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 2009

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/ Shoichi Aoki
		Shoichi Aoki
		Managing Executive Officer
		General Manager of Corporate Financial & Accounting Group
Date: April 27, 2009

Information furnished on this form :

EXHIBITS

Exhibit

Number

Consolidated and Non-consolidated Financial Results for the Year Ended March 31, 2009

Consolidated Financial Results of Kyocera Corporation and its Subsidiaries

for the Year Ended March 31, 2009

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

1. Consolidated financial information for the year ended March 31, 2009 :

(1) Consolidated results of operations :


	(Japanese yen)
	Years ended March 31,
	2008			2009
Net sales	¥	1,290,436 million		¥	1,128,586 million
% change from the previous period		0.5	%		(12.5	)%
Profit from operations		152,420 million			43,419 million
% change from the previous period		12.8	%		(71.5	)%
Income before income taxes		174,842 million			55,982 million
% change from the previous period		11.7	%		(68.0	)%
Net income		107,244 million			29,506 million
% change from the previous period		0.7	%		(72.5	)%
Earnings per share :
Basic		¥566.58			¥157.27
Diluted		565.80			157.23
Return on equity		7.2	%		2.1	%
Income before income taxes to total assets		8.5	%		3.0	%
Profit from operations to net sales		11.8	%		3.8	%

Note :

Equity in earnings of affiliates and unconsolidated subsidiaries :


Year ended March 31, 2009 :	¥	6,460 million
Year ended March 31, 2008 :	¥	6,091 million

(2) Consolidated financial position :


	(Japanese yen)
	March 31,
	2008			2009
Total assets	¥	1,976,746 million		¥	1,773,802 million
Stockholders’ equity		1,451,165 million			1,323,663 million
Stockholders’ equity to total assets		73.4	%		74.6	%
Stockholders’ equity per share		¥7,659.72			¥7,212.32

(3) Consolidated cash flows :


	(Japanese yen)
	March 31,
	2008		2009
Cash flows from operating activities	¥	196,935 million	¥	99,664 million
Cash flows from investing activities		14,894 million		(201,957) million
Cash flows from financing activities		(28,071) million		(64,287) million
Cash and cash equivalents at end of year	¥	447,586 million	¥	269,247 million

– 1 –

2. Dividends :


	(Japanese yen)
	Years ended March 31,				Year ending March 31,
	2008		2009		2010
Interim dividends per share	¥60		¥60		—
Year-end dividends per share	60		60		—
Annual dividends per share	120		120		¥120
Annual aggregate amount of dividends paid	¥22,732 million		¥22,399 million		—
Dividends to net income	21.2	%	76.3	%	66.2	%
Dividends to stockholders’ equity	1.5	%	1.6	%	—

Note :

Dividends per share for the year ending March 31, 2010 are forecasted to be 120 yen on an annual basis.

3. Consolidated financial forecast for the year ending March 31, 2010 :


	(Japanese yen)
	Year ending March 31, 2010
Net sales	¥ 1,040,000 million
% change from the previous year		(7.8	)%
Profit from operations	44,000 million
% change from the previous year		1.3	%
Income before income taxes	57,000 million
% change from the previous year		1.8	%

Note :


Net income attributable to shareholders of KYOCERA CORPORATION	:	¥34,000 million
Earnings per share attributable to shareholders of KYOCERA CORPORATION	:	¥181.18

Net income attributable to shareholders of KYOCERA CORPORATION is computed in the same manner as for net income for the year ended March 31, 2009.

Earnings per share attributable to shareholders of KYOCERA CORPORATION is computed based on Statement of Financial Accounting Standards No.128.

Forecast of earnings per share attributable to shareholders of KYOCERA CORPORATION is computed based on the diluted average number of shares outstanding during the year ended March 31, 2009.

– 2 –

4. Others :

(1) Increase or decrease in significant subsidiaries during the period :


	Number of company	Name of company
Increase	1	KYOCERA TELECOM EQUIPMENT (MALAYSIA) SDN. BHD.
Decrease	0	—

Please refer to the accompanying “BASIS OF PREPARATION OF CONSOLIDATED FINANCIAL STATEMENTS” on page 27.

(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 27.

(3) Number of shares (common stock) :


	March 31,
	2008	2009
Number of shares issued	191,309,290	191,309,290
Number of shares in treasury	1,855,119	7,781,256
Number of shares outstanding (average)	189,283,237	187,618,426

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

1. Results for the year ended March 31, 2009 :

(1) Results of operations :


	(Japanese yen)
	Years ended March 31,
	2008			2009
Net sales	¥	539,320 million		¥	521,993 million
% change from the previous year		1.5	%		(3.2	)%
Profit from operations		48,551 million			(8,536) million
% change from the previous year		(1.8	)%		—
Recurring profit		90,211 million			28,992 million
% change from the previous year		22.4	%		(67.9	)%
Net income		67,859 million			14,023 million
% change from the previous year		9.4	%		(79.3	)%

Earnings per share :
Basic		¥358.51			¥74.74
Diluted		¥358.01			¥74.73

(2) Financial Position :


	(Japanese yen)
	March 31,
	2008			2009
Total assets	¥	1,465,960 million		¥	1,278,075 million
Net assets		1,219,415 million			1,118,614 million
Net assets to total assets		83.2	%		87.5	%
Net assets per share		6,436.46			6,095.06

With regard to forecasts set forth above, please refer to the accompanying “Forward-Looking Statements” on page 14.

