in the public and industrial sectors, which includes mega-solar power projects, as a result of the introduction of feed-in tariff for renewable energy in July 2012.

Consolidated Financial Results

Average exchange rates for fiscal 2013 were ¥83 to the U.S. dollar, marking depreciation of ¥4 (approximately 5%) from ¥79 for fiscal 2012, and ¥107 to the Euro, marking appreciation of ¥2 (approximately 2%) from ¥109 for fiscal 2012. Mainly as a result of the effect of the yen’s depreciation against the U.S. dollar, net sales and income before income taxes for fiscal 2013 were pushed up by approximately ¥21 billion and ¥2.5 billion, respectively, compared with fiscal 2012.

Consolidated net sales for fiscal 2013 increased by ¥89,184 million, or 7.5%, to ¥1,280,054 million, compared with ¥1,190,870 million for fiscal 2012, due primarily to sales growth in the Applied Ceramic Products Group and the Semiconductor Parts Group and a full-year contribution from a consolidated subsidiary newly added in fiscal 2012. Profit from operations decreased by ¥20,749 million, or 21.2%, to ¥76,926 million, compared with ¥97,675 million for fiscal 2012 due to the recording of a charge of ¥21,300 million for environmental remediation in New Bedford Harbor, Massachusetts in the United States by AVX Corporation, a U.S. subsidiary. Income before income taxes decreased by ¥13,530 million, or 11.8%, to ¥101,363 million, compared with ¥114,893 million for fiscal 2012. Net income attributable to shareholders of Kyocera Corporation for fiscal 2013 decreased by ¥12,884 million, or 16.2%, to ¥66,473 million, compared with ¥79,357 million for fiscal 2012.

 

     Years ended March 31,      Increase
(Decrease)
 
     2012      2013     
     Amount      %      Amount      %      Amount     %  
     (Yen in millions, except per share amounts and exchange rates)  

Net sales

   ¥ 1,190,870         100.0       ¥ 1,280,054         100.0       ¥ 89,184        7.5   

Profit from operations

     97,675         8.2         76,926         6.0         (20,749     (21.2

Income before income taxes

     114,893         9.6         101,363         7.9         (13,530     (11.8

Net income attributable to shareholders of Kyocera Corporation

     79,357         6.7         66,473         5.2         (12,884     (16.2

Diluted earnings per share attributable to shareholders of Kyocera Corporation

     432.58                 362.36                          

Average US$ exchange rate

     79                 83                          

Average Euro exchange rate

     109                 107                          

 

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Table of Contents

Consolidated Results by Reporting Segment

1) Fine Ceramic Parts Group

Sales decreased in this reporting segment compared with fiscal 2012 due to a year-on-year decline in component demand in the industrial machinery market, including for components for semiconductor fabrication equipment, and in the digital consumer equipment market. Operating profit decreased compared with fiscal 2012 due mainly to the impact of the lower sales combined with a decline in product prices.

2) Semiconductor Parts Group

Sales and operating profit in this reporting segment increased compared with fiscal 2012 due to growth in demand for ceramic packages primarily for smartphones.

3) Applied Ceramic Products Group

Sales in this reporting segment increased compared with fiscal 2012 due primarily to significant solar energy business sales in Japan, and to higher sales in the cutting tool business. Operating profit increased compared with fiscal 2012 due to the effect of the sales growth and cost reductions.

4) Electronic Device Group

Sales in this reporting segment increased compared with fiscal 2012 due to full-year sales contribution from Kyocera Display Corporation. An operating loss was recorded, however, due to recording of the environmental remediation charge at AVX Corporation.

5) Telecommunications Equipment Group

Sales increased overseas due to strong sales of mobile phone handsets and, as a result, profitability also improved. Sales in Japan decreased, however, due to contraction in the market and the impact of intensifying competition, and as a result, sales and operating profit in this reporting segment decreased slightly compared with fiscal 2012.

6) Information Equipment Group

Sales in this reporting segment increased compared with fiscal 2012 due to the introduction of new products and vigorous sales promotion activities. Operating profit decreased compared with fiscal 2012, however, due mainly to a decline in selling prices and the impact of the Euro’s depreciation against the yen.

7) Others

Sales and operating profit in this reporting segment increased compared with fiscal 2012 due primarily to an increase in sales at Kyocera Communication Systems Co., Ltd.

 

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Table of Contents

Net Sales by Reporting Segment

 

     Years ended March 31,     Increase
(Decrease)
 
     2012     2013    
     Amount     %     Amount     %     Amount     %  
     (Yen in millions)  

Fine Ceramic Parts Group

   ¥ 80,372        6.7      ¥ 74,852        5.9      ¥ (5,520     (6.9

Semiconductor Parts Group

     153,420        12.9        167,241        13.1        13,821        9.0   

Applied Ceramic Products Group

     179,784        15.1        211,439        16.5        31,655        17.6   

Electronic Device Group

     228,721        19.2        271,570        21.2        42,849        18.7   
  

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Total Components Business

     642,297        53.9        725,102        56.7        82,805        12.9   

Telecommunications Equipment Group

     178,669        15.0        177,314        13.8        (1,355     (0.8

Information Equipment Group

     243,457        20.4        250,534        19.6        7,077        2.9   
  

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Total Equipment Business

     422,126        35.4        427,848        33.4        5,722        1.4   

Others

     151,987        12.8        159,902        12.5        7,915        5.2   

Adjustments and eliminations

     (25,540     (2.1     (32,798     (2.6     (7,258       
  

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Net sales

   ¥ 1,190,870        100.0      ¥ 1,280,054        100.0      ¥ 89,184        7.5   
  

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

    

Operating Profit (Loss) by Reporting Segment

 

  

  

   
     Years ended March 31,     Increase
(Decrease)
 
     2012     2013    
     Amount     %*     Amount     %*     Amount     %  
     (Yen in millions)  

Fine Ceramic Parts Group

   ¥ 12,622        15.7      ¥ 7,614        10.2      ¥ (5,008     (39.7

Semiconductor Parts Group

     27,754        18.1        30,379        18.2        2,625        9.5   

Applied Ceramic Products Group

     6,459        3.6        17,924        8.5        11,465        177.5   

Electronic Device Group

     16,036        7.0        (4,014            (20,050       
  

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Total Components Business

     62,871        9.8        51,903        7.2        (10,968     (17.4

Telecommunications Equipment Group

     1,469        0.8        1,340        0.8        (129     (8.8

Information Equipment Group

     29,451        12.1        21,750        8.7        (7,701     (26.1
  

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Total Equipment Business

     30,920        7.3        23,090        5.4        (7,830     (25.3

Others

     8,054        5.3        10,542        6.6        2,488        30.9   
  

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Operating profit

     101,845        8.6        85,535        6.7        (16,310     (16.0

Corporate gains and Equity in losses of affiliates and unconsolidated subsidiaries

     13,840               17,248               3,408        24.6   

Adjustments and eliminations

     (792            (1,420            (628       
  

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Income before income taxes

   ¥ 114,893        9.6      ¥ 101,363        7.9      ¥ (13,530     (11.8
  

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 
* % to net sales of each corresponding segment

 

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Table of Contents

Net Sales by Geographic Area

i) Japan

Sales in Japan increased compared with fiscal 2012 due mainly to sales growth in the solar energy business, despite a decrease in sales in the Telecommunications Equipment Group affected by a decline in sales volume of mobile phone handsets.

ii) Asia

Sales in Asia increased compared with fiscal 2012 due primarily to an increase in sales in component for digital consumer equipment and in the solar energy business.

iii) United States of America

Sales in the United States of America increased compared with fiscal 2012 due to the newly contribution of Kyocera Display Corporation and increased sales in the Telecommunications Equipment Group resulting from increased sales of mobile phone handsets.

iv) Europe

Sales in Europe decreased compared with fiscal 2012 affected by a decline in demand in the solar energy business and the yen’s appreciation against the Euro.

v) Others

Sales in Others increased compared with fiscal 2012 due mainly to an increase in sales in the Information Equipment Group.

