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Kyocera 6-K 2016

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 2016

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 27, 2016


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, 2016


Table of Contents

LOGO

Consolidated Financial Results of Kyocera Corporation and its Subsidiaries

for the Year Ended March 31, 2016

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, 2016 (Fiscal 2016)

 

(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 2016

     1,479,627         (3.1     92,656         (0.8     145,583         19.5        109,047         (5.9

Fiscal 2015

     1,526,536         5.5        93,428         (22.5     121,862         (16.7     115,875         30.6   

(Note) Comprehensive income:

109,969 million yen in the year ended March 31, 2016, (68.8)% of change from previous year

352,446 million yen in the year ended March 31, 2015, 16.9% 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 2016

     297.24         297.24         4.8         4.8         6.3   

Fiscal 2015

     315.85         315.85         5.6         4.3         6.1   

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

(739) million yen in the year ended March 31, 2016

   332 million yen in the year ended March 31, 2015

(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, 2016

     3,095,049         2,373,762         2,284,264         73.8         6,226.58   

March 31, 2015

     3,021,184         2,303,623         2,215,319         73.3         6,038.57   

(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 2016

     194,040         (106,809     (50,608     374,020   

Fiscal 2015

     130,767         (93,608     (39,992     351,363   

 

1


Table of Contents

2. Dividends

 

   

 

Dividends per share

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

Fiscal 2015

           40.00               60.00        100.00        36,686        31.7        1.8   

Fiscal 2016

           50.00               50.00        100.00        36,686        33.6        1.6   

Fiscal 2017 (forecast)

                                100.00          43.2     

(Note) Dividends per share for the year ending March 31, 2017 are forecasted to be 100.00 yen on an annual basis.

3. Consolidated Financial Forecast for the Year Ending March 31, 2017 (Fiscal 2017)

 

              (% 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 2017

     1,520,000         2.7         110,000         18.7         130,000         (10.7     85,000         (22.1     231.70   

(Note) Forecast of earnings per share attributable to shareholders of Kyocera Corporation is calculated based on the diluted average number of shares outstanding during the year ended March 31, 2016.

(Notes)

(1) Increase or decrease in significant subsidiaries during the year ended March 31, 2016: None.

(2) Changes in accounting policies:

(i) Changes due to adoption of new accounting standards: Yes

(ii) Changes due to other than adoption of new accounting standards: Yes

For detailed information, please refer to the accompanying “(5) Basis of Preparation of Consolidated Financial Statements” on page 21.

(3) Number of shares (common stock):

(i) Number of shares issued:

 

377,618,580 shares at March 31, 2016

   377,618,580 shares at March 31, 2015

(ii) Number of treasury stock:

 

10,761,503 shares at March 31, 2016

   10,757,224 shares at March 31, 2015

(iii) Average number of shares outstanding:

 

366,859,072 shares in the year ended March 31, 2016

   366,864,176 shares in the year ended March 31, 2015

 

2


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, 2016:

 

(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 2016

    592,979        (6.6     28,147        28.1        94,598        14.5        74,041         9.4   

Fiscal 2015

    634,984        0.0        21,970        (21.0     82,591        6.4        67,681         4.5   

 

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

Fiscal 2016

     201.82           

Fiscal 2015

     184.49           

(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, 2016

     2,390,223         1,890,882         79.1         5,154.27   

March 31, 2015

     2,251,316         1,791,255         79.6         4,882.65   

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.

 

3


Table of Contents

Accompanying Information

1. ANALYSIS OF BUSINESS RESULTS AND FINANCIAL CONDITION

(1) Analysis of Business Results

[Business Results for the Year Ended March 31, 2016]

Economic Situation and Business Environment

During the year ended March 31, 2016 (“fiscal 2016”), the Japanese economy recorded low growth due mainly to a decline in personal consumption, despite improved corporate earnings and an increase in private capital investment. The U.S. economy expanded primarily on the back of improvement in the employment situation and growth in personal consumption, while the European economy continued to show a low level of growth and the slowdown in the Chinese economy became clearer.

With regard to the principal markets for Kyocera Corporation and its subsidiaries (“Kyocera Group” or “Kyocera”), shipment volume of smartphones grew in the digital consumer equipment market and sales volume increased in automotive markets in China and the United States.

Consolidated Financial Results

During fiscal 2016, sales in the Fine Ceramic Parts Group and Electronic Device Group increased, particularly in the automotive-related and smartphone markets. However, sales declined in the Telecommunications Equipment Group and the Applied Ceramic Products Group, including the solar energy business. As a result, consolidated net sales for fiscal 2016 amounted to ¥1,479,627 million, down ¥46,909 million, or 3.1%, compared with the year ended March 31, 2015 (“fiscal 2015”).

Profit from operations amounted to ¥92,656 million on par with fiscal 2015 due primarily to improvement in profitability in the Applied Ceramic Products Group on the back of cost reductions, despite the recording of losses in the amount of approximately ¥23 billion, including an impairment of goodwill in the Electronic Device Group. Income before income taxes increased by ¥23,721 million, or 19.5%, to ¥145,583 million, compared with ¥121,862 million for fiscal 2015, due primarily to the recording of gain on the sale of an asset in the amount of approximately ¥20 billion.

On the other hand, net income attributable to shareholders of Kyocera Corporation decreased by ¥6,828 million, or 5.9%, to ¥109,047 million, due to the decrease as compared with fiscal 2015 in the amount of income derived from revaluation of deferred tax assets and liabilities in line with a revision of the tax system in Japan.

Average foreign currency exchange rates for the fiscal 2016 were ¥120 to the U.S. dollar, marking depreciation of ¥10 (approximately 9%), and ¥133 to the Euro, marking appreciation of ¥6 (approximately 4%) in comparison with fiscal 2015.

