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Kyocera 6-K 2014

Documents found in this filing:

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

FORM 6-K

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D. C. 20549

Report of Foreign Private Issuer

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

the Securities Exchange Act of 1934

For the month of April 2014

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 28, 2014


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, 2014


Table of Contents

LOGO

Consolidated Financial Results of Kyocera Corporation and its Subsidiaries

for the Year Ended March 31, 2014

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, 2014 (Fiscal 2014)

 

(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 2014

     1,447,369         13.1         120,582         56.8        146,268         44.3        88,756         33.5   

Fiscal 2013

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

(Note) Comprehensive income:

301,582 million yen in the year ended March 31, 2014, 46.6% of change from previous year

205,727 million yen in the year ended March 31, 2013, 164.3% 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 2014

     241.93         241.93         5.0         5.9         8.3   

Fiscal 2013

     181.18         181.18         4.3         4.7         6.0   

(Reference) Equity in losses of affiliates and an unconsolidated subsidiary:

(139) million yen in the year ended March 31, 2014

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

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 had been undertaken at the beginning of the year ended March 31, 2013 in accordance with the standard related to earnings per share.

(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, 2014

     2,636,704         1,987,226         1,910,083         72.5         5,206.48   

March 31, 2013

     2,282,853         1,714,942         1,646,157         72.1         4,486.91   

“Kyocera Corporation shareholders’ equity per share” is computed under the assumption that the stock split, which took effect on October 1, 2013, had been undertaken at the beginning of the year ended March 31, 2013.

(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 2014

     149,141         (101,141     (32,805     335,174   

Fiscal 2013

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

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 2013

           60.00               60.00         120.00        22,013        33.1        1.4   

Fiscal 2014

           80.00               40.00                29,350        33.1        1.7   

Fiscal 2015 (forecast)

                                 80.00          30.3     

(Note) The above “Year-end” dividend per share of 40.00 yen for the year ended March 31, 2014 is the forecast based on the number of shares after the stock split which was undertaken on October 1, 2013. The forecast of “Annual” dividend for the year ended 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. Dividends per share for the year ending March 31, 2015 are forecasted to be 80.00 yen on an annual basis.

 

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Table of Contents

3. Consolidated Financial Forecast for the Year Ending March 31, 2015 (Fiscal 2015)

 

           (% 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 2015

     1,580,000         9.2         135,000         12.0         158,000         8.0         97,000         9.3         264.40   

(Note) Forecast of earnings per share attributable to shareholders of Kyocera Corporation is computed based on the diluted average number of shares outstanding during the year ended March 31, 2014. The average number of shares outstanding is computed under the assumption that the stock split, which took effect on October 1, 2013, had been undertaken at the beginning of the year ended March 31, 2014.

(Notes)

(1) Increase or decrease in significant subsidiaries during the year ended March 31, 2014: 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 20.

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

(3) Number of shares (common stock):

(i) Number of shares issued:

 

377,618,580 shares at March 31, 2014    382,618,580 shares at March 31, 2013

(ii) Number of treasury stock:

 

10,751,865 shares at March 31, 2014    15,738,940 shares at March 31, 2013

(iii) Average number of shares outstanding:

 

366,871,605 shares in the year ended March 31, 2014    366,883,754 shares in the year ended March 31, 2013

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

Kyocera Corporation adopted a resolution to retire treasury stock pursuant to Article 178 of the Companies Act of Japan at its meeting of the Board of Directors held on January 29, 2014, and Kyocera Corporation retired 5,000,000 shares of its treasury stock of which type is common stock on February 12, 2014.

 

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Table of Contents

(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, 2014:

 

(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 2014

    634,913        6.5        27,816        (1.5     77,589        20.1        64,769         23.3   

Fiscal 2013

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

 

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

Fiscal 2014

     176.54           

Fiscal 2013

     143.17           

“Net income per share-Basic” and “Net income per share-Diluted” are computed under the assumption that the stock split, which took effect on October 1, 2013, had been undertaken at the beginning of the year ended March 31, 2013.

(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, 2014

     1,934,854         1,541,203         79.7         4,200.99   

March 31, 2013

     1,648,295         1,344,538         81.6         3,664.79   

“Net assets per share” is computed under the assumption that the stock split, which took effect on October 1, 2013, had been undertaken at the beginning of the year ended March 31, 2013.

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 10.

 

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Accompanying Information

1. ANALYSIS OF BUSINESS RESULTS AND FINANCIAL CONDITION

(1) Analysis of Business Results

[Business Results for the Year Ended March 31, 2014]

Economic Situation and Business Environment

The Japanese economy displayed a recovery trend in the year ended March 31, 2014 (“fiscal 2014”), supported by an increase in public investment and solid growth in personal consumption. Overseas, the U.S. economy expanded on the back of increases in personal consumption, private investment and exports. The Chinese economy also continued to grow steadily. On the other hand, the European economy remained weak despite signs of recovery.

In the digital consumer equipment market, which is the principal market for Kyocera Corporation and its consolidated subsidiaries (“Kyocera Group” or “Kyocera”), shipment volume of conventional mobile phone handsets and PCs declined compared with the previous fiscal year ended March 31, 2013 (“fiscal 2013”). In contrast, shipment volume of smartphones and tablet PCs increased. In the automotive market, sales volume increased steadily, particularly in China and the United States, while the solar energy market in Japan expanded significantly compared with fiscal 2013 due to remarkable growth in demand in the public and commercial sectors.

Consolidated Financial Results

Sales and profit increased in fiscal 2014 compared with fiscal 2013 as Kyocera decisively took advantage of increased demand in key markets and worked to obtain orders and reduce costs by leveraging the collective strength of the Kyocera Group. Consolidated net sales for fiscal 2014 increased by 13.1%, or ¥167,315 million, to ¥1,447,369 million, compared with ¥1,280,054 million for fiscal 2013, on the back of increased sales in all reporting segments. This result was a new record high.

