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Kyocera 6-K 2013

Documents found in this filing:

  1. 6-K
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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 October 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: October 31, 2013


Table of Contents

Information furnished on this form:

EXHIBITS

 

Exhibit
    Number    

   

1.

  Consolidated Financial Results of Kyocera Corporation and its Subsidiaries for the Six Months Ended September 30, 2013

2.

  Notice relating to Distribution of Interim Dividends and Revision of Amount of Dividends Forecast for the Year Ending March 31, 2014


Table of Contents

 

LOGO

Consolidated Financial Results of Kyocera Corporation and its Subsidiaries

for the Six Months Ended September 30, 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 Six Months Ended September 30, 2013

 

(1) Consolidated results of operations

          (% of change 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             %      

Six Months ended September 30, 2013

    699,663        15.0        58,203        124.8        69,053        93.3        42,930        69.2   

Six Months ended September 30, 2012

    608,431        0.7        25,891        (61.8     35,732        (52.7     25,371        (45.8

(Note) Comprehensive income:

159,209 million yen for the six months ended September 30, 2013, 487.2% of change from previous year.

27,114 million yen for the six months ended September 30, 2012, 17.0% 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
 
     Yen      Yen  

Six Months ended September 30, 2013

     117.02         117.02   

Six Months ended September 30, 2012

     69.15         69.15   

At the meeting of the Board of Directors of Kyocera Corporation held on August 28, 2013, a resolution was made to undertake a stock split and a stock split at the ratio of two for one of all common shares was undertaken on October 1, 2013. “Net income attributable to shareholders of Kyocera Corporation per share–Basic” and “Net income attributable to shareholders of Kyocera Corporation per share–Diluted” are computed under the assumption that the stock split, which took effect on October 1, 2013, was undertaken at the beginning of the year ended March 31, 2013.

(2) Consolidated financial condition

 

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

September 30, 2013

     2,479,047         1,861,819         1,788,714         72.2   

March 31, 2013

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

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, 2013

             60.00                 60.00         120.00   

Year ending March 31, 2014

             80.00                 40.00           

(Note) The above “Year-end” dividend per share of 40.00 yen for the year ending March 31, 2014 is the forecast based on the number of shares after the stock split at the ratio of two for one of all common shares, which was undertaken on October 1, 2013. The forecast of “Annual” dividend for the year ending March 31, 2014 is essentially equal to the original forecast of 160.00 yen, which was previously announced on April 25, 2013, before the stock split.

3. Consolidated Financial Forecasts for the Year Ending March 31, 2014

(% of change 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, 2014

     1,430,000         11.7         140,000         82.0         150,000         48.0         96,000         44.4         261.67   

(Note) Forecast of earnings per share attributable to shareholders of Kyocera Corporation is computed based on the diluted average number of shares outstanding during six months ended September 30, 2013. This average number of shares is calculated based on the number of shares after the stock split which took effect on October 1, 2013.

 

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Table of Contents

(Notes)

(1) Increase or decrease in significant subsidiaries during the six months ended September 30, 2013: None.

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

(3) Changes in accounting policies:

 

  (i) Changes due to adoption of new accounting standards: Please refer to the accompanying “3. OTHER INFORMATION” on page 16.

 

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

(4) Number of shares (common stock):

(i) Number of shares issued:

 

382,618,580 shares at September 30, 2013

   382,618,580 shares at March 31, 2013

(ii) Number of treasury stock:

 

15,746,030 shares at September 30, 2013

   15,738,940 shares at March 31, 2013

(iii) Average number of shares outstanding:

 

366,875,459 shares at September 30, 2013

   366,885,860 shares at September 30, 2012

“Number of shares issued,” “Number of treasury stock” and “Average number of shares outstanding” are described under the assumption that the stock split, which took effect on October 1, 2013, was undertaken at the beginning of the year ended March 31, 2013.

Presentation of Situation of Review Procedure

The consolidated financial information included in this report 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 disclosure of this report.

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 11.

 

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Table of Contents

Accompanying Information

1. BUSINESS RESULTS, FINANCIAL CONDITION AND PROSPECTS

(1) Business Results for the Six Months Ended September 30, 2013

Economic Situation and Business Environment

During the six months ended September 30, 2013 (“the first half”), the Japanese economy registered upward momentum amid expectations regarding the impact of governmental economic policy and financial measures, evident primarily in growth in exports and personal consumption coupled with revitalization of investment activity, particularly public investment. Overseas, the U.S. economy recovered moderately on the back of steady personal consumption and capital investment. Meanwhile, the European economy continued to stagnate, despite showing signs of bottoming out. While the Chinese economy continues to show rapid growth, the pace of this growth has begun to taper off.

In the digital consumer equipment market, which is the principal market for Kyocera Corporation and its consolidated subsidiaries (“Kyocera”), shipment volume was down for conventional mobile phones, PCs and flat-screen TVs compared with the six months ended September 30, 2012 (“the previous first half”) while shipment volume of smartphones and tablet PCs increased. The solar energy market in Japan grew significantly compared with the previous first half due primarily to strong growth in demand in the public and commercial sectors.