 

     Years ended March 31,      Increase
(Decrease)
 
     2015      2016     
     Amount      %      Amount      %      Amount     %  
     (Yen in millions, except per share amounts and exchange rates)  

Net sales

   ¥ 1,526,536         100.0       ¥ 1,479,627         100.0         ¥(46,909     (3.1

Profit from operations

     93,428         6.1         92,656         6.3         (772     (0.8

Income before income taxes

     121,862         8.0         145,583         9.8         23,721        19.5   

Net income attributable to shareholders of Kyocera Corporation

     115,875         7.6         109,047         7.4         (6,828     (5.9

Diluted earnings per share attributable to shareholders of Kyocera Corporation

     315.85                 297.24                          

Average US$ exchange rate

     110                 120                          

Average Euro exchange rate

     139                 133                          

 

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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 2015 due primarily to increased sales of components for industrial machinery such as semiconductor processing equipment and of automotive components such as camera modules. Operating profit remained roughly on the same level as in fiscal 2015 due mainly to the effect of a change in product mix.

2) Semiconductor Parts Group

Sales in this reporting segment remained roughly on par with those for fiscal 2015 while operating profit decreased due primarily to a decline in sales of packages for digital consumer equipment and the impact of a decline in product prices, despite an increase in sales of packages for the communications infrastructure market and packages for LEDs for the automotive market.

3) Applied Ceramic Products Group

Sales in the cutting tool business increased primarily for automotive-related markets. Conversely, sales decreased in the solar energy business due to a decline in sales in Japan, Kyocera’s principal market, despite an increase in sales in the U. S. As a result, sales in this reporting segment decreased compared with fiscal 2015. Operating profit, however, increased due mainly to cost reduction efforts.

4) Electronic Device Group

Sales in this reporting segment increased compared with fiscal 2015 due primarily to growth in sales of capacitors for smartphones and printing devices for industrial equipment as well as to the contribution of sales from Nihon Inter Electronics Corporation, which joined Kyocera Group in September 2015. Operating profit, however, decreased due mainly to the recording of losses, including an impairment of goodwill.

5) Telecommunications Equipment Group

Sales of mobile phone handsets with exceptional damage and water resistance grew steadily. However, sales in this reporting segment decreased compared with fiscal 2015 due to a decline in sales of PHS-related products and low end handsets. Despite the impact of the decline in sales, operating loss was reduced compared with fiscal 2015, during which a loss from impairment of goodwill was recorded.

6) Information Equipment Group

Sales in this reporting segment increased compared with fiscal 2015 due to growth in sales volume of multifunctional peripherals and printers as result of active efforts to expand sales. On the other hand, operating profit decreased due to increased cost ratio of raw materials reflecting the effect of foreign currency exchange rate fluctuations.

7) Others

Sales in this reporting segment decreased compared with fiscal 2015 due primarily to a decline in sales of Kyocera Chemical Corporation. On the other hand, operating profit increased due mainly to gain on sales of assets.

 

5


Table of Contents

Net Sales by Reporting Segment

 

     Years ended March 31,     Increase
(Decrease)
 
     2015     2016    
     Amount     %     Amount     %     Amount     %  
     (Yen in millions)  

Fine Ceramic Parts Group

   ¥ 90,694        5.9      ¥ 95,092        6.4      ¥ 4,398        4.8   

Semiconductor Parts Group

     217,879        14.3        216,263        14.6        (1,616     (0.7

Applied Ceramic Products Group

     277,629        18.2        247,516        16.7        (30,113     (10.8

Electronic Device Group

     284,145        18.6        290,902        19.7        6,757        2.4   
  

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Total Components Business

     870,347        57.0        849,773        57.4        (20,574     (2.4

Telecommunications Equipment Group

     204,290        13.4        170,983        11.6        (33,307     (16.3

Information Equipment Group

     332,596        21.8        336,308        22.7        3,712        1.1   
  

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Total Equipment Business

     536,886        35.2        507,291        34.3        (29,595     (5.5

Others

     172,925        11.3        167,793        11.3        (5,132     (3.0

Adjustments and eliminations

     (53,622     (3.5     (45,230     (3.0     8,392          
  

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Net sales

   ¥ 1,526,536        100.0      ¥ 1,479,627        100.0      ¥ (46,909     (3.1
  

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Operating Profit (Loss) by Reporting Segment

 

            
     Years ended March 31,     Increase
(Decrease)
 
     2015     2016    
     Amount     %*     Amount     %*     Amount     %  
     (Yen in millions)  

Fine Ceramic Parts Group

   ¥ 16,134        17.8      ¥ 15,745        16.6      ¥ (389     (2.4

Semiconductor Parts Group

     33,971        15.6        28,934        13.4        (5,037     (14.8

Applied Ceramic Products Group

     3,159        1.1        16,386        6.6        13,227        418.7   

Electronic Device Group

     34,372        12.1        10,974        3.8        (23,398     (68.1
  

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Total Components Business

     87,636        10.1        72,039        8.5        (15,597     (17.8

Telecommunications Equipment Group

     (20,212            (4,558            15,654          

Information Equipment Group

     34,569        10.4        27,106        8.1        (7,463     (21.6
  

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Total Equipment Business

     14,357        2.7        22,548        4.4        8,191        57.1   

Others

     6,848        4.0        11,575        6.9        4,727        69.0   
  

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Operating profit

     108,841        7.1        106,162        7.2        (2,679     (2.5

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

     13,744               39,534               25,790        187.6   

Adjustments and eliminations

     (723            (113            610          
  

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Income before income taxes

   ¥ 121,862        8.0      ¥ 145,583        9.8      ¥ 23,721        19.5   
  

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 
* % to net sales of each corresponding segment

 

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Table of Contents

Net Sales by Geographic Area

i) Japan

Sales in Japan decreased compared with fiscal 2015 due mainly to a decline in sales in the solar energy business.

ii) Asia

Sales in Asia increased compared with fiscal 2015 due primarily to an increase in sales in the Semiconductor Parts Group and to the effect of the yen’s depreciation.

iii) Europe

Sales in Europe decreased compared with fiscal 2015 due to a decline in sales in the Information Equipment Group and to the effect of the yen’s appreciation against the Euro.

iv) United States of America

Sales in the United States of America increased compared with fiscal 2015 due to an increase in sales in the solar energy business and the Information Equipment Group as well as to the effect of the yen’s depreciation against the U.S. dollar.

v) Others

Sales in Others decreased compared with fiscal 2015 due mainly to a decrease in sales in the solar energy business and the Information Equipment Group.

