Annual Reports

 
8-K

 
Other

  • 6-K (Aug 10, 2017)
  • 6-K (Jul 28, 2017)
  • 11-K (Jun 29, 2017)
  • 6-K (Jun 27, 2017)
  • 6-K (Jun 6, 2017)
  • SD (May 30, 2017)
Kyocera 6-K 2017

Documents found in this filing:

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

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D. C. 20549

FORM 6-K

Report of Foreign Private Issuer

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

the Securities Exchange Act of 1934

For the month of August 2017

Commission File Number: 1-07952

KYOCERA CORPORATION

(Translation of registrant’s name into English)

6 Takeda Tobadono-cho, Fushimi-ku,

Kyoto 612-8501, Japan

(Address of principal executive office)

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  ☒        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: August 10, 2017


Table of Contents

Information furnished on this form:

EXHIBITS

 

Exhibit
    Number    

   

1.

  English translation of consolidated financial statements included in the Quarterly Report (“shihanki-houkokusho”) for the three months ended June 30, 2017 submitted to the Director of the Kanto Local Finance Bureau of the Ministry of Finance pursuant to the Financial Instruments and Exchange Law of Japan

 


Table of Contents

CONSOLIDATED BALANCE SHEETS (Unaudited)

 

     March 31, 2017     June 30, 2017  
     (Yen in millions)  

ASSETS

    

Current assets:

    

Cash and cash equivalents

   ¥ 376,195     ¥ 374,641  

Short-term investments in debt securities (Notes 4 and 5)

     84,703       84,584  

Other short-term investments (Note 4)

     212,668       214,361  

Trade receivables

    

Notes

     28,370       26,195  

Accounts

     291,485       255,940  

Less allowances for doubtful accounts and sales returns

     (5,593     (5,736
  

 

 

   

 

 

 
     314,262       276,399  

Inventories (Note 6)

     331,155       352,890  

Other current assets (Notes 5, 7 and 9)

     119,714       114,442  
  

 

 

   

 

 

 

Total current assets

     1,438,697       1,417,317  

Investments and advances:

    

Long-term investments in debt and equity securities (Notes 4 and 5)

     1,130,756       1,153,296  

Other long-term investments (Notes 4, 5 and 9)

     22,246       40,436  
  

 

 

   

 

 

 

Total investments and advances

     1,153,002       1,193,732  

Property, plant and equipment:

    

Land

     59,963       59,897  

Buildings

     351,431       355,159  

Machinery and equipment

     841,973       845,663  

Construction in progress

     14,097       13,811  

Less accumulated depreciation

     (1,000,860     (1,004,266
  

 

 

   

 

 

 

Total property, plant and equipment

     266,604       270,264  

Goodwill (Note 3)

     110,470       112,532  

Intangible assets (Note 3)

     61,235       61,511  

Other assets

     80,462       74,687  
  

 

 

   

 

 

 

Total assets

   ¥ 3,110,470     ¥ 3,130,043  
  

 

 

   

 

 

 

The accompanying notes are an integral part of these statements.

 

1


Table of Contents

CONSOLIDATED BALANCE SHEETS (Unaudited)—(Continued)

 

     March 31, 2017     June 30, 2017  
     (Yen in millions)  

LIABILITIES AND EQUITY

    

Current liabilities:

    

Short-term borrowings

   ¥ 191     ¥ 117  

Current portion of long-term debt (Note 5)

     8,235       8,531  

Trade notes and accounts payable

     129,460       131,134  

Other notes and accounts payable (Note 9)

     60,881       56,144  

Accrued payroll and bonus

     62,868       51,125  

Accrued income taxes

     15,707       8,501  

Other accrued liabilities (Note 9)

     51,062       48,868  

Other current liabilities (Notes 5 and 7)

     36,257       45,525  
  

 

 

   

 

 

 

Total current liabilities

     364,661       349,945  

Non-current liabilities:

    

Long-term debt (Note 5)

     16,409       17,678  

Accrued pension and severance liabilities (Note 8)

     31,720       32,345  

Deferred income taxes

     258,859       256,364  

Other non-current liabilities

     19,912       19,492  
  

 

 

   

 

 

 

Total non-current liabilities

     326,900       325,879  
  

 

 

   

 

 

 

Total liabilities

     691,561       675,824  

Commitments and contingencies (Note 9)

    

Kyocera Corporation shareholders’ equity:

    

Common stock

     115,703       115,703  

Additional paid-in capital

     165,230       165,220  

Retained earnings

      1,638,116         1,651,034   

Accumulated other comprehensive income (Note 11)

     447,479       468,414  

Common stock in treasury, at cost

     (32,309     (32,319
  

 

 

   

 

 

 

Total Kyocera Corporation shareholders’ equity

     2,334,219       2,368,052  

Noncontrolling interests

     84,690       86,167  
  

 

 

   

 

 

 

Total equity (Note 10)

     2,418,909       2,454,219  
  

 

 

   

 

 

 

Total liabilities and equity

   ¥ 3,110,470     ¥ 3,130,043  
  

 

 

   

 

 

 

The accompanying notes are an integral part of these statements.

 

2


Table of Contents

CONSOLIDATED STATEMENTS OF INCOME (Unaudited)

 

     Three months ended June 30,  
     2016     2017  
    

(Yen in millions and shares in thousands,

except per share amounts)

 

Net sales

   ¥ 319,985     ¥ 345,162  

Cost of sales (Note 8)

     239,855       248,334  
  

 

 

   

 

 

 

Gross profit

     80,130       96,828  

Selling, general and administrative expenses (Notes 3, 8 and 12)

     67,860       65,661  
  

 

 

   

 

 

 

Profit from operations

     12,270       31,167  
  

 

 

   

 

 

 

Other income (expenses):

    

Interest and dividend income (Note 4)

     14,584       18,403  

Interest expense

     (1,058     (323

Foreign currency transaction gains (losses), net (Note 7)

     (1,273     (590

Gains on sales of securities, net

     103       328  

Other, net

     172       275  
  

 

 

   

 

 

 

Total other income (expenses)

     12,528       18,093  
  

 

 

   

 

 

 

Income before income taxes

     24,798       49,260  

Income taxes

     6,324       12,732  
  

 

 

   

 

 

 

Net income

     18,474       36,528  

Net income attributable to noncontrolling interests

     (1,021     (1,547
  

 

 

   

 

 

 

Net income attributable to shareholders of Kyocera Corporation

   ¥ 17,453     ¥ 34,981  
  

 

 

   

 

 

 

Per share information (Note 14):

    

Net income attributable to shareholders of Kyocera Corporation:

    

Basic

   ¥ 47.58     ¥ 95.13  

Diluted

     47.58       95.13  

Average number of shares of common stock outstanding:

    

Basic

     366,857       367,712  

Diluted

     366,857       367,712  

The accompanying notes are an integral part of these statements.

 

3


Table of Contents

CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (Unaudited)

 

     Three months ended June 30,  
     2016     2017  
     (Yen in millions)  

Net income

   ¥ 18,474     ¥ 36,528  
  

 

 

   

 

 

 

Other comprehensive income—net of taxes

    

Net unrealized gains on securities (Notes 4, 10 and 11)

     18,204          15,001  

Net unrealized losses on derivative financial instruments (Notes 7, 10 and 11)

     (17     (52

Pension adjustments (Notes 8, 10 and 11)

     1,421       (587

Foreign currency translation adjustments (Notes 10 and 11)

     (53,836     7,221  
  

 

 

   

 

 

 

Total other comprehensive income

     (34,228     21,583  
  

 

 

   

 

 

 

Comprehensive income

     (15,754     58,111  

Comprehensive income attributable to noncontrolling interests

     5,669       (2,211
  

 

 

   

 

 

 

Comprehensive income attributable to shareholders of Kyocera Corporation

   ¥ (10,085   ¥ 55,900  
  

 

 

   

 

 

 

The accompanying notes are an integral part of these statements.

 

4


Table of Contents

CONSOLIDATED STATEMENTS OF CASH FLOWS (Unaudited)

 

     Three months ended June 30,  
     2016     2017  
     (Yen in millions)  

Cash flows from operating activities:

    

Net income

   ¥ 18,474     ¥ 36,528  

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

    

Depreciation and amortization

     17,190       17,605  

Provision for doubtful accounts and loss on bad debts

     538       4  

Write-down of inventories

     1,536       2,021  

Deferred income taxes

     (62     415  

Gains on sales of securities, net

     (103     (328

Gains on sales of property, plant and equipment, net

     (915     (36

Foreign currency adjustments

     8,509       (1,068

Change in assets and liabilities:

    

Decrease in receivables

     27,065       47,907  

Increase in inventories

     (5,779     (21,593

Increase in other current assets

     (13,017     (673

Increase (decrease) in notes and accounts payable

     8,254       (6,339

Decrease in accrued income taxes

     (17,739     (7,276

Decrease in other current liabilities

     (5,983     (6,669

Decrease in other non-current liabilities

     (388     (815

Other, net

     (121     (48
  

 

 

   

 

 

 

Net cash provided by operating activities

     37,459       59,635  
  

 

 

   

 

 

 

Cash flows from investing activities:

    

Payments for purchases of held-to-maturity securities

     (23,000     (16,600

Payments for purchases of other securities

     (806     (80

Proceeds from sales of available-for-sale securities

     167       479  

Proceeds from maturities of held-to-maturity securities

     53,713       15,453  

Acquisitions of businesses, net of cash acquired (Note 3)

     (9,085      

Payments for purchases of property, plant and equipment

     (17,952     (19,733

Payments for purchases of intangible assets

     (1,888     (1,852

Proceeds from sales of property, plant and equipment

     1,076       444  

Acquisition of time deposits and certificate of deposits

     (110,021     (155,251

Withdrawal of time deposits and certificate of deposits

     83,936       135,586  

Other, net

     (576     239  
  

 

 

   

 

 

 

Net cash used in investing activities

     (24,436     (41,315
  

 

 

   

 

 

 

Cash flows from financing activities:

    

Decrease in short-term borrowings, net

     (3,962     (74

Proceeds from issuance of long-term debt

     2,787       2,809  

Payments of long-term debt

     (4,382     (2,862

Dividends paid

     (18,169     (22,012

Purchases of noncontrolling interests

     (788      

Other, net

     (197     (236
  

 

 

   

 

 

 

Net cash used in financing activities

     (24,711     (22,375
  

 

 

   

 

 

 

Effect of exchange rate changes on cash and cash equivalents

     (17,317     2,501  
  

 

 

   

 

 

 

Net decrease in cash and cash equivalents

     (29,005     (1,554

Cash and cash equivalents at beginning of period

     374,020       376,195  
  

 

 

   

 

 

 

Cash and cash equivalents at end of period

   ¥ 345,015     ¥ 374,641  
  

 

 

   

 

 

 

The accompanying notes are an integral part of these statements.