– 3 –

BUSINESS RESULTS

1. Analysis of Business Results

[Business Results for the Year Ended March 31, 2009 (“fiscal 2009”)]

(1) Economic Situation and Business Environment

In the fiscal 2009, the impact of the financial crisis triggered in the United States affected the real economy, resulting in rapid deceleration in the global economy commencing the second half of fiscal 2009. In the Japanese economy, exports decreased significantly due to the slowdown in overseas economies and appreciation of the yen against the U.S. dollar and Euro, while there was a significant decline in corporate production activity. As a result, the recession in the Japanese economy has become evident rapidly.

Due to the impact of the slumping global consumer spending, the digital consumer equipment market, which is a principal market for Kyocera Corporation and its consolidated subsidiaries (“Kyocera Group” or “Kyocera”), posted sluggish growth in sales of mobile phone handsets, personal computers (“PCs”), flat panel TV sets and digital cameras. In addition, the business environment has changed dramatically commencing the second half of fiscal 2009 due to the sharp decline in corporate information technology investment. As a result, sales for both components business and equipment business decreased compared with the previous fiscal year ended March 31, 2008 (“fiscal 2008”). The solar energy market expanded worldwide, due in part to subsidies from national governments despite harsh environment.

(2) Consolidated Financial Results

Consolidated net sales for fiscal 2009 amounted to ¥1,128,586 million, a decrease of 12.5% compared with fiscal 2008, due primarily to the impact of a decrease in demand affected by deteriorating business environment and to appreciation of the yen.

Amid such a harsh business environment, Kyocera Group continued to pursue synergies by effectively utilizing management resources and to aggressively release new products, while also promoting comprehensive Group-wide cost reductions. Nonetheless, profit from operations for fiscal 2009 decreased by 71.5% compared with fiscal 2008 to ¥43,419 million due mainly to a decrease in demand and product selling price erosion. Income before income taxes decreased by 68.0% to ¥55,982 million due to the decrease in profit from operations. Net income decreased by 72.5% to ¥29,506 million.

Average exchange rates for fiscal 2009 were ¥101 to the U.S dollar and ¥143 to the Euro, marking appreciation of ¥13 and ¥19, respectively, compared with fiscal 2008. As a result, net sales and income before income taxes after translation into the yen for fiscal 2009 were, for calculation purposes, pushed down by approximately ¥91.0 billion and ¥23.0 billion, respectively.

– 4 –


	(Yen in millions, except per share amounts and exchange rate)
	Years ended March 31,						Increase (Decrease) (%)
	2008			2009
	Amount		%	Amount		%
Net sales	¥	1,290,436	100.0	¥	1,128,586	100.0	(12.5	)
Profit from operations	¥	152,420	11.8	¥	43,419	3.8	(71.5	)
Income before income taxes	¥	174,842	13.5	¥	55,982	5.0	(68.0	)
Net income	¥	107,244	8.3	¥	29,506	2.6	(72.5	)
Diluted earnings per share	¥	565.80	—	¥	157.23	—	(72.2	)
Average US$ exchange rate	¥	114	—	¥	101	—	—
Average Euro exchange rate	¥	162	—	¥	143	—	—

(3) Consolidated results by reporting segment

i) Components Business:

Sales in the components business for fiscal 2009 decreased by 15.1% to ¥577,055 million, and operating profit decreased by 68.3% to ¥31,830 million compared with fiscal 2008.

1) Fine Ceramic Parts Group

This reporting segment includes fine ceramic parts and automotive parts.

As a result of a substantial slump in component demand led by sharp decline in production activity in numerous industries, namely the semiconductor and automotive industries, overall sales and operating profit in this reporting segment decreased compared with fiscal 2008.

2) Semiconductor Parts Group

This reporting segment includes ceramic packages and organic packages.

As a result of rapid deterioration in demand for ceramic packages used mainly in digital consumer equipment and organic packages used mainly in servers from the latter half of the second quarter of fiscal 2009, sales and operating profit in this reporting segment both decreased compared with fiscal 2008.

3) Applied Ceramic Products Group

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

For the solar energy business, despite the impact of the yen appreciating against the Euro from the second half and a swift decline in demand in the fourth quarter, demand continued to show strong expansion until the third quarter, particularly in Europe and the United States, resulting in sales growth in this business compared with fiscal 2008. However, a significant decline in production activity in the automotive industry from the second half led to a decrease in demand for cutting tools. As a result, sales in this reporting segment decreased slightly compared with fiscal 2008. Operating profit was down due to one-off charge relating to an impairment of goodwill at a subsidiary as well as decreased sales for cutting tools.

– 5 –

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 and liquid crystal displays.