 

     Years ended March 31,      Increase
(Decrease)
 
     2015      2016     
     Amount      %      Amount      %      Amount     %  
     (Yen in millions)  

Japan

   ¥ 643,577         42.2       ¥ 607,642         41.1         ¥(35,935     (5.6

Asia

     301,278         19.7         307,744         20.8         6,466        2.1   

Europe

     265,323         17.4         253,382         17.1         (11,941     (4.5

United States of America

     248,145         16.2         250,203         16.9         2,058        0.8   

Others

     68,213         4.5         60,656         4.1         (7,557     (11.1
  

 

 

    

 

 

    

 

 

    

 

 

    

 

 

   

 

 

 

Net sales

   ¥ 1,526,536         100.0       ¥ 1,479,627         100.0         ¥(46,909     (3.1
  

 

 

    

 

 

    

 

 

    

 

 

    

 

 

   

 

 

 

 

7


Table of Contents

[Consolidated Forecasts for the Year Ending March 31, 2017]

In the year ending March 31, 2017 (“fiscal 2017”), the Japanese economy is expected to continue growing at a low rate. Overseas, the U.S. economy is forecast to continue expanding, while persistent low growth is forecast in the European economy and the growth rate in the Chinese economy is projected to decline. With regard to principal markets for Kyocera, despite expectations of steady expansion in the automotive market, stagnant demand in the mobile phone handset market and contraction in the solar energy market in Japan are forecast.

In light of these forecasts, Kyocera projects financial results for fiscal 2017 as shown in the table below.

Kyocera will strive to increase orders in key markets and at the same time work to cultivate new markets and new customers by grasping new business opportunities and promote thorough cost reductions as means to achieve full-year consolidated financial forecasts.

Kyocera expects the yen to continue appreciating in fiscal 2017 in year-on-year terms. Assumed exchange rates for fiscal 2017 are ¥110 to the U.S. dollar, marking appreciation of ¥10 (approximately 8%) compared with ¥120 for fiscal 2016, and ¥120 to the euro, marking appreciation of ¥13 (approximately 10%) compared with ¥133 for fiscal 2016.

 

     Results for
the year ended
March 31, 2016
     Forecasts for
the year ending
March 31, 2017
     Increase
(Decrease)
 
     Amount      %          Amount               %             Amount           %      
     (Yen in millions, except per share amounts and exchange rates)  

Net sales

   ¥ 1,479,627         100.0       ¥ 1,520,000         100.0       ¥ 40,373        2.7   

Profit from operations

     92,656         6.3         110,000         7.2         17,344        18.7   

Income before income taxes

     145,583         9.8         130,000         8.6         (15,583     (10.7

Net income attributable to shareholders of Kyocera Corporation

     109,047         7.4         85,000         5.6         (24,047     (22.1

Diluted earnings per share attributable to shareholders of Kyocera Corporation

     297.24                 231.70                          

Average US$ exchange rate

     120                 110                          

Average Euro exchange rate

     133                 120                          

 

Note: Forecast of earnings per share is computed based on the diluted average number of shares outstanding during the year ended March 31, 2016.

 

8


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, 2016
    Forecasts for
the year ending
March 31, 2017
    Increase
(Decrease)
 
     Amount     %         Amount             %           Amount           %      
     (Yen in millions)  

Fine Ceramic Parts Group

   ¥ 95,092        6.4      ¥ 101,000        6.7      ¥ 5,908        6.2   

Semiconductor Parts Group

     236,265        16.0        237,000        15.6        735        0.3   

Applied Ceramic Products Group

     247,516        16.7        263,000        17.3        15,484        6.3   

Electronic Device Group

     290,902        19.7        304,000        20.0        13,098        4.5   
  

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Total Components Business

     869,775        58.8        905,000        59.6        35,225        4.0   

Telecommunications Equipment Group

     170,983        11.6        152,000        10.0        (18,983     (11.1

Information Equipment Group

     336,308        22.7        344,000        22.6        7,692        2.3   
  

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Total Equipment Business

     507,291        34.3        496,000        32.6        (11,291     (2.2

Others

     146,897        9.9        154,000        10.1        7,103        4.8   

Adjustments and eliminations

     (44,336     (3.0     (35,000     (2.3     9,336          
  

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Net sales

   ¥ 1,479,627        100.0      ¥ 1,520,000        100.0      ¥ 40,373        2.7   
  

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Operating Profit (Loss) by Reporting Segment

            
     Results for
the year ended

March 31, 2016
    Forecasts for
the year ending
March 31, 2017
    Increase
(Decrease)
 
     Amount     %*         Amount             %*         Amount     %  
     (Yen in millions)  

Fine Ceramic Parts Group

   ¥ 15,745        16.6      ¥ 15,000        14.9      ¥ (745     (4.7

Semiconductor Parts Group

     42,232        17.9        26,000        11.0        (16,232     (38.4

Applied Ceramic Products Group

     16,386        6.6        20,000        7.6        3,614        22.1   

Electronic Device Group

     10,974        3.8        38,000        12.5        27,026        246.3   
  

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Total Components Business

     85,337        9.8        99,000        10.9        13,663        16.0   

Telecommunications Equipment Group

     (4,558            4,200        2.8        8,758          

Information Equipment Group

     27,106        8.1        23,000        6.7        (4,106     (15.1
  

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Total Equipment Business

     22,548        4.4        27,200        5.5        4,652        20.6   

Others

     (1,722            (6,000            (4,278       
  

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Operating profit

     106,163        7.2        120,200        7.9        14,037        13.2   

Corporate and others

     39,420               9,800               (29,620     (75.1
  

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Income before income taxes

   ¥ 145,583        9.8      ¥ 130,000        8.6      ¥ (15,583     (10.7
  

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 
* % to net sales of each corresponding segment

(Note) On April 1, 2016, Kyocera Corporation implemented an absorption-type merger with Kyocera Chemical Corporation, once a domestic subsidiary, and determined to conduct business with reporting segment transferred from formerly “Others” to “Semiconductor Parts Group” since the date. The result for the year ended March 31, 2016 and the forecast for the year ending March 31, 2017 shown in the above table were both set forth by the reporting segment after the transfer.