 

     Years ended March 31,      Increase
(Decrease)
 
     2012      2013     
     Amount      %      Amount      %      Amount     %  
     (Yen in millions)  

Japan

   ¥ 559,344         47.0       ¥ 574,202         44.9       ¥ 14,858        2.7   

Asia

     205,469         17.2         235,520         18.4         30,051        14.6   

United States of America

     166,706         14.0         215,032         16.8         48,326        29.0   

Europe

     204,887         17.2         198,868         15.5         (6,019     (2.9

Others

     54,464         4.6         56,432         4.4         1,968        3.6   
  

 

 

    

 

 

    

 

 

    

 

 

    

 

 

   

 

 

 

Net sales

   ¥ 1,190,870         100.0       ¥ 1,280,054         100.0       ¥ 89,184        7.5   
  

 

 

    

 

 

    

 

 

    

 

 

    

 

 

   

 

 

 

 

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Table of Contents

[Consolidated Forecasts for the Year Ending March 31, 2014]

In the year ending March 31, 2014 (“fiscal 2014”), the Japanese economy is expected to pick up due primarily to an improvement in the export environment on the back of correction to the yen’s appreciation and to the effects of the government’s economic and monetary policies. The U.S. economy is projected to continue expanding moderately.

In the information and communications market, the main market for Kyocera, production activities for digital consumer equipment are projected to show a general recovery trend, including growth in such products as smartphones and tablet PCs. In addition, production activities in the industrial machinery market and automotive related markets are expected to recover moderately as well. In the environment and energy market, a continued increase in demand for solar energy systems in Japan is projected. Overall the business environment surrounding Kyocera for fiscal 2014 is expected to improve compared with fiscal 2013.

Kyocera intends to take full advantage of the recovery in the business environment to improve its performance. In the Components Business, Kyocera will work to further increase sales and to improve profitability through reduction of manufacturing costs by commencing production at a new plant in Vietnam from this summer to accommodate expanding component demand for digital consumer equipment and by developing its solar energy business through the comprehensive capabilities of the Kyocera Group. In addition, Kyocera will strive to enhance sales and profit in the Equipment Business by increasing sales to new mobile phone handset customers and by increasing production at a plant for information equipment in Vietnam.

Furthermore, Kyocera intends to integrate various group-wide manufacturing, development and marketing capabilities and resources that have been fostered in both Components and Equipment Businesses. Through these initiatives, Kyocera will endeavor to further expand its business by strengthening the development of new products and increasing market share.

By executing the initiatives above, Kyocera aims to achieve its full-year financial forecasts for fiscal 2014. Specific financial forecasts for fiscal 2014 are as follows.

 

     Results for
the year ended
March 31, 2013
     Forecasts for
the year ending
March 31, 2014
     Increase
(Decrease)
 
     Amount      %      Amount      %      Amount      %  
     (Yen in millions, except per share amounts and exchange rates)  

Net sales

   ¥ 1,280,054         100.0       ¥ 1,400,000         100.0         119,946         9.4   

Profit from operations

     76,926         6.0         140,000         10.0         63,074         82.0   

Income before income taxes

     101,363         7.9         150,000         10.7         48,637         48.0   

Net income attributable to shareholders of Kyocera Corporation

     66,473         5.2         96,000         6.9         29,527         44.4   

Diluted earnings per share attributable to shareholders of
Kyocera Corporation

     362.36                 523.33                           

Average US$ exchange rate

     83                 95                           

Average Euro exchange rate

     107                 123                           

Note:

Forecast of earnings per share is computed based on the diluted average number of shares outstanding during the year ended March 31, 2013.

 

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Table of Contents

Net sales and operating profit forecasts by reporting segment are as follows.

Net Sales by Reporting Segment

 

     Results for
the year ended
March 31, 2013
    Forecasts for
the year ending
March 31, 2014
    Increase
(Decrease)
 
     Amount     %         Amount             %         Amount     %  
     (Yen in millions)  

Fine Ceramic Parts Group

   ¥ 74,852        5.9      ¥ 82,500        5.9      ¥ 7,648        10.2   

Semiconductor Parts Group

     167,241        13.1        192,500        13.8        25,259        15.1   

Applied Ceramic Products Group

     211,439        16.5        227,000        16.2        15,561        7.4   

Electronic Device Group

     271,570        21.2        282,000        20.1        10,430        3.8   
  

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Total Components Business

     725,102        56.7        784,000        56.0        58,898        8.1   

Telecommunications Equipment Group

     177,314        13.8        191,000        13.6        13,686        7.7   

Information Equipment Group

     250,534        19.6        280,000        20.0        29,466        11.8   
  

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Total Equipment Business

     427,848        33.4        471,000        33.6        43,152        10.1   

Others

     159,902        12.5        176,000        12.6        16,098        10.1   

Adjustments and eliminations

     (32,798     (2.6     (31,000     (2.2     1,798          
  

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Net sales

   ¥ 1,280,054        100.0      ¥ 1,400,000        100.0      ¥ 119,946        9.4   
  

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 
Operating Profit (Loss) by Reporting Segment             
     Results for
the year ended
March 31, 2013
    Forecasts for
the year ending
March 31, 2014
    Increase
(Decrease)
 
     Amount     %*         Amount             %*         Amount     %  
     (Yen in millions)  

Fine Ceramic Parts Group

   ¥ 7,614        10.2      ¥ 12,000        14.5      ¥ 4,386        57.6   

Semiconductor Parts Group

     30,379        18.2        36,000        18.7        5,621        18.5   

Applied Ceramic Products Group

     17,924        8.5        24,000        10.6        6,076        33.9   

Electronic Device Group

     (4,014            28,200        10.0        32,214          
  

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Total Components Business

     51,903        7.2        100,200        12.8        48,297        93.1   

Telecommunications Equipment Group

     1,340        0.8        6,400        3.4        5,060        377.6   

Information Equipment Group

     21,750        8.7        28,000        10.0        6,250        28.7   
  

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Total Equipment Business

     23,090        5.4        34,400        7.3        11,310        49.0   

Others

     10,542        6.6        8,600        4.9        (1,942     (18.4
  

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Operating profit

     85,535        6.7        143,200        10.2        57,665        67.4   

Corporate and others

     15,828               6,800               (9,028     (57.0
  

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Income before income taxes

   ¥ 101,363        7.9      ¥ 150,000        10.7      ¥ 48,637        48.0   
  

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 
* % to net sales of each corresponding segment