Profit increased significantly compared with fiscal 2013 in both the Components Business and the Equipment Business due to the effect of higher sales and efforts to enhance productivity. In addition, in fiscal 2013 an environmental remediation charge was recorded at AVX Corporation, a U.S.-based consolidated subsidiary (please refer to “(10) Financial Settlement between AVX Corporation, the United States Environmental Protection Agency and Commonwealth of Massachusetts regarding the New Bedford Harbor Superfund Site” on page 24). As a result, profit from operations increased by 56.8%, or ¥43,656 million, to ¥120,582 million, compared with ¥76,926 million for fiscal 2013. Income before income taxes increased by 44.3%, or ¥44,905 million, to ¥146,268 million, compared with ¥101,363 million for fiscal 2013. Net income attributable to shareholders of Kyocera Corporation for fiscal 2014 increased by 33.5%, or ¥22,283 million, to ¥88,756 million, compared with ¥66,473 million for fiscal 2013.

 

     Years ended March 31,      Increase
(Decrease)
 
     2013      2014     
     Amount      %      Amount      %      Amount      %  
     (Yen in millions, except per share amounts and exchange rates)  

Net sales

   ¥ 1,280,054         100.0       ¥ 1,447,369         100.0       ¥ 167,315         13.1   

Profit from operations

     76,926         6.0         120,582         8.3         43,656         56.8   

Income before income taxes

     101,363         7.9         146,268         10.1         44,905         44.3   

Net income attributable to shareholders of Kyocera Corporation

     66,473         5.2         88,756         6.1         22,283         33.5   

Diluted earnings per share attributable to shareholders of Kyocera Corporation

     181.18                 241.93                           

Average US$ exchange rate

     83                 100                           

Average Euro exchange rate

     107                 134                           

Note:

As Kyocera Corporation undertook a stock split at the ratio of two for one of all common shares on October 1, 2013, “Diluted earnings per share attributable to shareholders of Kyocera Corporation” is computed under the assumption that the stock split had been undertaken at the beginning of the year ended March 31, 2013 in accordance with standard related to earnings per share.

 

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Table of Contents

Consolidated Results by Reporting Segment

1) Fine Ceramic Parts Group

Sales in this reporting segment increased compared with fiscal 2013 due to steady growth in demand in the industrial machinery market, including for components for semiconductor processing equipment, and in the automotive related market. Operating profit increased significantly due to an increase in sales of core products and the effect of cost reductions.

2) Semiconductor Parts Group

Sales and operating profit increased in this reporting segment compared with fiscal 2013 due to an increase in demand for ceramic packages and organic packages for smartphones etc. despite a decline in demand for packages used in digital cameras. There was also a contribution to sales from Kyocera Circuit Solutions, Inc., which became a consolidated subsidiary of Kyocera in October 2013 with the aim of strengthening the organic substrate business.

3) Applied Ceramic Products Group

Sales in the solar energy business increased considerably mainly in the public and commercial sectors in Japan. Additionally, sales in the cutting tool business increased mainly in the automotive market. As a result, sales and operating profit in this reporting segment increased significantly compared with fiscal 2013 while profitability improved to record a double-digit operating profit ratio.

4) Electronic Device Group

Sales and operating profit in this reporting segment increased compared with fiscal 2013 due to the effect of increased sales of core products and reduced manufacturing costs despite a decline in sales and profit of certain products as a result of the execution of structural reforms. In particular, sales of capacitors and connectors for automobiles and smartphones increased. In addition, operating profit grew significantly owing to the absence of the environmental remediation charge at AVX Corporation recorded in fiscal 2013.

5) Telecommunications Equipment Group

Sales and operating profit in this reporting segment increased compared with fiscal 2013 due to the vigorous introduction in Japan and overseas of new model smartphones and mobile phone handsets with Kyocera’s unique features, such as the Smart Sonic Receiver that transmits sound through vibration, and to an increase in sales volume in overseas markets through development of major customers.

6) Information Equipment Group

Sales volume of hardware grew as an accompaniment to vigorous new product introductions and activities to expand sales. In addition, sales in China etc. expanded based on efforts to cultivate emerging markets. As a result, sales and operating profit increased significantly in this reporting segment compared with fiscal 2013.

7) Others

Sales in this reporting segment increased compared with fiscal 2013 due primarily to an increase in sales at Kyocera Communication Systems Co., Ltd. Operating profit decreased compared with fiscal 2013, however, due to an increase in R&D expenses to develop new technologies and products.

 

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Table of Contents

Net Sales by Reporting Segment

 

     Years ended March 31,     Increase
(Decrease)
 
     2013     2014    
     Amount     %     Amount     %     Amount     %  
     (Yen in millions)  

Fine Ceramic Parts Group

   ¥ 74,852        5.9      ¥ 80,020        5.5      ¥ 5,168        6.9   

Semiconductor Parts Group

     167,241        13.1        187,891        13.0        20,650        12.3   

Applied Ceramic Products Group

     211,439        16.5        272,795        18.9        61,356        29.0   

Electronic Device Group

     271,570        21.2        284,322        19.6        12,752        4.7   
  

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Total Components Business

     725,102        56.7        825,028        57.0        99,926        13.8   

Telecommunications Equipment Group

     177,314        13.8        186,749        12.9        9,435        5.3   

Information Equipment Group

     250,534        19.6        307,848        21.3        57,314        22.9   
  

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Total Equipment Business

     427,848        33.4        494,597        34.2        66,749        15.6   

Others

     159,902        12.5        173,137        11.9        13,235        8.3   

Adjustments and eliminations

     (32,798     (2.6     (45,393     (3.1     (12,595       
  

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Net sales

   ¥ 1,280,054        100.0      ¥ 1,447,369        100.0      ¥ 167,315        13.1   
  