Consolidated Financial Results

Consolidated net sales for the first half amounted to ¥699,663 million, an increase of ¥91,232 million, or 15.0%, compared with ¥608,431 million in the previous first half due to increased sales in the Applied Ceramic Products Group, particularly in the solar energy business, the Telecommunications Equipment Group and the Information Equipment Group combined with the effects of depreciation of the yen.

In terms of profit, Kyocera enhanced profitability in all reporting segments of the Components Business, primarily the Applied Ceramic Products Group, as a result of sales growth and improved productivity. Also, profit grew considerably due to the absence of the environmental remediation charge of ¥21.3 billion recorded in the previous first half at AVX Corporation, a U.S.-based consolidated subsidiary (please refer to “(3) Financial Settlement between AVX Corporation, the United States Environmental Protection Agency and Commonwealth of Massachusetts regarding the New Bedford Harbor Superfund Site” on page 8). Profit from operations increased by ¥32,312 million, or 124.8%, to ¥58,203 million, compared with ¥25,891 million in the previous first half. Income before income taxes increased by ¥33,321 million, or 93.3%, to ¥69,053 million, compared with ¥35,732 million in the previous first half, and net income attributable to shareholders of Kyocera Corporation increased by ¥17,559 million, or 69.2%, to ¥42,930 million, compared with ¥25,371 million in the previous first half.

Average exchange rates for the first half were ¥99 to the U.S. dollar, marking depreciation of ¥20 (approximately 25%) from ¥79 in the previous first half, and ¥130 to the Euro, marking depreciation of ¥29 (approximately 29%) from ¥101 in the previous first half. As a result, net sales and income before income taxes were pushed up by approximately ¥79 billion and ¥16 billion, respectively, compared with the previous first half.

 

     Six months ended September 30,      Increase
(Decrease)
 
     2012      2013     
     Amount      %      Amount      %      Amount      %  
     (Yen in millions, except per share amounts and exchange rates)  

Net sales

   ¥ 608,431         100.0       ¥ 699,663         100.0       ¥ 91,232         15.0   

Profit from operations

     25,891         4.3         58,203         8.3         32,312         124.8   

Income before income taxes

     35,732         5.9         69,053         9.9         33,321         93.3   

Net income attributable to shareholders of Kyocera Corporation

     25,371         4.2         42,930         6.1         17,559         69.2   

Diluted earnings per share attributable to shareholders of Kyocera Corporation

     69.15                 117.02                           

Average US$ exchange rate

     79                 99                           

Average Euro exchange rate

     101                 130                           

Note:

At the meeting of the Board of Directors of Kyocera Corporation held on August 28, 2013, a resolution was made to undertake a stock split and a stock split at the ratio of two for one of all common shares was undertaken effective on October 1, 2013. “Diluted earnings per share attributable to shareholders of Kyocera Corporation” is computed under the assumption that the stock split, which took effect on October 1, 2013, was undertaken at the beginning of the year ended March 31, 2013.

 

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Consolidated Results by Reporting Segment

1) Fine Ceramic Parts Group

Sales in this reporting segment remained roughly unchanged from the previous first half due to growth in sales of components for automotive markets offset by a decline in component demand for the digital consumer equipment market, particularly flat-screen TVs and PCs. However, operating profit increased compared with the previous first half due mainly to the effect of a reduction in costs.

2) Semiconductor Parts Group

Sales and operating profit in this reporting segment increased compared with the previous first half due to growth in sales of ceramic packages for smartphones and increased demand for organic packages primarily for high-end servers.

3) Applied Ceramic Products Group

Sales in the solar energy business increased substantially in the public and commercial sectors in Japan, and, in addition, sales in the cutting tool business also increased in automotive related areas. As a result, sales in this reporting segment increased significantly over the previous first half. Operating profit increased compared with the previous first half due to higher sales in the solar energy business and the effects of a reduction in costs.

4) Electronic Device Group

Sales in this reporting segment increased compared with the previous first half due to growth in sales of capacitors and connectors, as well as the effect of the yen’s depreciation. Operating profit increased substantially compared with the previous first half due to the absence of the environmental remediation charge at AVX Corporation recorded in the previous first half as well as to the effects of higher sales and a reduction in costs.

5) Telecommunications Equipment Group

Sales in this reporting segment increased compared with the previous first half due primarily to growth in sales of mobile phones overseas on the back of vigorous new product introductions and an increase in the number of telecommunication carrier adopting Kyocera’s products. However, operating profit decreased compared with the previous first half due to the impact of fierce competition in the Japanese market.

6) Information Equipment Group

Sales volume increased mainly in Europe and Asia due to new product introductions as well as vigorous market cultivation and sales expansion activities. The depreciation of the yen also contributed to the increase in sales in this reporting segment compared with the previous first half. However, operating profit decreased compared with the previous first half due primarily to an increase in sales promotion costs.

7) Others

Sales in this reporting segment increased compared with the previous first half due mainly to an increase in sales at Kyocera Communication Systems Co., Ltd. Operating profit decreased, however, due to an increase in R&D expenses for the development of new technologies and new products.