 

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Note: 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:

 

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

 

(2) Economic, political and legal conditions and unexpected changes therein in countries or areas where we operate;

 

(3) Factors that may affect our exports, including the yen’s appreciation, political and economic instability, customs, and inadequate protection of our intellectual property;

 

(4) Fluctuation in exchange rates that may affect the value of our foreign assets or the prices of our products;

 

(5) Intensified competition in product pricing, technological innovation, R&D activities, product quality and speed of delivery;

 

(6) Manufacturing delays or defects resulting from outsourcing or internal manufacturing processes;

 

(7) Shortages and rising costs of electricity affecting our production and sales activities;

 

(8) The possibility that expansion of production capacity and in-process R&D activities may not produce the desired results;

 

(9) The possibility that companies or assets acquired by us may not produce the returns or benefits, or bring in business opportunities, which we expect;

 

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

 

(11) The possibility of divulgence of our trade secrets and infringement of our intellectual property rights;

 

(12) The possibility that we may receive notice of claims of infringement of other parties’ intellectual property rights and claims for royalty payments;

 

(13) Increases in our environmental liability and in costs and expenses required to observe obligations imposed by environmental laws and regulations in Japan and other countries;

 

(14) Unintentional conflict with laws and regulations, or the possibility that newly enacted laws and regulations may limit our business operations;

 

(15) Events that may negatively impact our markets or supply chain, including terrorist acts, plague, war and similar events;

 

(16) Earthquakes and other related natural disasters affecting our operational facilities and our markets or supply chain, as well as social and economic infrastructure;

 

(17) Exposure to difficulties in collection of trade receivables due to customers’ worsening financial condition;

 

(18) The possibility of recognition of impairment losses on investment securities held by us due to declines in their value;

 

(19) The possibility that we may record impairment losses on long-lived assets, goodwill and intangible assets;

 

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

 

(21) 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.

 

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(2) Analysis of Financial Condition

Consolidated Cash Flows

Cash and cash equivalents at March 31, 2013 increased by ¥32,166 million to ¥305,454 million from ¥273,288 million at March 31, 2012.

i) Cash flows from operating activities

Net cash provided by operating activities for fiscal 2013 was ¥109,489 million which was almost flat as ¥109,065 million for fiscal 2012. This was due mainly that a decrease in net income and cash flow adjustment related to notes and accounts payable were offset by cash flow adjustments related to inventories and other non-current liabilities.

ii) Cash flows from investing activities

Net cash used in investing activities for fiscal 2013 increased by ¥10,091 million to ¥66,142 million from ¥56,051 million for fiscal 2012. This was due mainly that an increase in acquisition and a decrease in withdrawal of time deposits and certificate of deposits exceeded decreases in acquisitions of business and in payments for purchases of held-to-maturity securities.

iii) Cash flows from financing activities

Net cash used in financing activities for fiscal 2013 decreased by ¥19,338 million to ¥31,431 million from ¥50,769 million for fiscal 2012. This was due mainly to decreases in payments of short-term borrowings and long-term debts as well as a decrease in dividend paid.

Consolidated Cash Flows

 

     Years ended March 31,  
     2012     2013  
     (Yen in millions)  

Cash flows from operating activities

   ¥ 109,065      ¥ 109,489   

Cash flows from investing activities

     (56,051     (66,142

Cash flows from financing activities

     (50,769     (31,431

Effect of exchange rate changes on cash and cash equivalents

     (2,428     20,250   

Net increase (decrease) in cash and cash equivalents

     (183     32,166   

Cash and cash equivalents at beginning of year

     273,471        273,288   

Cash and cash equivalents at end of year

   ¥ 273,288      ¥ 305,454   

 

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Table of Contents

(3)  Basic Profit Distribution Policy and Dividends for the Year Ended March 31, 2013 and for the Year Ending March 31, 2014

i) Basic profit distribution policy for the year ended March 31, 2013

Kyocera believes that the best way to increase corporate value and meet shareholders’ expectations is to improve future consolidated performance on an ongoing basis. Kyocera therefore has adopted a principal guideline that dividend amounts within a range based on net income attributable to shareholders of Kyocera Corporation on a consolidated basis, and has set its consolidated dividend policy to maintain a consolidated dividend ratio at a level of approximately 20% to 25% of consolidated net income attributable to shareholders of Kyocera Corporation. In addition, Kyocera determines dividend amounts based on an overall assessment, taking into account various factors including the amount of capital expenditures necessary for medium to long-term corporate growth.

Kyocera also has adopted policies to ensure a sound financial basis, and, for such purpose, it sets aside other general reserves in preparation for the creation of new businesses, cultivation of new markets, development of new technologies and acquisition of outside management resources necessary to achieve sustainable corporate growth.

ii) Dividends for the year ended March 31, 2013

Based on performance during the year ended March 31, 2013 and pursuant to the aforementioned policies, Kyocera will distribute a year-end dividend for the year ended March 31, 2013 of 60 yen per share, the same amount as in the year ended March 31, 2012. When aggregated with the interim dividend in the amount of 60 yen per share, the total annual dividend will be 120 yen per share.

iii) Basic profit distribution policy for the year ending March 31, 2014 (Review of consolidated dividend ratio)

Commencing from the year ended March 31, 2005, Kyocera has decided dividend amounts pursuant to “i) Basic profit distribution policy” set forth above in order to clarify its shareholder-oriented stance and establish a greater linkage between the amount of dividends and its performance.

In order to further enhance the return of profit to shareholders and expand its shareholder base, Kyocera will amend this policy to aim for a consolidated dividend ratio of 30% or more commencing in the year ending March 31, 2014, replacing the current dividend ratio of approximately 20% to 25%. Other basic policies are not amended.

iv) Dividend forecast for the year ending March 31, 2014

Dividend amounts for the year ending March 31, 2014 will be decided pursuant to “iii) Basic profit distribution policy” set forth above. At present, Kyocera forecasts a total annual dividend in the amount of 160 yen per share, based on its financial forecast for the year ending March 31, 2014.

 

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2. MANAGEMENT POLICIES

(1) Basic Policy

Kyocera aims to be respected by society as “The Company” from the perspective of corporate ethics, while maintaining continuous sales growth and high profitability. It has been pursuing this objective since the company’s earliest days through implementation of the “Kyocera Philosophy,” a corporate philosophy placing people’s hearts at its core, and of the “Amoeba Management System,” a management system unique to Kyocera which has been developed for implementing our corporate ethics.

Kyocera’s management policy is to be a high-growth, highly profitable company. To realize this policy, Kyocera aims to increase corporate value by further enhancing performance through strengthening existing businesses and creating new businesses.

(2) Management Target

To be a high-growth, highly profitable company, Kyocera aims to achieve continuous sales growth and a consolidated pre-tax income ratio of double digits or higher.