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Operating Profit (Loss) by Reporting Segment

 

            
     Years ended March 31,     Increase
(Decrease)
 
     2013     2014    
     Amount     %*     Amount     %*     Amount     %  
     (Yen in millions)  

Fine Ceramic Parts Group

   ¥ 7,614        10.2      ¥ 11,836        14.8      ¥ 4,222        55.5   

Semiconductor Parts Group

     30,379        18.2        31,889        17.0        1,510        5.0   

Applied Ceramic Products Group

     17,924        8.5        33,501        12.3        15,577        86.9   

Electronic Device Group

     (4,014            21,160        7.4        25,174          
  

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Total Components Business

     51,903        7.2        98,386        11.9        46,483        89.6   

Telecommunications Equipment Group

     1,340        0.8        1,437        0.8        97        7.2   

Information Equipment Group

     21,750        8.7        28,193        9.2        6,443        29.6   
  

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Total Equipment Business

     23,090        5.4        29,630        6.0        6,540        28.3   

Others

     10,542        6.6        6,276        3.6        (4,266     (40.5
  

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Operating profit

     85,535        6.7        134,292        9.3        48,757        57.0   

Corporate gains and Equity in losses of affiliates and
an unconsolidated subsidiary

     17,248               11,889               (5,359     (31.1

Adjustments and eliminations

     (1,420            87               1,507          
  

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Income before income taxes

   ¥ 101,363        7.9      ¥ 146,268        10.1      ¥ 44,905        44.3   
  

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 
* % 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 2013 due to an increase in the solar energy business primarily in the public and commercial sectors, as well as to the newly contribution of Kyocera Circuit Solutions, Inc., which became a consolidated subsidiary of Kyocera.

ii) Asia

Sales in Asia increased compared with fiscal 2013 due to an increase in sales in the Information Equipment Group and in the Electronic Device Group such as connectors and capacitors, as well as to the effect of the yen’s depreciation.

iii) Europe

Sales in Europe increased compared with fiscal 2013 due to an increase in sales in the Information Equipment Group and in the Electric Device Group and to the effect of the yen’s depreciation.

iv) United States of America

Sales in the United States of America increased slightly compared with fiscal 2013 due mainly to sales growth in the Information Equipment Group despite a decline in sales of the Electric Device Group.

v) Others

Sales in Others increased compared with fiscal 2013 due to an increase in sales in the Information Equipment Group and the Telecommunications Equipment Group.

 

     Years ended March 31,      Increase
(Decrease)
 
     2013      2014     
     Amount      %      Amount      %      Amount      %  
     (Yen in millions)  

Japan

   ¥ 574,202         44.9       ¥ 643,423         44.4       ¥ 69,221         12.1   

Asia

     235,520         18.4         274,512         19.0         38,992         16.6   

Europe

     198,868         15.5         247,700         17.1         48,832         24.6   

United States of America

     215,032         16.8         217,230         15.0         2,198         1.0   

Others

     56,432         4.4         64,504         4.5         8,072         14.3   
  

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

 

Net sales

   ¥ 1,280,054         100.0       ¥ 1,447,369         100.0       ¥ 167,315         13.1   
  

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

 

Implemented Management Measures and Significant Management Decisions made in the year ended March 31, 2014

In October 2013, Kyocera acquired all shares in NEC Toppan Circuit Solutions, Inc. (currently Kyocera Circuit Solutions, Inc.), a printed wiring board (PWB) manufacturing company, in order to further strengthen and expand Kyocera’s organic substrate business and made it a consolidated subsidiary. Kyocera circuit solutions, Inc. has high-end PWB technologies from low-profile PWBs to high-density multilayer PWBs and extensive business domains, and going forward, efforts will be made to create synergies with Kyocera on both technological and sales fronts, with the aim of strengthening new product development and further expansion of sales and profit in this business.

 

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Table of Contents

[Consolidated Forecasts for the Year Ending March 31, 2015]

In the year ending March 31, 2015 (“fiscal 2015”), the Japanese economy is expected to show continued moderate recovery due to growth in public investment despite concerns over the impact of an increase in the consumption tax rate. In overseas economies, the United States is expected to remain robust and the European economy is forecast to rebound as well.

In the information and communications market, production activities for digital consumer equipment are forecast to remain brisk, particularly for smartphones and tablet PCs. In the environment and energy market, demand is expected to increase for solar energy systems in Japan. In automotive related markets, Kyocera projects production activities to expand, especially in Asia. Kyocera will exploit the collective strengths of the Kyocera Group to robustly seize business opportunities in these markets and expand sales.

In addition, Kyocera will work to expand production, mainly of ceramic components, at sites in both Vietnam and India, where operations started in fiscal 2014, in order to meet buoyant demand. At the same time, Kyocera will promote cost reductions to increase profitability.

Kyocera aims to achieve the following full-year financial forecasts for fiscal 2015 by executing these initiatives.

 

     Results for
the year ended
March 31, 2014
     Forecasts for
the year ending
March 31, 2015
     Increase
(Decrease)
 
     Amount      %      Amount      %      Amount      %  
     (Yen in millions, except per share amounts and exchange rates)  

Net sales

   ¥ 1,447,369         100.0       ¥ 1,580,000         100.0         132,631         9.2   

Profit from operations

     120,582         8.3         135,000         8.5         14,418         12.0   

Income before income taxes

     146,268         10.1         158,000         10.0         11,732         8.0   

Net income attributable to shareholders of Kyocera Corporation

     88,756         6.1         97,000         6.1         8,244         9.3   

Diluted earnings per share attributable to shareholders of Kyocera Corporation

     241.93                 264.40                           

Average US$ exchange rate

     100                 100                           

Average Euro exchange rate

     134                 137                           

Notes:

(1) Forecast of earnings per share is computed based on the diluted average number of shares outstanding during the year ended March 31, 2014.