 

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Table of Contents

Net Sales by Reporting Segment

 

     Six months ended September 30,     Increase
(Decrease)
 
     2012     2013    
     Amount     %     Amount     %     Amount     %  
     (Yen in millions)  

Fine Ceramic Parts Group

   ¥ 38,399        6.3      ¥ 38,187        5.5      ¥ (212     (0.6

Semiconductor Parts Group

     82,483        13.6        87,063        12.4        4,580        5.6   

Applied Ceramic Products Group

     85,424        14.0        127,515        18.2        42,091        49.3   

Electronic Device Group

     140,815        23.1        147,451        21.1        6,636        4.7   
  

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Total Components Business

     347,121        57.0        400,216        57.2        53,095        15.3   

Telecommunications Equipment Group

     84,333        13.9        96,557        13.8        12,224        14.5   

Information Equipment Group

     116,787        19.2        144,525        20.7        27,738        23.8   
  

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Total Equipment Business

     201,120        33.1        241,082        34.5        39,962        19.9   

Others

     74,861        12.3        79,713        11.4        4,852        6.5   

Adjustments and eliminations

     (14,671     (2.4     (21,348     (3.1     (6,677       
  

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Net sales

   ¥ 608,431        100.0      ¥ 699,663        100.0      ¥ 91,232        15.0   
  

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 
Operating Profit (Loss) by Reporting Segment             
     Six months ended September 30,     Increase
(Decrease)
 
     2012     2013    
     Amount     %*     Amount     %*     Amount     %  
     (Yen in millions)  

Fine Ceramic Parts Group

   ¥ 4,535        11.8      ¥ 5,762        15.1      ¥ 1,227        27.1   

Semiconductor Parts Group

     13,862        16.8        16,041        18.4        2,179        15.7   

Applied Ceramic Products Group

     5,288        6.2        14,834        11.6        9,546        180.5   

Electronic Device Group

     (11,879            14,662        9.9        26,541          
  

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Total Components Business

     11,806        3.4        51,299        12.8        39,493        334.5   

Telecommunications Equipment Group

     801        0.9        266        0.3        (535     (66.8

Information Equipment Group

     11,106        9.5        10,449        7.2        (657     (5.9
  

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Total Equipment Business

     11,907        5.9        10,715        4.4        (1,192     (10.0

Others

     4,345        5.8        2,001        2.5        (2,344     (53.9
  

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Operating profit

     28,058        4.6        64,015        9.1        35,957        128.2   

Corporate gains and equity in earnings of affiliates and
an unconsolidated subsidiary

     8,136               5,370               (2,766     (34.0

Adjustments and eliminations

     (462            (332            130          
  

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Income before income taxes

   ¥ 35,732        5.9      ¥ 69,053        9.9      ¥ 33,321        93.3   
  

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 
* % to net sales of each corresponding segment

 

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Table of Contents

Net Sales by Geographic Area

1) Japan

Sales in Japan for the first half increased compared with the previous first half due primarily to an increase in sales in the solar energy business in the public and commercial sectors.

2) Asia

Sales in Asia for the first half increased compared with the previous first half due to an increase in sales in the Electronic Device Group including connectors and capacitors, and in the Information Equipment Group, as well as to the effect of the yen’s depreciation.

3) Europe

Sales in Europe for the first half increased compared with the previous first half due primarily to an increase in sales in the Information Equipment Group affected by growth in sales volume of printers and multifunctional products and the yen’s depreciation.

4) United States of America

Sales in the United States of America for the first half increased compared with the previous first half due to sales growth in the Telecommunications Equipment Group resulting from increased sales volume of mobile phones, and to an increase in sales in the Information Equipment Group affected by growth in sales volume of printers and multifunctional products, as well as to the effect of the yen’s depreciation.

5) Others

Sales in Others for the first half increased compared with the previous first half due to an increase in sales in the Information Equipment Group and the Telecommunications Equipment Group.

 

     Six months ended September 30,      Increase
(Decrease)
 
     2012      2013     
     Amount      %      Amount      %      Amount      %  
     (Yen in millions)  

Japan

   ¥ 274,848         45.2       ¥ 299,430         42.8       ¥ 24,582         8.9   

Asia

     112,735         18.5         139,201         19.9         26,466         23.5   

Europe

     93,226         15.3         114,119         16.3         20,893         22.4   

United States of America

     100,724         16.6         113,870         16.3         13,146         13.1   

Others

     26,898         4.4         33,043         4.7         6,145         22.8   
  

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

 

Net sales

   ¥ 608,431         100.0       ¥ 699,663         100.0       ¥ 91,232         15.0   
  

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

 

 

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Table of Contents

(2) Consolidated Financial Condition

Consolidated Cash Flows

Cash and cash equivalents at September 30, 2013 increased by ¥11,489 million to ¥316,943 million from ¥305,454 million at March 31, 2013.