(3) Medium-term Management Strategy and Management Challenges

The business environment surrounding the Kyocera Group has been harsh overall in the past few years through this fiscal year due primarily to incidents such as financial crises and natural disasters, coupled with the yen’s sharp appreciation. Kyocera expects the business environment to pick up going forward, however, in line with gradual recovery in the global economy and correction of the extreme appreciation of the yen. Although fierce competition is projected to continue in the global market, Kyocera intends to take full advantage of the positive turn in the business environment to drive further growth for the Kyocera Group. To achieve this, Kyocera will continue with initiatives to boost profitability, which includes persisting with efforts to reduce manufacturing costs and raise productivity, while also seeking to launch new products and cultivate new markets. Specifically, Kyocera aims to be a high-growth, highly profitable company by tackling the following challenges.

i) Expand sales in growth markets

Kyocera views the information and communications market and the environment and energy market as future growth markets and will strive to further expand sales in both areas. In addition, Kyocera will leverage the comprehensive capabilities of the Kyocera Group to expand customer and sales networks and launch new products in a timely manner, particularly in these markets, as well as to promote global business development.

In the information and communications market, Kyocera anticipates demand to grow for small, high-performance components, in line with more advanced functionality in smartphones and increased speed in communications networks such as with LTE (Long Term Evolution). Kyocera will work to increase sales in the Components Business by releasing high performance components and expanding business areas. Efforts will also be made to increase sales in the Equipment Business by introducing attractive telecommunications equipment and information equipment that meets customer needs and by vigorously implementing sales promotion measures.

In the environment and energy market, demand for solar energy batteries is expected to continue rising, particularly in Japan. Kyocera will work to expand business in this sector, from the supply of solar cells and modules through the design, construction and maintenance of solar energy systems to power generation projects by making the most of management resources throughout the Kyocera Group. In addition, Kyocera will strive to expand sales of environment and energy related products through marketing of battery storage units and energy management systems which control energy efficiently in combination with solar energy systems.

ii) Enhance management foundations

Kyocera will further integrate a variety of existing products, technologies and sales networks from the Components Business into the Equipment Business as well as accelerate the creation and development of new products that meet customer needs and expand sales by leveraging the comprehensive capabilities of the Kyocera Group.

In terms of manufacturing, Kyocera aims to overcome global competition on the cost front and at the same time to strengthen services in the Asian region, where customer production sites are located by expanding production in Vietnam and India in order to reduce production costs. On the other hand, Kyocera seeks to expand production of high-value-added products and achieve increased profitability in its Japanese production by driving further advancement in production technology. Kyocera will also continuously seek opportunities to strengthen its business foundations by acquiring external management resources.

 

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3. CONSOLIDATED FINANCIAL STATEMENTS

(1) Consolidated Balance Sheets

 

     March 31,      Increase
(Decrease)
 
     2012      2013     
     Amount     %      Amount     %     
     (Yen in millions)  

Current assets:

            

Cash and cash equivalents

   ¥ 273,288         ¥ 305,454           ¥32,166   

Short-term investments in debt and equity securities

     47,175           43,893           (3,282

Other short-term investments

     158,765           179,843           21,078   

Trade notes receivables

     19,349           27,061           7,712   

Trade accounts receivables

     225,578           268,927           43,349   

Less allowances for doubtful accounts and sales returns

     (4,583        (4,705        (122

Inventories

     270,336           296,450           26,114   

Advance payments

     68,685           65,812           (2,873

Deferred income taxes

     45,049           47,349           2,300   

Other current assets

     40,961           38,299           (2,662
  

 

 

   

 

 

    

 

 

   

 

 

    

 

 

 

Total current assets

     1,144,603        57.4         1,268,383        55.6         123,780   
  

 

 

   

 

 

    

 

 

   

 

 

    

 

 

 

Non-current assets:

            

Investments and advances:

            

Long-term investments in debt and equity securities

     372,779           506,490           133,711   

Other long-term investments

     19,098           12,661           (6,437
  

 

 

   

 

 

    

 

 

   

 

 

    

 

 

 

Total investments and advances

     391,877        19.6         519,151        22.7         127,274   
  

 

 

   

 

 

    

 

 

   

 

 

    

 

 

 

Property, plant and equipment:

            

Land

     60,600           61,808           1,208   

Buildings

     301,911           323,014           21,103   

Machinery and equipment

     719,146           788,692           69,546   

Construction in progress

     17,035           13,546           (3,489

Less accumulated depreciation

     (838,155        (918,236        (80,081
  

 

 

   

 

 

    

 

 

   

 

 

    

 

 

 

Total property, plant and equipment

     260,537        13.1         268,824        11.8         8,287   
  

 

 

   

 

 

    

 

 

   

 

 

    

 

 

 

Goodwill

     89,039        4.5         103,425        4.5         14,386   

Intangible assets

     49,653        2.5         54,583        2.4         4,930   

Other assets

     58,394        2.9         68,487        3.0         10,093   
  

 

 

   

 

 

    

 

 

   

 

 

    

 

 

 

Total non-current assets

     849,500        42.6         1,014,470        44.4         164,970   
  

 

 

   

 

 

    

 

 

   

 

 

    

 

 

 

Total assets

   ¥ 1,994,103        100.0       ¥ 2,282,853        100.0       ¥ 288,750   
  

 

 

   

 

 

    

 

 

   

 

 

    

 

 

 

 

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Table of Contents
      March 31,     Increase
(Decrease)
 
     2012     2013    
     Amount     %     Amount     %    
     (Yen in millions)  

Current liabilities:

          

Short-term borrowings

   ¥ 4,062        ¥ 3,135        ¥ (927

Current portion of long-term debt

     10,610          9,817          (793

Trade notes and accounts payable

     102,699          111,249          8,550   

Other notes and accounts payable

     60,993          52,018          (8,975

Accrued payroll and bonus

     49,880          52,420          2,540   

Accrued income taxes

     13,496          22,214          8,718   

Other accrued liabilities

     29,940          39,135          9,195   

Other current liabilities

     29,368          36,642          7,274   
  

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Total current liabilities

     301,048        15.1        326,630        14.3        25,582   
  

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Non-current liabilities:

          

Long-term debt

     21,197          20,855          (342

Accrued pension and severance liabilities

     32,441          36,322          3,881   

Deferred income taxes

     90,179          146,229          56,050   

Other non-current liabilities

     14,997          37,875          22,878   
  

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Total non-current liabilities

     158,814        8.0        241,281        10.6        82,467   
  

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Total liabilities

     459,862        23.1        567,911        24.9        108,049   
  

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Kyocera Corporation shareholders’ equity:

          

Common stock

     115,703          115,703            

Additional paid-in capital

     162,617          163,062          445   

Retained earnings

     1,324,052          1,368,512          44,460   

Accumulated other comprehensive income

     (81,639       50,138          131,777   

Treasury stock, at cost

     (51,228       (51,258       (30
  

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Total Kyocera Corporation shareholders’ equity

     1,469,505        73.7        1,646,157        72.1        176,652   
  

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Noncontrolling interests

     64,736        3.2        68,785        3.0        4,049   
  

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Total equity

     1,534,241        76.9        1,714,942        75.1        180,701   
  

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Total liabilities and equity