 

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Note: Forward-Looking Statements

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

 

(1) General conditions in the Japanese or global economy;

 

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

 

(3) Various export risks which may affect the significant percentage of our revenues derived from overseas sales;

 

(4) The effect of foreign exchange fluctuations on our results of operations;

 

(5) Intense competitive pressures to which our products are subject;

 

(6) Fluctuations in the price and ability of suppliers to provide the required quantity of raw materials for use in Kyocera’s production activities;

 

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

 

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

 

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

 

(10) Companies or assets acquired by us not produce the returns or benefits, or bring in business opportunities;

 

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

 

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

 

(13) Expenses associated with licenses we require to continue to manufacture and sell products;

 

(14) Environmental liability and compliance obligations by tightening of environmental laws and regulations;

 

(15) Unintentional conflict with laws and regulations or newly enacted laws and regulations;

 

(16) Our market or supply chains being affected by terrorism, plague, wars or similar events;

 

(17) Earthquakes and other natural disasters affecting our headquarters and major facilities as well as our suppliers and customers;

 

(18) Credit risk on trade receivables;

 

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

 

(20) Impairment losses on long-lived assets, goodwill and intangible assets;

 

(21) Unrealized deferred tax assets and additional liabilities for unrecognized tax benefits; and

 

(22) Changes in accounting principles.

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

 

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(2) Analysis of Financial Condition

Consolidated Cash Flows

Cash and cash equivalents at March 31, 2016 increased by ¥22,657 million to ¥374,020 million from ¥351,363 million at March 31, 2015.

i) Cash flows from operating activities

Net cash provided by operating activities for fiscal 2016 increased by ¥63,273 million to ¥194,040 million from ¥130,767 million for fiscal 2015. This was mainly because receivables and inventories, which increased for fiscal 2015, decreased for fiscal 2016 although net income decreased.

ii) Cash flows from investing activities

Net cash used in investing activities for fiscal 2016 increased by ¥13,201 million to ¥106,809 million from ¥93,608 million for fiscal 2015. This mainly reflected that a decrease in proceeds from maturities of held-to-maturity securities exceeded a decrease in payments for purchases of held-to-maturity securities.

iii) Cash flows from financing activities

Net cash used in financing activities for fiscal 2016 increased by ¥10,616 million to ¥50,608 million from ¥39,992 million for fiscal 2015. This was due mainly to increases in dividends paid.

Consolidated Cash Flows

 

     Years ended March 31,  
     2015     2016  
     (Yen in millions)  

Cash flows from operating activities

   ¥ 130,767      ¥ 194,040   

Cash flows from investing activities

     (93,608     (106,809

Cash flows from financing activities

     (39,992     (50,608

Effect of exchange rate changes on cash and cash equivalents

     19,022        (13,966

Net increase in cash and cash equivalents

     16,189        22,657   

Cash and cash equivalents at beginning of year

     335,174        351,363   

Cash and cash equivalents at end of year

   ¥ 351,363      ¥ 374,020   

 

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(3)  Basic Profit Distribution Policy and Dividends for the Year Ended March 31, 2016 and for the Year Ending March 31, 2017

i) Basic profit distribution policy

Kyocera Corporation believes that the best way to increase corporate value and meet shareholders’ expectations is to improve future consolidated performance on an ongoing basis. Kyocera Corporation therefore has adopted a principal guideline that dividend amounts be within a range based on net income attributable to shareholders of Kyocera Corporation on a consolidated basis, and has set its dividend policy to maintain a payout ratio of 30% or more of consolidated net income attributable to shareholders of Kyocera Corporation. In addition, Kyocera Corporation 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 Corporation 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, as necessary, of outside management resources to achieve sustainable corporate growth.

ii) Dividends for the year ended March 31, 2016

Pursuant to “i) Basic profit distribution policy” set forth above and based on full-year performance for the year ended March 31, 2016, Kyocera Corporation will distribute a year-end dividend for the year ended March 31, 2016 in the amount of 50 yen per share. When aggregated with the interim dividend in the amount of 50 yen per share, the total annual dividend will be 100 yen per share, the same amount as in the year ended March 31, 2015.

iii) Basic profit distribution policy for the year ending March 31, 2017 (Revision of consolidated dividend ratio)

Since the year ended March 31, 2005, Kyocera Corporation has implemented a dividend policy based on payout ratio in order to clarify its shareholder-oriented stance and establish a greater linkage between the amount of dividends and its performance. In order to further enhance the return of profit to shareholders and expand its shareholder base, Kyocera Corporation will revise this policy to aim for a consolidated dividend payout ratio of around 40% commencing in the year ending March 31, 2017, replacing the current dividend payout ratio of 30% or more. Other basic policies with respect to profit distribution are not amended.

iv) Dividend forecast for the year ending March 31, 2017

Dividend amounts for the year ending March 31, 2017 will be decided pursuant to “iii) Basic profit distribution policy for the year ending March 31, 2017 (Revision of consolidated dividend ratio)” set forth above. At present, Kyocera Corporation forecasts a total annual dividend in the amount of 100 yen per share, based on its financial forecast for the year ending March 31, 2017.

 

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2. MANAGEMENT POLICIES

(1) Basic Policy

Kyocera’s management rationale is “To provide opportunities for the material and intellectual growth of all our employees, and through our joint efforts, contribute to the advancement of society and humankind,” and to realize this, we are striving to put into practice Amoeba Management, our unique business management system, and to achieve further sales expansion and high profitability. In addition, Kyocera aims to be respected as “The Company” from the perspective of corporate ethics.

Kyocera’s management policy is to be a “high-growth, highly profitable company.” To realize this policy, Kyocera aims to increase corporate value by further enhancing performance through “strengthening existing businesses,” “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 10 % 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 increase the sophistication of technologies, enhance new product development, expand sales by making the best use of sales networks, promote cost reductions and further reinforce management foundations by exploiting the collective capabilities of the Kyocera Group, which includes bolstering ties between businesses and Group companies. By doing so, Kyocera aims to be a high-growth, highly profitable company. Kyocera will focus on the following challenges:

i) Expand Business in key markets

Kyocera views the information and communications market, automotive-related market, the environment and energy market and the medical and healthcare market as key markets and will strive to increase sales and profit by expanding existing businesses and creating new businesses in these markets. In addition, we will work to strengthen various technologies and product development with the aim of bolstering the proliferation of IoT and strive to secure new business opportunities.