Demand for digital consumer equipment such as mobile phone handsets and PCs declined due to the global economic downturn, forcing a rapid decline in production of digital consumer equipment and inventory adjustments for components thereof from the second half. Further, the impact of a decline in component prices and yen appreciation coupled with an impairment loss of certain fixed assets led to decreases in sales and operating profit in this reporting segment compared with fiscal 2008.

ii) Equipment Business:

Sales in the equipment business for fiscal 2009 decreased by 10.0% to ¥448,055 million, and operating profit decreased by ¥50,540 million to ¥(4,216) million compared with fiscal 2008.

1) Telecommunications Equipment Group

This reporting segment includes mobile phone handsets as well as PHS handsets, base stations for PHS/EVDO, and iBurst^TM related equipment.

Although the mobile phone handset related business newly acquired from SANYO Electric Co., Ltd. (“SANYO”) contributed to sales from fiscal 2009, replacement demand for mobile phone handsets in the Japanese market weakened sharply due to the introduction of an installment sales method, while sales in overseas markets also decreased. As a result, sales in this reporting segment decreased only slightly compared with fiscal 2008. This reporting segment recorded an operating loss in fiscal 2009 due to the impact of a decrease in sales combined with decline in product price and the execution of structural reform at an overseas subsidiary.

– 6 –

2) Information Equipment Group

This reporting segment includes ECOSYS brand printers and copiers, and digital MFPs.

Despite implementing various strategies to expand sales, such as continuous new product launches and extending sales networks, the impact of the yen’s appreciation against the Euro and U.S. dollar coupled with significant restrictions on information technology investment in the corporate sector resulted in a decrease in sales of printers and digital MFPs. As a result, both sales and operating profit in this reporting segment decreased compared with fiscal 2008.

(iii) Others

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

Sales in this reporting segment for fiscal 2009 decreased by 9.0% compared with fiscal 2008 to ¥126,043 million due primarily to a decrease in sales of materials for electronic components. Despite an impairment of goodwill at a subsidiary, operating profit increased by 46.4% compared with fiscal 2008 to ¥14,106 million due to one-time gains from sales of certain real estate in Japan and overseas.

Consolidated Sales by Reporting Segment


	(Yen in millions)
	Years ended March 31,										Increase (Decrease) %
	2008					2009
	Amount			%		Amount			%
Fine Ceramic Parts Group	¥	81,309		6.3		¥	61,730		5.4		(24.1	)
Semiconductor Parts Group		154,538		12.0			135,137		12.0		(12.6	)
Applied Ceramic Products Group		149,942		11.6			148,917		13.2		(0.7	)
Electronic Device Group		294,201		22.8			231,271		20.5		(21.4	)

Total Components Business		679,990		52.7			577,055		51.1		(15.1	)
Telecommunications Equipment Group		220,817		17.1			218,758		19.4		(0.9	)
Information Equipment Group		276,746		21.5			229,297		20.3		(17.1	)

Total Equipment Business		497,563		38.6			448,055		39.7		(10.0	)
Others		138,494		10.7			126,043		11.2		(9.0	)
Adjustments and eliminations		(25,611	)	(2.0	)		(22,567	)	(2.0	)	—

Net sales	¥	1,290,436		100.0		¥	1,128,586		100.0		(12.5	)

– 7 –

Consolidated Operating Profit (Loss) by Reporting Segment


	(Yen in millions)
	Years ended March 31,								Increase (Decrease) %
	2008				2009
	Amount			%*	Amount			%*
Fine Ceramic Parts Group	¥	11,167		13.7	¥	(240	)	—	—
Semiconductor Parts Group		20,027		13.0		8,671		6.4	(56.7	)
Applied Ceramic Products Group		32,655		21.8		27,469		18.4	(15.9	)
Electronic Device Group		36,524		12.4		(4,070	)	—	—

Total Components Business		100,373		14.8		31,830		5.5	(68.3	)
Telecommunications Equipment Group		6,786		3.1		(17,713	)	—	—
Information Equipment Group		39,538		14.3		13,497		5.9	(65.9	)

Total Equipment Business		46,324		9.3		(4,216	)	—	—
Others		9,635		7.0		14,106		11.2	46.4

Operating profit		156,332		12.1		41,720		3.7	(73.3	)

Corporate		12,497		—		7,632		—	(38.9	)
Equity in earnings of affiliates and unconsolidated subsidiaries		6,091		—		6,460		—	6.1
Adjustments and eliminations		(78	)	—		170		—	—

Income before income taxes	¥	174,842		13.5	¥	55,982		5.0	(68.0	)

*	% to net sales of each corresponding segment

– 8 –

(4) Consolidated Sales by Geographic Area


	(Yen in millions)
	Years ended March 31,						Increase (Decrease) (%)
	2008			2009
	Amount		%	Amount		%
Japan	¥	507,837	39.4	¥	473,387	41.9	(6.8	)
United States of America		248,760	19.3		201,502	17.9	(19.0	)
Europe		229,830	17.8		200,483	17.8	(12.8	)
Asia		232,425	18.0		183,347	16.2	(21.1	)
Others		71,584	5.5		69,867	6.2	(2.4	)

Net sales	¥	1,290,436	100.0	¥	1,128,586	100.0	(12.5	)

1) Japan

Sales decreased compared with the previous fiscal year due mainly to decreased demand for components for digital consumer equipment.