 

5


Table of Contents

NOTES TO THE UNAUDITED QUARTERLY CONSOLIDATED FINANCIAL STATEMENTS (Unaudited)

1. ACCOUNTING PRINCIPLES, PROCEDURES AND FINANCIAL STATEMENTS’ PRESENTATION

In December 1975, Kyocera Corporation registered its common stock and American Depository Receipts (ADRs) with the United States Securities and Exchange Commission (SEC). In May 1980, Kyocera listed its ADRs on the New York Stock Exchange.

Kyocera Corporation has filed Form 20-F as an annual report with the SEC, which includes the consolidated financial statements prepared in accordance with accounting principles generally accepted in the United States of America, under section 13 of the Securities Exchange Act of 1934. Kyocera Corporation has also prepared quarterly consolidated financial statements in accordance with accounting principles generally accepted in the United States of America for interim financial statements.

The following paragraphs identify the significant differences for Kyocera Corporation and its consolidated subsidiaries (Kyocera) between accounting principles generally accepted in the United States of America and accounting principles generally accepted in Japan.

(1) Revenue recognition

Kyocera adopts the Financial Accounting Standards Board (FASB)’s Accounting Standards Codification (ASC) 605, “Revenue Recognition.” Kyocera recognizes revenue when the risks and rewards of ownership have been transferred to the customer and revenue can be reliably measured.

(2) Goodwill and other intangible assets

Kyocera adopts ASC 350, “Intangibles—Goodwill and Other.” Goodwill and intangible assets with indefinite useful lives, rather than being amortized, are tested for impairment at least annually, and also following any events and changes in circumstances that might lead to impairment.

(3) Lease accounting

Kyocera adopts ASC 840, “Leases.” Kyocera classifies a lease as an operating or a capital lease, and records all capital leases as an asset and an obligation.

(4) Benefit plans

Kyocera adopts ASC 715, “Compensation—Retirement Benefits.” Actuarial gain or loss is recognized by amortizing a portion in excess of 10% of the greater of the projected benefit obligations or the market-related value of plan assets by the straight-line method over the average remaining service period of employees.

(5) Unused compensated absence

Kyocera adopts ASC 710, “Compensation—General.” Kyocera records accrued liabilities for compensated absences that employees have earned but have not yet used.

(6) Income taxes

Kyocera adopts ASC 740, “Income Taxes.” Kyocera records assets and liabilities for unrecognized tax benefits based on the premise of being subject to income tax examination by tax authorities, when it is more likely than not that tax benefits associated with tax positions will not be sustained. Kyocera records the effect of a change in tax law or rates as a component of income tax provision, including the changes in the deferred tax assets and liabilities related to accumulated other comprehensive income.

(7) Stock issuance costs

Stock issuance costs, net of taxes are deducted from additional paid-in capital.

 

6


Table of Contents

2. SUMMARY OF ACCOUNTING POLICIES

(1) Basis of consolidation and accounting for investments in affiliated companies

The quarterly consolidated financial statements include the accounts of Kyocera Corporation, its subsidiaries in which Kyocera has a controlling financial interest and variable interest entities for which Kyocera is the primary beneficiary under ASC 810, “Consolidation.” All significant inter-company transactions and accounts are eliminated. Investments in 20% to 50% owned companies and investments in variable interest entities, for which Kyocera is not the primary beneficiary but has a significant influence to, are accounted for by the equity method, whereby Kyocera includes in net income its equity in the earnings or losses from these companies. These variable interest entities do not have material impacts on Kyocera’s consolidated result of operations, financial condition and cash flows.

(2) Revenue recognition

Kyocera generates revenue principally through the sale of industrial components and telecommunications and information equipment. Kyocera’s operations consist of the following reporting segments: 1) Industrial & Automotive Components Group, 2) Semiconductor Components Group, 3) Electronic Devices Group, 4) Communications Group, 5) Document Solutions Group and 6) Life & Environment Group.

Kyocera recognizes revenue when persuasive evidence of an arrangement exists, delivery has occurred and title and risk of loss have been transferred to the customer or services have been rendered, the sales price is fixed or determinable and collectability is reasonably assured in accordance with ASC 605, “Revenue Recognition.” Sales to customers in each of the above segments are based on the specific terms and conditions contained in basic contracts with customers and firm customer orders which detail the price, quantity and timing of the transfer of ownership (such as risk of loss and title) of the products.

For most customer orders, the transfer of ownership and revenue recognition occurs at the time of shipment of the products to the customer. For the remainder of customer orders, the transfer of ownership and revenue recognition occurs at the time of receipt of the products by the customer, with exception of sales of information equipment in the Document Solutions Group and solar power generating systems in the Life & Environment Group for which sales are made to end users together with installation services. The transfer of ownership and revenue recognition in these cases occur at the completion of installation and customer acceptance, as Kyocera has no further obligations under the contracts and all revenue recognition criteria under ASC 605, “Revenue Recognition” are met. When Kyocera provides a combination of products and services, the arrangement is evaluated under ASC 605-25, “Multiple-Element Arrangements.”

In addition, in the Document Solutions Group, Kyocera may enter into sales contracts and lease agreements ranging from one to seven years directly with end users. Sales contracts and lease agreements may include installation services and have customer acceptance clauses. For sales and sales-type lease agreements, revenue is recognized at the completion of installation and customer acceptance which usually occurs on the same business day as delivery. For sales-type leases, unearned income (which represents interest) is amortized over the lease term using the effective interest method in accordance with ASC 840, “Leases.”

For all sales in the above segments, product returns are only accepted if the products are determined to be defective. There are no price protections, stock rotation or returns provisions, except for certain programs in the Electronic Devices Group as noted below.

Sales Incentives

In the Electronic Devices Group, sales to independent electronic component distributors may be subject to various sale programs for which a provision for incentive programs is recorded as a reduction of revenue at the time of sale, as further described below in accordance with ASC 605-50, “Customer Payments and Incentives” and ASC 605-15, “Products.”

 

7


Table of Contents

(a) Distributor Stock Rotation Program

Stock rotation is a program whereby distributors are allowed to return for credit, qualified inventory, semi-annually, equal to a certain percentage of the previous six months net sales. In accordance with ASC 605-15, “Products” an estimated sales allowance for stock rotation is recorded at the time of sale based on a percentage of distributor sales using historical trends, current pricing and volume information, other market specific information and input from sales, marketing and other key management personnel. These procedures require the exercise of significant judgments. Kyocera believes that these procedures enable Kyocera to make reliable estimates of future returns under the stock rotation program. Kyocera’s actual results have historically approximated its estimates. When the products are returned and verified, the distributor is given credit against their accounts receivables.

(b) Distributor Ship-from-Stock and Debit Program

Ship-from-Stock and Debit (ship and debit) is a program designed to assist distributors in meeting competitive prices in the marketplace on sales to their end customers. Ship and debit programs require a request from the distributor for a pricing adjustment of a specific part for a sale to the distributor’s end customers from the distributor’s stock. Ship and debit authorizations may cover current and future distributor activity for a specific part for a sale to their customers. In accordance with ASC 605, “Revenue Recognition” at the time Kyocera records the sales to distributors, an allowance for the estimated future distributor activities related to such sales is provided since it is probable that such sales to distributors will result in ship and debit activities. In accordance with ASC 605-15, “Products” Kyocera records an estimated sales allowance based on sales during the period, credits issued to distributors, distributor inventory levels, historical trends, market conditions, pricing trends noted in direct sales activity with original equipment manufacturers and other customers, and input from sales, marketing and other key management personnel. These procedures require the exercise of significant judgments. Kyocera believes that these procedures enable Kyocera to make reliable estimates of future credits under the ship and debit program. Kyocera’s actual results have historically approximated its estimates.

Sales Rebates

In the case of sales to distributors in the Industrial & Automotive Components Group and Document Solutions Group, Kyocera provides cash rebates when predetermined sales targets are achieved during a certain period. Provisions for sales rebates are recorded as a reduction of revenue at the time of revenue recognition based on the best estimate of forecasted sales to each distributor in accordance with ASC 605-50, “Customer Payments and Incentives.”

Sales Returns

Kyocera records an estimated sales returns allowance at the time of sales based on historical return experience.