   ¥ 1,994,103        100.0      ¥  2,282,853        100.0      ¥  288,750   
  

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 
Note: Accumulated other comprehensive income is as follows:           
      March 31,     Increase
(Decrease)
 
     2012     2013    
     (Yen in millions)  

Net unrealized gains on securities

     ¥ 40,735        ¥ 135,248      ¥ 94,513   

Net unrealized losses on derivative financial instruments

       (70       (68     2   

Pension adjustments

       (12,290       (23,415     (11,125

Foreign currency translation adjustments

       (110,014       (61,627     48,387   

Total

     ¥ (81,639     ¥ 50,138      ¥ 131,777   

 

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Table of Contents

(2) Consolidated Statements of Income

 

    Years ended March 31,     Increase
(Decrease)
 
    2012     2013    
    Amount     %     Amount     %     Amount     %  
    (Yen in millions and shares in thousands, except per share amounts)  

Net sales

  ¥ 1,190,870        100.0      ¥ 1,280,054        100.0      ¥ 89,184        7.5   

Cost of sales

    870,143        73.1        952,350        74.4        82,207        9.4   
 

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Gross profit

    320,727        26.9        327,704        25.6        6,977        2.2   

Selling, general and administrative expenses

    223,052        18.7        250,778        19.6        27,726        12.4   
 

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Profit from operations

    97,675        8.2        76,926        6.0        (20,749     (21.2

Other income (expenses):

           

Interest and dividend income

    13,966        1.2        14,666        1.1        700        5.0   

Interest expense

    (2,042     (0.2     (1,890     (0.2     152          

Foreign currency transaction gains, net

    4,533        0.4        5,136        0.4        603        13.3   

Gains on sales of securities, net

    337        0.0        4,542        0.4        4,205          

Other, net

    424        0.0        1,983        0.2        1,559        367.7   
 

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Total other income (expenses)

    17,218        1.4        24,437        1.9        7,219        41.9   
 

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Income before income taxes

    114,893        9.6        101,363        7.9        (13,530     (11.8

Income taxes

    30,135        2.5        34,012        2.6        3,877        12.9   
 

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Net income

    84,758        7.1        67,351        5.3        (17,407     (20.5

Net income attributable to noncontrolling interests

    (5,401     (0.4     (878     (0.1     4,523          
 

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Net income attributable to shareholders of Kyocera Corporation

  ¥ 79,357        6.7      ¥ 66,473        5.2      ¥ (12,884     (16.2
 

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Earnings per share:

           

Net income attributable to shareholders of Kyocera Corporation:

           

Basic

  ¥ 432.58        ¥ 362.36         

Diluted

  ¥ 432.58        ¥ 362.36         

Average number of shares of common stock outstanding:

           

Basic

    183,451          183,442         

Diluted

    183,451          183,442         

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 of stock outstanding during each period.

 

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Table of Contents

Consolidated Statements of Comprehensive Income

 

     Years ended March 31,     Increase
(Decrease)
 
     2012     2013    
     Amount     Amount     Amount  
     (Yen in millions)  

Net income

   ¥ 84,758      ¥ 67,351      ¥ (17,407
  

 

 

   

 

 

   

 

 

 

Other comprehensive income (loss)—net of taxes

      

Net unrealized gains on securities

     8,520        94,577        86,057   

Net unrealized gains (losses) on derivative financial instruments

     (58     8        66   

Pension adjustments

     (8,941     (11,677     (2,736

Foreign currency translation adjustments

     (6,429     55,468        61,897   
  

 

 

   

 

 

   

 

 

 

Total other comprehensive income (loss)

     (6,908     138,376        145,284   
  

 

 

   

 

 

   

 

 

 

Comprehensive income

     77,850        205,727        127,877   

Comprehensive income (loss) attributable to noncontrolling interests

     (4,320     (7,202     (2,882
  

 

 

   

 

 

   

 

 

 

Comprehensive income attributable to shareholders of Kyocera Corporation

   ¥ 73,530      ¥ 198,525      ¥ 124,995   
  

 

 

   

 

 

   

 

 

 

 

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Table of Contents

(3) Consolidated Statements of Equity

 

     Common
stock
    Additional
paid-in
capital
    Retained
earnings
    Accumulated
other
comprehensive
income
    Treasury
stock
    Kyocera
Corporation
shareholders’
equity
    Noncontrolling
interests
    Total
equity
 
    (Yen in millions and shares in thousands)  

Balance at March 31, 2011 (183,513)

  ¥ 115,703      ¥ 162,336      ¥ 1,268,548      ¥ (75,633   ¥ (50,691   ¥ 1,420,263      ¥ 63,096      ¥ 1,483,359   

Comprehensive income:

               

Net income

        79,357            79,357        5,401        84,758   

Other comprehensive income (loss)

          (5,827       (5,827     (1,081     (6,908
           

 

 

   

 

 

   

 

 

 

Total comprehensive income

              73,530        4,320        77,850   
           

 

 

   

 

 

   

 

 

 

Cash dividends paid to Kyocera Corporation’s shareholders

        (23,853         (23,853       (23,853

Cash dividends paid to noncontrolling interests

                (2,124     (2,124

Purchase of treasury stock (69)

            (540     (540       (540

Reissuance of treasury stock (0)

      0            3        3          3   

Stock option plan of subsidiaries

      103              103        41        144   

Other

      178          (179       (1     (597     (598
 

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Balance at March 31, 2012 (183,444)

    115,703        162,617        1,324,052        (81,639     (51,228     1,469,505        64,736        1,534,241   

Comprehensive income:

               

Net income

        66,473            66,473        878        67,351   

Other comprehensive income (loss)

          132,052          132,052        6,324        138,376   
           

 

 

   

 

 

   

 

 

 

Total comprehensive income

              198,525        7,202        205,727   
           

 

 

   

 

 

   

 

 

 

Cash dividends paid to Kyocera Corporation’s shareholders

        (22,013         (22,013       (22,013

Cash dividends paid to noncontrolling interests

                (2,229     (2,229

Purchase of treasury stock (4)

            (30     (30       (30

Reissuance of treasury stock (0)

      0            0        0          0   

Stock option plan of subsidiaries

      80              80        32        112   

Other

      365          (275       90        (956     (866
 

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Balance at March 31, 2013 (183,440)

  ¥ 115,703      ¥ 163,062      ¥ 1,368,512      ¥ 50,138      ¥ (51,258   ¥ 1,646,157      ¥ 68,785      ¥ 1,714,942   
 

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

 

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Table of Contents

(4) Consolidated Statements of Cash Flows

 

     Years ended March 31,  
     2012     2013  
     (Yen in millions)  

Cash flows from operating activities:

    

Net income

   ¥ 84,758      ¥ 67,351   

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

    

Depreciation and amortization

     73,120        73,597   

Provision for doubtful accounts and loss on bad debts

     370        238   

Write-down of inventories

     11,486        11,507   

Gains on sales of securities, net

     (337     (4,542

Foreign currency adjustments

     (759     (2,003

Change in assets and liabilities:

    

