Edgar Filing: KYOCERA CORP

Form 6-K

FORM 6-K

SECURITIES AND EXCHANGE COMMISSION

Washington, D. C. 20549

Report of Foreign Private Issuer

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

the Securities Exchange Act of 1934

For the month of April 2008

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):

Indicate by check mark whether by furnishing the information contained in this Form, the registrant is also thereby furnishing the information to the Commission pursuant to Rule 12g3-2(b) under the Securities Exchange Act of 1934.

Yes No X

If “Yes” is marked, indicate below the file number assigned to the registrant in connection with Rule 12g3-2(b); 82-

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/ Akihiko Toyotani
		Akihiko Toyotani
		General Manager of Finance Division
Date: April 25, 2008

Information furnished on this form :

EXHIBITS


Exhibit Number
1.		Consolidated and Non-consolidated Financial Results for the Year Ended March 31, 2008

Consolidated Results of Kyocera Corporation and its Subsidiaries

for the Year Ended March 31, 2008

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

1. Consolidated selected financial information for the year ended March 31, 2008 :

(1) Consolidated results of operations :


	Japanese yen
	Years ended March 31,
	2007			2008
Net sales	¥	1,283,897 million		¥	1,290,436 million
% change from the previous year		9.4	%		0.5	%
Profit from operations		135,102 million			152,420 million
% change from the previous year		35.5	%		12.8	%
Income from continuing operations before income taxes		156,540 million			174,842 million
% change from the previous year		33.5	%		11.7	%
Net income		106,504 million			107,244 million
% change from the previous year		52.8	%		0.7	%
Earnings per share :
Basic		¥566.03			¥566.58
Diluted		564.79			565.80
Return on equity		7.6	%		7.2	%
Income from continuing operations before income taxes to total assets		7.7	%		8.5	%
Profit from operations to net sales		10.5	%		11.8	%

Note :

1. Equity in earnings of affiliates and unconsolidated subsidiaries :


Year ended March 31, 2008 :	¥	6,091 million
Year ended March 31, 2007 :	¥	2,621 million

(2) Consolidated financial position :


	Japanese yen
	March 31,
	2007			2008
Total assets	¥	2,130,464 million		¥	1,976,746 million
Stockholders’ equity		1,514,560 million			1,451,165 million
Stockholders’ equity to total assets		71.1	%		73.4	%
Stockholders’ equity per share		¥8,028.45			¥7,659.72

(3) Consolidated cash flows :


	Japanese yen
	Years ended March 31,
	2007		2008
Cash flows from operating activities	¥	149,644 million	¥	196,935 million
Cash flows from investing activities		(151,703) million		14,894 million
Cash flows from financing activities		(20,645) million		(28,071) million
Cash and cash equivalents at end of year		282,208 million		447,586 million

2. Dividends :


	Japanese yen
	Years ended March 31,				Year ending March 31,
	2007		2008		2009
Interim dividends per share	¥50		¥60		—
Year-end dividends per share	60		60		—
Annual dividends per share	110		120		¥120
Annual aggregate amount of dividends paid	20,719		22,732		—
Dividends to net income	19.4	%	21.2	%	22.3	%
Dividends to stockholders’ equity	1.5	%	1.5	%	—

Note :

Dividends per share for the year ending March 31, 2009 are forecasted to be 120 yen on annual basis.

3. Consolidated financial forecast for the year ending March 31, 2009 :


	Japanese yen
	Year ending March 31, 2009
Net sales	¥1,476,000 million
% change from the previous year		14.4	%
Profit from operations	145,000 million
% change from the previous year		(4.9	)%
Income from continuing operations before income taxes	165,000 million
% change from the previous year		(5.6	)%
Net income	102,000 million
% change from the previous year		(4.9	)%

Note :

Forecast of earnings per share : ¥538.13

Earnings per share amount is computed based on Statement of Financial Accounting Standards No.128.

Forecast of earnings per share is computed based on the diluted average number of shares outstanding during the year ended March 31, 2008.

4. Others

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


	Consolidation	Equity method
Increase	14	0
Decrease	7	0

Please refer to the accompanying “BASIS OF PREPARATION OF CONSOLIDATED FINANCIAL STATEMENTS” on page 25.

(2) Change in accounting policies :

There were changes in accounting policies due to new accounting standards.

Please refer to the accompanying “BASIS OF PREPARATION OF CONSOLIDATED FINANCIAL STATEMENTS” on page 26.

(3) Number of shares (common stock) :


	March 31,
	2007	2008
Number of shares issued	191,309,290	191,309,290
Number of shares in treasury	2,660,201	1,855,119
Number of shares outstanding (average)	188,160,482	189,283,237

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

1. Results for the year ended March 31, 2008 :

(1) Results of operations :


	Japanese yen
	Years ended March 31,
	2007			2008
Net sales	¥	531,557 million		¥	539,320 million
% change from the previous year		11.3	%		1.5	%
Profit from operations		49,432 million			48,551 million
% change from the previous year		23.8	%		(1.8	)%
Recurring profit		73,729 million			90,211 million
% change from the previous year		8.1	%		22.4	%
Net income		62,029 million			67,859 million
% change from the previous year		(9.7	)%		9.4	%

Earnings per share :
Basic		¥329.66			¥358.51
Diluted		¥328.94			¥358.01

(2) Financial Position :


	Japanese yen
	March 31,
	2007			2008
Total assets	¥	1,611,891 million		¥	1,465,960 million
Net assets		1,286,361 million			1,219,415 million
Net assets to total assets		79.8	%		83.2	%
Net assets per share		6,818.80			6,436.46

With regard to forecasts set forth above, please refer to the accompanying “Forward Looking Statements” on page 13.

Business Results

1. Analysis of Business Results

[Business Results for the Year Ended March 31, 2008]

(1) Economic

Situation and Business Environment

The Japanese economy during the year ended March 31, 2008 (fiscal 2008) was characterized by steadily increasing exports and a high level of corporate earnings, while individual consumption was also stable. Slumping housing investment and rising energy and raw material prices, however, resulted in only moderate economic expansion overall. In the United States, credit uneasiness worsened, triggered by issues related to housing loans for individuals with low creditworthiness and culminating in heightened fears of a business slowdown beginning in the summer of 2007. Combined with this, a drop-off in individual consumption and restrained capital investment became obvious and resulted in economic deceleration. The European economy expanded moderately, supported by an increase in exports. Individual consumption in Europe has tapered off since the start of calendar year 2008, however, and the economic outlook has become increasingly uncertain. The Chinese economy continued to expand on account of increases in capital investment and exports, together with robust individual consumption.

In the digital consumer equipment market, which is the principal market for Kyocera Corporation and its consolidated subsidiaries (“Kyocera Group” or “Kyocera”), demands for mobile phone handsets, flat panel TV sets and other equipment expanded steadily, particularly in the first half of fiscal 2008. There have been inventory adjustments for mobile phone handsets in certain Asian markets, however, since the start of calendar year 2008. In addition, the yen appreciated against the U.S. dollar, with the exchange rate at one time dropping below 100 yen to the dollar.

(2) Consolidated

Financial Results

During fiscal 2008, Kyocera Group worked aggressively to introduce new products and improve productivity in order to achieve continuous sales expansion and high profitability.

Consolidated net sales for fiscal 2008 amounted to ¥1,290,436 million, an increase of only 0.5% compared with the year ended March 31, 2007 (fiscal 2007) but still marked the highest. This result can be attributed to an increase in sales in the Components Business, which more than offset a decrease in sales in the Equipment Business.

Profit from operations increased by 12.8% to ¥152,420 million due to a significant increase in profit in the Equipment Business, which was partly offset by a decrease in profit in the Components Business. Depreciation increased by ¥5,475 million resulting from a comprehensive review of the value of fixed assets, triggered by the tax revision in Japan.

Income from continuing operations before income taxes increased by 11.7% to ¥174,842 million due to increases in equity in earnings of affiliates and unconsolidated subsidiaries and interest and dividend income. Net income increased by 0.7% to ¥107,244 million.


	(Yen in millions, except per share amounts and exchange rate)
	Years ended March 31,
	2007		2008		Increase (Decrease) (%)
	Amount	% of net sales	Amount	% of net sales	Increase (Decrease) (%)
Net sales	1,283,897	100.0	1,290,436	100.0	0.5
Profit from operations	135,102	10.5	152,420	11.8	12.8
Income from continuing operations before income taxes	156,540	12.2	174,842	13.5	11.7
Net income	106,504	8.3	107,244	8.3	0.7
Diluted earnings per share	564.79	—	565.80	—	0.2
Average US$ exchange rate	117	—	114	—	—
Average Euro exchange rate	150	—	162	—	—

(3) Implemented Management Measures and Significant Management Decisions made in Fiscal 2008

1) In September 2007, AVX Corporation (AVX), a U.S. subsidiary, acquired American Technical Ceramics Corp., a U.S.-based manufacturer of electronic components, and made it a wholly-owned subsidiary, with the goal of strengthening its business in the area of advanced components such as high frequency ceramic capacitors. This acquisition has enabled AVX to expand its product line-up and its sales networks for high-frequency products.

2) With the objective of further enhancing the Telecommunications Equipment Group, Kyocera concluded a basic agreement with SANYO Electric Co., Ltd. (SANYO) in October 2007 regarding acquisition by Kyocera of the mobile phone business of SANYO, and it concluded a final agreement relating thereto in January 2008. Through this acquisition, Kyocera seeks to expand sales and boost profitability in the Telecommunications Equipment Group by expanding its sales channels in North America and by integrating the excellent product development and design technologies of SANYO with the management resources of Kyocera. This acquisition was completed on April 1, 2008.

(4) Consolidated Financial Results by Business Segment

Sales in the Components Business increased by 4.5% compared with fiscal 2007 to ¥679,990 million, while operating profit decreased by 4.1% to ¥100,373 million. The operating profit ratio was 14.8%.