Products Warranty

For after-service costs to be paid during warranty periods, Kyocera accrues a product warranty liability for claims under warranties relating to the products that have been sold. Kyocera records an estimated product warranty liability based on its historical repair experience with consideration given to the expected level of future warranty costs.

In the Document Solutions Group, Kyocera provides a standard one year manufacturer’s warranty on its products. For sales directly to end users, Kyocera offers extended warranty plans that may be purchased and that are renewable in one year incremental periods at the end of the warranty term. Service revenues are recognized over the term of the related service maintenance contracts in accordance with ASC 605-20, “Services.”

 

8


Table of Contents

(3) Cash and cash equivalents

Kyocera considers cash, bank deposits and all highly liquid investments purchased with an original maturity of three months or less to be cash and cash equivalents accounted for under ASC 305, “Cash and Cash Equivalents.”

(4) Translation of foreign currencies

Assets and liabilities of consolidated foreign subsidiaries and affiliates accounted for by the equity method are translated into Japanese yen at the exchange rates in effect on the respective balance sheet dates. Operating accounts are translated at the average exchange rates for the respective periods accounted for under ASC 830, “Foreign Currency Matters.” Translation adjustments result from the process of translating foreign currency denominated financial statements into Japanese yen. These translation adjustments, which are not included in the determination of net income, are included in other comprehensive income.

Assets and liabilities denominated in foreign currencies are translated at the exchange rates in effect on the respective balance sheet dates, and resulting transaction gains or losses are included in the determination of net income.

(5) Allowance for doubtful accounts

Kyocera maintains allowances for doubtful accounts related to trade notes receivables, trade accounts receivables and finance receivables for estimated losses resulting from customers’ inability to make timely payments, including interest on finance receivables. Kyocera’s estimates are based on various factors, including the length of past due payments, historical experience and current business environments. In circumstances where it is aware of a specific customer’s inability to meet its financial obligations, a specific allowance against these amounts is provided, considering the fair value of assets pledged by the customer as collateral.

(6) Inventories

Inventories are accounted for under ASC 330, “Inventory.” Inventories are stated at the lower of cost and net realizable value. The remaining balance of raw materials to be purchased under the long term purchase agreements are also stated at the lower of cost and net realizable value.

For finished goods and work in process, cost is mainly determined by the average method. For raw materials and supplies, cost is mainly determined by the first-in, first-out method.

Kyocera recognizes estimated write-down of inventories for excess, slow-moving and obsolete inventories.

(7) Securities

Debt and equity securities are accounted for under ASC 320, “Investments—Debt and Equity Securities.” Securities classified as available-for-sale securities are recorded at fair value, with unrealized gains and losses excluded from income and reported in other comprehensive income, net of taxes. Securities classified as held-to-maturity securities are recorded at amortized cost. Non-marketable equity securities are accounted for by the cost method in accordance with ASC 325, “Investments—Other.”

Kyocera evaluates whether the declines in fair value of securities are other-than-temporary. Other-than-temporary declines in fair value are recorded as a realized loss with a new cost basis. This evaluation is based mainly on the duration and the extent to which the fair value is less than cost, and the anticipated recoverability in fair value.

 

9


Table of Contents

Kyocera also reviews its investments accounted for by the equity method for impairment in accordance with ASC 323, “Investments—Equity Method and Joint Ventures.” Factors considered in assessing whether an indication of other-than-temporary impairment exists include the achievement of business plan objectives and milestones including cash flow projections and the results of planned financing activities, the financial condition and prospects of each investee company, the fair value of the ownership interest relative to the carrying amount of the investment, the period of time during which the fair value of the ownership interest has been below the carrying amount of the investment and other relevant factors. Impairment to be recognized is measured based on the amount by which the carrying amount of the investment exceeds the fair value of the investment. Fair value is determined through the use of various methodologies such as discounted cash flows and comparable valuations of similar companies.

(8) Property, plant and equipment and depreciation

Property, plant and equipment are accounted for under ASC 360, “Property, Plant, and Equipment.” Kyocera provides for depreciation of buildings, machinery and equipment over their estimated useful lives primarily on the declining balance method. The principal estimated useful lives used for computing depreciation are as follows:

 

Buildings

  

2 to 50 years

Machinery and equipment

  

2 to 20 years

Major renewals and betterments are capitalized as tangible assets and they are depreciated based on estimated useful lives. The costs of minor renewals, maintenance and repairs are charged to expenses in the period incurred. When assets are sold or otherwise disposed of, the gains or losses thereon, computed on the basis of the difference between depreciated costs and proceeds, are credited or charged to income in the period of disposal, and costs and accumulated depreciation are removed from accounts.

(9) Goodwill and other intangible assets

Goodwill and other intangible assets are accounted for under ASC 350, “Intangibles—Goodwill and Other.” Goodwill and intangible assets with indefinite useful lives, rather than being amortized, are tested for impairment at least annually, and also following any events and changes in circumstances that might lead to impairment. Intangible assets with definite useful lives are amortized straight line over their respective estimated useful lives to their estimated residual values, and reviewed for impairment which are accounted for under ASC 360, “Property, Plant, and Equipment” whenever events or changes in circumstances indicate that their carrying amount may not be recoverable.

The principal estimated useful lives for intangible assets are as follows:

 

Customer relationships

   3 to 20 years

Software

   2 to 15 years

Patent rights

   2 to 8 years

Trademarks

   2 to 21 years

Non-patent technology

   5 to 20 years

(10) Impairment of long-lived assets

Impairment of long-lived assets which include intangible assets with definite useful lives is accounted for under ASC 360, “Property, Plant, and Equipment.” Kyocera reviews its long-lived assets for impairment whenever events or changes in circumstances indicate that its carrying amount may not be recoverable.

In the case that their carrying amounts are considered unrecoverable and exceed their fair value, its exceeded amount is recognized as the impairment loss. The fair value is determined using the expected discounted cash flows gained from them directly.

 

10


Table of Contents

(11) Derivative financial instruments

Derivatives are accounted for under ASC 815, “Derivatives and Hedging.” All derivatives are recorded as either assets or liabilities on the balance sheet and measured at fair value. Changes in the fair value of derivatives are charged to income. However cash flow hedges may qualify for hedge accounting, if the hedging relationship is expected to be highly effective in achieving offsetting cash flows of hedging instruments and hedged items. Under hedge accounting, changes in the fair value of the effective portion of these cash flow hedge derivatives are deferred in accumulated other comprehensive income and charged to income when the underlying transaction being hedged occurs.

Kyocera designates certain foreign currency forward contracts. However, changes in fair value of most of the foreign currency forward contracts are recorded in income without applying hedge accounting as it is expected that such changes will be offset by corresponding gains or losses of the underlying hedged assets and liabilities. Kyocera’s affiliate accounted for by the equity method designates certain interest rate swaps with applying hedge accounting to this transaction.

Kyocera formally documents all relationships between hedging instruments and hedged items, as well as its risk management objective and strategy for undertaking various hedge transactions. This process includes linking all derivatives designated as cash flow hedges to specific assets and liabilities on the balance sheet or forecasted transactions. Kyocera also formally assesses, both at the hedge’s inception and on an ongoing basis, whether the derivatives that are used in hedging transactions are highly effective in offsetting cash flows of hedged items. When it is determined that a derivative is not a highly effective hedge or that it has ceased to be a highly effective hedge, Kyocera discontinues hedge accounting prospectively. When a cash flow hedge is discontinued, the net derivative gains or losses remain in accumulated other comprehensive income, unless it is probable that the forecasted transaction will not occur at which point the derivative gains or losses are reclassified into income immediately.

(12) Commitments and contingencies

Commitments and contingencies are accounted for under ASC 450, “Contingencies.” Liabilities for loss contingencies are recorded when analysis indicates that it is both probable that a liability has been incurred and the amount of loss can be reasonably estimated. When a range of loss can be estimated, we accrue the most likely amount. In the event that no amount in the range of probable loss is considered most likely, the minimum loss in the range is accrued. Amounts recorded are reviewed periodically and adjusted to reflect additional legal and technical information that becomes available. Legal costs are accrued as incurred.

(13) Stock-based compensation

Costs resulting from share-based payment transactions are accounted for under ASC 718, “Compensation—Stock Compensation,” Kyocera recognizes such costs in the quarterly consolidated financial statements based on the grant date fair value over the measurement method.

(14) Net income attributable to shareholders of Kyocera Corporation

Earnings per share is accounted for under ASC 260, “Earnings Per Share.” Basic earnings per share attributable to shareholders of Kyocera Corporation is 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.

(15) Research and development expenses and advertising expenses

Research and development expenses are accounted for under ASC 730, “Research and Development,” and charged to expense as incurred. Advertising expenses are accounted for under ASC 720-35, “Other Expenses—Advertising Costs,” and charged to expense as incurred.

 

11


Table of Contents

(16) Use of estimates

The preparation of the quarterly consolidated financial statements in conformity with accounting principles generally accepted in the United States of America requires management to make estimates and assumptions that affect the amounts reported in the quarterly consolidated financial statements and accompanying notes. However, actual results could differ from those estimates and assumptions.

(17) Recently adopted accounting standards

On April 1, 2017, Kyocera adopted ASU No. 2016-07, “Investments—Simplifying the Transition to the Equity Method of Accounting.” The accounting standard eliminates the requirement to retroactively adopt the equity method of accounting when an investment qualifies for use of the equity method as a result of an increase in the level of ownership interest or degree of influence. The adoption of this accounting standard did not have a material impact on Kyocera’s consolidated results of operations, financial condition and cash flows.