In the information and communications market, Kyocera will work to develop and expand sales of high-value-added products that meet trends of more advanced performance and multiple functions in digital consumer equipment, which includes smartphones, as well as an increase in demand primarily for high capacity and high-speed transmission in each industrial market. In addition, efforts will be made to release new products and to cultivate new markets for telecommunications and information equipment that incorporate unique technologies and differentiate from the competition.

In automotive-related markets, we will strive to strengthen our framework by creating an organization that straddles the Kyocera Group so that we can take advantage of various business opportunities associated with increased electrification and environmental responsiveness of automobiles and proliferation of automated driving. We will take steps to increase share by expanding application of existing products and cultivating new customers as well as accelerate new product development by strengthening technology development and collaborating with customers.

In the environment and energy market, Kyocera will push ahead with broad business development, from energy creating business through solar power generating systems to energy storage business through the supply of electricity storage units and energy saving business that seeks to enhance efficiency of power consumption through an energy management system. In response to the rise in self-consumption of power created, we will seek to improve the conversion efficiency of solar modules, introduce a high-efficiency fuel cell system to market and expand sales of large storage batteries. At the same time, we will strive to expand business by strengthening the development of a system that contributes to the stable supply of power and power savings.

In the medical and healthcare market, Kyocera will expand the medical materials business, which includes artificial joints. Additionally, we will take advantage of business opportunities by pursuing synergies in technologies from materials to components and systems, and by linking up with external organizations. We will also work to reinforce new product development and expand business domain in healthcare-related markets.

 

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Table of Contents

ii) Enhance management foundations

Kyocera will strive to optimize its production system and expand production capacity with the aim of further boosting competitiveness. Overseas, we will pursue expansion of production items and production volume in Vietnam as well as thoroughly reduce production costs. In Japan, we will work to expand high-value-added products by leveraging sophisticated production technology capabilities. In addition, we will actively invest in business to drive future growth, which will include utilizing external management resources through M&A with the objective of bolstering existing businesses and creating new businesses.

3. BASIC RATIONALE FOR SELECTION OF ACCOUNTING STANDARD

Kyocera has disclosed its consolidated financial statements in accordance with accounting principles generally accepted in the United States of America (“U.S. GAAP”) for long periods since it registered its common stock and American Depositary Share with the U.S. Securities and Exchange Commission in 1975. Kyocera continues to adopt U.S. GAAP as it considers being consistent with the past consolidated financial statements will contribute to benefits for the users of Kyocera’s consolidated financial statements.

 

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4. CONSOLIDATED FINANCIAL STATEMENTS

(1) Consolidated Balance Sheets

 

     March 31,     Increase
(Decrease)
 
     2015     2016    
     Amount     %     Amount     %    
     (Yen in millions)  

Current assets:

                                                    

Cash and cash equivalents

   ¥ 351,363        ¥ 374,020        ¥ 22,657   

Short-term investments in debt and equity securities

     95,237          101,566          6,329   

Other short-term investments

     184,358          213,613          29,255   

Trade notes receivables

     19,130          22,832          3,702   

Trade accounts receivables

     299,412          266,462          (32,950

Less allowances for doubtful accounts and sales returns

     (5,378       (5,278       100   

Inventories

     354,499          327,875          (26,624

Other current assets

     158,926          133,671          (25,255
  

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Total current assets

     1,457,547        48.2        1,434,761        46.4        (22,786
  

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Non-current assets:

          

Investments and advances:

          

Long-term investments in debt and equity securities

     1,051,638          1,131,403          79,765   

Other long-term investments

     20,402          20,130          (272
  

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Total investments and advances

     1,072,040        35.5        1,151,533        37.2        79,493   
  

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Property, plant and equipment:

          

Land

     59,590          59,914          324   

Buildings

     350,354          344,087          (6,267

Machinery and equipment

     846,391          841,895          (4,496

Construction in progress

     11,015          18,314          7,299   

Less accumulated depreciation

     (1,005,859       (999,723       6,136   
  

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Total property, plant and equipment

     261,491        8.6        264,487        8.5        2,996   
  

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Goodwill

     102,167        3.4        102,599        3.3        432   

Intangible assets

     56,615        1.9        59,106        1.9        2,491   

Other assets

     71,324        2.4        82,563        2.7        11,239   
  

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Total non-current assets

     1,563,637        51.8        1,660,288        53.6        96,651   
  

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Total assets

   ¥ 3,021,184        100.0      ¥ 3,095,049        100.0      ¥ 73,865   
  

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

 

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Table of Contents
     March 31,     Increase
(Decrease)
 
     2015     2016    
     Amount     %     Amount     %    
     (Yen in millions)  

Current liabilities:

                                                

Short-term borrowings

   ¥ 4,129        ¥ 5,119        ¥ 990   

Current portion of long-term debt

     9,441          9,516          75   

Trade notes and accounts payable

     119,654          115,644          (4,010

Other notes and accounts payable

     59,613          82,758          23,145   

Accrued payroll and bonus

     59,454          59,959          505   

Accrued income taxes

     17,316          22,847          5,531   

Other accrued liabilities

     53,305          43,525          (9,780

Other current liabilities

     33,339          28,464          (4,875
  

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Total current liabilities

     356,251        11.8        367,832        11.9        11,581   
  

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Non-current liabilities:

          

Long-term debt

     17,881          18,115          234   

Accrued pension and severance liabilities

     34,764          46,101          11,337   

Deferred income taxes

     292,454          271,220          (21,234

Other non-current liabilities

     16,211          18,019          1,808   
  

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Total non-current liabilities

     361,310        12.0        353,455        11.4        (7,855
  

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Total liabilities

     717,561        23.8        721,287        23.3        3,726   
  

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Kyocera Corporation shareholders’ equity:

          

Common stock

     115,703          115,703            

Additional paid-in capital

     162,695          162,844          149   

Retained earnings

      1,502,310          1,571,002          68,692   

Accumulated other comprehensive income

     469,673          469,803          130   

Common stock in treasury stock, at cost

     (35,062       (35,088       (26
  

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Total Kyocera Corporation shareholders’ equity

     2,215,319        73.3        2,284,264        73.8        68,945   
  

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Noncontrolling interests

     88,304        2.9        89,498        2.9        1,194   
  

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Total equity

     2,303,623        76.2        2,373,762        76.7        70,139   
  

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Total liabilities and equity

   ¥ 3,021,184        100.0      ¥ 3,095,049        100.0      ¥ 73,865   
  

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 
Note: Accumulated other comprehensive income is as follows:           
     March 31,     Increase
(Decrease)
 
     2015     2016    
     (Yen in millions)  

Net unrealized gains on securities

     ¥ 467,841        ¥ 517,190      ¥ 49,349   

Net unrealized losses on derivative financial instruments

       (372       (488     (116

Pension adjustments

       (28,452       (42,648     (14,196

Foreign currency translation adjustments

       30,656          (4,251     (34,907

Total

     ¥ 469,673        ¥ 469,803      ¥ 130   

 

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Table of Contents

(2) Consolidated Statements of Income

 

    Years ended March 31,     Increase
(Decrease)
 
    2015     2016    
    Amount     %     Amount     %     Amount     %  
    (Yen in millions and shares in thousands, except per share amounts)  

Net sales

  ¥ 1,526,536        100.0      ¥ 1,479,627        100.0      ¥ (46,909     (3.1

Cost of sales

    1,137,137        74.5        1,093,467        73.9        (43,670     (3.8
 

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Gross profit

    389,399        25.5        386,160        26.1        (3,239     (0.8

Selling, general and administrative expenses

    277,515        18.2        279,361        18.9        1,846        0.7   

Loss on impairment of goodwill

    18,456        1.2        14,143        0.9        (4,313     (23.4
 

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Profit from operations

    93,428        6.1        92,656        6.3        (772     (0.8
 

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Other income (expenses):

           

Interest and dividend income

    22,783        1.5        28,609        1.9        5,826        25.6   

Interest expense

    (1,718     (0.1     (1,814     (0.1     (96       

Foreign currency transaction gains, net

    4,499        0.3        3,820        0.2        (679     (15.1

Gains on sales of securities, net

    505        0.0        20,600        1.4        20,095          

Other, net

    2,365        0.2        1,712        0.1        (653     (27.6
 

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Total other income (expenses)

    28,434        1.9        52,927        3.5        24,493        86.1   
 

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Income before income taxes

    121,862        8.0        145,583        9.8        23,721        19.5   

Income taxes

    (3,441     (0.2     31,392        2.1        34,833          
 

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Net income

    125,303        8.2        114,191        7.7        (11,112     (8.9

Net income attributable to noncontrolling interests

    (9,428     (0.6     (5,144     (0.3     4,284          
 

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Net income attributable to shareholders of
Kyocera Corporation

  ¥ 115,875        7.6      ¥ 109,047        7.4      ¥ (6,828     (5.9
 

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Per share information:

           

Net income attributable to shareholders of
Kyocera Corporation:

           

Basic

  ¥ 315.85        ¥ 297.24         

Diluted

  ¥ 315.85        ¥ 297.24         

Average number of shares of common stock outstanding:

           

Basic

    366,864          366,859         

Diluted

    366,864          366,859         

Note:

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

 

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Table of Contents

Consolidated Statements of Comprehensive Income

 

     Years ended March 31,     Increase
(Decrease)
 
     2015     2016    
     Amount     Amount     Amount  
     (Yen in millions)  

Net income

   ¥ 125,303      ¥ 114,191      ¥ (11,112
  

 

 

   

 

 

   

 

 

 

Other comprehensive income (loss)—net of taxes

      

Net unrealized gains on securities

     174,184        49,205        (124,979

Net unrealized losses on derivative financial instruments

     (111     (116     (5

Pension adjustments

     (7,688     (13,969     (6,281

Foreign currency translation adjustments

     60,758        (39,342     (100,100
  

 

 

   

 

 

   

 

 

 

Total other comprehensive income (loss)

     227,143        (4,222     (231,365
  

 

 

   

 

 

   

 

 

 

Comprehensive income

     352,446        109,969        (242,477

Comprehensive income attributable to noncontrolling interests

     (17,757     (786     16,971   
  

 

 

   

 

 

   

 

 

 

Comprehensive income attributable to shareholders of Kyocera Corporation

   ¥ 334,689      ¥ 109,183      ¥ (225,506
  

 

 

   

 

 

   

 

 

 

 

18


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, 2014 (366,867)

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

Comprehensive income:

               

Net income

        115,875            115,875        9,428        125,303   

Other comprehensive income (loss)

          218,814          218,814        8,329        227,143   
           

 

 

   

 

 

   

 

 

 

Total comprehensive income

              334,689        17,757        352,446   
           

 

 

   

 

 

   

 

 

 

Cash dividends paid to Kyocera Corporation’s shareholders

        (29,349         (29,349       (29,349

Cash dividends paid to noncontrolling interests

                (3,492     (3,492

Purchase of treasury stock (6)

            (30     (30       (30

Reissuance of treasury stock (0)

      1            1        2          2   

Stock option plan of subsidiaries

      114              114        43        157   

Other

      (86       (104       (190     (3,147     (3,337
 

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Balance at March 31, 2015 (366,861)

  ¥ 115,703      ¥ 162,695      ¥ 1,502,310      ¥ 469,673      ¥ (35,062   ¥ 2,215,319      ¥ 88,304      ¥ 2,303,623   

Comprehensive income:

               

Net income

        109,047            109,047        5,144        114,191   

Other comprehensive income (loss)

          136          136        (4,358     (4,222
           

 

 

   

 

 

   

 

 

 

Total comprehensive income

              109,183        786        109,969   
           

 

 

   

 

 

   

 

 

 