Increase in receivables

     (3,803     (14,876

Increase in inventories

     (39,762     (13,910

Decrease in advance payment

     3,507        2,872   

(Increase) decrease in other current assets

     (1,094     2,035   

Decrease in notes and accounts payable

     (10,092     (35,557

Increase (decrease) in accrued income taxes

     (6,680     8,151   

Increase in other current liabilities

     4,411        9,242   

Increase (decrease) in other non-current liabilities

     (5,287     14,739   

Other, net

     (773     (9,355
  

 

 

   

 

 

 

Net cash provided by operating activities

     109,065        109,489   
  

 

 

   

 

 

 

Cash flows from investing activities:

    

Payments for purchases of available-for-sale securities

     (18,970     (30,052

Payments for purchases of held-to-maturity securities

     (74,369     (49,583

Proceeds from sales and maturities of available-for-sale securities

     29,346        37,593   

Proceeds from maturities of held-to-maturity securities

     74,083        71,167   

Acquisitions of businesses, net of cash acquired

     (35,454     (18,533

Investment in affiliates

     (793     (2,150

Payments for purchases of property, plant and equipment

     (67,765     (58,416

Payments for purchases of intangible assets

     (6,744     (6,553

Acquisition of time deposits and certificate of deposits

     (258,032     (289,694

Withdrawal of time deposits and certificate of deposits

     299,531        276,436   

Other, net

     3,116        3,643   
  

 

 

   

 

 

 

Net cash used in investing activities

     (56,051     (66,142
  

 

 

   

 

 

 

Cash flows from financing activities:

    

Decrease in short-term borrowings, net

     (13,615     (1,465

Proceeds from issuance of long-term debt

     10,141        9,055   

Payments of long-term debt

     (19,166     (12,733

Dividends paid

     (25,874     (24,336

Purchase of common stock in treasury

     (540     (30

Other, net

     (1,715     (1,922
  

 

 

   

 

 

 

Net cash used in financing activities

     (50,769     (31,431
  

 

 

   

 

 

 

Effect of exchange rate changes on cash and cash equivalents

     (2,428     20,250   
  

 

 

   

 

 

 

Net increase (decrease) in cash and cash equivalents

     (183     32,166   

Cash and cash equivalents at beginning of year

     273,471        273,288   
  

 

 

   

 

 

 

Cash and cash equivalents at end of year

   ¥ 273,288      ¥ 305,454   
  

 

 

   

 

 

 

 

18


Table of Contents

(5) Basis of Preparation of Consolidated Financial Statements

i) Scope of consolidation

 

Number of consolidated subsidiaries

     217       Kyocera Document Solutions Inc.
      AVX Corporation
      Kyocera International, Inc. and others

Number of affiliates accounted for by the equity method

     11      

ii) Changes in scope of consolidation and application of the equity method:

 

Consolidated subsidiaries:

Number of increase

     11       MOTEX Inc.
      AVX Tantalum Asia Corporation and others

Number of decrease

     17       Kyocera Chemical (Thailand) Ltd. and others

Affiliates accounted for by the equity method:

Number of increase

     2       Kagoshima Mega Solar Power Corporation and other

Number of decrease

     2      

iii) Summary of significant accounting policies

Kyocera’s consolidated financial statements are prepared in conformity with accounting principles generally accepted in the United States of America.

Recently Adopted Accounting Standards

On April 1, 2012, Kyocera adopted the Financial Accounting Standards Board (FASB)’s Accounting Standards Update (ASU) No. 2011-05, “Presentation of Comprehensive Income” and ASU No. 2011-12, “Deferral of the Effective Date for Amendments to the Presentation of Reclassifications of Items Out of Accumulated Other Comprehensive Income in Accounting Standards Update No. 2011-05.” ASU No. 2011-05 requires entities to present net income and other comprehensive income in either a single continuous statement or in two separate, but consecutive, statements of net income and other comprehensive income. It eliminates the current option to present the components of other comprehensive income as part of the statement of equity. ASU No. 2011-05 also requires reclassification adjustments and the effect of those adjustments on net income and other comprehensive income to be disclosed on the face of financial statements, however, the effective date of this requirement is deferred indefinitely by ASU No. 2011-12. As these accounting standards are a provision for presentation, the adoption of these accounting standards did not have an impact on Kyocera’s consolidated results of operations, financial condition and cash flows.

On April 1, 2012, Kyocera adopted the FASB’s ASU No. 2011-08, “Testing Goodwill for Impairment.” This accounting standard permits an entity to first assess qualitative factors to determine whether it is more likely than not that the fair value of a reporting unit is less than its carrying amount as a basis for determining whether it is necessary to perform the two-step goodwill impairment test. An entity is not required to calculate the fair value of a reporting unit unless the entity determines that it is more likely than not that its fair value is less than its carrying amount. As this accounting standard does not actually change how the impairment would be calculated, the adoption of this accounting standard did not have an impact on Kyocera’s consolidated results of operations, financial condition and cash flows.

 

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Table of Contents

(6) Segment Information

i) Reporting segment:

 

     March 31,     Increase (Decrease)  
     2012     2013    
     Amount     Amount     Amount     %  
     (Yen in millions)  

Assets by reporting segments:

        

Fine Ceramic Parts Group

   ¥ 68,637      ¥ 62,453      ¥ (6,184     (9.0

Semiconductor Parts Group

     112,121        118,524        6,403        5.7   

Applied Ceramic Products Group

     265,093        327,465        62,372        23.5   

Electronic Device Group

     417,105        448,141        31,036        7.4   

Telecommunications Equipment Group

     109,975        119,894        9,919        9.0   

Information Equipment Group

     246,834        263,837        17,003        6.9   

Others

     138,304        158,617        20,313        14.7   
  

 

 

   

 

 

   

 

 

   

 

 

 
     1,358,069        1,498,931        140,862        10.4   

Corporate and investments in and advances to affiliates and unconsolidated subsidiaries

     729,646        892,098        162,452        22.3   

Adjustments and eliminations

     (93,612     (108,176     (14,564       
  

 

 

   

 

 

   

 

 

   

 

 

 

Total assets

   ¥ 1,994,103      ¥ 2,282,853      ¥ 288,750        14.5   
  

 

 

   

 

 

   

 

 

   

 

 

 
     Years ended March 31,     Increase
(Decrease)
 
     2012     2013    
     Amount     Amount     Amount     %  
     (Yen in millions)  

Depreciation and amortization:

        

Fine Ceramic Parts Group

   ¥ 6,767      ¥ 6,403      ¥ (364     (5.4

Semiconductor Parts Group

     11,795        12,850        1,055        8.9   

Applied Ceramic Products Group

     14,843        15,152        309        2.1   

Electronic Device Group

     13,762        15,155        1,393        10.1   

Telecommunications Equipment Group

     8,949        7,514        (1,435     (16.0

Information Equipment Group

     10,131        9,723        (408     (4.0

Others

     4,668        4,734        66        1.4   

Corporate

     2,205        2,066        (139     (6.3
  

 

 

   

 

 

   

 

 

   

 

 

 

Total

   ¥ 73,120      ¥  73,597      ¥ 477       0.7   
  

 

 

   

 

 

   

 

 

   

 

 

 

Capital expenditures:

        

Fine Ceramic Parts Group

   ¥ 11,050      ¥ 3,348      ¥ (7,702     (69.7

Semiconductor Parts Group

     13,279        14,727        1,448        10.9   

Applied Ceramic Products Group

     13,001        7,963        (5,038     (38.8

Electronic Device Group

     14,193        14,071        (122     (0.9

Telecommunications Equipment Group

     4,142        3,069        (1,073     (25.9

Information Equipment Group

     6,199        6,536        337        5.4   

Others

     2,800        2,837        37        1.3   

Corporate

     1,744        4,137        2,393        137.2   
  

 

 

   

 

 

   

 

 

   

 

 

 

Total

   ¥ 66,408      ¥  56,688      ¥ (9,720     (14.6
  

 

 

   

 

 

   

 

 

   

 

 

 

Note:

With regard to Reporting segment information of Net sales and Income before income taxes, please refer to the accompanying “1. ANALYSIS OF BUSINESS RESULTS AND FINANCIAL CONDITION (1) Analysis of Business Results Consolidated Results by Reporting Segment” on page 5.

 

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Table of Contents

ii) Geographic segments (Net sales and Income before income taxes by geographic area):

 

     Years ended March 31,     Increase
(Decrease)
 
     2012     2013    
     Amount     Amount     Amount     %  
     (Yen in millions)  

Net sales:

        

Japan

   ¥ 576,757      ¥ 617,823      ¥ 41,066        7.1   

Intra-group sales and transfer between geographic areas

     380,978        421,438        40,460        10.6   
  

 

 

   

 

 

   

 

 

   

 

 

 
     957,735        1,039,261        81,526        8.5   
  

 

 

   

 

 

   

 

 

   

 

 

 

Asia

     176,636        203,218        26,582        15.0   

Intra-group sales and transfer between geographic areas

     171,386        261,062        89,676        52.3   
  

 

 

   

 

 

   

 

 

   

 

 

 
     348,022        464,280        116,258        33.4   
  

 

 

   

 

 

   

 

 

   

 

 

 

United States of America

     199,256        227,324        28,068        14.1   

Intra-group sales and transfer between geographic areas

     20,550        30,509        9,959        48.5   
  

 

 

   

 

 

   

 

 

   

 

 

 
     219,806        257,833        38,027        17.3   
  

 

 

   

 

 

   

 

 

   

 

 

 

Europe

     214,259        207,448        (6,811     (3.2

Intra-group sales and transfer between geographic areas

     30,134        36,795        6,661        22.1   
  

 

 

   

 

 

   

 

 

   

 

 

 
     244,393        244,243        (150     (0.1
  

 

 

   

 

 

   

 

 

   

 

 

 

Others

     23,962        24,241        279        1.2   

Intra-group sales and transfer between geographic areas

     11,240        12,802        1,562        13.9   
  

 

 

   

 

 

   

 

 

   

 

 

 
     35,202        37,043        1,841        5.2   

Adjustments and eliminations

     (614,288     (762,606     (148,318       
  

 

 

   

 

 

   

 

 

   

 

 

 

Net sales

   ¥ 1,190,870      ¥  1,280,054      ¥ 89,184        7.5   
  

 

 

   

 

 

   

 

 

   

 

 

 

Income before income taxes:

        

Japan

   ¥ 62,407      ¥ 63,450      ¥ 1,043        1.7   

Asia

     17,824        23,344        5,520        31.0   

United States of America

     7,732        (6,465     (14,197       

Europe

     11,572        5,599        (5,973     (51.6

Others

     1,048        1,096        48        4.6   
  

 

 

   

 

 

   

 

 

   

 

 

 
     100,583        87,024        (13,559     (13.5

Corporate gains and Equity in losses of affiliates and unconsolidated subsidiaries

     13,840        17,248        3,408        24.6   

Adjustments and eliminations

     470        (2,909     (3,379       
  

 

 

   

 

 

   

 

 

   

 

 

 

Income before income taxes

   ¥ 114,893      ¥  101,363      ¥ (13,530     (11.8
  

 

 

   

 

 

   

 

 

   

 

 

 

iii) Geographic segments (Net sales by region):

With regard to Information of Geographic segments, please refer to the accompanying “1. ANALYSIS OF BUSINESS RESULTS AND FINANCIAL CONDITION (1) Analysis of Business Results Net Sales by Geographic Area” on page 6.

 

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Table of Contents

(7) Earnings per Share

With regard to earnings per share, please refer to “Consolidated Financial Results of Kyocera Corporation and its Subsidiaries for the Year Ended March 31, 2013” on page 1 and “3. CONSOLIDATED FINANCIAL STATEMENTS (2) Consolidated Statements of Income” on page 15.

(8) Material Subsequent Event

None.

(9) Cautionary Statement for Premise of a Going Concern

None.

(10) AVX Corporation Reached Settlement with the Environmental Protection Agency and Commonwealth of Massachusetts regarding the New Bedford Harbor Superfund Site

On October 10, 2012, AVX Corporation (AVX), a consolidated subsidiary of Kyocera Corporation in the United States, and the Environmental Protection Agency (EPA) announced that they had reached a financial settlement with respect to the EPA’s ongoing clean up of the New Bedford Harbor Superfund site in New Bedford, Massachusetts.

AVX’s involvement in this site arose from the operations of an alleged legal predecessor, Aerovox Corporation, which produced liquid filled capacitors adjacent to the harbor from the late 1930s through the early 1970s. Subsequent owners of the facility are dissolved or in bankruptcy. AVX itself never produced this type of capacitor, nor does it do so today.

Following legal action brought in 1983, AVX reached a settlement agreement with the United States and the Commonwealth of Massachusetts with respect to their claims relating to harbor clean up and alleged natural resource damages in 1992. That agreement was contained in a Consent Decree whereby AVX paid $72 million, including interest, toward the harbor clean up and natural resource damages. That agreement included reopener provisions allowing the EPA to institute new proceedings against AVX, including the right to seek to have AVX perform or pay for additional clean up under certain circumstances.

On April 18, 2012, the EPA issued to AVX a Unilateral Administrative Order directing AVX to perform the remainder of the harbor clean up, invoking the clean up reopeners described above.

After settlement negotiations, including mediation, between the parties, the current proposed agreement with the EPA and the Commonwealth of Massachusetts was reached whereby AVX will pay $366 million, plus interest computed from August 1, 2012, in three installments over a two-year period for use by the EPA and the Commonwealth to complete the clean up of the harbor, and the EPA will withdraw the Unilateral Administrative Order.

The recent proposed agreement is contained in a Supplemental Consent Decree that modifies certain provisions of the 1992 Consent Decree, including elimination of the governments’ right to invoke the clean up reopener provisions in the future. The EPA filed the Supplemental Consent Decree in the United States District Court for the District of Massachusetts on October 10, 2012. A public comment period ended on December 17, 2012 and currently the EPA and the Commonwealth are reviewing the public comments and formulating responses. The settlement requires approval by the United States District Court before becoming final.