(18) Recently issued accounting standards to be adopted in the future

In May 2014, the FASB issued ASU No. 2014-09, “Revenue from Contracts with Customers.” This accounting standard requires an entity to recognize revenue to depict the transfer of promised goods or services to customers in an amount that reflects the consideration to which the entity expects to be entitled in exchange for those goods or services. The two permitted transition methods under the standard are the full retrospective method, in which case the standard would be applied to each prior reporting period presented and the cumulative effect of applying the standard would be recognized at the earliest period shown, or the modified retrospective method, in which case the cumulative effect of applying the standard would be recognized at the date of initial application. This accounting standard also requires an entity to disclose sufficient information to enable users of financial statements to understand the nature, amount, timing, and uncertainty of revenue and cash flows arising from contracts with customers. Qualitative and quantitative information is required about:

1. Contracts with customers—including revenue and impairments recognized, disaggregation of revenue, and information about contract balances and performance obligations (including the transaction price allocated to the remaining performance obligations)

2. Significant judgments and changes in judgments—determining the timing of satisfaction of performance obligations (over time or at a point in time), and determining the transaction price and amounts allocated to performance obligations

3. Assets recognized from the costs to obtain or fulfill a contract.

Furthermore, in August 2015, the FASB issued ASU No. 2015-14, “Revenue from Contracts with Customers—Deferral of the Effective Date.” This accounting standard defers the effective date of ASU No. 2014-09 for all entities by one year. As a result, ASU No. 2014-09 will be effective for annual reporting periods beginning after December 15, 2017, including interim periods within that reporting period. Kyocera is currently in the assessment phase of implementing these standards. Kyocera has reviewed, and is continuing to review, Kyocera’s contracts with customers to identify performance obligations and the associated transaction price and timing of revenue recognition in accordance with ASU 2014-09. As Kyocera continues the analysis of the impact on Kyocera’s consolidated financial statements and related disclosures, Kyocera will evaluate and determine the appropriate adoption methodology. Kyocera has not yet quantified and, accordingly, is evaluating the impact that these accounting standards will have on Kyocera’s consolidated results of operations, financial position and cash flows.

 

12


Table of Contents

In January 2016, the FASB issued ASU No. 2016-01, “Recognition and Measurement of Financial Assets and Financial Liabilities.” The amendments in this accounting standard address certain aspects of recognition, measurement, presentation, and disclosure of financial instruments. This accounting standard includes the requirement that equity securities be measured at fair value with changes in the fair value recognized through net income. This accounting standard will be effective for fiscal years beginning after December 15, 2017, including interim periods within those fiscal years. Kyocera currently has equity securities that will need to be measured at fair value through earnings as opposed to being measured through other comprehensive income when this accounting standard is adopted. If Kyocera adopted this accounting standard in the three months ended June 30, 2017, the amount of ¥ 21,421 millions of gain due to changes in the fair value of equity securities during the three months ended June 30, 2017 would be reported in “other income (expenses)” in the consolidated statements of income.

In February 2016, the FASB issued ASU No. 2016-02, “Leases.” This accounting standard requires a lessee to recognize in the statement of financial position a liability to make lease payments and a right-of-use asset representing its right to use the underlying asset for the lease term. This accounting standard will be effective for fiscal years beginning after December 15, 2018, including interim periods within those fiscal years. Kyocera is currently evaluating the impact that this accounting standard will have on Kyocera’s consolidated results of operations, financial position and cash flows.

(19) Reclassifications

Certain reclassifications and changes have been made to the corresponding footnotes to conform to the current presentation.

 

13


Table of Contents

3. BUSINESS COMBINATION

Business combination for the three months ended June 30, 2016

On May 2, 2016, Kyocera acquired 100% of the common stock of SGS Tool Company which is the U.S. based solid tool manufacturing and sales company for ¥9,046 million by cash in order to strengthen Kyocera’s cutting tool business in North America, and made it consolidated subsidiary and changed its name as Kyocera SGS Precision Tools, Inc.

Kyocera has used the acquisition method of accounting to record assets acquired and liabilities assumed in accordance with ASC 805, “Business Combinations.” The allocation of fair value to the acquired assets and assumed liabilities was completed during the three months ended March 31, 2017. As a result, the allocation of fair value to them based on estimated fair value in this business combination as of the acquisition date and goodwill were recognized as described below.

Acquisition-related costs of ¥282 million were included in selling, general and administrative expenses in the consolidated statement of income for the three months ended June 30, 2016. The result of operation of the acquired business was included into Kyocera’s quarterly consolidated financial statements since the acquisition date. For segment reporting, it is reported in the Industrial & Automotive Components Group.

 

     May 2, 2016  
     (Yen in millions)  

Cash and cash equivalents

   ¥ 501  

Trade receivables

     940  

Inventories

     1,330  

Others

     145  
  

 

 

 

Total current assets

     2,916  
  

 

 

 

Property, plant and equipment

     3,514  

Intangible assets

     1,432  

Others

     1  
  

 

 

 

Total non-current assets

     4,947  
  

 

 

 

Total assets

     7,863  
  

 

 

 

Trade notes and accounts payable

     172  

Others

     779  
  

 

 

 

Total current liabilities

     951  
  

 

 

 

Non-current liabilities

     1,111  
  

 

 

 

Total liabilities

     2,062  
  

 

 

 

Total identified assets and liabilities

     5,801  
  

 

 

 

Purchase price (Cash)

     9,046  
  

 

 

 

Goodwill*

   ¥ 3,245  
  

 

 

 

 

* The total amount of goodwill is not expected to be deductible for tax purposes.

Intangible assets that Kyocera recorded due to this acquisition are summarized as follows:

 

     May 2, 2016  
     (Yen in millions)  

Intangible assets subject to amortization:

  

Customer relationships

   ¥ 1,160  

Trademarks

     213  

Others

     59  
  

 

 

 

Total

   ¥ 1,432  
  

 

 

 

The weighted average amortization periods for customer relationships and trademarks are 15 years and two years, respectively.

The pro forma results are not presented as the revenue and earnings were not material.

 

14


Table of Contents

4. DEBT SECURITIES, EQUITY SECURITIES AND OTHER INVESTMENTS

(1) Debt and equity securities with readily determinable fair values

Investments in debt and equity securities at March 31, 2017 and June 30, 2017, included in short-term investments in debt securities and in long-term investments in debt and equity securities in the consolidated balance sheets, are summarized as follows:

 

     March 31, 2017      June 30, 2017  
     Cost*1      Aggregate
Fair Value
     Gross
Unrealized
Gains
     Gross
Unrealized
Losses
     Cost*1      Aggregate
Fair Value
     Gross
Unrealized
Gains
     Gross
Unrealized
Losses
 
     (Yen in millions)  

Available-for-sale securities:

                       

Marketable equity securities*2

   ¥ 267,526      ¥ 1,048,127      ¥ 780,644      ¥ 43      ¥ 267,426      ¥ 1,069,406      ¥ 802,013      ¥ 33  
  

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

 

Total equity securities

     267,526        1,048,127        780,644        43        267,426        1,069,406        802,013        33  
  

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

 

Total available-for-sale securities

     267,526        1,048,127        780,644        43        267,426        1,069,406        802,013        33  
  

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

 

Held-to-maturity securities:

                       

Corporate bonds

     167,329        167,135        172        366        168,471        168,943        577        105  

Government bonds and public bonds

     3        3                      3        3                
  

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

 

Total held-to-maturity securities

     167,332        167,138        172        366        168,474        168,946        577        105  
  

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

 

Total

   ¥ 434,858      ¥ 1,215,265      ¥ 780,816      ¥ 409      ¥ 435,900      ¥ 1,238,352      ¥ 802,590      ¥ 138  
  

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

 

 

*1 Cost represents amortized cost for held-to-maturity securities and acquisition cost for available-for-sale securities. The cost basis of the individual securities is written down to fair value as a new cost basis when other-than-temporary impairment is recognized.

 

*2 Marketable equity securities mainly consist of the shares of KDDI Corporation, which is a telecommunications carrier in Japan. At June 30, 2017, Kyocera Corporation’s equity interest in KDDI Corporation was 12.95%. Cost, aggregate fair value and gross unrealized gain of the shares of KDDI Corporation held by Kyocera are as follows:

 

     March 31, 2017      June 30, 2017  
     Cost      Aggregate
Fair Value
     Gross
Unrealized
Gain
     Gross
Unrealized
Loss
     Cost      Aggregate
Fair Value
     Gross
Unrealized
Gain
     Gross
Unrealized
Loss
 
     (Yen in millions)  

Shares of KDDI Corporation

   ¥ 242,868      ¥    979,151      ¥ 736,283      ¥   —      ¥ 242,868      ¥    996,911      ¥ 754,043      ¥   —  

Kyocera received dividends from KDDI Corporation, and included them in interest and dividend income in the consolidated statements of income, are summarized as follows:

 

     Three months ended June 30,  
     2016      2017  
     (Yen in millions)  

Dividends from KDDI Corporation

   ¥ 11,728      ¥ 15,079  

 

15


Table of Contents

Short-term investments in debt securities and long-term investments in debt and equity securities at March 31, 2017 and June 30, 2017 are as follows:

 

     March 31, 2017      June 30, 2017  
     Available-
for-Sale
     Held-to-
Maturity
     Total      Available-
for-Sale
     Held-to-
Maturity
     Total  
     (Yen in millions)  