Cash dividends paid to Kyocera Corporation’s shareholders

        (40,355         (40,355       (40,355

Cash dividends paid to noncontrolling interests

                (3,629     (3,629

Purchase of treasury stock (4)

            (27     (27       (27

Reissuance of treasury stock (0)

      0            1        1          1   

Stock option plan of subsidiaries

      125              125        48        173   

Other

      24          (6       18        3,989        4,007   
 

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Balance at March 31, 2016 (366,857)

  ¥ 115,703      ¥ 162,844      ¥ 1,571,002      ¥ 469,803      ¥ (35,088   ¥ 2,284,264      ¥ 89,498      ¥ 2,373,762   
 

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

 

19


Table of Contents

(4) Consolidated Statements of Cash Flows

 

     Years ended March 31,  
     2015     2016  
     (Yen in millions)  

Cash flows from operating activities:

    

Net income

   ¥ 125,303      ¥ 114,191   

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

    

Depreciation and amortization

     72,994        76,647   

Provision for doubtful accounts and loss on bad debts

     197        761   

Write-down of inventories

     17,361        12,238   

Deferred income taxes

     (49,745     (17,795

Gains on sales of securities, net

     (581     (20,600

Gains on sales of property, plant and equipment, net

     (339     (12,039

Loss on impairment of goodwill

     18,456        14,143   

Foreign currency adjustments

     (2,687     2,955   

Change in assets and liabilities:

    

(Increase) decrease in receivables

     (16,804     15,611   

(Increase) decrease in inventories

     (19,938     6,310   

Decrease in other current assets

     2,955        87   

Increase (decrease) in notes and accounts payable

     (13,085     2,400   

Increase (decrease) in accrued income taxes

     (6,392     5,807   

Increase (decrease) in other current liabilities

     9,002        (3,478

Decrease in other non-current liabilities

     (6,348     (4,722

Other, net

     418        1,524   
  

 

 

   

 

 

 

Net cash provided by operating activities

     130,767        194,040   
  

 

 

   

 

 

 

Cash flows from investing activities:

    

Payments for purchases of available-for-sale securities

     (24,505     (42

Payments for purchases of held-to-maturity securities

     (197,391     (121,924

Payments for purchases of other securities

     (1,062     (5,546

Proceeds from sales of available-for-sale securities

     25,131        39,057   

Proceeds from maturities of held-to-maturity securities

     182,531        94,608   

Acquisitions of businesses, net of cash acquired

     (1,843     (22,676

Payments for purchases of property, plant and equipment

     (57,055     (66,102

Payments for purchases of intangible assets

     (6,214     (10,703

Proceeds from sales of property, plant and equipment

     4,247        16,989   

Acquisition of time deposits and certificate of deposits

     (246,667     (313,911

Withdrawal of time deposits and certificate of deposits

     229,982        281,614   

Other, net

     (762     1,827   
  

 

 

   

 

 

 

Net cash used in investing activities

     (93,608     (106,809
  

 

 

   

 

 

 

Cash flows from financing activities:

    

Decrease in short-term borrowings, net

     (554     (2,881

Proceeds from issuance of long-term debt

     10,642        10,996   

Payments of long-term debt

     (13,347     (12,830

Dividends paid

     (32,705     (43,874

Purchases of noncontrolling interests

     (4,004     (1,780

Other, net

     (24     (239
  

 

 

   

 

 

 

Net cash used in financing activities

     (39,992     (50,608
  

 

 

   

 

 

 

Effect of exchange rate changes on cash and cash equivalents

     19,022        (13,966
  

 

 

   

 

 

 

Net increase in cash and cash equivalents

     16,189        22,657   

Cash and cash equivalents at beginning of year

     335,174        351,363   
  

 

 

   

 

 

 

Cash and cash equivalents at end of year

   ¥ 351,363      ¥ 374,020   
  

 

 

   

 

 

 

 

20


Table of Contents

(5) Basis of Preparation of Consolidated Financial Statements

i) Scope of consolidation:

 

Number of consolidated subsidiaries

     222       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

     18      

Number of decrease

     10      

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, 2015, Kyocera adopted Accounting Standards Update (ASU) No. 2014-08, “Reporting Discontinued Operations and Disclosures of Disposals of Components of an Entity.” This accounting standard changes the requirements for reporting discontinued operations in ASC 205-20, “Presentation of Financial Statements—Discontinued Operations.” A disposal of a component of an entity or a group of components of an entity is required to be reported in discontinued operations if the disposal represents a strategic shift that has (or will have) a major effect on an entity’s operations and financial results. This accounting standard also requires an entity to provide disclosures about a disposal of an individually significant component of an entity that does not qualify for discontinued operations presentation in the financial statements. The adoption of this accounting standard did not have a material impact on Kyocera’s consolidated results of operations, financial condition and cash flows.

In July 2015, the FASB issued ASU No. 2015-11, “Simplifying the Measurement of Inventory.” This accounting standard requires an entity to measure inventory at the lower of cost and net realizable value. Net realizable value is the estimated selling prices in the ordinary course of business, less reasonably predictable costs of completion, disposal, and transportation. On December 31, 2015, Kyocera early adopted this accounting standard. The adoption of this accounting standard did not have a material impact on Kyocera’s consolidated results of operations, financial condition and cash flows.

In December 2015, the FASB issued ASU No. 2015-17, “Balance Sheet Classification of Deferred Taxes.” To simplify the presentation of deferred income taxes, this accounting standard changes require that deferred tax liabilities and assets be classified as noncurrent in a classified statement of financial position. On December 31, 2015, Kyocera early adopted this accounting standard. For the adoption of this accounting standard, Kyocera did not adjust prior period’s financial statement retrospectively.