AVX recorded a charge of ¥21,300 million ($266 million) with respect to this matter for the year ended March 31, 2013 in addition to a charge of ¥7,900 million ($100 million) recorded in the year ended March 31, 2012. Kyocera included this charge in selling, general and administrative expenses in the consolidated statement of income for the year ended March 31, 2013.

 

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Table of Contents

April 25, 2013

To All Persons Concerned,

 

Name of Company Listed:    Kyocera Corporation
Name of Representative:    Goro Yamaguchi, President and Director
  

(Code number: 6971,

The First Section of the Tokyo Stock Exchange,

The First Section of the Osaka Securities Exchange)

Person for inquiry:   

Shoichi Aoki

Director, Managing Executive Officer and General Manager of

Corporate Financial and Accounting Group

(Tel: +81-75-604-3500)

Notice relating to Review of Dividend Payout Ratio and Dividend Forecast

for the Year ending March 31, 2014

This is to advise you that Kyocera Corporation (the “Company”) resolved at a meeting of its Board of Directors held on April 25, 2013 to amend its target dividend payout ratio with effect from the year ending March 31, 2014, and resolved a dividend forecast per share for the year ending March 31, 2014 pursuant to such new dividend policy as set forth below.

1. Review of dividend payout ratio and reason for revision

Commencing from the year ended March 31, 2005, the Company adopted a dividend policy under which dividend payout ratio was used as an indicator to clarify its shareholder-oriented stance and to establish a greater linkage between dividend amount and performance. The Company adopted a principal to the effect that its total dividend amount would be within the amount of consolidated net income attributable to shareholders and its dividend payout ratio would be approximately 20% to 25% on a consolidated basis. On this basis, the amount of dividends would be determined based on an overall assessment, taking into consideration various factors, including capital expenditures necessary for the further development of the Company from a medium to long-term perspective.

In order to further enhance the return of profit to shareholders and expand its shareholder base, the Company will amend this policy to aim for a dividend payout ratio of 30% or more commencing in the year ending March 31, 2014, replacing the current dividend payout ratio of approximately 20% to 25%.

2. Dividend forecast for the year ending March 31, 2014

 

     Dividends per Share  
     Interim
Dividend
     Year-end
Dividend
    Annual Total
Dividend
 

Dividend forecast for the year ending March 31, 2014

     TBD         TBD      ¥ 160   

Dividend results for the year ended March 31, 2013*

   ¥ 60       ¥

 

60

(plan


  ¥

 

120

(plan


 

* The Company is planning to submit to the Ordinary General Meeting of Shareholders to be held in late June 2013 with regard to the year-end dividend (plan) and the annual total dividend per share (plan) for the year ended March 31, 2013.

 

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Table of Contents

[For reference: Consolidated financial forecasts and results]

(Unit: Yen in millions)

     Net Sales      Profit from
Operations
     Income before
Income Taxes
     Net Income
Attributable to
Shareholders
of Kyocera
Corporation
 

Financial forecasts for the year ending March 31, 2014
(Released on 25 April, 2013)

     1,400,000         140,000         150,000         96,000   

Financial results for the year ended March 31, 2013

     1,280,054         76,926         101,363         66,473   

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:

 

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

 

(2) Economic, political and legal conditions and unexpected changes therein in countries or areas where we operate;

 

(3) Factors that may affect our exports, including a strong yen, political and economic instability, customs, and inadequate protection of our intellectual property;

 

(4) Fluctuation in exchange rates that may affect the value of our foreign assets or the prices of our products;

 

(5) Intensified competition in product pricing, technological innovation, R&D activities, product quality and speed of delivery;

 

(6) Manufacturing delays or defects resulting from outsourcing or internal manufacturing processes;

 

(7) Shortages and rising costs of electricity affecting our production and sales activities;

 

(8) The possibility that expansion of production capacity and in-process R&D activities may not produce the desired results;

 

(9) The possibility that companies or assets acquired by us may not produce the returns or benefits, or bring in business opportunities, which we expect;

 

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

 

(11) The possibility of divulgence of our trade secrets and infringement of our intellectual property rights;

 

(12) The possibility that we may receive notice of claims of infringement of other parties’ intellectual property rights and claims for royalty payments;

 

(13) Increases in our environmental liability and in costs and expenses required to observe obligations imposed by environmental laws and regulations in Japan and other countries;

 

(14) Unintentional conflict with laws and regulations, or the possibility that newly enacted laws and regulations may limit our business operations;

 

(15) Events that may negatively impact our markets or supply chain, including terrorist acts, plague, war and similar events;

 

(16) Earthquakes and other related natural disasters affecting our operational facilities and our markets or supply chain, as well as social and economic infrastructure;

 

(17) Exposure to difficulties in collection of trade receivables due to customers’ worsening financial condition;

 

(18) The possibility of recognition of impairment losses on investment securities held by us due to declines in their value;

 

(19) The possibility that we may record impairment losses on long-lived assets, goodwill and intangible assets;

 

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

 

(21) 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.

 

2


Table of Contents

April 25, 2013

To All Persons Concerned,

 

Name of Company Listed:

   Kyocera Corporation

Name of Representative:

   Goro Yamaguchi, President and Director
  

(Code number: 6971,

The First Section of the Tokyo Stock Exchange,

The First Section of the Osaka Securities Exchange)

Person for inquiry:

  

Shoichi Aoki

Director, Managing Executive Officer and General Manager of

Corporate Financial and Accounting Group

(Tel: +81-75-604-3500)

Notice relating to Partial Amendments to the Articles of Incorporation

This is to advise you that Kyocera Corporation (the “Company”) resolved at a meeting of its Board of Directors held on April 25, 2013 that the Company shall propose to the 59th Ordinary General Meeting of Shareholders, to be held on June 26, 2013, to partially amend the Articles of Incorporation, as set forth below.

1. Reason for Proposal

It is proposed to newly establish Article 28 (Exemption from Liability of Outside Directors) as set forth in the Proposed Amendment below in order to permit the Company to enter into agreements limiting the liability of Outside Directors and thereby enable the Company to obtain the services of superior candidates as Outside Directors of the Company in accordance with the provisions of the Companies Act.

In addition, it is proposed to renumber Articles 28 and following Articles of the current Articles of Incorporation.

All Audit & Supervisory Board Members have consented to the proposal.

 

2. The Proposed Amendments

(The underlined portion shows the proposed amendments.)

 

Present Article

  

Proposed Amendment

<Newly established>

   Article 28. Exemption from Liability of Outside Directors
   The Company may, under the provisions of Article 427, Paragraph 1 of the Companies Act, enter into a contract with any Outside Director, to limit the liability for damages caused by his dereliction of duty, provided, that the maximum amount of liability pursuant to such contract shall not exceed the minimum amount of liability provided for in the Article 425, Paragraph 1 of the Companies Act.

Article 28.

LOGO

Article 39.

  

LOGO

  

(Text of the provisions omitted)

  

Article 29.

         LOGO

Article 40.

   LOGO    (Same as present articles)
              
              

 

3. Schedule

Date of the General Meeting of Shareholders to amend the Articles of Incorporation:

June 26, 2013 (Wednesday)

Effective date of the amendment to the Articles of Incorporation:

June 26, 2013 (Wednesday)

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