In particular, the Applied Ceramic Products Group posted a considerable increase in sales compared with fiscal 2007 driven by the solar energy business in overseas markets, which led to the overall increase in sales in the Components Business compared with fiscal 2007. Despite an increase in profit in the Applied Ceramic Products Group, operating profit in the Components Business decreased overall compared to fiscal 2007 due to a decline in profit in the Fine Ceramic Parts Group, the Semiconductor Parts Group and the Electronic Device Group.

Sales in the Equipment Business decreased by 4.3% compared with fiscal 2007 to ¥497,563 million, while operating profit increased significantly by 35.2% to ¥46,324million. The operating profit ratio was 9.3%.

Overall sales in the Equipment Business were down from fiscal 2007, despite an increase in sales in the Information Equipment Group, on account of a decrease in sales in the Telecommunications Equipment Group. Operating profit in the Equipment Business increased significantly overall, however, owing to an increase in profit in both reporting segments.

Consolidated results by reporting segment are as follows.

Components Business:

1) Fine Ceramic Parts Group

This reporting segment includes fine ceramic components and automotive components.

Sales of parts for diesel engines for automobiles, sapphire substrates for LEDs and dielectric parts for mobile phone base stations all increased. However, there was a decrease in demand for parts for semiconductor fabrication equipment, one of the core products in this reporting segment, due to a decrease in capital investment in the semiconductor industry. As a result, sales in this reporting segment remained level with fiscal 2007. Operating profit decreased compared with fiscal 2007 due primarily to an increase in depreciation.

2) Semiconductor Parts Group

This reporting segment includes ceramic packages and organic packages.

Sales of Surface Mount Device (SMD) ceramic packages for electronic components, ceramic packages for image sensors and organic packages increased steadily. Sales of parts for optical telecommunications devices decreased, however, leading to only a slight increase in overall sales in this reporting segment compared with fiscal 2007. Although losses shrank substantially in the organic package business, overall operating profit in this segment decreased due to an increase in depreciation cost coupled with a decline in selling prices.

3) Applied Ceramic Products Group

This reporting segment includes solar power generating systems, cutting tools, dental and medical implants, and jewelry and applied ceramic related products.

Both sales and operating profit increased significantly in this reporting segment compared with fiscal 2007 due to considerable growth in sales in the solar energy business in overseas markets, notably Europe, and to an increase in sales in the cutting tool business.

4) Electronic Device Group

This reporting segment includes electronic components such as various types of capacitors, crystal related products and connectors, and thin-film products such as thermal printheads.

Demands for capacitors and crystal related products have decreased since the start of calendar year 2008. Production of digital consumer equipment was solid throughout fiscal 2008, however, resulting in increased overall sales in this reporting segment compared with fiscal 2007. Operating profit decreased substantially, however, due to a decline in selling prices, etc.

Equipment Business:

1) Telecommunications Equipment Group

This reporting segment includes mobile phone handsets as well as PHS base stations and handsets.

Despite strong sales in the mobile phone handset business in Japan, a slow sales overseas culminated in a decline in overall sales in this reporting segment compared with fiscal 2007. Operating profit increased significantly compared with fiscal 2007, however, due to a reduction in product development and production costs in the domestic mobile phone handset business, and improved profitability in the PHS related business as a result of concentrating management resources in Japan.

2) Information Equipment Group

This reporting segment includes ECOSYS brand printers and digital MFPs.

Sales in this reporting segment increased due to sales growth in printers, particularly in Europe, spurred by aggressive new product introductions and enhanced sales activities. Operating profit increased significantly compared with fiscal 2007 on account of new product introductions and increased sales of consumables in addition to the positive effect of yen depreciation against the Euro.

Others:

This reporting segment includes various information and communications technology services, materials for electronic components and optical components.

Sales in this reporting segment increased slightly compared with fiscal 2007 to ¥138,494 million. Operating profit increased substantially by 40.0% to ¥9,635 million due to improved profitability at Kyocera Communication Systems Co., Ltd. and in the optical related business.

Consolidated Sales by Reporting Segment


	(Yen in millions)
	Years ended March 31,								Increase (Decrease) %
	2007				2008
	Amount		% of net sales		Amount		% of net sales
	Amount		% of net sales		Amount		% of net sales
Fine Ceramic Parts Group	81,326		6.3		81,309		6.3		(0.0	)
Semiconductor Parts Group	152,292		11.9		154,538		12.0		1.5
Applied Ceramic Products Group	131,103		10.2		149,942		11.6		14.4
Electronic Device Group	286,156		22.3		294,201		22.8		2.8

Total Components Business	650,877		50.7		679,990		52.7		4.5
Telecommunications Equipment Group	251,183		19.6		220,817		17.1		(12.1	)
Information Equipment Group	268,781		20.9		276,746		21.5		3.0

Total Equipment Business	519,964		40.5		497,563		38.6		(4.3	)
Others	137,235		10.7		138,494		10.7		0.9
Adjustments and eliminations	(24,179	)	(1.9	)	(25,611	)	(2.0	)	—

Net sales	1,283,897		100.0		1,290,436		100.0		0.5

Consolidated Operating Profit by Reporting Segment


	(Yen in millions)
	Years ended March 31,						Increase (Decrease) %
	2007			2008
	Amount		% of segment sales	Amount		% of segment sales
Fine Ceramic Parts Group	15,677		19.3	11,167		13.7	(28.8	)
Semiconductor Parts Group	22,210		14.6	20,027		13.0	(9.8	)
Applied Ceramic Products Group	22,334		17.0	32,655		21.8	46.2
Electronic Device Group	44,487		15.5	36,524		12.4	(17.9	)

Total Components Business	104,708		16.1	100,373		14.8	(4.1	)
Telecommunications Equipment Group	291		0.1	6,786		3.1	—
Information Equipment Group	33,970		12.6	39,538		14.3	16.4

Total Equipment Business	34,261		6.6	46,324		9.3	35.2
Others	6,881		5.0	9,635		7.0	40.0

Operating profit	145,850		11.4	156,332		12.1	7.2

Corporate	8,569		—	12,497		—	45.8
Equity in earnings of affiliates and unconsolidated subsidiaries	2,621		—	6,091		—	132.4
Adjustments and eliminations	(500	)	—	(78	)	—	—

Income from continuing operations before income taxes	156,540		12.2	174,842		13.5	11.7

Note 1. From April 1, 2007, the “Optical Equipment Group,” previously a separate reporting segment, has been reclassified into “Others.” Accordingly, sales and operating profit for fiscal 2007 have been retroactively reclassified.

Note 2. For the reasons set forth in Note 1 above, net sales of “Others” in fiscal 2007 increased by ¥11,579 million and “Adjustments and eliminations” decreased by ¥(125) million compared with those previously announced. Also, operating profit of “Others” in fiscal 2007 decreased by ¥1,895 million compared with those previously announced.

(5) Consolidated Sales by Geographic Area


	(Yen in millions)
	Years ended March 31,				Increase (Decrease) (%)
	2007		2008
	Amount	% of net sales	Amount	% of net sales
Japan	496,959	38.7	507,837	39.4	2.2
United States of America	274,361	21.4	248,760	19.3	(9.3	)
Asia	216,663	16.9	232,425	18.0	7.3
Europe	210,726	16.4	224,066	17.3	6.3
Others	85,188	6.6	77,348	6.0	(9.2	)

Net sales	1,283,897	100.0	1,290,436	100.0	0.5

1) Japan

Sales increased compared with fiscal 2007 due mainly to increase in sales in the Semiconductor Parts Group and Kyocera Communication Systems, Co., Ltd.

2) United Sates of America

Sales decreased compared with fiscal 2007 due mainly to a decline in sales in the Telecommunications Equipment Group.

3) Asia

Sales increased compared with fiscal 2007 due to sales growth in the Electronic Device Group.

4) Europe

Sales increased in the Information Equipment Group and the solar energy business in the Applied Ceramic Products Group. As a result, sales in this region increased compared with fiscal 2007.

5) Others

Although sales in the Information Equipment Group in Latin America and Middle East increased, sales in the Telecommunication Equipment Group in Latin America and Oceania declined. As a result, overall sales in this region decreased compared with fiscal 2007.

(6) Capital Expenditures and Depreciation


	(Yen in millions)
	Years ended March 31,				Increase (Decrease) (%)
	2007		2008
	Amount	% of net sales	Amount	% of net sales
Capital expenditures	69,896	5.4	85,101	6.6	21.8
Depreciation	70,155	5.5	75,630	5.9	7.8

During fiscal 2008, Kyocera made capital expenditures particularly to increase production capacity in the Electronic Device Group and the solar energy business in response to burgeoning demand. Overall capital expenditures in fiscal 2008 increased compared with fiscal 2007. Furthermore, depreciation increased compared with fiscal 2007 due to the increase in capital expenditures in fiscal 2007 and to a review of depreciation method, triggered by the tax revision in Japan.

[Fiscal 2009 Forecast]

Consolidated Forecasts for the Year Ending March 31, 2009 (fiscal 2009)


	(Yen in millions, except per share amounts and exchange rates)
	Fiscal 2008 Results		Fiscal 2009 Forecasts		Increase (Decrease) (%)
	Amount	% of net sales	Amount	% of net sales	Increase (Decrease) (%)
Net sales	1,290,436	100.0	1,476,000	100.0	14.4
Profit from operations	152,420	11.8	145,000	9.8	(4.9	)
Income from continuing operations before income taxes	174,842	13.5	165,000	11.2	(5.6	)
Net income	107,244	8.3	102,000	6.9	(4.9	)
Diluted earnings per share	565.80	—	538.13	—	(4.9	)
Average US$ exchange rate	114	—	100	—	—
Average Euro exchange rate	162	—	152	—	—

Capital expenditures	85,101	6.6	84,000	5.7	(1.3	)
Depreciation	75,630	5.9	90,000	6.1	19.0

The global economic downturn is expected to intensify in fiscal 2009, fuelling fear of a negative impact on demand for digital consumer equipment, and therefore also uncertainty in the outlook for component demand.