Short-term investment in debt securities

   ¥      ¥ 84,703      ¥ 84,703      ¥      ¥ 84,584      ¥ 84,584  

Long-term investment in debt and equity securities

     1,048,127        82,629        1,130,756        1,069,406        83,890        1,153,296  
  

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

 

Total

   ¥ 1,048,127      ¥ 167,332      ¥ 1,215,459      ¥ 1,069,406      ¥ 168,474      ¥ 1,237,880  
  

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

 

(2) Other investments

Kyocera holds time deposits and certificates of deposits which are due over three months to original maturity, non-marketable equity securities, long-term loans and investments in affiliates and an unconsolidated subsidiary. Carrying amounts of these investments at March 31, 2017 and June 30, 2017, included in other short-term investments and in other long-term investments in the consolidated balance sheets, are summarized as follows:

 

     March 31, 2017      June 30, 2017  
     (Yen in millions)  

Time deposits and certificates of deposits (due over 3 months)

   ¥ 213,143      ¥ 232,850  

Non-marketable equity securities

     15,865        16,393  

Long-term loans

     43        37  

Investments in affiliates and an unconsolidated subsidiary

     5,863        5,517  
  

 

 

    

 

 

 

Total

   ¥ 234,914      ¥ 254,797  
  

 

 

    

 

 

 

 

16


Table of Contents

5. FAIR VALUE

Fair value is the price that would be received from selling an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date. The three levels of inputs that may be used to measure fair value are as follows:

 

Level 1:    Unadjusted quoted prices in active markets for identical assets and liabilities.
Level 2:    Observable inputs other than those included in Level 1. For example, quoted prices for similar assets or liabilities in active markets or quoted prices for identical assets or liabilities in inactive markets.
Level 3:    Unobservable inputs reflecting management’s own assumptions about the inputs used in pricing the asset or liability.

(1) Assets and liabilities measured at fair value on a recurring basis

 

     March 31, 2017      June 30, 2017  
     Level 1      Level 2      Level 3      Total      Level 1      Level 2      Level 3      Total  
     (Yen in millions)  

Current Assets:

                       

Foreign currency forward contracts

   ¥      ¥ 2,470      ¥      ¥ 2,470      ¥      ¥ 743      ¥      ¥ 743  
  

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

 

Total derivatives

            2,470               2,470               743               743  
  

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

 

Total current assets

            2,470               2,470               743               743  
  

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

 

Non-Current Assets:

                       

Marketable equity securities

     1,048,127                      1,048,127        1,069,406                      1,069,406  
  

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

 

Total equity securities

     1,048,127                      1,048,127        1,069,406                      1,069,406  
  

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

 

Total non-current assets

     1,048,127                      1,048,127        1,069,406                      1,069,406  
  

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

 

Total assets

   ¥ 1,048,127      ¥ 2,470      ¥      ¥ 1,050,597      ¥ 1,069,406      ¥ 743      ¥      ¥ 1,070,149  
  

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

 

Current Liabilities:

                       

Foreign currency forward contracts

   ¥      ¥ 4,770      ¥      ¥ 4,770      ¥      ¥ 6,977      ¥      ¥ 6,977  
  

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

 

Total derivatives

            4,770               4,770               6,977               6,977  
  

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

 

Total current liabilities

   ¥      ¥ 4,770      ¥      ¥ 4,770      ¥      ¥ 6,977      ¥      ¥ 6,977  
  

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

 

The fair value of Level 1 investments is quoted price in an active market with sufficient volume and frequency of transactions.

The fair value of Level 2 investments is other than quoted price included within Level 1 that is observable for the asset or liability, either directly or indirectly through corroboration with observable market data. Kyocera did not recognize any transfers between Levels 1 and 2 for the three months ended June 30, 2017.

The fair value of Level 2 derivatives is estimated based on quotes from financial institutions. With respect to the detail information of derivatives, please refer to the Note 7 to the Quarterly Consolidated Financial Statements.

 

17


Table of Contents

(2) Fair value of financial instruments

The fair values of financial instruments and the methods and assumptions used to estimate the fair value are as follows:

 

     March 31, 2017      June 30, 2017  
     Carrying Amount      Fair Value      Carrying Amount      Fair Value  
     (Yen in millions)  

Assets (a):

           

Short-term investments in debt securities

   ¥ 84,703      ¥ 84,713      ¥ 84,584      ¥ 84,599  

Long-term investments in debt and equity securities

     1,130,756        1,130,552        1,153,296        1,153,753  

Other long-term investments (excluding investments in affiliates and an unconsolidated subsidiary)

     16,383        16,383        34,919        34,919  
  

 

 

    

 

 

    

 

 

    

 

 

 

Total

   ¥ 1,231,842      ¥ 1,231,648      ¥ 1,272,799      ¥ 1,273,271  
  

 

 

    

 

 

    

 

 

    

 

 

 

Liabilities (b):

           

Long-term debt (including due within one year)

   ¥ 24,644      ¥ 24,644      ¥ 26,209      ¥ 26,209  
  

 

 

    

 

 

    

 

 

    

 

 

 

Total

   ¥ 24,644      ¥ 24,644      ¥ 26,209      ¥ 26,209  
  

 

 

    

 

 

    

 

 

    

 

 

 

 

(a) For investments with active markets, fair value is based on quoted market prices. For non-marketable equity securities, it is not practicable to estimate the fair value because of the lack of the market price and difficulty in estimating fair value without incurring excessive cost. In addition, Kyocera did not identify any events or changes in circumstances that may have had a significant adverse effect on these investments. The aggregated carrying amounts of these investments included in the above table at March 31, 2017 and June 30, 2017 were ¥15,852 million and ¥16,380 million, respectively. Fair value of held-to-maturity investments in debt securities is mainly classified as Level 2.

 

(b) The fair value is estimated by discounting cash flows, using current interest rates for instruments with similar terms and remaining maturities, and classified as Level 2.

Carrying amounts of cash and cash equivalents, other short-term investments, trade notes receivables, trade accounts receivables, short-term borrowings, trade notes and accounts payable, and other notes and accounts payable approximate fair values because of the short maturity of these instruments.

6. INVENTORIES

Inventories at March 31, 2017 and June 30, 2017 are as follows:

 

     March 31, 2017      June 30, 2017  
     (Yen in millions)  

Finished goods

   ¥ 142,615      ¥ 161,385  

Work in process

     66,956        70,790  

Raw materials and supplies

     121,584        120,715  
  

 

 

    

 

 

 

Total

   ¥ 331,155      ¥ 352,890  
  

 

 

    

 

 

 

 

18


Table of Contents

7. DERIVATIVES AND HEDGING

Kyocera’s activities are exposed to a variety of market risks, including the effects of changes in foreign currency exchange rates, interest rates and stock prices. Approximately 60% of Kyocera’s net sales are generated from overseas customers, which expose Kyocera to foreign currency exchange rate fluctuations. These financial exposures to market risks are monitored and managed by Kyocera as an integral part of its overall risk management program. Kyocera’s risk management program focuses on the unpredictability of financial markets and seeks to reduce the potentially adverse effects that the volatility of these markets may have on its operating results.

Kyocera maintains a foreign currency risk management strategy that uses derivative financial instruments, such as foreign currency forward contracts to minimize the volatility in its cash flows caused by changes in foreign currency exchange rates. Movements in foreign currency exchange rates pose a risk to Kyocera’s operations and competitive position, since exchange rate changes may affect the profitability, cash flows, and business and/or pricing strategies of non Japan-based competitors. These movements affect cross-border transactions that involve, but not limited to, direct export sales made in foreign currencies and raw material purchases incurred in foreign currencies.

By using derivative financial instruments to hedge exposures to changes in exchange rates, Kyocera became exposed to credit risk. Credit risk is the failure of the counterparty to perform under the terms of the derivative contracts. When the fair value of a derivative contract is positive, the counterparty owes Kyocera, which creates repayment risk for Kyocera. When the fair value of a derivative contract is negative, Kyocera owes the counterparty and, therefore, it does not possess repayment risk. Kyocera minimizes the credit (or repayment) risk in derivative financial instruments by (a) entering into transactions with creditworthy counterparties, (b) limiting the amount of exposure to each counterparty, and (c) monitoring the financial condition of its counterparties.

Kyocera does not hold or issue such derivative financial instruments for trading purposes.

Kyocera’s affiliate accounted for by the equity method uses interest rate swaps to minimize significant, unanticipated cash flow fluctuations caused by interest rate volatility. The affiliate also reduces credit risks by entering into transactions with certain creditworthy counterparty and limiting the amount of exposure to the counterparty.

Cash Flow Hedges:

Kyocera uses certain foreign currency forward contracts with terms normally lasting for less than four months designated as cash flow hedges to protect against foreign currency exchange rate risks inherent in its forecasted transactions related to purchase commitments and sales. Kyocera’s affiliate accounted for by the equity method uses interest rate swaps mainly to convert a portion of its variable rate debt to fixed rate debt.

Other Derivatives:

Kyocera’s main direct foreign export sales and some import purchases are denominated in the customers’ and suppliers’ transaction currencies, principally the U.S. dollar and the Euro. Kyocera purchases foreign currency forward contracts to protect against the adverse effects that exchange rate fluctuations may have on foreign-currency-denominated trade receivables and payables. The gains and losses on both the derivatives and the foreign-currency-denominated trade receivables and payables are recorded as foreign currency transaction gains, net in the consolidated statement of income. Kyocera does not adopt hedge accounting for such derivatives.