1) Cash flows from operating activities

Net cash provided by operating activities for the first half increased by ¥14,439 million to ¥74,465 million from ¥60,026 million for the previous first half. This was due mainly to that increases in net income and cash inflow adjustments related to receivables exceeded increases in cash outflow adjustments related to notes and accounts payables and other non-current liabilities.

2) Cash flows from investing activities

Net cash used in investing activities for the first half increased by ¥938 million to ¥53,767 million from ¥52,829 million for the previous first half. This was mainly because increases in payment for purchase of securities exceeded decreases in payments for acquisitions, an increase in withdrawal of time deposits and certificate of deposits and an increase in proceeds from sales and maturities of available-for-sale securities.

3) Cash flows from financing activities

Net cash used in financing activities for the first half increased by ¥2,090 million to ¥14,369 million from ¥12,279 million for the previous first half. This was due mainly to a decrease in proceeds from issuance of short-term debt.

 

     Six months ended September 30,  
     2012     2013  
     (Yen in millions)  

Cash flows from operating activities

   ¥ 60,026      ¥ 74,465   

Cash flows from investing activities

     (52,829     (53,767

Cash flows from financing activities

     (12,279     (14,369

Effect of exchange rate changes on cash and cash equivalents

     (6,689     5,160   

Net increase (decrease) in cash and cash equivalents

     (11,771     11,489   

Cash and cash equivalents at beginning of period

     273,288        305,454   

Cash and cash equivalents at end of period

   ¥ 261,517      ¥ 316,943   

 

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(3)  Financial Settlement between AVX Corporation, the United States 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 United States Environmental Protection Agency and the Commonwealth of Massachusetts (the “Governments”) announced that they had reached a settlement with respect to the Governments’ 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 with the Governments with respect to their claims relating to harbor clean-up and alleged natural resource damages in 1992. That settlement was contained in a Consent Decree whereby AVX paid $72 million, including interest, toward the harbor clean-up and natural resource damages. That Consent Decree included reopener provisions allowing the Governments 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 United States Environmental Protection Agency issued to AVX a Unilateral Administrative Order directing AVX to perform the remainder of the harbor clean-up, pursuant to the reopener provisions referred to the above.

After settlement negotiations, including mediation, between the parties, the current settlement with the Governments was reached whereby AVX will pay $366.25 million, plus interest computed from August 1, 2012, in three installments over a two-year period for use by the Governments to complete the clean-up of the harbor, and the United States Environmental Protection Agency will withdraw the Unilateral Administrative Order.

The agreement is set forth in a Supplemental Consent Decree that modifies certain provisions of the 1992 Consent Decree, including elimination of the Governments’ right to invoke any clean-up reopener provisions in the future. The United States District Court approved the settlement on September 19, 2013. A third party has until November 18, 2013 to file an appeal of entry of the Supplemental Consent Decree.

On October 18, 2013, AVX paid the initial settlement payment of ¥13,068 million ($133.35 million), plus interest into a court-managed registry account. This payment and any other payments made by AVX into the registry account will be disbursed to the Governments upon finalization of any appeal processes.

AVX and Kyocera recorded a charge with respect to this matter of ¥7,900 million ($100 million) for the year ended March 31, 2012, and ¥21,300 million ($266.25 million) for the three months ended June 30, 2012, which were included in selling general and administrative expenses in the consolidated statements of income.

(4)  Acquisition of Shares of NEC Toppan Circuit Solutions, Inc.

Kyocera acquired 100% of the shares of NEC Toppan Circuit Solutions, Inc. (currently Kyocera Circuit Solutions, Inc.), a printed circuit board (“PCB”) manufacturing company, and made it a consolidated subsidiary as of October 1, 2013 in order to further strengthen and expand its organic substrate business. This company supplies high-density PCBs for a wide range of markets, from industrial applications to digital consumer equipment such as smartphones. It also possesses advanced technologies relating to low-profile substrates, enabling development of the world’s lowest profile component-embedded PCBs. Through this consolidation, Kyocera seeks to strengthen its development of new products by pursuing synergies with the technologies it already possessed, and to further expand sales by enhancing its sales network.

 

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(5)  Consolidated Financial Forecasts for the Year Ending March 31, 2014

In the six months ending March 31, 2014 (“the second half”), Kyocera forecasts a continued increase in demand for solar energy systems and expects result from the Applied Ceramic Products Group to exceed its initial projections. In addition, the newly consolidated Kyocera Circuit Solutions, Inc. will begin contributing to Kyocera’s results from October 2013. Taking these factors into account, Kyocera has revised its consolidated sales forecasts announced in April 2013 for the year ending March 31, 2014, as follows. Based on the first half results and the outlook for the business environment in the second half, sales and profit forecasts for each of the consolidated reporting segments have been revised as well.

Kyocera has also revised its forecasts of average exchange rates for the second half from the projections announced in August 2013, from ¥95 to ¥97 against the U.S. dollar and from ¥123 to ¥130 against the Euro. As a result, full-year forecasts of average exchange rates for the year ending March 31, 2014 have been revised to ¥98 to the U.S. dollar and ¥130 to the Euro.