Based on this market outlook, Kyocera believes that sales in the Components Business will be sluggish in fiscal 2009. However, Kyocera forecasts increase of sales compared with fiscal 2008 owing to a sales increase as a result of the acquisition of the mobile phone business of SANYO in the Telecommunications Equipment Group, and to an increase in sales from the Applied Ceramic Products Group, particularly relating to the solar energy business. On the other hand, operating profit is expected to decrease compared with fiscal 2008 due mainly to costs associated with infrastructure development in line with business integration in the Telecommunications Equipment Group, coupled with selling price erosion in the Components Business and the impact of the appreciation of the yen.

Nonetheless, Kyocera aims at a minimum to achieve its aforementioned financial forecasts. To improve business performance, Kyocera will work aggressively to introduce new products, reduce costs, enhance productivity and cultivate new markets.

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

Consolidated Sales by Reporting Segment


	(Yen in millions)
	Fiscal 2008 Results				Fiscal 2009 Forecasts				Increase (Decrease) (%)
	Amount		% of net sales		Amount		% of net sales		Increase (Decrease) (%)
Fine Ceramic Parts Group	81,309		6.3		81,500		5.5		0.2
Semiconductor Parts Group	154,538		12.0		155,000		10.5		0.3
Applied Ceramic Products Group	149,942		11.6		179,000		12.1		19.4
Electronic Device Group	294,201		22.8		281,000		19.1		(4.5	)

Total Components Business	679,990		52.7		696,500		47.2		2.4
Telecommunications Equipment Group	220,817		17.1		366,000		24.8		65.7
Information Equipment Group	276,746		21.5		290,000		19.6		4.8

Total Equipment Business	497,563		38.6		656,000		44.4		31.8
Others	138,494		10.7		146,000		9.9		5.4
Adjustments and eliminations	(25,611	)	(2.0	)	(22,500	)	(1.5	)	—

Net sales	1,290,436		100.0		1,476,000		100.0		14.4

Consolidated Operating Profit by Reporting Segment


	(Yen in millions)
	Fiscal 2008 Results		Fiscal 2009 Forecasts		Increase (Decrease) (%)
	Amount	% of segment sales	Amount	% of segment sales	Increase (Decrease) (%)
Fine Ceramic Parts Group	11,167	13.7	10,000	12.3	(10.5	)
Semiconductor Parts Group	20,027	13.0	20,500	13.2	2.4
Applied Ceramic Products Group	32,655	21.8	33,000	18.4	1.1
Electronic Device Group	36,524	12.4	31,000	11.0	(15.1	)

Total Components Business	100,373	14.8	94,500	13.6	(5.9	)
Telecommunications Equipment Group	6,786	3.1	5,000	1.4	(26.3	)
Information Equipment Group	39,538	14.3	35,000	12.1	(11.5	)

Total Equipment Business	46,324	9.3	40,000	6.1	(13.7	)
Others	9,635	7.0	14,500	9.9	50.5

Operating profit	156,332	12.1	149,000	10.1	(4.7	)
Corporate and others	18,510	—	16,000	—	(13.6	)

Income from continuing operations before income taxes	174,842	13.5	165,000	11.2	(5.6	)

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: general economic conditions in our markets, which are primarily Japan, North America, Europe, and Asia, particularly including China; unexpected changes in economic, political and legal conditions in China; our ability to develop, launch and produce innovative products, including meeting quality and delivery standards, and our ability to otherwise meet the advancing technical requirements of our customers, particularly in the highly competitive markets for ceramics, semiconductor parts and electronic components; manufacturing delays or defects resulting from outsourcing or internal manufacturing processes which may adversely affect our production yields and operating results; factors that may affect our exports, including a strong yen, political and economic instability, difficulties in collection of accounts receivable, decrease in cost competitiveness of our products, increases in shipping and handling costs, difficulty in staffing and managing international operations, and inadequate protection of our intellectual property; changes in exchange rates, particularly between the yen and the U.S. dollar and Euro, respectively, in which we make significant sales; inability to secure skilled employees, particularly engineering and technical personnel; insufficient protection of our trade secrets and patents; holding licenses to continue to manufacture and sell certain of its products; future initiatives and in-process research and development may not produce the desired results; events that may impact negatively on our markets or supply chain, including terrorist acts and outbreaks of diseases; the occurrence of natural disasters, such as earthquakes, in locations where our manufacturing and other key business facilities are located; and fluctuations in the value of, and impairment losses on, securities and other assets held by us, and changes in accounting principles. Such risks, uncertainties and other factors may cause our actual results, performance, achievements or financial position to be materially different from any future results, performance, achievements or financial position expressed or implied by these forward-looking statements. We undertake no obligation to publicly update any forward-looking statements included in this document.

2. Analysis of Financial Position

1. Cash Flow

Cash and cash equivalents at March 31, 2008 increased by ¥165,378 million to ¥447,586 million compared with those at March 31, 2007.


	(Yen in millions)
	Years Ended March 31,				Increase (Decrease)
	2007		2008		Increase (Decrease)
Cash flow from operating activities	149,644		196,935		47,291
Cash flow from investing activities	(151,703	)	14,894		166,597
Cash flow from financing activities	(20,645	)	(28,071	)	(7,426	)
Effect of exchange rate changes on cash and cash equivalents	4,103		(18,380	)	(22,483	)
Net increase (decrease) in cash and cash equivalents	(18,601	)	165,378		183,979
Cash and cash equivalents at beginning of year	300,809		282,208		(18,601	)
Cash and cash equivalents at end of year	282,208		447,586		165,378

(1) Cash flow from operating activities

Net cash provided by operating activities in fiscal 2008 increased by ¥47,291 million to ¥196,935 million from ¥149,644 million in fiscal 2007. This was due mainly to a decrease in receivables that increased in fiscal 2007.

(2) Cash flow from investing activities

Cash flow from investing activities turned from ¥151,703 million of cash outflows in fiscal 2007 to ¥14,894 million of cash inflows in fiscal 2008. This was due mainly to a large increase in withdrawal of time deposits, which exceeded increases in purchases of property, plant and equipment, and intangible assets, and acquisitions of businesses.

(3) Cash flow from financing activities

Net cash used in financing activities in fiscal 2008 increased by ¥7,426 million to ¥28,071 million from ¥20,645 million in fiscal 2007. This was due mainly to an increase in dividends paid.

2. Cash Flows Indexes (Consolidated)


	Years Ended March 31,
	2004		2005		2006		2007		2008
Stockholders’ equity to total assets	64.1	%	67.3	%	66.7	%	71.1	%	73.4	%
Market capitalization to total assets	91.3	%	82.2	%	101.3	%	98.4	%	80.2	%
Interest bearing debts per operating cash flows (years)	3.2		1.0		0.8		0.2		0.1
Operating cash flows per interest paid (ratio)	20.6		62.4		88.5		93.4		161.8

All indexes are computed on a consolidated basis.

Interest bearing debts represent all debts with interest expense included in consolidated balance sheets.

3. Basic Profit Distribution Policy and Dividends for Fiscal 2008 and Fiscal 2009

(1) Basic Profit Distribution Policy

Kyocera believes that the best way to increase corporate value and meet shareholders’ expectations is to improve future consolidated performance. Kyocera therefore strongly takes into consideration the linkage between dividend amounts and consolidated performance and has implemented a dividend policy aiming for a consolidated dividend ratio of approximately 20% to 25%. In addition, Kyocera determines dividend amounts based on an overall assessment, taking into account various factors that include the amount of capital expenditures necessary for medium to long-term growth.

In order to ensure a sound financial basis, Kyocera also sets aside other general reserves in preparation for the creation of new businesses, cultivation of new markets, development of new technologies and acquisition of outside management resources needed to achieve sustainable corporate growth.

(2) Dividends for Fiscal 2008

Based on performance during fiscal 2008 and pursuant to the aforementioned policy, Kyocera will distribute a year-end dividend in the amount of 60 yen per share. When aggregated with the interim dividend in the amount of 60 yen per share, the total annual dividend will be 120 yen per share, an increase of 10 yen compared with fiscal 2007.

(3) Dividend Forecast for Fiscal 2009

Dividend amounts for fiscal 2009 will be decided pursuant to “(1) Basic Profit Distribution Policy” set forth above. At present, Kyocera forecasts a total annual dividend in the amount of 120 yen per share based on financial forecast for fiscal 2009.

KYOCERA GROUP

Kyocera group consists of Kyocera Corporation, 176 subsidiaries and 10 affiliates.

(Chart of the group companies)

LOGO

Management Policies

1. Basic Policy

Kyocera aims to be respected by society as “The Company” from the perspective of corporate ethics, while maintaining continuous sales growth and high profitability. To achieve this management vision, Kyocera’s management policy is to further drive business expansion to be “a creative company that continues to grow.” In order to implement this policy, Kyocera aims to increase corporate value by expanding businesses; namely by promoting efficient use of management resources and further strengthening consolidated group management.

2. Target of Pre-tax Income Ratio

To be “a creative company that continues to grow,” Kyocera aims to achieve its target of a pre-tax income ratio of 15% or higher.

3. Medium Term Management Strategy

Kyocera promotes “high-value-added diversification” as its management strategy to realize such management policy. This involves ensuring that each business is highly profitable and pursuing synergies within Kyocera with the objective of driving sustainable growth even in an ever-changing business environment.

Specifically, Kyocera aims to: 1) exploit competitive advantages; 2) strengthen existing businesses; and 3) create new businesses.