2) United Sates of America

Sales decreased compared with the previous fiscal year due to impact of the yen’s appreciation, in addition to a decline in sales in the Telecommunication Equipment Group and the Information Equipment Group, and to a decline in demand for electronic components.

3) Europe

Sales decreased compared with the previous fiscal year due mainly to the yen’s appreciation, in addition to sales decline in the Information Equipment Group affected by a slowdown in information technology investment.

4) Asia

Sales decreased compared with the previous fiscal year due mainly to a decline in demand for components for digital consumer equipment and to the yen’s appreciation.

5) Others

Despite the addition of the mobile phone handset related business from SANYO, sales decreased compared with the previous fiscal year due mainly to a decline in sales in the Information Equipment Group.

– 9 –

(5) Capital Expenditures and Depreciation


	(Yen in millions)
	Years ended March 31,						Increase (Decrease) (%)
	2008			2009
	Amount		% to net sales	Amount		% to net sales
Capital expenditure	¥	85,101	6.6	¥	63,055	5.6	(25.9	)
Depreciation	¥	75,630	5.9	¥	83,753	7.4	10.7

During fiscal 2009, Kyocera made capital expenditures to increase production volume in the solar energy business. In the forth quarter, Kyocera substantially slowed down capital expenditures in other businesses in reaction to deteriorating business environment. Therefore, capital expenditures in this fiscal year decreased compared with fiscal 2008.

Depreciation increased compared with the previous fiscal year due mainly to the acquisition in Telecommunications Equipment Group.

[Consolidated Forecasts for the Year Ending March 31, 2010 (“fiscal 2010”)]


	(Yen in millions, except per share amounts and exchange rates)
	Fiscal 2009 Results		Fiscal 2010 Forecasts		Increase (Decrease) (%)
	Amount	%	Amount	%	Increase (Decrease) (%)
Net sales	¥1,128,586	100.0	¥1,040,000	100.0	(7.8	)
Profit from operations	¥ 43,419	3.8	¥ 44,000	4.2	1.3
Income before income taxes	¥ 55,982	5.0	¥ 57,000	5.5	1.8
Net income attributable to shareholders of KYOCERA CORPORATION	¥ 29,506	2.6	¥ 34,000	3.3	15.2
Diluted earnings per share attributable to shareholders of KYOCERA CORPORATION	¥ 157.23	—	¥ 181.18	—	15.2
Average US$ exchange rate	¥ 101	—	¥ 92	—	—
Average Euro exchange rate	¥ 143	—	¥ 123	—	—

Capital expenditures	¥ 63,055	5.6	¥ 43,000	4.1	(31.8	)
Depreciation	¥ 83,753	7.4	¥ 68,000	6.5	(18.8	)

Net income attributable to shareholders of KYOCERA CORPORATION is computed in the same manner as for net income for the year ended March 31, 2009.

Earnings per share attributable to shareholders of KYOCERA CORPORATION 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, 2009.

– 10 –

The future of the global economy is quite unpredictable, however, it is expected to take time to move to a recovery trend as a result of the implementation of economic stimulus packages and monetary policies.

Demand for digital consumer equipment remains slow, while with respect to exchange rates, which constitute the basis of the financial forecast for fiscal 2010, the yen is expected to appreciate against both the U.S. dollars and the Euro. Accordingly, the business environment surrounding Kyocera Group in fiscal 2010 is expected to be severe.

In the components business, certain products are showing recovery in demand relative to the fourth quarter of fiscal 2009, however, future trends of recovery in demand are still unclear. With respect to the equipment business, slowdown in replacement demand for mobile phone handsets is expected to continue in the United States and Japan. Restraint on investment in information technologies by corporations is also expected to continue.

Based on this forecast of market conditions, Kyocera expects a decline in sales for fiscal 2010 compared with fiscal 2009. Even under these circumstances, Kyocera Group as a whole will execute all-out cost cutting and reduction of capital expenditures and will aim to achieve profit growth compared with fiscal 2009. Kyocera will also aim to establish highly profitable structure as quickly as possible by expanding businesses in the information and communication market, as well as in the environment and energy market.

– 11 –

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

Consolidated Sales by Reporting Segment


	(Yen in millions)
	Fiscal 2009 Results					Fiscal 2010 Forecasts					Increase (Decrease) (%)
	Amount			%		Amount			%		Increase (Decrease) (%)
Fine Ceramic Parts Group	¥	61,730		5.4		¥	50,000		4.8		(19.0	)
Semiconductor Parts Group		135,137		12.0			110,000		10.6		(18.6	)
Applied Ceramic Products Group		148,917		13.2			158,000		15.2		6.1
Electronic Device Group		231,271		20.5			185,000		17.8		(20.0	)

Total Components Business		577,055		51.1			503,000		48.4		(12.8	)
Telecommunications Equipment Group		218,758		19.4			200,000		19.2		(8.6	)
Information Equipment Group		229,297		20.3			234,000		22.5		2.1