 

19


Table of Contents

The aggregate contractual amounts of derivative financial instruments at March 31, 2017 and June 30, 2017 are as follows:

 

         March 31, 2017      June 30, 2017  
         (Yen in millions)  

Derivatives designated as hedging instruments:

       

Foreign currency forward contracts

     ¥ 13,701      ¥ 14,092  
    

 

 

    

 

 

 

Derivatives not designated as hedging instruments:

       

Foreign currency forward contracts

       315,523        397,175  
    

 

 

    

 

 

 

Total derivatives

     ¥ 329,224      ¥ 411,267  
    

 

 

    

 

 

 

 

The fair value and location of derivative financial instruments in the consolidated balance sheets at March 31, 2017 and June 30, 2017 are as follows:

 

 

   

Location

   March 31, 2017      June 30, 2017  
         (Yen in millions)  

Derivative assets:

       

Derivatives designated as hedging instruments:

       

Foreign currency forward contracts

  Other current assets    ¥ 129      ¥ 107  
    

 

 

    

 

 

 

Derivatives not designated as hedging instruments:

       

Foreign currency forward contracts

  Other current assets      2,341        636  
    

 

 

    

 

 

 

Total derivative assets

     ¥ 2,470      ¥ 743  
    

 

 

    

 

 

 

Derivative liabilities:

       

Derivatives designated as hedging instruments:

       

Foreign currency forward contracts

  Other current liabilities    ¥ 77      ¥ 136  
    

 

 

    

 

 

 

Derivatives not designated as hedging instruments:

       

Foreign currency forward contracts

  Other current liabilities      4,693        6,841  
    

 

 

    

 

 

 

Total derivative liabilities

     ¥     4,770      ¥     6,977  
    

 

 

    

 

 

 

Changes in the fair value of derivative financial instruments not designated as hedging instruments for the three months ended June 30, 2016 and 2017 are as follows:

 

          Three months ended June 30,  

Type of derivatives

  

Location

           2016                      2017          
          (Yen in millions)  

Foreign currency forward contracts

   Foreign currency transaction gains (losses), net    ¥ 13,319      ¥ (3,853

Realized gains (losses) on derivative financial instruments designated as hedging instruments are not presented because the amounts were not material.

 

20


Table of Contents

8. BENEFIT PLANS

Domestic:

Kyocera Corporation and its major domestic subsidiaries sponsor funded defined benefit pension plans or unfunded retirement and severance plans for their employees.

Net periodic pension costs at Kyocera Corporation and its major domestic subsidiaries for the three months ended June 30, 2016 and 2017 include the following components and were recorded in cost of sales, and selling, general and administrative expenses in the consolidated statements of income.

 

     Three months ended June 30,  
     2016     2017  
     (Yen in millions)  

Service cost

   ¥ 3,412     ¥ 3,270  

Interest cost

     46       96  

Expected return on plan assets

     (999     (1,042

Amortization of prior service cost

     (1,091     (1,086

Recognized actuarial loss

             617               496  
  

 

 

   

 

 

 

Net periodic pension costs

   ¥ 1,985     ¥ 1,734  
  

 

 

   

 

 

 

Foreign:

Kyocera’s foreign consolidated subsidiaries, such as Kyocera International, Inc. and its consolidated subsidiaries, AVX Corporation and its consolidated subsidiaries, and TA Triumph-Adler GmbH, maintain non-contributory defined benefit pension plans in the U.S., Germany and other countries.

Net periodic pension costs at these foreign subsidiaries for the three months ended June 30, 2016 and 2017 include the following components and were recorded in cost of sales, and selling, general and administrative expenses in the consolidated statements of income.

 

     Three months ended June 30,  
     2016     2017  
     (Yen in millions)  

Service cost

   ¥ 177     ¥ 177  

Interest cost

     408       394  

Expected return on plan assets

     (447     (465

Amortization of prior service cost

     5       5  

Recognized actuarial loss

             278               232  
  

 

 

   

 

 

 

Net periodic pension costs

   ¥ 421     ¥ 343  
  

 

 

   

 

 

 

 

21


Table of Contents

9. COMMITMENTS AND CONTINGENCIES

(1) Assets pledged as collateral

Kyocera’s investment in Kagoshima Mega Solar Power Corporation, which was ¥1,735 million at June 30, 2017 accounted for by the equity method, is pledged as collateral for loans of ¥18,198 million from financial institutions of Kagoshima Mega Solar Power Corporation.

(2) Contractual obligations for the acquisition or construction of property, plant and equipment and lease contracts

As of June 30, 2017, Kyocera had contractual obligations for the acquisition or construction of property, plant and equipment aggregating ¥17,006 million principally due within one year.

Kyocera is a lessee under long-term operating leases primarily for office space and equipment. The future minimum lease commitments under non-cancelable leases as of June 30, 2017 are as follows:

 

     June 30, 2017  
     (Yen in millions)  

Due within 1 year

   ¥ 5,415  

Due after 1 year but within 2 years

     3,720  

Due after 2 years but within 3 years

     2,522  

Due after 3 years but within 4 years

     1,426  

Due after 4 years but within 5 years

     988  

Thereafter

     1,101  
  

 

 

 

Total

   ¥ 15,172  
  

 

 

 

(3) Long-term purchase agreements for the supply of raw materials

Between 2005 and 2008, Kyocera entered into four long-term purchase agreements (the “LTAs”), principally governed by Michigan law, with Hemlock Semiconductor Operations LLC and its subsidiary Hemlock Semiconductor, LLC (collectively, “Hemlock”) for the supply of polysilicon material for use in its solar energy business. As of June 30, 2017, there was a remaining balance of ¥148,372 million of polysilicon material to be purchased under the LTAs by December 31, 2020, of which ¥41,398 million is prepaid.

After the LTAs were signed, the price of polysilicon material in the world market significantly declined, causing a significant divergence between the market price of polysilicon material and the fixed contract price in the LTAs. In light of these circumstances, Kyocera requested Hemlock to modify the contract terms including its price and quantity, and Kyocera sued Hemlock contending that the LTAs are illegal and unenforceable because of Hemlock’s alleged abuse of a superior position, which is prohibited under Japanese Antitrust Law.

Taking into consideration these condition, Kyocera withheld to order the polysilicon material for the amount stated under the LTAs during the year ended December 31, 2016 (“the 2016 amount”), which is ¥29,623 million in total.As a result, Hemlock issued an invoice for the amount equal to the difference between the 2016 amount and applicable advanced payment, which was due for payment by Kyocera on February 15, 2017.

As Kyocera contends that it has the right to cure a default by purchasing the 2016 amount within a certain period from the issuance of the default notice, Kyocera has accounted for its rights and obligations under the LTAs, and has recorded ¥29,623 million as other current asset for the 2016 amount and ¥21,756 million as other account payable for the amount equal to the difference between the 2016 amount and applicable advanced payment in the consolidated balance sheet as of June 30, 2017.

Kyocera also placed an order for purchasing the 2016 amount on February 15, 2017, in order to secure the right to cure the default.

 

22


Table of Contents

In addition, Kyocera considered the obligation to purchase polysilicon material through 2020 in its analysis based on lower of cost and net realizable value approach taking into consideration the anticipated selling price of the applicable solar products and concluded no loss was incurred as of June 30, 2017.

(4) Environmental matters

Kyocera is involved in various environmental matters and Kyocera currently has certain amount of reserves related to such environmental matters. The amount recorded for identified contingent liabilities is based on estimates. Amounts recorded are reviewed periodically and adjusted to reflect additional legal and technical information that becomes available. The uncertainties about the status of laws, regulations, regulatory actions, technology and information related to individual matters make it difficult to develop an estimate of the reasonably possible aggregate environmental remediation exposure; therefore these costs could differ from our current estimates.

(5) Others

On April 25, 2013, AVX was named as a defendant in a patent infringement case filed in the United States District Court for the District of Delaware captioned Greatbatch, Inc. v AVX Corporation. This case alleged that certain AVX products infringe on one or more of six Greatbatch patents. On January 26, 2016, the jury returned a verdict in favor of the plaintiff in the first phase of a segmented trial and found damages to Greatbatch in the amount of ¥4,200 million ($37.5 million). AVX is reviewing this initial verdict, consulting with its legal advisors on what action AVX may take in response, and continuing to litigate the rest of the case. As of June 30, 2017, AVX and Kyocera have the above mentioned amount for this case in other accrued liabilities in the consolidated balance sheets.

Kyocera is also subject to various lawsuits and claims which arise in the ordinary course of business. Kyocera consults with legal counsel and assesses the likelihood of adverse outcome of these contingencies. Kyocera records liabilities for these contingencies when the likelihood of an adverse outcome is probable and the amount can be reasonably estimated. Based on the information available, management believes that damages, if any, resulting from these actions will not have a significant impact on Kyocera’s consolidated results of operations, financial condition and cash flows.

 

23


Table of Contents

10. EQUITY

Cash dividends per share are those declared with respect to the earnings for the respective periods for which dividends are proposed by the Board of Directors. Dividends are charged to retained earnings in the year in which they are declared.

Based on the resolution at the Ordinary General Shareholders’ Meeting held on June 27, 2017, Kyocera Corporation declared year-end cash dividends totaling ¥22,063 million, ¥60 per share of common stock effective June 28, 2017 to shareholders of record on March 31, 2017.