Kyocera will strive to continue securing orders, reducing costs and strengthening its development of new products by leveraging the overall capabilities of the Kyocera Group and will aim to achieve these full-year financial forecasts for the year ending March 31, 2014.

 

     Results for
the year ended
March 31, 2013
     Forecasts for the year ending
March 31, 2014 announced on
     Increase
(Decrease)
to Results
 
        April 25, 2013
(Previous)
     October 31, 2013
(Revised)
    
     Amount      %      Amount      %      Amount      %      %  
     (Yen in millions, except exchange rates)  

Net sales

   ¥ 1,280,054         100.0       ¥ 1,400,000         100.0       ¥ 1,430,000         100.0         11.7   

Profit from operations

     76,926         6.0         140,000         10.0         140,000         9.8         82.0   

Income before income taxes

     101,363         7.9         150,000         10.7         150,000         10.5         48.0   

Net income attributable to shareholders of Kyocera Corporation

     66,473         5.2         96,000         6.9         96,000         6.7         44.4   

Diluted earnings per share attributable to shareholders of Kyocera Corporation

     181.18                 261.67                 261.67                   

Average US$ exchange rate

     83                 96                 98                   

Average Euro exchange rate

     107                 124                 130                   

Notes:

(1) “Diluted earnings per share attributable to shareholders of Kyocera Corporation” announced on October 31, 2013 (Revised) is computed based on the average number of shares outstanding during the six months ended September 30, 2013.
(2) “Diluted earnings per share attributable to shareholders of Kyocera Corporation” is computed under the assumption that the stock split, which took effect on October 1, 2013, was undertaken at the beginning of the year ended March 31, 2013.
(3) “Diluted earnings per share attributable to shareholders of Kyocera Corporation” and “Average exchange rates against the U.S. dollar and the Euro” as set forth in the previous forecast, have been revised on August 1, 2013.

 

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Table of Contents

Net Sales by Reporting Segment

 

     Results for
the year ended
March 31, 2013
    Forecasts for the year ending
March 31, 2014 announced on
    Increase
(Decrease)
to Results
 
       April 25, 2013
(Previous)
    October 31, 2013
(Revised)
   
     Amount     %     Amount     %     Amount     %     %  
     (Yen in millions)  

Fine Ceramic Parts Group

   ¥ 74,852        5.9      ¥ 82,500        5.9      ¥ 82,500        5.8        10.2   

Semiconductor Parts Group

     167,241        13.1        192,500        13.8        199,000        13.9        19.0   

Applied Ceramic Products Group

     211,439        16.5        227,000        16.2        257,000        18.0        21.5   

Electronic Device Group

     271,570        21.2        282,000        20.1        282,000        19.7        3.8   
  

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Total Components Business

     725,102        56.7        784,000        56.0        820,500        57.4        13.2   

Telecommunications Equipment Group

     177,314        13.8        191,000        13.6        193,000        13.5        8.8   

Information Equipment Group

     250,534        19.6        280,000        20.0        290,000        20.3        15.8   
  

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Total Equipment Business

     427,848        33.4        471,000        33.6        483,000        33.8        12.9   

Others

     159,902        12.5        176,000        12.6        173,000        12.1        8.2   

Adjustments and eliminations

     (32,798     (2.6     (31,000     (2.2     (46,500     (3.3       
  

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Net sales

   ¥ 1,280,054        100.0      ¥ 1,400,000        100.0      ¥ 1,430,000        100.0        11.7   
  

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Operating Profit (Loss) by Reporting Segment

 

     Results for
the year ended
March 31, 2013
     Forecasts for the year ending
March 31, 2014 announced on
     Increase
(Decrease)
to Results
 
        April 25, 2013
(Previous)
     October 31, 2013
(Revised)
    
     Amount     %*      Amount      %*      Amount      %*      %  
     (Yen in millions)  

Fine Ceramic Parts Group

   ¥ 7,614        10.2       ¥ 12,000         14.5       ¥ 13,000         15.8         70.7   

Semiconductor Parts Group

     30,379        18.2         36,000         18.7         32,000         16.1         5.3   

Applied Ceramic Products Group

     17,924        8.5         24,000         10.6         29,600         11.5         65.1   

Electronic Device Group

     (4,014             28,200         10.0         28,000         9.9           
  

 

 

   

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

 

Total Components Business

     51,903        7.2         100,200         12.8         102,600         12.5         97.7   

Telecommunications Equipment Group

     1,340        0.8         6,400         3.4         5,000         2.6         273.1   

Information Equipment Group

     21,750        8.7         28,000         10.0         25,000         8.6         14.9   
  

 

 

   

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

 

Total Equipment Business

     23,090        5.4         34,400         7.3         30,000         6.2         29.9   

Others

     10,542        6.6         8,600         4.9         6,400         3.7         (39.3
  

 

 

   

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

 

Operating profit

     85,535        6.7         143,200         10.2         139,000         9.7         62.5   

Corporate and others

     15,828                6,800                 11,000                 (30.5
  

 

 

   

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

 