1) Exploit competitive advantages

The “Kyocera Philosophy,” which places people’s hearts at its core, the “Amoeba Management” system, which is unique to Kyocera and has been a driving force for growth since Kyocera Corporation’s earliest days, and a strong financial structure, are sources of competitive advantage for Kyocera over other companies in implementing its diversification strategy. With these foundations firmly in place, Kyocera endeavors to strengthen competitiveness in technological development, sales and marketing in the high-growth potential markets for telecommunications and information processing and for environmental protection, and to translate its diversification strategy into improved business performance.

2) Strengthen existing businesses

Kyocera strives to continuously improve profitability in all existing businesses within Kyocera Group. Elsewhere, by strengthening ties and maximizing synergies between headquarters Kyocera Corporation and Kyocera Group companies, Kyocera seeks to improve profitability in each business segment on a consolidated basis. In promoting a global strategy in each business, Kyocera has created development, manufacturing and sales systems in optimal locations, while the integration of Group-wide resources helps boost the competitiveness of existing businesses. Kyocera regularly reviews those businesses that have lost market competitiveness and that show little promise of expansion going forward.

3) Create new businesses

Kyocera endeavors to create businesses that will become its core going forward in order to improve consolidated performance over the medium term. To achieve this goal, Kyocera integrates Group-wide management resources to develop new technologies and products and create new markets. The focus of Kyocera’s business creation strategy lies in the markets for telecommunications and information processing and for environmental protection.

4. Challenges

Kyocera faces the following challenges from fiscal 2009 onward, in light of the aforementioned medium to long-term management strategy.

(1) Improve

profitability in the Telecommunications Equipment Group

Kyocera acquired the mobile phone business of SANYO on April 1, 2008. As a result, the Telecommunications Equipment Group now generates the largest amount of sales among all of Kyocera’s reporting segments. Going forward, Kyocera seeks to achieve the following three goals as a means to swiftly improve profitability in such business: 1) expand sales and improve profitability in the mobile phone market in North America; 2) further expand market share and establish strong business foundations in the Japanese mobile phone market; and 3) expand the wireless telecommunication systems business.

(2) Strengthen

new product development and create new businesses

Kyocera promotes the development of small ceramics and organic packages in the Semiconductor Parts Group and electronic devices befitting sophisticated digital consumer equipment for the telecommunications and information processing market. Kyocera is also striving to increase the conversion efficiency of photovoltaic generating systems for the environmental preservation market. In addition, Kyocera seeks to create new businesses in key markets by leveraging its cutting-edge materials and components technologies amassed across departments within Kyocera. Specifically, Kyocera is pushing ahead with development aimed at quick commercialization of solid oxide fuel cells (SOFC) for household use by exploiting materials technology employed in fine ceramic parts.

CONSOLIDATED BALANCE SHEETS


	Yen in millions
	March 31,								Increase (Decrease)
	2007				2008
	Amount			%	Amount			%
Current assets :
Cash and cash equivalents	¥	282,208			¥	447,586			¥	165,378
Short-term investments		213,495				147,503				(65,992	)
Trade notes receivables		25,033				20,375				(4,658	)
Trade accounts receivables		236,380				205,522				(30,858	)
Less allowances for doubtful accounts and sales returns		(5,960	)			(4,352	)			1,608
Inventories		209,188				205,212				(3,976	)
Deferred income taxes		45,390				41,244				(4,146	)
Other current assets		40,757				55,135				14,378

Total current assets		1,046,491		49.1		1,118,225		56.6		71,734

Non-current assets :
Investments and advances :
Investments in and advances to affiliates and unconsolidated subsidiaries		10,093				16,753				6,660
Securities and other investments		690,568				437,369				(253,199	)

Total investments and advances		700,661		32.9		454,122		23.0		(246,539	)
Property, plant and equipment, at cost :
Land		56,806				57,155				349
Buildings		261,998				274,206				12,208
Machinery and equipment		729,636				718,812				(10,824	)
Construction in progress		7,362				17,920				10,558
Less accumulated depreciation		(774,896	)			(782,194	)			(7,298	)

Total property, plant and equipment, at cost		280,906		13.2		285,899		14.4		4,993
Goodwill		32,894		1.5		39,794		2.0		6,900
Intangible assets		24,657		1.2		29,829		1.5		5,172
Other assets		44,855		2.1		48,877		2.5		4,022

Total non-current assets		1,083,973		50.9		858,521		43.4		(225,452	)

Total assets	¥	2,130,464		100.0	¥	1,976,746		100.0	¥	(153,718	)


	Yen in millions
	March 31,
	2007				2008				Increase (Decrease)
	Amount			%	Amount			%	Increase (Decrease)
Current liabilities :
Short-term borrowings	¥	15,250			¥	7,279			¥	(7,971	)
Current portion of long-term debt		5,853				3,432				(2,421	)
Trade notes and accounts payable		100,295				95,390				(4,905	)
Other notes and accounts payable		49,134				66,757				17,623
Accrued payroll and bonus		41,680				43,207				1,527
Accrued income taxes		36,475				27,118				(9,357	)
Other accrued liabilities		33,391				32,815				(576	)
Other current liabilities		24,110				25,684				1,574

Total current liabilities		306,188		14.4		301,682		15.3		(4,506	)

Non-current liabilities :
Long-term debt		7,283				8,298				1,015
Accrued pension and severance liabilities		16,297				15,041				(1,256	)
Deferred income taxes		206,858				118,016				(88,842	)
Other non-current liabilities		12,355				17,542				5,187

Total non-current liabilities		242,793		11.4		158,897		8.0		(83,896	)

Total liabilities		548,981		25.8		460,579		23.3		(88,402	)

Minority interests in subsidiaries		66,923		3.1		65,002		3.3		(1,921	)
Stockholders’ equity :
Common stock		115,703				115,703				—
Additional paid-in capital		162,363				162,864				501
Retained earnings		1,055,293				1,143,821				88,528
Accumulated other comprehensive income		203,056				44,066				(158,990	)
Treasury stock, at cost		(21,855	)			(15,289	)			6,566

Total stockholders’ equity		1,514,560		71.1		1,451,165		73.4		(63,395	)

Total liabilities, minority interests and stockholders’ equity	¥	2,130,464		100.0	¥	1,976,746		100.0	¥	(153,718	)


Note: Accumulated other comprehensive income is as follows:

	Yen in millions
	March 31,
	2007				2008
Net unrealized gains on securities	¥	184,670			¥	64,799
Net unrealized gains on derivative financial instruments	¥	63			¥	196
Pension adjustments	¥	15,419			¥	12,865
Foreign currency translation adjustments	¥	2,904			¥	(33,794	)

CONSOLIDATED STATEMENTS OF INCOME


	Yen in millions and shares in thousands, except per share amounts
	Years ended March 31,										Increase (Decrease)
	2007					2008					Increase (Decrease)
	Amount			%		Amount			%		Amount			%
Net sales	¥	1,283,897		100.0		¥	1,290,436		100.0		¥	6,539		0.5
Cost of sales		900,470		70.1			883,763		68.5			(16,707	)	(1.9	)

Gross profit		383,427		29.9			406,673		31.5			23,246		6.1
Selling, general and administrative expenses		248,325		19.4			254,253		19.7			5,928		2.4

Profit from operations		135,102		10.5			152,420		11.8			17,318		12.8
Other income (expenses) :
Interest and dividend income		15,472		1.2			18,444		1.4			2,972		19.2
Interest expense		(1,647	)	(0.1	)		(1,480	)	(0.1	)		167		—
Foreign currency transaction losses, net		(65	)	(0.0	)		(956	)	(0.1	)		(891	)	—
Equity in earnings of affiliates and unconsolidated subsidiaries		2,621		0.2			6,091		0.5			3,470		132.4
Gain (loss) on sales of securities, net		3,819		0.3			(622	)	(0.1	)		(4,441	)	—
Other, net		1,238		0.1			945		0.1			(293	)	(23.7	)

Total other income		21,438		1.7			22,422		1.7			984		4.6

Income from continuing operations before income taxes and minority interests		156,540		12.2			174,842		13.5			18,302		11.7
Income taxes		48,887		3.8			60,235		4.6			11,348		23.2

Income from continuing operations before minority interests		107,653		8.4			114,607		8.9			6,954		6.5
Minority interests		(6,324	)	(0.5	)		(7,363	)	(0.6	)		(1,039	)	—

Income from continuing operations		101,329		7.9			107,244		8.3			5,915		5.8
Income from discontinued operations		5,175		0.4			—		—			(5,175	)	—

Net income	¥	106,504		8.3		¥	107,244		8.3		¥	740		0.7


Earnings per share :
Income from continuing operations :
Basic	¥	538.52				¥	566.58
Diluted	¥	537.35				¥	565.80
Income from discontinued operations :
Basic	¥	27.51					—
Diluted	¥	27.44					—
Net income :
Basic	¥	566.03				¥	566.58
Diluted	¥	564.79				¥	565.80
Weighted average number of shares of common stock outstanding :
Basic		188,160					189,283
Diluted		188,573					189,544

Notes:

Kyocera applies the Statement of Financial Accounting Standards Board (SFAS) No.130, “Financial Reporting of Comprehensive Income.” Based on this standard, comprehensive income for the years ended March 31, 2007 and 2008 were an increase of ¥219,055 million and a decrease of ¥51,746 million, respectively.

Earnings per share amounts were computed based on SFAS No.128, “Earnings per Share.” Under SFAS No.128, basic earnings per share was computed based on the weighted average number of shares of common stock outstanding during each period and diluted earnings per share assumed the dilution that could occur if securities or other contracts to issue common stock were converted into common stock, exercised or resulted in the issuance of common stock.

In March 2005, Kyocera received a Correction Notice from the Osaka Regional Taxation Bureau regarding transfer pricing. In May 2005, Kyocera filed the Request for Reinvestigation. As a consequence of Kyocera filing the Request for Reinvestigation, the Osaka Regional Taxation Bureau approved a refund for ¥4,035 million which was recorded in income taxes for the year ended March 31, 2007.