 

(2) As Kyocera Corporation undertook a stock split at the ratio of two for one of all common shares on October 1, 2013, “Diluted earnings per share attributable to shareholders of Kyocera Corporation” is computed under the assumption that the stock split had been undertaken at the beginning of the year ended March 31, 2014 in accordance with the standard related to earnings per share.

 

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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, 2014
    Forecasts for
the year ending
March 31, 2015
    Increase
(Decrease)
 
     Amount     %         Amount             %         Amount     %  
     (Yen in millions)  

Fine Ceramic Parts Group

   ¥ 80,020        5.5      ¥ 91,000        5.7      ¥ 10,980        13.7   

Semiconductor Parts Group

     187,891        13.0        224,000        14.2        36,109        19.2   

Applied Ceramic Products Group

     272,795        18.9        303,000        19.2        30,205        11.1   

Electronic Device Group

     284,322        19.6        291,000        18.4        6,678        2.3   
  

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Total Components Business

     825,028        57.0        909,000        57.5        83,972        10.2   

Telecommunications Equipment Group

     186,749        12.9        205,000        13.0        18,251        9.8   

Information Equipment Group

     307,848        21.3        335,000        21.2        27,152        8.8   
  

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Total Equipment Business

     494,597        34.2        540,000        34.2        45,403        9.2   

Others

     173,137        11.9        178,000        11.3        4,863        2.8   

Adjustments and eliminations

     (45,393     (3.1     (47,000     (3.0     (1,607       
  

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Net sales

   ¥ 1,447,369        100.0      ¥ 1,580,000        100.0      ¥ 132,631        9.2   
  

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 
Operating Profit by Reporting Segment             
     Results for
the year ended
March 31, 2014
    Forecasts for
the year ending
March 31, 2015
    Increase
(Decrease)
 
     Amount     %*         Amount             %*         Amount     %  
     (Yen in millions)  

Fine Ceramic Parts Group

   ¥ 11,836        14.8      ¥ 13,700        15.1      ¥ 1,864        15.7   

Semiconductor Parts Group

     31,889        17.0        33,600        15.0        1,711        5.4   

Applied Ceramic Products Group

     33,501        12.3        30,300        10.0        (3,201     (9.6

Electronic Device Group

     21,160        7.4        28,900        9.9        7,740        36.6   
  

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Total Components Business

     98,386        11.9        106,500        11.7        8,114        8.2   

Telecommunications Equipment Group

     1,437        0.8        8,300        4.0        6,863        477.6   

Information Equipment Group

     28,193        9.2        33,500        10.0        5,307        18.8   
  

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Total Equipment Business

     29,630        6.0        41,800        7.7        12,170        41.1   

Others

     6,276        3.6        6,400        3.6        124        2.0   
  

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Operating profit

     134,292        9.3        154,700        9.8        20,408        15.2   

Corporate and others

     11,976               3,300               (8,676     (72.4
  

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Income before income taxes

   ¥ 146,268        10.1      ¥ 158,000        10.0      ¥ 11,732        8.0   
  

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 
* % 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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Table of Contents

(2) Analysis of Financial Condition

Consolidated Cash Flows

Cash and cash equivalents at March 31, 2014 increased by ¥29,720 million to ¥335,174 million from ¥305,454 million at March 31, 2013.

i) Cash flows from operating activities

Net cash provided by operating activities for fiscal 2014 increased by ¥39,652 million to ¥149,141 million from ¥109,489 million for fiscal 2013. This was due mainly that an increase in net income and cash flow adjustment related to receivables exceeded cash flow adjustments related to other current and non-current liabilities.

ii) Cash flows from investing activities

Net cash used in investing activities for fiscal 2014 increased by ¥34,999 million to ¥101,141 million from ¥66,142 million for fiscal 2013. This was due mainly that increases in cash used in purchases of held-to-maturity securities exceeded decreases in cash used in acquisitions of time deposits and certificate of deposits.

iii) Cash flows from financing activities

Net cash used in financing activities for fiscal 2014 increased by ¥1,374 million to ¥32,805 million from ¥31,431 million for fiscal 2013. This was due mainly to increases in dividend paid, which exceeded decreases in payments of short-term borrowings and increases in proceeds from issuance of long-term debt.

Consolidated Cash Flows

 

     Years ended March 31,  
     2013     2014  
     (Yen in millions)  

Cash flows from operating activities

   ¥ 109,489      ¥ 149,141   

Cash flows from investing activities

     (66,142     (101,141

Cash flows from financing activities

     (31,431     (32,805

Effect of exchange rate changes on cash and cash equivalents

     20,250        14,525   

Net increase in cash and cash equivalents

     32,166        29,720   

Cash and cash equivalents at beginning of year

     273,288        305,454   

Cash and cash equivalents at end of year

   ¥ 305,454      ¥ 335,174   

 

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(3)  Basic Profit Distribution Policy and Dividends for the Year Ended March 31, 2014 and for the Year Ending March 31, 2015

i) Basic profit distribution policy for the year ended March 31, 2014

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 payout ratio of 30% or more 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, 2014

Kyocera Corporation undertook a stock split at the ratio of two for one of all common shares on October 1, 2013. Regarding the dividends for the year ended March 31, 2014, Kyocera distributed the interim dividend of 80 yen per share (before the stock split). Pursuant to the aforementioned policies and performance during the year ended March 31, 2014, Kyocera will distribute a year-end dividend for the year ended March 31, 2014 of 40 yen per share. As a result, an annual dividend March 31, 2014 is actually the same amount (160 yen) as we forecasted at the beginning of the year ended March 31, 2014.

iii) Dividend forecast for the year ending March 31, 2015

Dividend amounts for the year ending March 31, 2015 will be decided pursuant to “i) Basic profit distribution policy for the year ended March 31, 2014” set forth above. At present, Kyocera forecasts a total annual dividend in the amount of 80 yen per share, based on its financial forecast for the year ending March 31, 2015.