Income before income taxes

   ¥ 101,363        7.9       ¥ 150,000         10.7       ¥ 150,000         10.5         48.0   
  

 

 

   

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

 
* % to net sales of each corresponding segment

 

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Table of Contents

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. CONSOLIDATED FINANCIAL STATEMENTS

(1) Consolidated Balance Sheets (Unaudited)

 

     March 31, 2013      September 30, 2013      Increase
(Decrease)
 
     Amount     %      Amount     %     
     (Yen in millions)  

Current assets:

            

Cash and cash equivalents

   ¥ 305,454         ¥ 316,943         ¥ 11,489   

Short-term investments in debt securities

     43,893           86,530           42,637   

Other short-term investments

     179,843           157,483           (22,360

Trade notes receivables

     27,061           24,880           (2,181

Trade accounts receivables

     268,927           259,628           (9,299

Less allowances for doubtful accounts and sales returns

     (4,705        (4,791        (86

Inventories

     296,450           321,380           24,930   

Advance payments

     65,812           63,291           (2,521

Deferred income taxes

     47,349           45,571           (1,778

Other current assets

     38,299           40,395           2,096   
  

 

 

   

 

 

    

 

 

   

 

 

    

 

 

 

Total current assets

     1,268,383        55.6         1,311,310        52.9         42,927   
  

 

 

   

 

 

    

 

 

   

 

 

    

 

 

 

Non-current assets:

            

Investments and advances:

            

Long-term investments in debt and equity securities

     506,490           659,020           152,530   

Other long-term investments

     12,661           13,553           892   
  

 

 

   

 

 

    

 

 

   

 

 

    

 

 

 

Total investments and advances

     519,151        22.7         672,573        27.1         153,422   
  

 

 

   

 

 

    

 

 

   

 

 

    

 

 

 

Property, plant and equipment:

            

Land

     61,808           62,691           883   

Buildings

     323,014           333,265           10,251   

Machinery and equipment

     788,692           809,353           20,661   

Construction in progress

     13,546           9,186           (4,360

Less accumulated depreciation

     (918,236        (945,320        (27,084
  

 

 

   

 

 

    

 

 

   

 

 

    

 

 

 

Total property, plant and equipment

     268,824        11.8         269,175        10.9         351   
  

 

 

   

 

 

    

 

 

   

 

 

    

 

 

 

Goodwill

     103,425        4.5         107,298        4.3         3,873   

Intangible assets

     54,583        2.4         55,197        2.2         614   

Other assets

     68,487        3.0         63,494        2.6         (4,993
  

 

 

   

 

 

    

 

 

   

 

 

    

 

 

 

Total non-current assets

     1,014,470        44.4         1,167,737        47.1         153,267   
  

 

 

   

 

 

    

 

 

   

 

 

    

 

 

 

Total assets

   ¥ 2,282,853        100.0       ¥ 2,479,047        100.0       ¥ 196,194   
  

 

 

   

 

 

    

 

 

   

 

 

    

 

 

 

 

12


Table of Contents
     March 31, 2013      September 30, 2013      Increase
(Decrease)
 
     Amount     %      Amount     %     
     (Yen in millions)  

Current liabilities:

            

Short-term borrowings

   ¥ 3,135         ¥ 2,720         ¥ (415

Current portion of long-term debt

     9,817           10,482           665   

Trade notes and accounts payable

     111,249           124,513           13,264   

Other notes and accounts payable

     52,018           44,310           (7,708

Accrued payroll and bonus

     52,420           54,934           2,514   

Accrued income taxes

     22,214           16,870           (5,344

Other accrued liabilities

     39,135           52,871           13,736   

Other current liabilities

     36,642           30,574           (6,068
  

 

 

   

 

 

    

 

 

   

 

 

    

 

 

 

Total current liabilities

     326,630        14.3         337,274        13.6         10,644   
  

 

 

   

 

 

    

 

 

   

 

 

    

 

 

 

Non-current liabilities:

            

Long-term debt

     20,855           21,830           975   

Accrued pension and severance liabilities

     36,322           34,791           (1,531

Deferred income taxes

     146,229           194,866           48,637   

Other non-current liabilities

     37,875           28,467           (9,408
  

 

 

   

 

 

    

 

 

   

 

 

    

 

 

 

Total non-current liabilities

     241,281        10.6         279,954        11.3         38,673   
  

 

 

   

 

 

    

 

 

   

 

 

    

 

 

 

Total liabilities

     567,911        24.9         617,228        24.9         49,317   
  

 

 

   

 

 

    

 

 

   

 

 

    

 

 

 

Kyocera Corporation shareholders’ equity:

            

Common stock

     115,703           115,703             

Additional paid-in capital

     163,062           163,091           29   

Retained earnings

     1,368,512           1,400,436           31,924   

Accumulated other comprehensive income

     50,138           160,779           110,641   

Common stock in treasury, at cost

     (51,258        (51,295        (37
  

 

 

   

 

 

    

 

 

   

 

 

    

 

 

 

Total Kyocera Corporation shareholders’ equity

     1,646,157        72.1         1,788,714        72.2         142,557   
  

 