Changes in Kyocera Corporation shareholders’ equity, noncontrolling interests and total equity for the three months ended June 30, 2016 and 2017 are as follows:

 

     Three months ended June 30, 2016  
     Kyocera Corporation
Shareholders’
Equity
    Noncontrolling
Interests
    Equity  
     (Yen in millions)  

Balance at beginning of period

   ¥ 2,284,264     ¥ 89,498     ¥ 2,373,762  

Comprehensive income

      

Net income

     17,453       1,021       18,474  

Other comprehensive income—net of taxes

      

Net unrealized gains (losses) on securities

     18,243       (39     18,204  

Net unrealized gains (losses) on derivative financial instruments

     (31     14       (17

Pension adjustments

     1,295       126       1,421  

Foreign currency translation adjustments

     (47,045     (6,791     (53,836
  

 

 

   

 

 

   

 

 

 

Total other comprehensive income

     (27,538     (6,690     (34,228
  

 

 

   

 

 

   

 

 

 

Total comprehensive income

     (10,085     (5,669     (15,754
  

 

 

   

 

 

   

 

 

 

Cash dividends paid to Kyocera Corporation’s shareholders

     (18,343           (18,343

Cash dividends paid to noncontrolling interests

           (960     (960

Equity transactions with noncontrolling interests and others

     85       (686     (601
  

 

 

   

 

 

   

 

 

 

Balance at end of period

   ¥ 2,255,921     ¥ 82,183     ¥ 2,338,104  
  

 

 

   

 

 

   

 

 

 

 

     Three months ended June 30, 2017  
     Kyocera Corporation
Shareholders’
Equity
    Noncontrolling
Interests
    Equity  
     (Yen in millions)  

Balance at beginning of period

   ¥ 2,334,219     ¥ 84,690     ¥ 2,418,909  

Comprehensive income

      

Net income

     34,981       1,547       36,528  

Other comprehensive income—net of taxes

      

Net unrealized gains on securities

     14,993       8       15,001  

Net unrealized losses on derivative financial instruments

     (31     (21     (52

Pension adjustments

     (580     (7     (587

Foreign currency translation adjustments

     6,537       684       7,221  
  

 

 

   

 

 

   

 

 

 

Total other comprehensive income

     20,919       664       21,583  
  

 

 

   

 

 

   

 

 

 

Total comprehensive income

     55,900       2,211       58,111  
  

 

 

   

 

 

   

 

 

 

Cash dividends paid to Kyocera Corporation’s shareholders

     (22,063           (22,063

Cash dividends paid to noncontrolling interests

           (1,049     (1,049

Equity transactions with noncontrolling interests and others

     (4     315       311  
  

 

 

   

 

 

   

 

 

 

Balance at end of period

   ¥ 2,368,052     ¥ 86,167     ¥ 2,454,219  
  

 

 

   

 

 

   

 

 

 

 

24


Table of Contents

11. ACCUMULATED OTHER COMPREHENSIVE INCOME

Changes in accumulated other comprehensive income for the three months ended June 30, 2016 and 2017 are as follows:

 

     Three months ended June 30, 2016  
     Net
Unrealized
Gains on
Securities
    Net
Unrealized
Losses
on Derivative
Financial
Instruments
    Pension
Adjustments
    Foreign
Currency
Translation
Adjustments
    Total
Accumulated
Other
Comprehensive
Income
 
     (Yen in millions)  

Balance at beginning of period

   ¥ 517,190     ¥ (488   ¥ (42,648   ¥ (4,251   ¥ 469,803  

Other comprehensive income

          

Other comprehensive income before reclassifications

     18,297       (82     1,384       (46,877     (27,278

Amounts reclassified from accumulated other comprehensive income

     (54     51       (89     (168     (260
  

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Other comprehensive income

     18,243       (31     1,295       (47,045     (27,538
  

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Equity transactions with noncontrolling interests

           0       (1     (6     (7
  

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Balance at end of period

   ¥ 535,433     ¥ (519   ¥ (41,354   ¥ (51,302   ¥ 442,258  
  

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 
     Three months ended June 30, 2017  
     Net
Unrealized
Gains on
Securities
    Net
Unrealized
Losses
on Derivative
Financial
Instruments
    Pension
Adjustments
    Foreign
Currency
Translation
Adjustments
    Total
Accumulated
Other
Comprehensive
Income
 
     (Yen in millions)  

Balance at beginning of period

   ¥ 499,650     ¥ (449   ¥ (35,362   ¥ (16,360   ¥ 447,479  

Other comprehensive income

          

Other comprehensive income before reclassifications

     15,213       68       (367     6,537       21,451  

Amounts reclassified from accumulated other comprehensive income

     (220     (99     (213           (532
  

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Other comprehensive income

     14,993       (31     (580     6,537       20,919  
  

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Equity transactions with noncontrolling interests

                 5       11       16  
  

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Balance at end of period

   ¥ 514,643     ¥ (480   ¥ (35,937   ¥ (9,812   ¥ 468,414  
  

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

 

25


Table of Contents

Tax effect allocated to each components of other comprehensive income for the three months ended June 30, 2016 and 2017 are as follows:

 

     Before-tax
amount
    Tax (expense)
or benefit
    Net-of-tax
amount
 
     (Yen in millions)  

For the three months ended June 30, 2016:

      

Net unrealized gains on securities

   ¥ 26,016     ¥ (7,812   ¥ 18,204  

Net unrealized losses on derivative financial instruments

     (40     23       (17

Pension adjustments

     1,298       123       1,421  

Foreign currency translation adjustments

     (53,836           (53,836
  

 

 

   

 

 

   

 

 

 

Other comprehensive income

   ¥ (26,562   ¥ (7,666   ¥ (34,228
  

 

 

   

 

 

   

 

 

 

For the three months ended June 30, 2017:

      

Net unrealized gains on securities

   ¥ 21,443     ¥ (6,442   ¥ 15,001  

Net unrealized losses on derivative financial instruments

     (44     (8     (52

Pension adjustments

     (743     156       (587

Foreign currency translation adjustments

     7,221             7,221  
  

 

 

   

 

 

   

 

 

 

Other comprehensive income

   ¥ 27,877     ¥ (6,294   ¥ 21,583  
  

 

 

   

 

 

   

 

 

 

 

26


Table of Contents

12. SUPPLEMENTAL EXPENSE INFORMATION

Supplemental expense information for the three months ended June 30, 2016 and 2017 is as follows:

 

     Three months ended June 30,  
     2016      2017  
     (Yen in millions)  

Research and development expenses

   ¥ 15,269      ¥ 13,584  

Advertising expenses

     1,151        1,049  

Shipping and handling cost included in selling, general and administrative expenses

     5,195        5,985  

13. SEGMENT REPORTING

In order to focus on the direction of the growth strategy, starting from year ending March 31, 2018, Kyocera has changed the classification of its reporting segments which have been “Fine Ceramic Parts Group,” “Semiconductor Parts Group,” “Applied Ceramic Products Group,” “Electronic Device Group,” “Telecommunications Equipment Group” and “Information Equipment Group” to “Industrial & Automotive Components Group,” “Semiconductor Components Group,” “Electronic Devices Group,” “Communications Group,” “Document Solutions Group” and “Life & Environment Group.”

The principal businesses of each reporting segment are as follows.

 

Reporting segment

  

Principal business

Industrial & Automotive Components Group

   Fine Ceramic Components, Automotive Components, Liquid Crystal Displays, Cutting Tools etc.

Semiconductor Components Group

   Ceramic Packages, Organic Multilayer Substrates and Boards etc.

Electronic Devices Group

   Electronic Components, Power Semiconductor Products, Printing Devices etc.

Communications Group

   Mobile Phones, M2M Modules, Information Systems and Telecommunication Services etc.

Document Solutions Group

   Printers, Multifunctional Products, Document Solutions, Supplies etc.

Life & Environment Group

   Solar Power Generating System related Products, Medical Devices, Jewelry and Ceramic Knives etc.

Due to this change, results for the three months ended June 30, 2016 have been reclassified to conform to the current presentation.

Inter-segment sales, operating revenue and transfers are made with reference to prevailing market prices. Transactions between reportable segments are immaterial and not shown separately.

Operating profit for each reporting segment represents net sales, less related costs and operating expenses, excluding corporate gains and equity in earnings of affiliates and an unconsolidated subsidiary, income taxes and net income attributable to noncontrolling interests.