Total Equipment Business		448,055		39.7			434,000		41.7		(3.1	)
Others		126,043		11.2			123,000		11.8		(2.4	)
Adjustments and eliminations		(22,567	)	(2.0	)		(20,000	)	(1.9	)	—

Net sales	¥	1,128,586		100.0		¥	1,040,000		100.0		(7.8	)

– 12 –

Consolidated Operating Profit (Loss) by Reporting Segment


	(Yen in millions)
	Fiscal 2009 Results			Fiscal 2010 Forecasts			Increase (Decrease) (%)
	Amount		%*	Amount		%*	Increase (Decrease) (%)
Fine Ceramic Parts Group	¥ (240	)	—	¥ 0		0.0	—
Semiconductor Parts Group	8,671		6.4	4,000		3.6	(53.9	)
Applied Ceramic Products Group	27,469		18.4	18,000		11.4	(34.5	)
Electronic Device Group	(4,070	)	—	2,000		1.1	—

Total Components Business	31,830		5.5	24,000		4.8	(24.6	)
Telecommunications Equipment Group	(17,713	)	—	(6,000	)	—	—
Information Equipment Group	13,497		5.9	11,000		4.7	(18.5	)

Total Equipment Business	(4,216	)	—	5,000		1.2	—
Others	14,106		11.2	4,000		3.3	(71.6	)

Operating profit	41,720		3.7	33,000		3.2	(20.9	)
Corporate and others	14,262		—	24,000		—	68.3

Income before income taxes	¥55,982		5.0	¥57,000		5.5	1.8

*	% to net sales of each corresponding segment

– 13 –

Note : Forward-Looking Statements

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

(1)	General economic conditions in our markets, which are primarily Japan, North America, Europe and Asia, particularly China

(2)	Unexpected changes in economic, political and legal conditions in China

(3)

Our ability to develop, launch and produce innovative products, including meeting quality and delivery standards, and our ability to otherwise meet the advancing technological requirements of our customers, particularly in the highly competitive markets for ceramics, semiconductor parts and electronic components

(4)	Manufacturing delays or defects resulting from outsourcing or internal manufacturing processes which may adversely affect our production yields and operating results

(5)

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

(6)	Changes in exchange rates, particularly between the yen and the U.S. dollar and Euro, respectively, in which we make significant sales

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

(8)	Insufficient protection of our trade secrets and patents

(9)	Our continuing to hold licenses to manufacture and sell certain of our products

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

(11)	The possibility that companies or assets acquired by us may require more cost than expected for integration, and may not produce the returns or benefits, or bring in business opportunities, which we expect

(12)	Events that may impact negatively on our markets or supply chain, including terrorist acts and outbreaks of disease

(13)	The occurrence of natural disasters, such as earthquakes, in locations where our manufacturing and other key business facilities are located

(14)	The possibility of future tightening of environmental laws and regulations in Japan and other countries which may increase our environmental liability and compliance obligations

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

(16)	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.

– 14 –

2. Analysis of Financial Position

1. Consolidated Cash Flows

Cash and cash equivalents at March 31, 2009 decreased by ¥178,339 million to ¥269,247 million compared with those at March 31, 2008.


	(Yen in millions)
	Years Ended March 31,
	2008		2009
Cash flows from operating activities	196,935		99,664
Cash flows from investing activities	14,894		(201,957	)
Cash flows from financing activities	(28,071	)	(64,287	)
Effect of exchange rate changes on cash and cash equivalents	(18,380	)	(11,759	)
Net increase (decrease) in cash and cash equivalents	165,378		(178,339	)
Cash and cash equivalents at beginning of year	282,208		447,586
Cash and cash equivalents at end of year	447,586		269,247

(1) Cash flows from operating activities

Net cash provided by operating activities in fiscal 2009 decreased by ¥97,271 million to ¥99,664 million from ¥196,935 million in fiscal 2008. This was due mainly to a decrease in net income.

(2) Cash flows from investing activities

Cash flow from investing activities turned from ¥14,894 million of cash inflows in fiscal 2008 to ¥201,957 million of cash outflows in fiscal 2009. This was due mainly to a decrease in withdrawal of certificate deposits and time deposits, and a decrease in proceeds from sales and maturities of securities.

(3) Cash flows from financing activities

Net cash used in financing activities in fiscal 2009 increased by ¥36,216 million to ¥64,287 million from ¥28,071 million in fiscal 2008. This was due mainly to purchases of treasury stock from November 28, 2008 to December 22, 2008.

2. Indexes of Consolidated Cash Flows


	Years Ended March 31,
	2005		2006		2007		2008		2009
Stockholders’ equity to total assets	67.3	%	66.7	%	71.1	%	73.4	%	74.6	%
Market capitalization to total assets	82.2	%	101.3	%	98.4	%	80.2	%	67.0	%
Interest bearing debts per operating cash flows (years)	1.0		0.8		0.2		0.1		0.6
Operating cash flows per interest paid (ratio)	62.4		88.5		93.4		161.8		153.8

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

– 15 –

3. Basic Profit Distribution Policy and Dividends for Fiscal 2009 and Fiscal 2010

(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 on an ongoing basis. Kyocera therefore has adopted a principal guideline that dividend amounts within a range based on net income on a consolidated basis, and has set its consolidated dividend policy to maintain a consolidated dividend ratio at a level of approximately 20% to 25% of consolidated net income. In addition, Kyocera determines dividend amounts based on an overall assessment, taking into account various factors including the amount of capital expenditures necessary for medium to long-term corporate growth.