 

   

 

 

    

 

 

   

 

 

    

 

 

 

Noncontrolling interests

     68,785        3.0         73,105        2.9         4,320   
  

 

 

   

 

 

    

 

 

   

 

 

    

 

 

 

Total equity

     1,714,942        75.1         1,861,819        75.1         146,877   
  

 

 

   

 

 

    

 

 

   

 

 

    

 

 

 

Total liabilities and equity

   ¥ 2,282,853        100.0       ¥ 2,479,047        100.0       ¥ 196,194   
  

 

 

   

 

 

    

 

 

   

 

 

    

 

 

 

Note: Accumulated other comprehensive income is as follows:

 

     March 31, 2013     September 30, 2013     Increase
(Decrease)
 
     (Yen in millions)  

Net unrealized gains on securities

   ¥ 135,248      ¥ 227,396      ¥ 92,148   

Net unrealized losses on derivative financial instruments

     (68     (242 )       (174

Pension adjustments

     (23,415     (23,919 )       (504

Foreign currency translation adjustments

     (61,627     (42,456 )       19,171   
  

 

 

   

 

 

   

 

 

 

Total

   ¥ 50,138      ¥ 160,779      ¥ 110,641   
  

 

 

   

 

 

   

 

 

 

 

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Table of Contents

(2) Consolidated Statements of Income and Comprehensive Income (Unaudited)

Consolidated Statements of Income

 

    Six months ended September 30,     Increase
(Decrease)
 
    2012     2013    
    Amount     %     Amount     %     Amount     %  
    (Yen in millions and shares in thousands, except per share amounts)  

Net sales

  ¥ 608,431        100.0      ¥ 699,663        100.0      ¥ 91,232        15.0   

Cost of sales

    451,798        74.3        518,916        74.2        67,118        14.9   
 

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Gross profit

    156,633        25.7        180,747        25.8        24,114        15.4   

Selling, general and administrative expenses

    130,742        21.4        122,544        17.5        (8,198     (6.3
 

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Profit from operations

    25,891        4.3        58,203        8.3        32,312        124.8   

Other income (expenses) :

           

Interest and dividend income

    7,305        1.2        8,692        1.2        1,387        19.0   

Interest expense

    (861     (0.2     (1,022     (0.1     (161       

Foreign currency transaction gains, net

    2,350        0.4        1,768        0.3        (582     (24.8

Other, net

    1,047        0.2        1,412        0.2        365        34.9   
 

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Total other income (expenses)

    9,841        1.6        10,850        1.6        1,009        10.3   
 

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Income before income taxes

    35,732        5.9        69,053        9.9        33,321        93.3   

Income taxes

    11,877        2.0        23,281        3.4        11,404        96.0   
 

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Net income

    23,855        3.9        45,772        6.5        21,917        91.9   

Net income attributable to noncontrolling interests

    1,516        0.3        (2,842     (0.4     (4,358       
 

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Net income attributable to shareholders of Kyocera Corporation

  ¥ 25,371        4.2      ¥ 42,930        6.1      ¥ 17,559        69.2   
 

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Earnings per share:

           

Net income attributable to shareholders of Kyocera Corporation:

           

Basic

  ¥ 69.15        ¥ 117.02         

Diluted

    69.15          117.02         

Average number of shares of common stock outstanding:

           

Basic

    366,886          366,875         

Diluted

    366,886          366,875         

Notes:

(1) 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 is computed based on the diluted average number of shares of stock outstanding during each period.
(2) “Net income attributable to shareholders of Kyocera Corporation” and “Average number of shares of common stock outstanding” are computed under the assumption that the stock split, which took effect on October 1, 2013, was undertaken at the beginning of the year ended March 31, 2013.

 

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Table of Contents

Consolidated Statements of Comprehensive Income

 

     Six months ended September 30,     Increase
(Decrease)
 
     2012     2013    
     Amount     Amount     Amount  
     (Yen in millions)  

Net income

   ¥ 23,855      ¥ 45,772      ¥ 21,917   
  

 

 

   

 

 

   

 

 

 

Other comprehensive income (loss)—net of taxes

      

Net unrealized gains on securities

     25,009        92,150        67,141   

Net unrealized gains (losses) on derivative financial instruments

     100        (156     (256

Pension adjustments

     (404     (511     (107

Foreign currency translation adjustments

     (21,446     21,954        43,400   
  

 

 

   

 

 

   

 

 

 

Total other comprehensive income (loss)

     3,259        113,437        110,178   
  

 

 

   

 

 

   

 

 

 

Comprehensive income

     27,114        159,209        132,095   

Comprehensive income (loss) attributable to noncontrolling interests

     4,123        (5,625     (9,748
  

 

 

   

 

 

   

 

 

 

Comprehensive income attributable to shareholders of Kyocera Corporation

   ¥ 31,237      ¥ 153,584      ¥ 122,347   
  

 

 

   

 

 

   

 

 

 

(3) Notes to the consolidated financial statements

Cautionary Statement for Premise of a Going Concern

None.