 

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Table of Contents

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, as well as the “Amoeba Management System,” a management system unique to Kyocera which has been developed to implement our corporate philosophy.

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,” “creating new businesses” and “thorough cost reduction.”

(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

Kyocera has a wide range of management resources within the Kyocera Group, from materials technologies such as ceramics to components, devices, equipment, systems and services. Kyocera will strive to enhance development by exploiting the collective strengths of the Kyocera Group, which includes bolstering ties between businesses, and by expanding applications for products and technologies accumulated over the years. Other efforts will be made to increase sales by making the best use of sales networks. By doing so, Kyocera aims to be a high-growth, highly profitable company. Specifically, Kyocera will focus on the following challenges.

i) Expand sales in growth markets

Kyocera views the information and communications market and the environment and energy market, as well as automotive related markets and the medical market, as future growth markets and will strive to further increase sales in these markets. Kyocera has established a dedicated sales division to strengthen marketing activities for these core markets and key customers, and is working to expand sales of a wide range of products within the Kyocera Group, from the Components Business to the Equipment Business.

In the information and communications market, Kyocera will work to expand sales by introducing small, high-performance components for smartphones and tablet PCs, as well as new differentiated telecommunications and information equipment incorporating unique own technologies.

In the environment and energy market, Kyocera will strive to increase sales through the integrated development of its solar energy systems business. In concrete terms, efforts will be made to boost integrated system sales, such as with the release of an energy management system that efficiently controls energy in conjunction with a solar module and an electricity storage unit. Furthermore, Kyocera will develop business in a variety of forms across the design, construction and maintenance of solar energy systems, as well as power generation business.

In automotive related markets, Kyocera will seek to expand sales by strategically linking component and device businesses within the Kyocera Group and working to cultivate customers and develop new products to meet market trends, namely the increased use of electrical systems and equipment in automobiles, enhanced safety and environmental responsiveness.

In the medical market, Kyocera will pursue synergies in technologies and products toward the development of products in new domains in addition to its existing medical materials business, and at the same time will work to create business opportunities by cultivating new markets.

ii) Enhance management foundations

Kyocera will work to expand production in Vietnam and India to overcome global competition and to strengthen service in the Asia region, which holds major production sites of customers. In Japan, Kyocera aims to expand production of high-value-added products and secure high profitability through the further enhancement of production technology in both the Components Business and Equipment Business. Kyocera will also continue seeking opportunities for the acquisition of external management resources in order to strengthen business foundations in existing businesses.

 

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Table of Contents

3. CONSOLIDATED FINANCIAL STATEMENTS

(1) Consolidated Balance Sheets

 

     March 31,      Increase
(Decrease)
 
     2013      2014     
     Amount     %      Amount     %     
     (Yen in millions)  

Current assets:

            

Cash and cash equivalents

   ¥ 305,454         ¥ 335,174           ¥29,720   

Short-term investments in debt and equity securities

     43,893           115,900           72,007   

Other short-term investments

     179,843           160,331           (19,512

Trade notes receivables

     27,061           22,054           (5,007

Trade accounts receivables

     268,927           257,850           (11,077

Less allowances for doubtful accounts and sales returns

     (4,705        (5,062        (357

Inventories

     296,450           335,802           39,352   

Advance payments

     65,812           59,192           (6,620

Deferred income taxes

     47,349           41,499           (5,850

Other current assets

     38,299           44,695           6,396   
  

 

 

   

 

 

    

 

 

   

 

 

    

 

 

 

Total current assets

     1,268,383        55.6         1,367,435        51.9         99,052   
  

 

 

   

 

 

    

 

 

   

 

 

    

 

 

 

Non-current assets:

            

Investments and advances:

            

Long-term investments in debt and equity securities

     506,490           738,212           231,722   

Other long-term investments

     12,661           14,847           2,186   
  

 

 

   

 

 

    

 

 

   

 

 

    

 

 

 

Total investments and advances

     519,151        22.7         753,059        28.6         233,908   
  

 

 

   

 

 

    

 

 

   

 

 

    

 

 

 

Property, plant and equipment:

            

Land

     61,808           63,268           1,460   

Buildings

     323,014           344,167           21,153   

Machinery and equipment

     788,692           826,881           38,189   

Construction in progress

     13,546           11,821           (1,725

Less accumulated depreciation

     (918,236        (975,580        (57,344
  

 

 

   

 

 

    

 

 

   

 

 

    

 

 

 

Total property, plant and equipment

     268,824        11.8         270,557        10.3         1,733   
  

 

 

   

 

 

    

 

 

   

 

 

    

 

 

 

Goodwill

     103,425        4.5         116,632        4.4         13,207   

Intangible assets

     54,583        2.4         59,326        2.2         4,743   

Other assets

     68,487        3.0         69,695        2.6         1,208   
  

 

 

   

 

 

    

 

 

   

 

 

    

 

 

 

Total non-current assets

     1,014,470        44.4         1,269,269        48.1         254,799   
  

 

 

   

 

 

    

 

 

   

 

 

    

 

 

 

Total assets

   ¥ 2,282,853        100.0       ¥ 2,636,704        100.0       ¥ 353,851   
  

 

 

   

 

 

    

 

 

   

 

 

    

 

 

 

 

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Table of Contents
      March 31,     Increase
(Decrease)
 
     2013     2014    
     Amount     %     Amount     %    
     (Yen in millions)  

Current liabilities:

          