Kyocera sold its entire shares in Kyocera Leasing Co., Ltd., a subsidiary engaged in financial services; as a result, business results and profit on sales, ¥5,175 million, for Kyocera Leasing Co., Ltd. for the year ended March 31, 2007 have been recorded as income from discontinued operations in conformity with SFAS No.144, “Accounting for the Impairment of Disposal of Long-Lived Assets.”

CONSOLIDATED STATEMENTS OF STOCKHOLDERS’ EQUITY


	(Yen in millions and shares in thousands)

(Number of shares of common stock)	Common stock		Additional paid-in capital		Retained earnings			Accumulated other comprehensive income			Treasury stock			Comprehensive income
Balance, March 31, 2006 (187,755)	¥	115,703	¥	161,994	¥	967,576		¥	72,947		¥	(29,143	)
Net income for the year						106,504								¥	106,504
Other comprehensive income									112,551						112,551

Total comprehensive income for the year														¥	219,055

Adjustment for initially applying SAFS No. 158, net of tax									17,558
Cash dividends						(18,787	)
Purchase of treasury stock (24)												(251	)
Reissuance of treasury stock (918)				127								7,539
Stock option plan of subsidiaries				242

Balance, March 31, 2007 (188,649)		115,703		162,363		1,055,293			203,056			(21,855	)
Cumulative effect of applying FIN 48 to opening balance (Note)						3,968
Net income for the year						107,244								¥	107,244
Other comprehensive income									(158,990	)					(158,990	)

Total comprehensive income for the year														¥	(51,746	)

Cash dividends						(22,684	)
Purchase of treasury stock (18)												(211	)
Reissuance of treasury stock (823)				254								6,777
Stock option plan of subsidiaries				247

Balance, March 31, 2008 (189,454)	¥	115,703	¥	162,864	¥	1,143,821		¥	44,066		¥	(15,289	)

Note:

FIN 48 - Interpretation No. 48, “Accounting for Uncertainty in Income Taxes-an interpretation of FASB Statement No. 109” Please refer to page 26 “(6) Accounting changes.”

CONSOLIDATED STATEMENTS OF CASH FLOWS


	Yen in millions
	Years ended March 31,
	2007			2008
Cash flows from operating activities :
Net income	¥	106,504		¥	107,244
Adjustments to reconcile net income to net cash provided by operating activities :
Depreciation and amortization		82,182			87,045
Write-down of inventories		11,328			5,141
Minority interests		6,324			7,363
Equity in earnings of affiliates and unconsolidated subsidiaries		(2,621	)		(6,091	)
(Gains) losses on sales of securities, net		(3,819	)		622
Gains on sales of investment in subsidiaries		(8,252	)		—
(Increase) decerase in receivables		(32,626	)		13,732
Increase in inventories		(25,100	)		(9,766	)
Increase in notes and accounts payable		6,015			5,177
Increase (decrease) in accrued income taxes		9,066			(8,817	)
Increase in other current liabilities		11,111			6,010
Other, net		(10,468	)		(10,725	)

Net cash provided by operating activities		149,644			196,935

Cash flows from investing activities :
Payments for purchases of securities		(71,449	)		(38,744	)
Sales and maturities of securities		127,119			124,813
Acquisitions of businesses, net of cash acquired		(756	)		(26,483	)
Proceeds from sales of investment in subsidiaries		24,602			—
Payments for purchases of property, plant and equipment, and intangible assets		(72,966	)		(78,269	)
Proceeds from sales of property, plant and equipment, and intangible assets		2,693			877
Deposit of negotiable certificate of deposits and time deposits		(356,169	)		(372,798	)
Withdrawal of negotiable certificate of deposits and time deposits		203,076			423,845
Other, net		(7,853	)		(18,347	)

Net cash provided by (used in) investing activities		(151,703	)		14,894

Cash flows from financing activities :
Increase (decrease) in short-term debt		9,369			(7,202	)
Proceeds from issuance of long-term debt		1,928			5,000
Payments of long-term debt		(13,361	)		(6,647	)
Dividends paid		(20,632	)		(24,566	)
Purchases of treasury stock		(251	)		(211	)
Reissuance of treasury stock		7,666			7,031
Other, net		(5,364	)		(1,476	)

Net cash used in financing activities		(20,645	)		(28,071	)

Effect of exchange rate changes on cash and cash equivalents		4,103			(18,380	)

Net increase (decrease) in cash and cash equivalents		(18,601	)		165,378
Cash and cash equivalents at beginning of year		300,809			282,208

Cash and cash equivalents at end of year	¥	282,208		¥	447,586

SUPPLEMENTAL CASH FLOW INFORMATION


	Yen in millions
	Years ended March 31,
	2007			2008
Cash paid during the year for :
Interest	¥	1,603		¥	1,217
Income taxes		52,847			66,989

Acquisitions of businesses :
Fair value of assets acquired	¥	1,151		¥	32,959
Fair value of liabilities assumed		(333	)		(5,537	)
Cash acquired		(62	)		(939	)

	¥	756		¥	26,483

BASIS OF PREPARATION OF CONSOLIDATED FINANCIAL STATEMENTS

1. Scope of consolidation and application of the equity method :

Major consolidated subsidiaries :

AVX CORPORATION

KYOCERA WIRELESS CORP.

KYOCERA MITA CORPORATION

KYOCERA ELCO CORPORATION

Major affiliates accounted for by the equity method :

WILLCOM, INC.

2. Changes in scope of consolidation and application of the equity method :


Consolidation

(Increase)	14	AMERICAN TECHNICAL CERAMICS CORP. and others
(Decrease)	7	KYOCERA MITA (SCHWEIZ) AG and others

Equity method

(Increase)	None
(Decrease)	None

3. 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.

(1) Valuation of inventories

Finished goods and work in process are mainly stated at the lower of cost or market, the cost being determined by the average method. All other inventories are mainly stated at the lower of cost or market, the cost being determined by the first-in, first-out method.

(2) Valuation of securities

Kyocera adopts SFAS No.115, “Accounting for Certain Investments in Debt and Equity Securities.” Held-to-maturity securities are recorded at amortized cost. Available-for-sale securities are recorded at fair value, with unrealized gains and losses excluded from income and recorded in other comprehensive income, net of taxes.

(3) Depreciation method of Property, Plant and Equipment

Depreciation is computed based mainly on the declining balance method over their estimated useful lives. Effective April 1, 2007, Kyocera Corporation and its domestic subsidiaries, as a result of taking the business situation into consideration, has adopted “the 250 percent declining-balance depreciation method” for buildings, machinery and equipment. Estimated useful lives and estimated salvage values were also changed in conjunction with this change. Under the provisions of SFAS No. 154 “Accounting Changes and Error Corrections, a replacement of APB Opinion No. 20 and FASB Statement No. 3,” a change in depreciation method is treated as a change in estimate. The effect of the change in depreciation method will be reflected on a prospective basis beginning April 1, 2007, and prior period results will not be restated. Kyocera Corporation and its domestic subsidiaries believe that the change from the declining-balance depreciation method to the 250 percent declining-balance depreciation method will better reflect future business situation and will provide a better matching of costs and revenues over the assets’ estimated useful lives.

(4) Goodwill and other intangible assets

Kyocera adopts SFAS No. 142, “Goodwill and Other Intangible Assets.”

(5) Accounting for allowances and accruals

Allowance for doubtful accounts : Kyocera provides allowance for doubtful accounts based on the past actual ratio of losses on bad debt in addition to the estimation of uncollectible amount based on the analysis of certain individual receivables.

Accrued pension and severance cost :

Kyocera adopts SFAS No. 87, “Employers’ Accounting for Pensions” and SFAS No. 158, “Employers’ Accounting for Defined Benefit Pension and Other Postretirement Plans - an amendment of FASB No. 87, 88, 106 and 132(R),” and pension and severance cost is accrued based on the projected benefit obligations and the fair value of plan assets at the balance sheet date. Prior service cost is amortized by the straight-line method over the average remaining service period of employees. Actuarial 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.

(6) Accounting change

In June 2006, the Financial Accounting Standard Board (FASB) issued Interpretation No. 48, “Accounting for Uncertainty in Income Taxes - an interpretation of FASB Statement No. 109 ”(FIN48) which clarifies the accounting for uncertainty in income taxes recognized in the financial statements in accordance with SFAS No. 109, “Accounting for Income Taxes.” FIN48 also provides guidance on derecognition, classification, interest and penalties, disclosure and transitional measures. Cumulative effect of applying FIN48, which was effective April 1, 2007, increased the opening balance of retained earnings by ¥3,968 million.