Kyocera also has adopted policies to ensure a sound financial basis, and, for such purpose, it sets aside other general reserves in preparation for the creation of new businesses, cultivation of new markets, development of new technologies and acquisition of outside management resources necessary to achieve sustainable corporate growth.

(2) Dividends for fiscal 2009

Based on performance during fiscal 2009 and pursuant to the aforementioned policies, 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, the same amount as in the previous fiscal year.

(3) Dividend Forecast for Fiscal 2010

Dividend amounts for fiscal 2010 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 its financial forecast for fiscal 2010.

– 16 –

KYOCERA GROUP

Kyocera group consists of Kyocera Corporation, 211 subsidiaries and 10 affiliates.

(Chart of the group companies)

LOGO

– 17 –

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”, it is essential to be always highly profitable. Specifically, Kyocera aims to quickly 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 among each business 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

Sources of competitive advantage for Kyocera over other companies in implementing its diversification strategy are 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 With these foundations firmly in place, Kyocera endeavors to strengthen competitiveness in technological development, sales and marketing in the high-growth potential markets for information and communication and for environment and energy, 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.

– 18 –

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 information and communication and for environmental and energy.

4. Management Challenges

In order for Kyocera Group as a whole to overcome the current difficult circumstances and improve its performance, Kyocera has substantially changed its management structure by promoting young members of the management team as officers and directors of the Company and the group companies.

Kyocera faces the following challenges in its fiscal year ending March 31, 2010 and beyond.

(1) Establish Highly Profitable Corporate Structure

In the year ending March 31, 2010 (“fiscal 2010”), it is expected that harsh business environment will continue, where expansion of sales is difficult. However, Kyocera will endeavor to enhance its corporate structure and to secure profitability even in the face of the current sluggish business environment. Particularly, Kyocera will manage its business by thoroughly implementing the “Kyocera Philosophy” and the “Amoeba Management System” to achieve “maximum sales and minimum costs” by all employee’s effort. In order to improve profitability as quickly as possible, all divisions will engage in all-out cost cutting, including the reduction of manufacturing costs and review of capital expenditures plans.

Kyocera will improve the profitability of existing businesses and develop competitive new products and technologies to establish a highly profitable structure by efficiently utilizing Kyocera’s management resources to pursue synergetic effects.

– 19 –

(2) Business Expansion in Important Markets

Kyocera will expand its businesses in the information and communication market and the environment and energy market. In the information and communication market it is ensuring the linkage of new business opportunities with its business expansion, such as commencement of provision of new generation high speed wireless communication service in the domestic market. It also aims to expand its component business and equipment business by releasing products meeting the need for advanced digital consumer equipment in a timely fashion.

In the environment and energy market, further growth is expected due to raising awareness of environmental issues. Kyocera will continue to implement strategic investments to expand production capacity for solar cells and modules. It will also make efforts to reduce manufacturing costs and to improve conversion efficiency and expand solar energy business as a core business of Kyocera Group. In addition, it will make further efforts to expand its business in the environment and energy market by creating new products and expanding product items such as solid oxide fuel cell (SOFC) based power generating units for home use, utilizing its fine ceramic materials technologies.

– 20 –

CONSOLIDATED BALANCE SHEETS


	(Yen in millions)
	March 31,								Increase (Decrease)
	2008				2009
	Amount			%	Amount			%
Current assets :
Cash and cash equivalents	¥	447,586			¥	269,247			¥	(178,339	)
Short-term investments		147,503				202,143				54,640
Trade notes receivables		20,375				13,750				(6,625	)
Trade accounts receivables		205,522				158,754				(46,768	)
Less allowances for doubtful accounts and sales returns		(4,352	)			(4,669	)			(317	)
Inventories		205,212				199,641				(5,571	)
Deferred income taxes		41,244				35,187				(6,057	)
Other current assets		55,135				78,263				23,128

Total current assets		1,118,225		56.6		952,316		53.7		(165,909	)

Non-current assets :
Investments and advances :
Investments in and advances to affiliates and unconsolidated subsidiaries		16,753				19,376				2,623
Securities and other investments		437,369				351,849				(85,520	)

Total investments and advances		454,122		23.0		371,225		20.9		(82,897	)
Property, plant and equipment :
Land		57,155				57,077				(78	)
Buildings		274,206				288,460				14,254
Machinery and equipment		718,812				707,399				(11,413	)
Construction in progress		17,920				6,397				(11,523	)
Less accumulated depreciation		(782,194	)			(793,279	)			(11,085	)

Total property, plant and equipment		285,899		14.4		266,054		15.0		(19,845	)
Goodwill		39,794		2.0		63,226		3.6		23,432
Intangible assets		29,829		1.5		60,077		3.4		30,248
Other assets		48,877		2.5		60,904		3.4		12,027