Short-term borrowings

   ¥ 3,135        ¥ 4,064        ¥ 929   

Current portion of long-term debt

     9,817          12,360          2,543   

Trade notes and accounts payable

     111,249          122,424          11,175   

Other notes and accounts payable

     52,018          48,224          (3,794

Accrued payroll and bonus

     52,420          56,068          3,648   

Accrued income taxes

     22,214          23,353          1,139   

Other accrued liabilities

     39,135          31,347          (7,788

Other current liabilities

     36,642          29,611          (7,031
  

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Total current liabilities

     326,630        14.3        327,451        12.4        821   
  

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Non-current liabilities:

          

Long-term debt

     20,855          19,466          (1,389

Accrued pension and severance liabilities

     36,322          36,812          490   

Deferred income taxes

     146,229          235,954          89,725   

Other non-current liabilities

     37,875          29,795          (8,080
  

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Total non-current liabilities

     241,281        10.6        322,027        12.2        80,746   
  

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Total liabilities

     567,911        24.9        649,478        24.6        81,567   
  

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Kyocera Corporation shareholders’ equity:

          

Common stock

     115,703          115,703            

Additional paid-in capital

     163,062          162,666          (396

Retained earnings

     1,368,512          1,415,784          47,272   

Accumulated other comprehensive income

     50,138          250,963          200,825   

Treasury stock, at cost

     (51,258       (35,033       16,225   
  

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Total Kyocera Corporation shareholders’ equity

     1,646,157        72.1        1,910,083        72.5        263,926   
  

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Noncontrolling interests

     68,785        3.0        77,143        2.9        8,358   
  

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Total equity

     1,714,942        75.1        1,987,226        75.4        272,284   
  

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Total liabilities and equity

   ¥ 2,282,853        100.0      ¥ 2,636,704        100.0      ¥ 353,851   
  

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 
Note: Accumulated other comprehensive income is as follows:           
      March 31,     Increase
(Decrease)
 
     2013     2014    
     (Yen in millions)  

Net unrealized gains on securities

     ¥ 135,248        ¥ 293,783      ¥ 158,535   

Net unrealized losses on derivative financial instruments

       (68       (260     (192

Pension adjustments

       (23,415       (21,101     2,314   

Foreign currency translation adjustments

       (61,627       (21,459     40,168   

Total

     ¥ 50,138        ¥ 250,963      ¥ 200,825   

 

15


Table of Contents

(2) Consolidated Statements of Income

 

    Years ended March 31,     Increase
(Decrease)
 
    2013     2014    
    Amount     %     Amount     %     Amount     %  
    (Yen in millions and shares in thousands, except per share amounts)  

Net sales

  ¥ 1,280,054        100.0      ¥ 1,447,369        100.0      ¥ 167,315        13.1   

Cost of sales

    952,350        74.4        1,068,465        73.8        116,115        12.2   
 

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Gross profit

    327,704        25.6        378,904        26.2        51,200        15.6   

Selling, general and administrative expenses

    250,778        19.6        258,322        17.9        7,544        3.0   
 

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Profit from operations

    76,926        6.0        120,582        8.3        43,656        56.8   

Other income (expenses):

           

Interest and dividend income

    14,666        1.1        18,172        1.3        3,506        23.9   

Interest expense

    (1,890     (0.2     (1,945     (0.1     (55       

Foreign currency transaction gains, net

    5,136        0.4        5,108        0.3        (28     (0.5

Gains on sales of securities, net

    4,542        0.4        2,875        0.2        (1,667     (36.7

Other, net

    1,983        0.2        1,476        0.1        (507     (25.6
 

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Total other income (expenses)

    24,437        1.9        25,686        1.8        1,249        5.1   
 

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Income before income taxes

    101,363        7.9        146,268        10.1        44,905        44.3   

Income taxes

    34,012        2.6        51,254        3.5        17,242        50.7   
 

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Net income

    67,351        5.3        95,014        6.6        27,663        41.1   

Net income attributable to noncontrolling interests

    (878     (0.1     (6,258     (0.5     (5,380       
 

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Net income attributable to shareholders of Kyocera Corporation

  ¥ 66,473        5.2      ¥ 88,756        6.1      ¥ 22,283        33.5   
 

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Earnings per share:

           

Net income attributable to shareholders of Kyocera Corporation:

           

Basic

  ¥ 181.18        ¥ 241.93         

Diluted

  ¥ 181.18        ¥ 241.93         

Average number of shares of common stock outstanding:

           

Basic

    366,884          366,872         

Diluted

    366,884          366,872         

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, had been undertaken at the beginning of the year ended March 31, 2013.

 

16


Table of Contents

Consolidated Statements of Comprehensive Income

 

     Years ended March 31,     Increase
(Decrease)
 
     2013     2014    
     Amount     Amount     Amount  
     (Yen in millions)  

Net income

   ¥ 67,351      ¥ 95,014      ¥ 27,663   
  

 

 

   

 

 

   

 

 

 

Other comprehensive income (loss)—net of taxes

      

Net unrealized gains on securities

     94,577        158,510        63,933   

Net unrealized gains (losses) on derivative financial instruments

     8        (167     (175

Pension adjustments

     (11,677     2,380        14,057   

Foreign currency translation adjustments

     55,468        45,845        (9,623
  

 

 

   

 

 

   

 

 

 

Total other comprehensive income (loss)

     138,376        206,568        68,192   
  

 

 

   

 

 

   

 

 

 

Comprehensive income

     205,727        301,582        95,855   

Comprehensive income (loss) attributable to noncontrolling interests

     (7,202     (11,946     (4,744
  

 

 

   

 

 

   

 

 

 

Comprehensive income attributable to shareholders of Kyocera Corporation

   ¥ 198,525      ¥ 289,636      ¥ 91,111   
  

 

 

   

 

 

   

 

 

 

 

17


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, 2012 (366,888)

  ¥ 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 (8)

            (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 (366,880)

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

Comprehensive income:

               

Net income

        88,756            88,756        6,258        95,014   

Other comprehensive income (loss)