SEGMENT INFORMATION

1. Reporting segments :


	Yen in millions
	Years ended March 31,						Increase (Decrease)
	2007			2008			Increase (Decrease)
	Amount			Amount			Amount			%
Net sales :
Fine Ceramic Parts Group	¥	81,326		¥	81,309		¥	(17	)	(0.0	)
Semiconductor Parts Group		152,292			154,538			2,246		1.5
Applied Ceramic Products Group		131,103			149,942			18,839		14.4
Electronic Device Group		286,156			294,201			8,045		2.8
Telecommunications Equipment Group		251,183			220,817			(30,366	)	(12.1	)
Information Equipment Group		268,781			276,746			7,965		3.0
Others		137,235			138,494			1,259		0.9
Adjustments and eliminations		(24,179	)		(25,611	)		(1,432	)	—

	¥	1,283,897		¥	1,290,436		¥	6,539		0.5

Operating profit :
Fine Ceramic Parts Group	¥	15,677		¥	11,167		¥	(4,510	)	(28.8	)
Semiconductor Parts Group		22,210			20,027			(2,183	)	(9.8	)
Applied Ceramic Products Group		22,334			32,655			10,321		46.2
Electronic Device Group		44,487			36,524			(7,963	)	(17.9	)
Telecommunications Equipment Group		291			6,786			6,495		—
Information Equipment Group		33,970			39,538			5,568		16.4
Others		6,881			9,635			2,754		40.0

		145,850			156,332			10,482		7.2
Corporate		8,569			12,497			3,928		45.8
Equity in earnings of affiliates and unconsolidated subsidiaries		2,621			6,091			3,470		132.4
Adjustments and eliminations		(500	)		(78	)		422		—

Income from continuing operations before income taxes and minority interests	¥	156,540		¥	174,842		¥	18,302		11.7

Segment assets :
Fine Ceramic Parts Group	¥	54,860		¥	53,713		¥	(1,147	)	(2.1	)
Semiconductor Parts Group		106,359			100,041			(6,318	)	(5.9	)
Applied Ceramic Products Group		125,266			149,870			24,604		19.6
Electronic Device Group		412,979			400,851			(12,128	)	(2.9	)
Telecommunications Equipment Group		92,584			66,191			(26,393	)	(28.5	)
Information Equipment Group		207,862			203,248			(4,614	)	(2.2	)
Others		133,072			131,946			(1,126	)	(0.8	)

		1,132,982			1,105,860			(27,122	)	(2.4	)
Corporate		1,056,646			906,159			(150,487	)	(14.2	)
Investments in and advances to affiliates and unconsolidated subsidiaries		10,093			16,753			6,660		66.0
Adjustments and eliminations		(69,257	)		(52,026	)		17,231		—

Total assets	¥	2,130,464		¥	1,976,746		¥	(153,718	)	(7.2	)

Depreciation and amortization :
Fine Ceramic Parts Group	¥	4,500		¥	7,511		¥	3,011		66.9
Semiconductor Parts Group		12,533			14,647			2,114		16.9
Applied Ceramic Products Group		8,097			9,685			1,588		19.6
Electronic Device Group		21,537			24,627			3,090		14.3
Telecommunications Equipment Group		9,075			8,753			(322	)	(3.5	)
Information Equipment Group		16,326			12,024			(4,302	)	(26.4	)
Others		7,419			6,922			(497	)	(6.7	)
Corporate		2,575			2,876			301		11.7

Total	¥	82,062		¥	87,045		¥	4,983		6.1

Capital expenditures :
Fine Ceramic Parts Group	¥	7,447		¥	9,253		¥	1,806		24.3
Semiconductor Parts Group		11,432			8,752			(2,680	)	(23.4	)
Applied Ceramic Products Group		7,330			10,714			3,384		46.2
Electronic Device Group		19,812			25,855			6,043		30.5
Telecommunications Equipment Group		3,800			2,317			(1,483	)	(39.0	)
Information Equipment Group		11,962			15,475			3,513		29.4
Others		5,774			6,056			282		4.9
Corporate		2,339			6,679			4,340		185.5

Total	¥	69,896		¥	85,101		¥	15,205		21.8

2. Geographic segments (Sales and Operating profits by geographic area) :


	Yen in millions
	Years ended March 31,
	2007			2008			Increase (Decrease)
	Amount			Amount			Amount			%
Net sales:
Japan	¥	523,869		¥	538,729		¥	14,860		2.8
Intra-group sales and transfer between geographic areas		388,879			387,196			(1,683	)	(0.4	)

		912,748			925,925			13,177		1.4

United States of America		319,033			282,677			(36,356	)	(11.4	)
Intra-group sales and transfer between geographic areas		37,357			30,542			(6,815	)	(18.2	)

		356,390			313,219			(43,171	)	(12.1	)

Asia		195,319			200,675			5,356		2.7
Intra-group sales and transfer between geographic areas		152,219			178,184			25,965		17.1

		347,538			378,859			31,321		9.0

Europe		219,695			243,406			23,711		10.8
Intra-group sales and transfer between geographic areas		40,040			39,172			(868	)	(2.2	)

		259,735			282,578			22,843		8.8

Others		25,981			24,949			(1,032	)	(4.0	)
Intra-group sales and transfer between geographic areas		11,432			15,076			3,644		31.9

		37,413			40,025			2,612		7.0

Adjustments and eliminations		(629,927	)		(650,170	)		(20,243	)	—

	¥	1,283,897		¥	1,290,436		¥	6,539		0.5

Operating Profits :
Japan	¥	96,804		¥	101,176		¥	4,372		4.5
United States of America		23,521			11,694			(11,827	)	(50.3	)
Asia		19,165			24,108			4,943		25.8
Europe		10,218			12,399			2,181		21.3
Others		1,086			2,922			1,836		169.1

		150,794			152,299			1,505		1.0
Adjustments and eliminations		(5,444	)		3,955			9,399		—

		145,350			156,254			10,904		7.5
Corporate		8,569			12,497			3,928		45.8
Equity in earnings of affiliates and unconsolidated subsidiaries		2,621			6,091			3,470		132.4

Income from continuing operations before income taxes and minority interests	¥	156,540		¥	174,842		¥	18,302		11.7

3. Geographic segments (Sales by region) :


	Yen in millions
	Years ended March 31,
	2007				2008				Increase (Decrease)
	Amount			%	Amount			%	Amount			%
Japan	¥	496,959		38.7	¥	507,837		39.4	¥	10,878		2.2
United States of America		274,361		21.4		248,760		19.3		(25,601	)	(9.3	)
Asia		216,663		16.9		232,425		18.0		15,762		7.3
Europe		210,726		16.4		224,066		17.3		13,340		6.3
Others		85,188		6.6		77,348		6.0		(7,840	)	(9.2	)

Net sales	¥	1,283,897		100.0	¥	1,290,436		100.0	¥	6,539		0.5

Sales outside Japan	¥	786,938			¥	782,599			¥	(4,339	)	(0.6	)
Sales outside Japan to net sales		61.3	%			60.6	%

INVESTMENTS IN DEBT AND EQUITY SECURITIES

Investments in debt and equity securities at March 31, 2007 and 2008, included in short-term investments (current assets) and

securities and other investments (non-current assets) are summarized as follows :


	Yen in millions
	March 31,
	2007								2008
	Cost		Aggregate fair values		Gross unrealized gains		Gross unrealized losses		Cost		Aggregate fair values		Gross unrealized gains		Gross unrealized losses
Available-for-sale securities :
Corporate debt securities	¥	3,842	¥	4,033	¥	194	¥	3	¥	9,111	¥	8,877	¥	46	¥	280
Other debt securities		74,563		74,574		71		60		5,632		5,471		2		163
Equity securities		272,653		585,274		312,724		103		275,984		386,162		113,327		3,149

Total available-for-sale securities		351,058		663,881		312,989		166		290,727		400,510		113,375		3,592

Held-to-maturity securities :
Other debt securities		33,512		33,447		—		65		15,904		15,989		85		—

Total held-to-maturity securities		33,512		33,447		—		65		15,904		15,989		85		—

Total investments in debt and equity securities	¥	384,570	¥	697,328	¥	312,989	¥	231	¥	306,631	¥	416,499	¥	113,460	¥	3,592

Note:

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.

EARNINGS PER SHARE

1. Stockholders’ equity per share, basic and diluted earnings per share are as follows:


	Japanese yen
	Years ended March 31,
	2007		2008
Stockholders’ equity per share	¥	8,028.45	¥	7,659.72
Basic earnings per share		566.03		566.58
Diluted earnings per share		564.79		565.80

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


	Yen in millions, except per share amounts
	Years ended March 31,
	2007	2008
Income from continuing operations	¥101,329	¥107,244
Income from discontinued operations	5,175	—
Net income	106,504	107,244

Basic earnings per share
Income from continuing operations	538.52	566.58
Income from discontinued operations	27.51	—
Net income	566.03	566.58

Diluted earnings per share
Income from continuing operations	537.35	565.80
Income from discontinued operations	27.44	—
Net income	564.79	565.80

Basic weighted average number of shares outstanding (shares in thousands)	188,160	189,283
Dilutive effect of stock options (shares in thousands)	413	261
Diluted weighted average number of shares outstanding (shares in thousands)	188,573	189,544

SUBSEQUENT EVENTS

[Acquisition of Mobile Phone Related Business of SANYO Electric Co., Ltd.]

Kyocera Corporation has agreed to acquire the spun-off mobile phone related business, including related assets and liabilities from SANYO Electric Co., Ltd. (SANYO) on April 1, 2008.

(1)	Name of acquired company and, reason for the acquisition, description of the acquired business, name of the selling party, effective dates, legal structure of corporate consolidation, name of the company after consolidation and ratio of voting rights acquired:

(i)

Reason for corporate acquisition:

Kyocera views the communication equipment related business, including mobile phones, PHS and wireless communication systems, as one of its core businesses which will aim to establish a highly profitable Company. Through this acquisition,

Kyocera seeks to acquire the customer base of SANYO in Japan and North America, and expand the size of its businesses as well as integrate SANYO’s development capabilities and design technologies with Kyocera’s management resources in order to succeed over the competition in a very competitive industry.

(ii)

Name of the selling party: SANYO Electric Co., Ltd.

(iii)

Substance of business acquisition: Development, manufacture and sale of mobile phones, PHS and wireless communication systems, etc.

(iv)

Effective Date of corporate acquisition: April 1, 2008

(v)

Legal structure of corporate acquisition: The acquisition will be completed principally by means of a corporate split, being Kyocera Corporation, the acquiring corporation.

(2)

Purchase price consideration related to the acquired corporation or acquired business and related breakdown. In case shares are issued for the acquisition as a part of the purchase consideration, exchange ratio by type, if applicable, related calculation method, number of exchanged shares and related value. Description as to whether or not the acquisition cost is calculated based on the share prices as at the exchange date.

(i)

Acquisition costs and breakdown thereof: Not yet determined, as the purchase price allocation calculations and the valuation of the identifiable assets and liabilities are under review.

(ii)

Distribution of shares: There was not exchange of shares on this acquisition.

(3)	Amount of positive or negative goodwill taking place, cause therefor, method of depreciation and depreciation period

Not yet determined, as the purchase price allocation calculations and the valuation of the identifiable assets and liabilities are under review.