 

21


Table of Contents

(6) Segment Information

i) Reporting segment:

 

     March 31,     Increase (Decrease)  
     2015     2016    
     Amount     Amount     Amount     %  
     (Yen in millions)  

Assets by reporting segments:

        

Fine Ceramic Parts Group

   ¥ 78,580      ¥ 81,076      ¥ 2,496        3.2   

Semiconductor Parts Group

     194,547        186,407        (8,140     (4.2

Applied Ceramic Products Group

     306,984        287,911        (19,073     (6.2

Electronic Device Group

     509,836        484,683        (25,153     (4.9

Telecommunications Equipment Group

     102,762        92,752        (10,010     (9.7

Information Equipment Group

     304,044        301,471        (2,573     (0.8

Others

     176,556        176,954        398        0.2   
  

 

 

   

 

 

   

 

 

   

 

 

 
     1,673,309        1,611,254        (62,055     (3.7

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

     1,492,915        1,616,029        123,114        8.2   

Adjustments and eliminations

     (145,040     (132,234     12,806          
  

 

 

   

 

 

   

 

 

   

 

 

 

Total assets

   ¥ 3,021,184      ¥ 3,095,049      ¥ 73,865           2.4   
  

 

 

   

 

 

   

 

 

   

 

 

 

 

22


Table of Contents
     Years ended March 31,     Increase (Decrease)  
     2015     2016    
     Amount     Amount     Amount     %  
     (Yen in millions)  

Depreciation and amortization:

        

Fine Ceramic Parts Group

   ¥ 4,956      ¥ 5,329      ¥ 373        7.5   

Semiconductor Parts Group

     15,723        15,618        (105     (0.7

Applied Ceramic Products Group

     12,527        11,425        (1,102     (8.8

Electronic Device Group

     16,010        17,294        1,284        8.0   

Telecommunications Equipment Group

     4,339        4,570        231        5.3   

Information Equipment Group

     11,488        14,428        2,940        25.6   

Others

     5,820        5,985        165        2.8   

Corporate

     2,131        1,998        (133     (6.2
  

 

 

   

 

 

   

 

 

   

 

 

 

Total

   ¥ 72,994      ¥ 76,647      ¥ 3,653        5.0   
  

 

 

   

 

 

   

 

 

   

 

 

 

Capital expenditures:

        

Fine Ceramic Parts Group

   ¥ 6,077      ¥ 7,136      ¥ 1,059        17.4   

Semiconductor Parts Group

     11,465        15,104        3,639        31.7   

Applied Ceramic Products Group

     6,665        10,055        3,390        50.9   

Electronic Device Group

     14,471        19,607        5,136        35.5   

Telecommunications Equipment Group

     2,525        2,624        99        3.9   

Information Equipment Group

     9,196        8,512        (684     (7.4

Others

     2,695        2,844        149        5.5   

Corporate

     3,576        3,051        (525     (14.7
  

 

 

   

 

 

   

 

 

   

 

 

 

Total

   ¥      56,670      ¥      68,933      ¥   12,263        21.6   
  

 

 

   

 

 

   

 

 

   

 

 

 

Note:

With regard to Reporting segment information of Net sales and Income before income taxes, please refer to the accompanying “1. ANALYSIS OF BUSINESS RESULTS AND FINANCIAL CONDITION (1) Analysis of Business Results Consolidated Results by Reporting Segment” on page 6.

 

23


Table of Contents

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

 

     Years ended March 31,     Increase
(Decrease)
 
     2015     2016    
     Amount     Amount     Amount     %  
     (Yen in millions)  

Net sales:

        

Japan

   ¥ 677,431      ¥ 642,004      ¥ (35,427     (5.2

Intra-group sales and transfer between geographic areas

     514,676        512,648        (2,028     (0.4
  

 

 

   

 

 

   

 

 

   

 

 

 
     1,192,107        1,154,652        (37,455     (3.1
  

 

 

   

 

 

   

 

 

   

 

 

 

Asia

     239,852        242,870        3,018        1.3   

Intra-group sales and transfer between geographic areas

     319,387        292,535        (26,852     (8.4
  

 

 

   

 

 

   

 

 

   

 

 

 
     559,239        535,405        (23,834     (4.3
  

 

 

   

 

 

   

 

 

   

 

 

 

Europe

     274,097        261,318        (12,779     (4.7

Intra-group sales and transfer between geographic areas

     36,923        29,787        (7,136     (19.3
  

 

 

   

 

 

   

 

 

   

 

 

 
     311,020        291,105        (19,915     (6.4
  

 

 

   

 

 

   

 

 

   

 

 

 

United States of America

     303,245        303,643        398        0.1   

Intra-group sales and transfer between geographic areas

     33,859        43,043        9,184        27.1   
  

 

 

   

 

 

   

 

 

   

 

 

 
     337,104        346,686        9,582        2.8   
  

 

 

   

 

 

   

 

 

   

 

 

 

Others

     31,911        29,792        (2,119     (6.6

Intra-group sales and transfer between geographic areas

     16,535        16,426        (109     (0.7
  

 

 

   

 

 

   

 

 

   

 

 

 
     48,446        46,218        (2,228     (4.6
  

 

 

   

 

 

   

 

 

   

 

 

 

Adjustments and eliminations

     (921,380     (894,439     26,941          
  

 

 

   

 

 

   

 

 

   

 

 

 

Net sales

   ¥ 1,526,536      ¥ 1,479,627      ¥ (46,909     (3.1
  

 

 

   

 

 

   

 

 

   

 

 

 

Income before income taxes:

        

Japan

   ¥ 51,316      ¥ 46,897      ¥ (4,419     (8.6

Asia

     25,232        23,627        (1,605     (6.4

Europe

     11,588        15,059        3,471        30.0   

United States of America

     20,016        13,998        (6,018     (30.1

Others

     1,459        1,022        (437     (30.0
  

 

 

   

 

 

   

 

 

   

 

 

 
     109,611        100,603        (9,008     (8.2

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

     13,744        39,534        25,790        187.6   

Adjustments and eliminations

     (1,493     5,446        6,939          
  

 

 

   

 

 

   

 

 

   

 

 

 

Income before income taxes

   ¥ 121,862      ¥ 145,583      ¥ 23,721        19.5   
  

 

 

   

 

 

   

 

 

   

 

 

 

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.

 

24


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, 2016” on page 1 and “4. CONSOLIDATED FINANCIAL STATEMENTS (2) Consolidated Statements of Income” on page 17.

(8) Material Subsequent Event

None.

(9) Cautionary Statement for Premise of a Going Concern

None.

 

25

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