 

27


Table of Contents

Information by reporting segments for the three months ended June 30, 2016 and 2017 is summarized as follows:

Reporting Segments

 

     Three months ended June 30,  
     2016     2017  
     (Yen in millions)  

Net sales:

    

Industrial & Automotive Components Group

   ¥ 52,516     ¥ 61,185  

Semiconductor Components Group

     56,005       60,786  

Electronic Devices Group

     55,453       63,120  

Communications Group

     57,835       57,071  

Document Solutions Group

     74,939       80,973  

Life & Environment Group

        27,308           24,606   

Others

     5,113       5,245  

Adjustments and eliminations

     (9,184     (7,824
  

 

 

   

 

 

 

Net sales

   ¥ 319,985     ¥ 345,162  
  

 

 

   

 

 

 

Income before income taxes:

    

Industrial & Automotive Components Group

   ¥ 1,757     ¥ 6,386  

Semiconductor Components Group

     4,479       8,005  

Electronic Devices Group

     6,920       8,599  

Communications Group

     (4,756     1,158  

Document Solutions Group

     5,851       9,237  

Life & Environment Group

     (1,882     (1,203

Others

     (966     466  
  

 

 

   

 

 

 

Total operating profit

     11,403       32,648  

Corporate gains and equity in earnings (losses) of affiliates and an unconsolidated subsidiary

     13,671       16,901  

Adjustments and eliminations

     (276     (289
  

 

 

   

 

 

 

Income before income taxes

   ¥ 24,798     ¥ 49,260  
  

 

 

   

 

 

 

Depreciation and amortization:

    

Industrial & Automotive Components Group

   ¥ 2,724     ¥ 2,980  

Semiconductor Components Group

     3,501       3,830  

Electronic Devices Group

     3,490       3,920  

Communications Group

     1,710       1,551  

Document Solutions Group

     3,548       3,006  

Life & Environment Group

     1,427       1,538  

Others

     357       308  

Corporate

     433       472  
  

 

 

   

 

 

 

Total

   ¥ 17,190     ¥ 17,605  
  

 

 

   

 

 

 

Capital expenditures:

    

Industrial & Automotive Components Group

   ¥ 3,413     ¥ 4,467  

Semiconductor Components Group

     4,891       2,834  

Electronic Devices Group

     4,656       5,685  

Communications Group

     423       1,233  

Document Solutions Group

     1,255       987  

Life & Environment Group

     1,431       1,124  

Others

     159       180  

Corporate

     980       670  
  

 

 

   

 

 

 

Total

   ¥ 17,208     ¥ 17,180  
  

 

 

   

 

 

 

 

28


Table of Contents

Geographic segments (Net sales by region)

 

     Three months ended June 30,  
     2016     2017  
     (Yen in millions)  

Net sales:

    

Japan

   ¥ 129,255     ¥ 138,883  

Asia

        67,316           78,951   

Europe

     54,284       63,669  

United States of America

     55,395       50,125  

Others

     13,735       13,534  
  

 

 

   

 

 

 

Net sales

   ¥ 319,985     ¥ 345,162  
  

 

 

   

 

 

 

There are no individually material countries with respect to revenue from external customers in Asia, Europe and Others.

 

29


Table of Contents

Geographic Segments (Net sales and Income before income taxes by Geographic area)

 

     Three months ended June 30,  
     2016     2017  
     (Yen in millions)  

Net sales:

    

Japan

   ¥ 134,800     ¥ 146,015  

Intra-group sales and transfer between geographic areas

     108,466       120,491  
  

 

 

   

 

 

 
     243,266       266,506  
  

 

 

   

 

 

 

Asia

     55,584       63,432  

Intra-group sales and transfer between geographic areas

     62,263       70,912  
  

 

 

   

 

 

 
     117,847       134,344  
  

 

 

   

 

 

 

Europe

     56,520       67,455  

Intra-group sales and transfer between geographic areas

     4,933       5,874  
  

 

 

   

 

 

 
     61,453       73,329  
  

 

 

   

 

 

 

United States of America

     66,051       60,841  

Intra-group sales and transfer between geographic areas

     13,090       14,737  
  

 

 

   

 

 

 
     79,141       75,578  
  

 

 

   

 

 

 

Others

     7,030       7,419  

Intra-group sales and transfer between geographic areas

     3,871       4,118  
  

 

 

   

 

 

 
     10,901       11,537  
  

 

 

   

 

 

 

Adjustments and eliminations

     (192,623     (216,132
  

 

 

   

 

 

 

Net sales

   ¥ 319,985     ¥ 345,162  
  

 

 

   

 

 

 

Income before income taxes:

    

Japan

   ¥ 990     ¥ 18,203  

Asia

     3,879       5,902  

Europe

     2,556       3,464  

United States of America

     3,299       4,934  

Others

     133       66  
  

 

 

   

 

 

 
     10,857       32,569  

Corporate gains and Equity in earnings (losses) of affiliates and an unconsolidated subsidiary

     13,671       16,901  

Adjustments and eliminations

     270       (210
  

 

 

   

 

 

 

Income before income taxes

   ¥ 24,798     ¥ 49,260  
  

 

 

   

 

 

 

 

30


Table of Contents

14. PER SHARE INFORMATION

A reconciliation of the numerators and the denominators of basic and diluted earnings per share computations are as follows:

 

     Three months ended June 30,  
     2016      2017  
    

(Yen in millions and shares in thousands,

except per share amounts)

 

Net income attributable to shareholders of Kyocera Corporation

   ¥ 17,453      ¥ 34,981  

Basic earnings per share:

     

Net income attributable to shareholders of Kyocera Corporation

     47.58        95.13  

Diluted earnings per share:

     

Net income attributable to shareholders of Kyocera Corporation

     47.58        95.13  
  

 

 

    

 

 

 

Basic weighted average number of shares outstanding

     366,857        367,712  

Diluted weighted average number of shares outstanding

     366,857        367,712  
  

 

 

    

 

 

 

15. SUBSEQUENT EVENTS

On June 29, 2017, Kyocera Corporation entered into a stock purchase agreement to acquire all of the common stock of Senco Holdings, Inc., a U.S. based company, which provides the product of the pneumatic tool in order to expand the pneumatic power tool related products globally in Kyocera’s cutting tool business. On August 7, 2017, Kyocera Corporation acquired all of the common stock of Senco Holdings, Inc., and made it consolidated subsidiary and changed its name to Kyocera Senco Industrial Tools, Inc.

On July 19, 2017, AVX Corporation, a U.S. based subsidiary, signed an agreement with TT Electronics PLC, a United Kingdom based company which mainly operates manufacturing and sales of electronic components for transportation, industrial, aerospace/defense and medical markets, to acquire its Transportation, Sensing & Control Division in order to expand its business in the automotive market, and they entered into a share transfer agreement to purchase all of the common stock of the related consolidated subsidiaries of TT Electronics PLC. The transaction is expected to close during the three months ending December 31, 2017.

On August 1, 2017, Kyocera Document Solutions Inc., a domestic subsidiary, signed an agreement to acquire the business of DataBank IMX, LLC and acquired all of the common stock of Databank Acquisition Corporation, its parent company, in order to activate a new business model and expand its business in the U.S. market. DataBank IMX, LLC mainly provides solutions services for improving the efficiency of document data management in a company.

 

31


Table of Contents

Reference Information (Unaudited)

1. Production (Sales price)

 

     Three months ended June 30,     Increase
(Decrease)
 
     2016     2017    
     Amount     % to
the total
    Amount     % to
the total
    %  
     (Yen in millions)  

Industrial & Automotive Components Group

   ¥ 49,681       15.8     ¥ 61,801       16.6       24.4  

Semiconductor Components Group

     57,363       18.2       65,905       17.7       14.9  

Electronic Devices Group

     52,721       16.7       65,238       17.5       23.7  
  

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Total Components Business

     159,765       50.7       192,944       51.8       20.8  

Communications Group

     47,612       15.1       61,809       16.6       29.8  

Document Solutions Group

     71,207       22.6       89,345       24.0       25.5  

Life & Environment Group

     35,717       11.3       26,697       7.2       (25.3
  

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Total Equipment & Systems Business

     154,536       49.0       177,851       47.8       15.1  

Others

     830       0.3       1,320       0.4       59.0  
  

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Production

   ¥ 315,131        100.0      ¥ 372,115        100.0        18.1  
  

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

 

2. Orders

 

          
     Three months ended June 30,     Increase
(Decrease)
 
     2016     2017    
     Amount     % to
the total
    Amount     % to
the total
    %  
     (Yen in millions)  

Industrial & Automotive Components Group

   ¥ 53,836       16.3     ¥ 63,589       17.7       18.1  

Semiconductor Components Group

     56,513       17.1       62,569       17.4       10.7  

Electronic Devices Group

     59,841       18.2       70,738       19.7       18.2  
  

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Total Components Business

     170,190       51.6       196,896       54.8       15.7  

Communications Group

     54,184       16.4       61,909       17.2       14.3  

Document Solutions Group

     75,709       22.9       81,298       22.6       7.4  

Life & Environment Group

     33,221       10.1       21,827       6.1       (34.3
  

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Total Equipment & Systems Business

     163,114       49.4       165,034       45.9       1.2  

Others

     3,763       1.1       3,509       1.0       (6.7

Adjustments and eliminations

     (6,959     (2.1     (6,050     (1.7      
  

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Orders

   ¥ 330,108       100.0     ¥ 359,389       100.0       8.9  
  

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Note: Kyocera has changed the classification of its reporting segments from the year ending March 31, 2018. Production and orders for the three months ended June 30, 2016 have been reclassified in line with the change to reporting segment classifications. For detailed information on the new reporting segment classification, please refer to the Note 13 in the Consolidated Financial Statement included in this quarterly report on Form 6-K.

 

32

Wikinvest © 2006, 2007, 2008, 2009, 2010, 2011, 2012. Use of this site is subject to express Terms of Service, Privacy Policy, and Disclaimer. By continuing past this page, you agree to abide by these terms. Any information provided by Wikinvest, including but not limited to company data, competitors, business analysis, market share, sales revenues and other operating metrics, earnings call analysis, conference call transcripts, industry information, or price targets should not be construed as research, trading tips or recommendations, or investment advice and is provided with no warrants as to its accuracy. Stock market data, including US and International equity symbols, stock quotes, share prices, earnings ratios, and other fundamental data is provided by data partners. Stock market quotes delayed at least 15 minutes for NASDAQ, 20 mins for NYSE and AMEX. Market data by Xignite. See data providers for more details. Company names, products, services and branding cited herein may be trademarks or registered trademarks of their respective owners. The use of trademarks or service marks of another is not a representation that the other is affiliated with, sponsors, is sponsored by, endorses, or is endorsed by Wikinvest.
Powered by MediaWiki