(4)	Breakdown and amounts of assets acquired and liabilities assumed at the acquisition date

Not yet determined, as the purchase price allocation calculations and the valuation of the identifiable assets and liabilities are under review.

(5)	Purchase price consideration subject to conditions contemplated in the business combination agreement and related accounting policy

(i)

Purchase price considerations subject to conditions:

The agreed acquisition cost was based on the amount after subtracting expected cash and deposits of the acquired business from ¥50 billion, and subject to further adjustments, at the acquisition (spin off) date, such other as cash and bank deposits, interest bearing debt, accounts receivable from and payable to Kyocera and some other agreed adjustments.

(ii)

Policy of accounting method to be applied subsequently:

Increase or decrease in the paid amount shall be reflected in the acquisition costs as an adjustment to goodwill.

(6)	Account description and amount of acquisition cost allocated to research and development cost which are expensed

Not yet determined, as the purchase price allocation calculations and the valuation of the identifiable assets and liabilities are under review.

(7)	In the case that most of the acquisition cost are allocated to intangible assets, breakdown, amount and type of those intangible assets other than goodwill; weighted average amortization period for those intangible assets, or amortization period of major intangible assets.

Not yet determined, as the purchase price allocation calculations and the valuation of the identifiable assets and liabilities are under review.

BALANCE SHEETS


	Yen in millions
	March 31,								Increase (Decrease)
	2007				2008
	Amount			%	Amount			%
Current assets :
Cash and bank deposits	¥	203,301			¥	123,465			¥	(79,836	)
Trade notes receivable		41,423				18,658				(22,765	)
Trade accounts receivable		108,685				113,025				4,340
Marketable securities		22,937				223,900				200,963
Finished goods and merchandise		17,204				21,246				4,042
Raw materials		16,560				15,232				(1,328	)
Work in process		20,541				19,978				(563	)
Supplies		706				1,527				821
Advance payments		10,100				19,415				9,315
Prepaid expenses		443				87				(356	)
Deferred income taxes		17,193				13,915				(3,278	)
Short-term loans to subsidiaries		16,880				8,552				(8,328	)
Other accounts receivable		8,291				12,498				4,207
Other current assets		891				2,500				1,609
Allowances for doubtful accounts		(173	)			(1,022	)			(849	)

Total current assets		484,982		30.1		592,976		40.4		107,994

Non-current assets :
Tangible fixed assets :
Buildings		34,921				38,108				3,187
Structures		2,091				1,967				(124	)
Machinery and equipment		44,896				42,701				(2,195	)
Vehicles		21				19				(2	)
Tools, furniture and fixtures		8,139				7,823				(316	)
Land		33,372				33,871				499
Construction in progress		900				1,432				532

Total tangible fixed assets		124,340		7.7		125,921		8.6		1,581

Intangible assets :
Patent rights		9,518				5,335				(4,183	)
Trademark		124				104				(20	)
Software		776				633				(143	)
Other intangible assets		13				14				1

Total intangible assets		10,431		0.6		6,086		0.4		(4,345	)

Investments and other assets :
Investments in securities		648,538				400,838				(247,700	)
Investments in subsidiaries and affiliates		260,775				260,833				58
Investments in subsidiaries and affiliates other than equity securities		26,685				27,623				938
Long-term loans to subsidiaries		20,633				23,181				2,548
Impaired loans		238				229				(9	)
Long-term prepaid expenses		2,458				1,521				(937	)
Long-term deposits		31,000				25,000				(6,000	)
Security deposits		1,823				1,773				(50	)
Other investments		289				242				(47	)
Allowances for doubtful accounts		(301	)			(263	)			38

Total investments and other assets		992,138		61.6		740,977		50.6		(251,161	)

Total non-current assets		1,126,909		69.9		872,984		59.6		(253,925	)

Total assets	¥	1,611,891		100.0	¥	1,465,960		100.0	¥	(145,931	)


	Yen in millions
	March 31,
	2007					2008					Increase (Decrease)
	Amount			%		Amount			%		Increase (Decrease)
Current liabilities :
Trade accounts payable	¥	55,561				¥	53,146				¥	(2,415	)
Other payables		21,774					38,312					16,538
Accrued expenses		8,356					8,288					(68	)
Income taxes payables		12,550					13,616					1,066
Advance received		532					604					72
Deposits received		1,916					2,378					462
Unearned income		10					15					5
Accrued bonuses		11,152					11,726					574
Accrued bonuses for directors		136					133					(3	)
Warranty reserves		5,045					5,363					318
Allowances for sales returns		114					149					35
Other current liabilities		125					—					(125	)

Total current liabilities		117,271		7.3			133,730		9.1			16,459

Non-current liabilities :
Long-term accounts payable		2,953					703					(2,250	)
Deferred income taxes		191,441					102,102					(89,339	)
Accrued pension and severance costs		12,705					8,809					(3,896	)
Retirement allowances for directors and executive officers		1,022					1,030					8
Other non-current liabilities		138					171					33

Total non-current liabilities		208,259		12.9			112,815		7.7			(95,444	)

Total liabilities		325,530		20.2			246,545		16.8			(78,985	)

Net assets
Stockholders’ equity :
Common stock		115,703		7.2			115,703		7.9			—
Capital surplus :
Additional paid-in capital		192,555					192,555					—
Other capital surplus		127					381					254
Total capital surplus		192,682		12.0			192,936		13.2			254
Retained earnings :
Legal reserves		17,207					17,207					—
Other retained earnings :		671,140					716,316					45,176
Reserve for special depreciation		991					555					(436	)
Reserve for research and development		1,000					1,000					—
Reserve for dividends		1,000					1,000					—
Reserve for retirement benefits		300					300					—
Reserve for overseas investments		1,000					1,000					—
General reserve		603,837					643,837					40,000
Unappropriated retained earnings		63,012					68,624					5,612

Total retained earnings		688,347		42.7			733,523		50.0			45,176
Treasury stock, at cost		(21,855	)	(1.4	)		(15,289	)	(1.0	)		6,566
Total stockholders’ equity		974,877		60.5			1,026,873		70.1			51,996
Difference of appreciation and conversion
Net unrealized gains on other securities		311,484		19.3			192,542		13.1			(118,942	)

Total net assets		1,286,361		79.8			1,219,415		83.2			(66,946	)

Total liabilities and net assets	¥	1,611,891		100.0		¥	1,465,960		100.0		¥	(145,931	)

STATEMENTS OF INCOME


	Yen in millions
	Years ended March 31,										Increase (Decrease)
	2007					2008					Increase (Decrease)
	Amount			%		Amount			%		Amount			%
Net sales	¥	531,557		100.0		¥	539,320		100.0		¥	7,763		1.5
Cost of sales		407,121		76.6			413,420		76.7			6,299		1.5

Gross profit		124,436		23.4			125,900		23.3			1,464		1.2
Selling, general and administrative expenses		75,004		14.1			77,349		14.3			2,345		3.1

Profit from operations		49,432		9.3			48,551		9.0			(881	)	(1.8	)
Non-operating income :
Interest and dividend income		25,090		4.7			35,839		6.6			10,749		42.8
Foreign currency transaction gains, net		1,021		0.2			1,200		0.2			179		17.6
Other non-operating income		6,730		1.3			7,860		1.5			1,130		16.8

Total non-operating income		32,841		6.2			44,899		8.3			12,058		36.7
Non-operating expenses :
Interest expense		14		0.0			20		0.0			6		45.3
Loss on disposal of inventories		7,235		1.4			1,508		0.3			(5,727	)	(79.1	)
Loss on sale of securities		—		—			471		0.1			471		—
Loss on reduction of fixed assets		—		—			636		0.1			636		—
Other non-operating expenses		1,295		0.2			604		0.1			(691	)	(53.4	)

Total non-operating expenses		8,544		1.6			3,239		0.6			(5,305	)	(62.1	)

Recurring profit		73,729		13.9			90,211		16.7			16,482		22.4
Non-recurring gain :
Gain on sale of tangible fixed assets		327		0.0			46		0.0			(281	)	(85.8	)
Reversal of allowance for doubtful accounts		7		0.0			7		0.0			0		2.6
Repatriation of settlement with foreign tax authorities		—		—			1,832		0.3			1,832		—
Gain on sale of investments in a subsidiary and an affiliate		9,084		1.7			—		—			(9,084	)	—
Other non-recurring gain		1,987		0.4			375		0.1			(1,612	)	(81.1	)

Total non-recurring gain		11,405		2.1			2,260		0.4			(9,145	)	(80.2	)
Non-recurring loss :
Depreciation expense		—		—			2,851		0.5			2,851		—
Loss on sale and disposal of tangible fixed assets		951		0.2			671		0.1			(280	)	(29.5	)
Loss on impairment of investments in subsidiaries and affiliates		3,166		0.6			—		—			(3,166	)	—
Other non-recurring loss		344		0.0			102		0.0			(242	)	(70.4	)

Total non-recurring loss		4,461		0.8			3,624		0.6			(837	)	(18.8	)

Income before income taxes		80,673		15.2			88,847		16.5			8,174		10.1
Income taxes – current		23,814		4.5			26,837		5.0			3,023		12.7
Refund of income taxes – previous years		(4,305	)	(0.8	)		(2,442	)	(0.5	)		1,863		—
Income taxes – deferred		(865	)	(0.2	)		(3,407	)	(0.6	)		(2,542	)	—