          200,880          200,880        5,688        206,568   
           

 

 

   

 

 

   

 

 

 

Total comprehensive income

              289,636        11,946        301,582   
           

 

 

   

 

 

   

 

 

 

Cash dividends paid to Kyocera Corporation’s shareholders

        (25,681         (25,681       (25,681

Cash dividends paid to noncontrolling interests

                (3,193     (3,193

Purchase of treasury stock (14)

            (68     (68       (68

Reissuance of treasury stock (1)

      1            2        3          3   

Retirement of treasury stock

      (488     (15,803       16,291                   

Stock option plan of subsidiaries

      99              99        38        137   

Other

      (8       (55       (63     (433     (496
 

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Balance at March 31, 2014 (366,867)

  ¥ 115,703      ¥ 162,666      ¥ 1,415,784      ¥ 250,963      ¥ (35,033   ¥ 1,910,083      ¥ 77,143      ¥ 1,987,226   
 

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

(Note) Numbers of common stock are computed under the assumption that the stock split, which took effect on October 1, 2013, had been undertaken at March 31, 2012.

 

18


Table of Contents

(4) Consolidated Statements of Cash Flows

 

     Years ended March 31,  
     2013     2014  
     (Yen in millions)  

Cash flows from operating activities:

    

Net income

   ¥ 67,351      ¥ 95,014   

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

    

Depreciation and amortization

     73,597        76,151   

Provision for doubtful accounts and loss on bad debts

     238        252   

Write-down of inventories

     11,507        7,256   

Deferred income taxes

     (5,643     10,354   

Gains on sales of securities, net

     (4,542     (2,875

Foreign currency adjustments

     (2,003     (1,975

Change in assets and liabilities:

    

(Increase) decrease in receivables

     (14,876     47,306   

Increase in inventories

     (13,910     (25,160

Decrease in advance payments

     2,872        6,718   

Decrease in other current assets

     2,035        943   

Decrease in notes and accounts payable

     (35,557     (34,589

Increase in accrued income taxes

     8,151        490   

Increase (decrease) in other current liabilities

     9,242        (26,825

Increase (decrease) in other non-current liabilities

     14,739        (3,628

Other, net

     (3,712     (291
  

 

 

   

 

 

 

Net cash provided by operating activities

     109,489        149,141   
  

 

 

   

 

 

 

Cash flows from investing activities:

    

Payments for purchases of available-for-sale securities

     (30,052     (38,530

Payments for purchases of held-to-maturity securities

     (49,583     (131,016

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

     37,593        43,432   

Proceeds from maturities of held-to-maturity securities

     71,167        73,623   

Acquisitions of businesses, net of cash acquired

     (18,533     (15,975

Investment in affiliates

     (2,150     (871

Payments for purchases of property, plant and equipment

     (58,416     (50,890

Payments for purchases of intangible assets

     (6,553     (6,722

Acquisition of time deposits and certificate of deposits

     (289,694     (260,241

Withdrawal of time deposits and certificate of deposits

     276,436        284,829   

Other, net

     3,643        1,220   
  

 

 

   

 

 

 

Net cash used in investing activities

     (66,142     (101,141
  

 

 

   

 

 

 

Cash flows from financing activities:

    

Decrease in short-term borrowings, net

     (1,465     (213

Proceeds from issuance of long-term debt

     9,055        10,671   

Payments of long-term debt

     (12,733     (13,247

Dividends paid

     (24,336     (28,624

Other, net

     (1,952     (1,392
  

 

 

   

 

 

 

Net cash used in financing activities

     (31,431     (32,805
  

 

 

   

 

 

 

Effect of exchange rate changes on cash and cash equivalents

     20,250        14,525   
  

 

 

   

 

 

 

Net increase in cash and cash equivalents

     32,166        29,720   

Cash and cash equivalents at beginning of year

     273,288        305,454   
  

 

 

   

 

 

 

Cash and cash equivalents at end of year

   ¥ 305,454      ¥ 335,174   
  

 

 

   

 

 

 

 

19


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

     12      

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

 

Consolidated subsidiaries:

Number of increase

     12       Kyocera Circuit Solutions, Inc. and others

Number of decrease

     12      

Affiliates accounted for by the equity method:

Number of increase

     2      

Number of decrease

     1      

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, 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 a material 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 ASC 815, “Derivatives and Hedging,” 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.

 

20


Table of Contents

(6) Segment Information

i) Reporting segment:

 

     March 31,     Increase (Decrease)  
     2013     2014    
     Amount     Amount     Amount     %  
     (Yen in millions)  

Assets by reporting segments:

        

Fine Ceramic Parts Group

   ¥ 62,453      ¥ 69,165      ¥ 6,712        10.7   

Semiconductor Parts Group

     118,524        169,330        50,806        42.9   

Applied Ceramic Products Group

     327,465        317,750        (9,715     (3.0

Electronic Device Group

     448,141        451,856        3,715        0.8   

Telecommunications Equipment Group

     119,894        105,597        (14,297     (11.9

Information Equipment Group

     263,837        290,378        26,541        10.1   

Others

     158,617        171,652        13,035        8.2   
  

 

 

   

 

 

   

 

 

   

 

 

 
     1,498,931        1,575,728        76,797        5.1   

Corporate and investments in and advances to affiliates and
an unconsolidated subsidiary

     892,098        1,182,912        290,814        32.6   

Adjustments and eliminations

     (108,176     (121,936     (13,760       
  

 

 

   

 

 

   

 

 

   

 

 

 

Total assets

   ¥ 2,282,853      ¥ 2,636,704      ¥ 353,851        15.5   
  

 

 

   

 

 

   

 

 

   

 

 

 

 

21


Table of Contents
     Years ended March 31,      Increase
(Decrease)
 
     2013      2014     
     Amount      Amount      Amount     %  
     (Yen in millions)  

Depreciation and amortization:

          

Fine Ceramic Parts Group

   ¥ 6,403       ¥ 5,014       ¥ (1,389)        (21.7

Semiconductor Parts Group

     12,850         15,765         2,915        22.7   

Applied Ceramic Products Group

     15,152         13,558         (1,594     (10.5

Electronic Device Group

     15,155         17,585         2,430        16.0   

Telecommunications Equipment Group

     7,514         5,091         (2,423     (32.2

Information Equipment Group

     9,723         10,963         1,240        12.8   

Others

     4,734         5,965         1,231        26.0   

Corporate

     2,066         2,210         144        7.0   
  

 

 

    

 

 

    

 

 

   

 

 

 

Total

   ¥ 73,597       ¥ 76,151       ¥ 2,554        3.5   
  

 

 

    

 

 

    

 

 

   

 

 

 

Capital expenditures:

          

Fine Ceramic Parts Group

   ¥ 3,348       ¥ 3,195       ¥ (153     (4.6

Semiconductor Parts Group

     14,727         16,566         1,839        12.5   

Applied Ceramic Products Group

     7,963         8,546         583        7.3   

Electronic Device Group

     14,071         12,048         (2,023     (14.4

Telecommunications Equipment Group

     3,069         2,997         (72     (2.3

Information Equipment Group

     6,536         5,550         (986     (15.1

Others

     2,837         3,437         600        21.1   

Corporate

     4,137         4,272         135        3.3   
  

 

 

    

 

 

    

 

 

   

 

 

 

Total

   ¥ 56,688       ¥ 56,611       ¥ (77     (0.1
  

 

 

    

 

 

    

 

 

   

 

 

 

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.

 

22


Table of Contents

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

 

     Years ended March 31,     Increase
(Decrease)
 
     2013     2014    
     Amount     Amount     Amount     %  
     (Yen in millions)  

Net sales:

        

Japan

   ¥ 617,823      ¥ 671,052      ¥ 53,229        8.6   

Intra-group sales and transfer between geographic areas

     421,438        471,547        50,109        11.9   
  

 

 

   

 

 

   

 

 

   

 

 

 
     1,039,261        1,142,599        103,338        9.9   
  

 

 

   

 

 

   

 

 

   

 

 

 

Asia

     203,218        231,075        27,857        13.7   

Intra-group sales and transfer between geographic areas

     261,062        281,750        20,688        7.9   
  

 

 

   

 

 

   

 

 

   

 

 

 
     464,280        512,825        48,545        10.5   
  

 

 

   

 

 

   

 

 

   

 

 

 

Europe

     207,448        255,637        48,189        23.2   

Intra-group sales and transfer between geographic areas

     36,795        48,204        11,409        31.0   
  

 

 

   

 

 

   

 

 

   

 

 

 
     244,243        303,841        59,598        24.4   
  

 

 

   

 

 

   

 

 

   

 

 

 

United States of America

     227,324        262,510        35,186        15.5   

Intra-group sales and transfer between geographic areas

     30,509        40,758        10,249        33.6   
  

 

 

   

 

 

   

 

 

   

 

 

 
     257,833        303,268        45,435        17.6   
  

 

 

   

 

 

   

 

 

   

 

 

 

Others

     24,241        27,095        2,854        11.8   

Intra-group sales and transfer between geographic areas

     12,802        15,853        3,051        23.8   
  

 

 

   

 

 

   

 

 

   

 

 

 
     37,043        42,948        5,905        15.9   

Adjustments and eliminations

     (762,606     (858,112     (95,506       
  

 

 

   

 

 

   

 

 

   

 

 

 

Net sales

   ¥ 1,280,054      ¥ 1,447,369      ¥ 167,315        13.1   
  

 

 

   

 

 

   

 

 

   

 

 

 

Income before income taxes:

        

Japan

   ¥ 63,450      ¥ 81,858      ¥ 18,408        29.0   

Asia

     23,344        23,371        27        0.1   

Europe

     5,599        11,862        6,263        111.9   

United States of America

     (6,465     17,428        23,893          

Others

     1,096        1,286        190        17.3   
  

 

 

   

 

 

   

 

 

   

 

 

 
     87,024        135,805        48,781        56.1   

Corporate gains and Equity in losses of affiliates and
an unconsolidated subsidiary

     17,248        11,889        (5,359     (31.1

Adjustments and eliminations

     (2,909     (1,426     1,483          
  

 

 

   

 

 

   

 

 

   

 

 

 

Income before income taxes

   ¥ 101,363      ¥ 146,268      ¥ 44,905        44.3   
  

 

 

   

 

 

   

 

 

   

 

 

 

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 7.

 

23


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, 2014” on page 1 and “3. CONSOLIDATED FINANCIAL STATEMENTS (2) Consolidated Statements of Income” on page 16.

(8) Material Subsequent Event

None.

(9) Cautionary Statement for Premise of a Going Concern

None.

(10) 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, on October 10, 2012, the settlement with the Governments was reached whereby AVX was obligated to 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. 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. In addition, the United States Environmental Protection Agency was obligated to withdraw the Unilateral Administrative Order.

On September 19, 2013, The United States District Court approved the settlement. According to the settlement, AVX paid the initial settlement installment of $133.35 million, plus interest, on October 18, 2013, and on November 26, 2013, the Unilateral Administrative Order was withdrawn by the United States Environmental Protection Agency. In accordance with the Supplemental Consent Decree, AVX has the option to prepay any portion of the remaining settlement balance at any time prior to the due dates of the remaining installments.

On March 26, 2014, AVX prepaid $110.82 million, plus interest on the entire remaining settlement balance, and is obligated to pay the remaining settlement balance of $122.08 million, plus interest, on or before September 21, 2015.

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 year ended March 31, 2013, which were included in selling general and administrative expenses in the consolidated statements of income.

 

24

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