Total non-current assets		858,521		43.4		821,486		46.3		(37,035	)

Total assets	¥	1,976,746		100.0	¥	1,773,802		100.0	¥	(202,944	)

– 21 –


	(Yen in millions)
	March 31,
	2008				2009				Increase (Decrease)
	Amount			%	Amount			%	Increase (Decrease)
Current liabilities :
Short-term borrowings	¥	7,279			¥	11,000			¥	3,721
Current portion of long-term debt		3,432				5,523				2,091
Trade notes and accounts payable		95,390				62,579				(32,811	)
Other notes and accounts payable		66,757				43,452				(23,305	)
Accrued payroll and bonus		43,207				41,756				(1,451	)
Accrued income taxes		27,118				7,430				(19,688	)
Other accrued liabilities		32,815				26,967				(5,848	)
Other current liabilities		25,684				39,254				13,570

Total current liabilities		301,682		15.3		237,961		13.4		(63,721	)

Non-current liabilities :
Long-term debt		8,298				7,189				(1,109	)
Lease obligations		2,088				22,964				20,876
Accrued pension and severance liabilities		15,041				34,567				19,526
Deferred income taxes		118,016				71,539				(46,477	)
Other non-current liabilities		15,454				16,494				1,040

Total non-current liabilities		158,897		8.0		152,753		8.6		(6,144	)

Total liabilities		460,579		23.3		390,714		22.0		(69,865	)

Minority interests in subsidiaries		65,002		3.3		59,425		3.4		(5,577	)
Stockholders’ equity :
Common stock		115,703				115,703				—
Additional paid-in capital		162,864				163,151				287
Retained earnings		1,143,821				1,150,050				6,229
Accumulated other comprehensive income		44,066				(54,673	)			(98,739	)
Treasury stock, at cost		(15,289	)			(50,568	)			(35,279	)

Total stockholders’ equity		1,451,165		73.4		1,323,663		74.6		(127,502	)

Total liabilities, minority interests and stockholders’ equity	¥	1,976,746		100.0	¥	1,773,802		100.0	¥	(202,944	)



Note: Accumulated other comprehensive income is as follows :

	(Yen in millions)
	March 31,
	2008			2009
Net unrealized gains on securities	¥	64,799		¥	11,621
Net unrealized gains (losses) on derivative financial instruments	¥	196		¥	(145	)
Pension adjustments	¥	12,865		¥	53
Foreign currency translation adjustments	¥	(33,794	)	¥	(66,202	)

– 22 –

CONSOLIDATED STATEMENTS OF INCOME


	(Yen in millions and shares in thousands, except per share amounts)
	Years ended March 31,										Increase (Decrease)
	2008					2009					Increase (Decrease)
	Amount			%		Amount			%		Amount			%
Net sales	¥	1,290,436		100.0		¥	1,128,586		100.0		¥	(161,850	)	(12.5	)
Cost of sales		883,763		68.5			836,638		74.1			(47,125	)	(5.3	)

Gross profit		406,673		31.5			291,948		25.9			(114,725	)	(28.2	)
Selling, general and administrative expenses		254,253		19.7			248,529		22.1			(5,724	)	(2.3	)

Profit from operations		152,420		11.8			43,419		3.8			(109,001	)	(71.5	)
Other income (expenses) :
Interest and dividend income		18,444		1.4			15,441		1.4			(3,003	)	(16.3	)
Interest expense		(1,480	)	(0.1	)		(1,206	)	(0.1	)		274		—
Foreign currency transaction losses, net		(956	)	(0.1	)		(91	)	(0.0	)		865		—
Equity in earnings of affiliates and unconsolidated subsidiaries		6,091		0.5			6,460		0.6			369		6.1
Losses on sale of securities, net		(622	)	(0.1	)		(2,840	)	(0.3	)		(2,218	)	—
Losses on impairment of securities		(248	)	(0.0	)		(7,141	)	(0.6	)		(6,893	)	—
Other, net		1,193		0.1			1,940		0.2			747		62.6

Total other income		22,422		1.7			12,563		1.2			(9,859	)	(44.0	)

Income before income taxes and minority interests		174,842		13.5			55,982		5.0			(118,860	)	(68.0	)
Income taxes		60,235		4.6			22,779		2.1			(37,456	)	(62.2	)

Income before minority interests		114,607		8.9			33,203		2.9			(81,404	)	(71.0	)
Minority interests		(7,363	)	(0.6	)		(3,697	)	(0.3	)		3,666		—

Net income	¥	107,244		8.3		¥	29,506		2.6		¥	(77,738	)	(72.5	)


Earnings per share :
Net income :
Basic	¥	566.58				¥	157.27
Diluted	¥	565.80				¥	157.23
Average number of shares of common stock outstanding :
Basic		189,283					187,618
Diluted		189,544					187,661

– 23 –

Notes:

1.	Kyocera applies the SFAS No.130, “Financial Reporting of Comprehensive Income.” Based on this standard, comprehensive income for the years ended March 31, 2008 and 2009 were a decrease of ¥51,746 million and a decrease of ¥68,815 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 was computed based on the diluted weighted average number of shares of stock outstanding during each period.