Net income	¥	62,029		11.7		¥	67,859		12.6		¥	5,830		9.4

STATEMENT OF CHANGES IN NET ASSETS


	Yen in millions
	Year ended March 31, 2007
	Stockholders’ equity																																			Difference of appreciation and conversion
			Capital surplus						Retained earnings
											Other retained earnings
	Common stock		Additional paid-in capital		Other capital surplus		Total capital surplus		Legal reserve		Reserve for special depre- ciation			Reserve for research and develop- ment		Reserve for dividends		Reserve for retire- ment benefits		Reserve for overseas invest- ments		General reserve		Unappro- priated retained earnings			Total retained earnings			Treasury stock, at cost			Total stock- holders’ equity			Net unrealized gains on other securities		Total unrealized gain (loss) on appreciation and conversion		Total net assets
Balance, March 31, 2006	¥	115,703	¥	192,555		—	¥	192,555	¥	17,207	¥	1,584		¥	1,000	¥	1,000	¥	300	¥	1,000	¥	553,837	¥	69,245		¥	645,173		¥	(29,143	)	¥	924,288		¥	207,973	¥	207,973	¥	1,132,261
Changes in net assets
Appropriation to reserve for special depreciation*		—		—		—		—		—		623			—		—		—		—		—		(623	)		—			—			—			—		—		—
Reversal of reserve for special depreciation*		—		—		—		—		—		(595	)		—		—		—		—		—		595			—			—			—			—		—		—
Appropriation to reserve for special depreciation		—		—		—		—		—		2			—		—		—		—		—		(2	)		—			—			—			—		—		—
Reversal of reserve for special depreciation		—		—		—		—		—		(623	)		—		—		—		—		—		623			—			—			—			—		—		—
Appropriation to general reserve*		—		—		—		—		—		—			—		—		—		—		50,000		(50,000	)		—			—			—			—		—		—
Dividends*		—		—		—		—		—		—			—		—		—		—		—		(9,387	)		(9,387	)		—			(9,387	)		—		—		(9,387	)
Dividends		—		—		—		—		—		—			—		—		—		—		—		(9,400	)		(9,400	)		—			(9,400	)		—		—		(9,400	)
Directors’ bonuses*		—		—		—		—		—		—			—		—		—		—		—		(68	)		(68	)		—			(68	)		—		—		(68	)
Net income		—		—		—		—		—		—			—		—		—		—		—		62,029			62,029			—			62,029			—		—		62,029
Purchase of treasury stock		—		—		—		—		—		—			—		—		—		—		—		—			—			(251	)		(251	)		—		—		(251	)
Reissuance of treasury stock		—		—		127		127		—		—			—		—		—		—		—		—			—			7,539			7,666			—		—		7,666
Net change in items other than stockholders’ equity		—		—		—		—		—		—			—		—		—		—		—		—			—			—			—			103,511		103,511		103,511
Total changes in net assets		—		—		127		127		—		(593	)		—		—		—		—		50,000		(6,233	)		43,174			7,288			50,589			103,511		103,511		154,100

Balance, March 31, 2007	¥	115,703	¥	192,555	¥	127	¥	192,682	¥	17,207	¥	991		¥	1,000	¥	1,000	¥	300	¥	1,000	¥	603,837	¥	63,012		¥	688,347		¥	(21,855	)	¥	974,877		¥	311,484	¥	311,484	¥	1,286,361

*Appropriation of surplus for the annual stockholders’ meeting held in June 2006

STATEMENT OF CHANGES IN NET ASSETS


	Yen in millions
	Year ended March 31, 2008
	Stockholders’ equity																																			Difference of appreciation and conversion
			Capital surplus						Retained earnings																																	Total net assets
											Other retained earnings
	Common stock		Additional paid-in capital		Other capital surplus		Total capital surplus		Legal reserve		Reserve for special depre- ciation			Reserve for research and develop- ment		Reserve for dividends		Reserve for retire- ment benefits		Reserve for overseas invest- ments		General reserve		Unappro- priated retained earnings			Total retained earnings			Treasury stock, at cost			Total stock- holders’ equity			Net unrealized gains on other securities			Total unrealized gain (loss) on appreciation and conversion
Balance, March 31, 2007	¥	115,703	¥	192,555	¥	127	¥	192,682	¥	17,207	¥	991		¥	1,000	¥	1,000	¥	300	¥	1,000	¥	603,837	¥	63,012		¥	688,347		¥	(21,855	)	¥	974,877		¥	311,484		¥	311,484		¥	1,286,361
Changes in net assets
Appropriation to reserve for special depreciation		—		—		—		—		—		31			—		—		—		—		—		(31	)		—			—			—			—			—			—
Reversal of reserve for special depreciation		—		—		—		—		—		(467	)		—		—		—		—		—		467			—			—			—			—			—			—
Appropriation to general reserve		—		—		—		—		—		—			—		—		—		—		40,000		(40,000	)		—			—			—			—			—			—
Dividends		—		—		—		—		—		—			—		—		—		—		—		(22,684	)		(22,684	)		—			(22,684	)		—			—			(22,684	)
Net income		—		—		—		—		—		—			—		—		—		—		—		67,859			67,859			—			67,859			—			—			67,859
Purchase of treasury stock		—		—		—		—		—		—			—		—		—		—		—		—			—			(211	)		(211	)		—			—			(211	)
Reissuance of treasury stock		—		—		254		254		—		—			—		—		—		—		—		—			—			6,777			7,031			—			—			7,031
Net change in items other than stockholders’ equity		—		—		—		—		—		—			—		—		—		—		—		—			—			—			—			(118,942	)		(118,942	)		(118,942	)
Total changes in net assets		—		—		254		254		—		(436	)		—		—		—		—		40,000		5,612			45,176			6,566			51,996			(118,942	)		(118,942	)		(66,946	)

Balance, March 31, 2008	¥	115,703	¥	192,555	¥	381	¥	192,936	¥	17,207	¥	555		¥	1,000	¥	1,000	¥	300	¥	1,000	¥	643,837	¥	68,624		¥	733,523		¥	(15,289	)	¥	1,026,873		¥	192,542		¥	192,542		¥	1,219,415

Appendix

1. Planned Change in Corporate Auditors

On April 25, 2008, Board of Directors of Kyocera Corporation has decided to change its corporate auditors as follows. This change will be resolved at the shareholders’ meeting which will be held on June 26, 2008.

1) Candidates for Corporate Auditors

Full-time Corporate Auditor:

Kokichi Ishibitsu (newly-appointed)

Corporate Auditors:

Osamu Nishieda (reappointed)

Kazuo Yoshida (newly-appointed)

2) Retiring Corporate Auditors

Full-time Corporate Auditor:

Yasuo Akashi

Corporate Auditor:

Shinji Kurihara

2. Consolidated Orders and Production by Reporting Segment

Consolidated Orders by Reporting Segment


	(Yen in millions)
	Years ended March 31,										Increase (Decrease) (%)
	2007					2008
	Amount			% of total		Amount			% of total
Fine Ceramic Parts Group	¥	81,287		6.3		¥	82,028		6.4		0.9
Semiconductor Parts Group		148,467		11.6			155,057		12.1		4.4
Applied Ceramic Products Group		132,577		10.3			152,617		11.9		15.1
Electronic Device Group		297,699		23.2			298,144		23.2		0.1

Total Components Business		660,030		51.4			687,846		53.6		4.2
Telecommunications Equipment Group		243,864		19.0			207,885		16.2		(14.8	)
Information Equipment Group		268,929		21.0			276,712		21.5		2.9

Total Equipment Business		512,793		40.0			484,597		37.7		(5.5	)
Others		134,365		10.5			135,495		10.6		0.8
Adjustments and eliminations		(23,573	)	(1.9	)		(24,048	)	(1.9	)	—

Orders	¥	1,283,615		100.0		¥	1,283,890		100.0		0.0

Note 1. From April 1, 2007, the “Optical Equipment Group,” previously a separate reporting segment, has been reclassified into “Others.” Accordingly, orders for fiscal 2007 have been retroactively reclassified.

Note 2. For the reasons set forth in Note 1 above, orders of “Others” in fiscal 2007 increased by ¥11,609 million and “Adjustments and eliminations” increased by ¥(2) million compared with those previously announced.

Consolidated Production by Reporting Segment


	(Yen in millions)
	Years ended March 31,						Increase (Decrease) (%)
	2007			2008
	Amount		% of total	Amount		% of total
Fine Ceramic Parts Group	¥	83,045	6.4	¥	81,683	6.4	(1.6	)
Semiconductor Parts Group		152,425	11.8		155,949	12.3	2.3
Applied Ceramic Products Group		135,137	10.5		155,933	12.3	15.4
Electronic Device Group		290,282	22.5		285,901	22.6	(1.5	)

Total Components Business		660,889	51.2		679,466	53.6	2.8
Telecommunications Equipment Group		253,184	19.6		215,282	17.0	(15.0	)
Information Equipment Group		273,975	21.3		270,120	21.3	(1.4	)

Total Equipment Business		527,159	40.9		485,402	38.3	(7.9	)
Others		101,263	7.9		103,369	8.1	2.1

Production	¥	1,289,311	100.0	¥	1,268,237	100.0	(1.6	)

Note 3. For the reasons set forth in Note 1 on the previous page, production of “Others” in fiscal 2007 increased by ¥11,499 million compared with those previously announced.

April 25, 2008

KYOCERA CORPORATION

Consolidated Financial Highlights

Results for the Year Ended March 31, 2008


(Yen in millions, except per share amounts, exchange rates and the number of employees)
	Years ended March 31,		Increase (Decrease) (%)
	2007	2008	Increase (Decrease) (%)
Net sales	1,283,897	1,290,436	0.5

Profit from operations	135,102	152,420	12.8

Income from continuing operations before income taxes	156,540	174,842	11.7

Net income	106,504	107,244	0.7

Average exchange rates :

US$	117	114	—

Euro	150	162	—

Earnings per share :

Net income

Basic	566.03	566.58	0.1

Diluted	564.79	565.80	0.2

Capital expenditures	69,896	85,101	21.8

Depreciation	70,155	75,630	7.8

R&D expenses	61,100	61,605	0.8

Total assets	2,130,464	1,976,746	—

Stockholders’ equity	1,514,560	1,451,165	—

Sales of products manufactured outside Japan to net sales (%)	34.0	33.4	—