Cautionary Statement for Significant Changes in Equity

None.

 

15


Table of Contents

3. OTHER INFORMATION

Changes in accounting policies

Recently Adopted Accounting Standards

On April 1, 2013, Kyocera adopted the Financial Accounting Standards Board (FASB)’s Accounting Standards Update (ASU) No. 2011-10, “Derecognition of in Substance Real Estate—a Scope Clarification.” This accounting standard requires the reporting entity to apply the guidance in Accounting Standards Codification (ASC) 360-20, “Property, Plant, and Equipment—Real Estate Sales” to determine whether it should derecognize the in substance real estate when a parent ceases to have a controlling financial interest in a subsidiary that is in substance real estate as a result of default on the subsidiary’s nonrecourse debt. The adoption of this accounting standard did not have a material impact on Kyocera’s consolidated results of operations, financial condition and cash flows.

On April 1, 2013, Kyocera adopted the FASB’s ASU No. 2012-02, “Testing Indefinite-Lived Intangible Assets for Impairment.” This accounting standard permits an entity to first assess qualitative factors to determine whether it is more likely than not that the indefinite-lived intangible asset is impaired as a basis for determining whether it is necessary to perform the impairment test. An entity is not required to calculate the fair value of the indefinite-lived intangible asset unless the entity determines that it is more likely than not that the indefinite-lived intangible asset is impaired. As this accounting standard did 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.

On July 17, 2013, Kyocera adopted the FASB’s ASU No. 2013-10, “Inclusion of the Fed Funds Effective Swap Rate (or Overnight Index Swap Rate) as a Benchmark Interest Rate for Hedge Accounting Purposes.” This accounting standard permits an entity to use the Fed Funds Effective Swap Rate (Overnight Index Swap Rate) as a U.S. benchmark interest rate for hedge accounting purposes under Topic 815, in addition to the interest rates on direct Treasury obligations of the U.S. government and the London Interbank Offered Rate. The adoption of this accounting standard did not have a material impact on Kyocera’s consolidated results of operations, financial condition and cash flows.

 

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Table of Contents

October 31, 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)

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 Distribution of Interim Dividends and Revision of Amount of

Dividends Forecast for the Year Ending March 31, 2014

This is to advise you that Kyocera Corporation (the “Company”) has adopted a resolution at a meeting of its Board of Directors held on October 31, 2013 in respect of its payment of interim dividends, as set forth below. The Company has also decided to revise its forecast of the total amount of its dividends for the year ending March 31, 2014.

1. Interim dividends

The Company determined the amounts of its dividends as set forth below, based on its basic profit allocation policy.

 

     Determined Amount    Most Recent  Forecast
(Published on April 25, 2013)
   Interim Dividends in
the  Year ended March 31,
2013

Record Date

   September 30, 2013    September 30, 2013    September 30, 2012

Dividend per Share

   ¥80       ¥60

Total Amount of Dividends

   ¥14,675 million       ¥11,006 million

Effective Date

   December 5, 2013       December 5, 2012

Source of Dividends

   Retained earnings       Retained earnings

2. Dividend Forecast

The Company undertook a stock split at a ratio of 2 for 1 in respect of all shares of its common stock as of October 1, 2013.

The forecast previously published was based on the number of shares of common stock prior to this stock split. The dividend forecast for the year ending March 31, 2014, taking into account the stock split, is as follows. Please note that this revision is made only in association with the stock split, and there is no substantive change in the forecast for the annual total dividends from the forecast previously published.

 

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     Dividends per Share (yen)  
     As of end of
semi-annual period
    As of end of the year
ending March 31, 2014
    Annual total dividends  

Forecast previously published

                 ¥ 160   

Current revision

          ¥ 40 *2        

Dividend resolved to be paid for the year ending March 31, 2014

   ¥ 80 *1               

Dividends for the year ended March 31, 2013

   ¥ 60      ¥ 60      ¥ 120   

*1: Dividend amount per share is based on number of shares prior to stock split.

*2: Dividend amount per share is based on number of shares after stock split.

3. References

1) Dividends paid for the year ended March 31, 2013 and forecast for the year ending March 31, 2014 based on the number of shares prior to the stock split are as follows:

 

     Dividends per Share (yen)  
     As of end of
semi-annual period
    As of end of the year
ending March 31,  2014
     Annual total dividends  

Forecast for the year ending March 31, 2014

   ¥ 80 *3    ¥ 80       ¥ 160   

Dividends for the year ended March 31, 2013

   ¥ 60      ¥ 60       ¥ 120   

*3: As resolved by the Board of Directors of the Company.

2) Financial forecast for the year ending March 31, 2014

 

     Net Sales      Profit from
operations
     Income before
income taxes
     Net income
attributable to
shareholders of
Kyocera
Corporation
 
     (Yen in millions)  

Current forecast (Published on October 31, 2013)

     1,430,000         140,000         150,000         96,000   

Previous forecast (Published on April 25, 2013)

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

Results for the year ended March 31, 2013

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

 

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Forward-Looking Statements

Certain 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 or depreciation, 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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