– 24 –

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, 2007 (188,649)	¥	115,703	¥	162,363	¥	1,055,293		¥	203,056		¥	(21,855	)
Cumulative effect of applying FIN 48 to opening balance						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	)
Adjustment for applying SFAS No. 158 to opening balance (Note)						(522	)		(418	)
Net income for the year						29,506								¥	29,506
Other comprehensive income									(98,321	)					(98,321	)

Total comprehensive income for the year														¥	(68,815	)

Cash dividends						(22,755	)
Purchase of treasury stock (6,283)												(38,219	)
Reissuance of treasury stock (357)				106								2,940
Stock option plan of subsidiaries				181

Balance, March 31, 2009 (183,528)	¥	115,703	¥	163,151	¥	1,150,050		¥	(54,673	)	¥	(50,568	)

Note :

SFAS No. 158 - “Employers’ Accounting for Defined Benefit Pension and Other Postretirement Plans-an amendment of FASB Statements No. 87, 88, 106, and 132 (R).”

Please refer to page 27 “BASIS OF PREPARATION OF CONSOLIDATED FINANCIAL STATEMENTS”

– 25 –

CONSOLIDATED STATEMENTS OF CASH FLOWS


	(Yen in millions)
	Years ended March 31,
	2008			2009
Cash flows from operating activities :
Net income	¥	107,244		¥	29,506
Adjustments to reconcile net income to net cash provided by operating activities :
Depreciation and amortization		87,045			97,577
Write-down of inventories		5,141			8,719
Minority interests		7,363			3,697
Equity in earnings of affiliates and unconsolidated subsidiaries		(6,091	)		(6,460	)
Losses (gains) on sales of property, plant and equipment, and intangible assets, net		1,474			(8,314	)
Losses on sale of securities, net		622			2,840
Losses on impairments of securities		248			7,141
Decrease in receivables		13,732			75,866
(Increase) decrease in inventories		(9,766	)		643
Increase (decrease) in notes and accounts payable		5,177			(77,648	)
Decrease in accrued income taxes		(8,817	)		(21,024	)
Increase (decrease) in other current liabilities		6,010			(12,404	)
Other, net		(12,447	)		(475	)

Net cash provided by operating activities		196,935			99,664

Cash flows from investing activities :
Payments for purchases of securities		(38,744	)		(74,793	)
Proceeds from sales and maturities of securities		124,813			55,782
Acquisitions of businesses, net of cash acquired		(26,483	)		(47,512	)
Payments for purchases of property, plant and equipment, and intangible assets		(78,269	)		(85,191	)
Proceeds from sales of property, plant and equipment, and intangible assets		877			12,893
Acquisition of certificate deposits and time deposits		(372,798	)		(290,536	)
Withdrawal of certificate deposits and time deposits		423,845			230,645
Other, net		(18,347	)		(3,245	)

Net cash provided by (used in) investing activities		14,894			(201,957	)

Cash flows from financing activities :
Increase (decrease) in short-term debt		(7,202	)		2,536
Payments of long-term debt		(6,647	)		(3,600	)
Dividends paid		(24,566	)		(24,248	)
Purchase of treasury stock		(211	)		(38,219	)
Reissuance of treasury stock		7,031			3,045
Other, net		3,524			(3,801	)

Net cash used in financing activities		(28,071	)		(64,287	)

Effect of exchange rate changes on cash and cash equivalents		(18,380	)		(11,759	)

Net increase (decrease) in cash and cash equivalents		165,378			(178,339	)
Cash and cash equivalents at beginning of year		282,208			447,586

Cash and cash equivalents at end of year	¥	447,586		¥	269,247

– 26 –

CAUTIONARY STATEMENT FOR PREMISE OF A GOING CONCERN

Not applicable.

BASIS OF PREPARATION OF CONSOLIDATED FINANCIAL STATEMENTS

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

Major consolidated subsidiaries :

KYOCERA MITA CORPORATION

AVX CORPORATION

KYOCERA INTERNATIONAL, INC.

Major affiliates accounted for by the equity method :

WILLCOM, INC.

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


Consolidation

(Increase)	41	KYOCERA TELECOM EQUIPMENT (MALAYSIA) SDN. BHD.
		KYOCERA SANYO TELECOM, INC.
		TA TRIUMPH-ADLER AKTIENGESELLSCHAFT* and others
(Decrease)	6	KYOCERA ZHENHUA COMMUNICATION EQUIPMENT CO., LTD. and others

Equity method

(Increase)	2	F&S FINANCE AND SERVICE LEASING GmbH CONSULTA BUROTECHNIK SPOL. S.R.O.
(Decrease)	2	TA TRIUMPH-ADLER AKTIENGESELLSCHAFT* MIS CO., LTD.
		*Moved from equity method to consolidation

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.

There is no material change in significant accounting policies.

In September 2006, the FASB issued SFAS No. 157, “Fair Value Measurements.” The purpose of SFAS No. 157 is to define fair value, establish a framework for measuring fair value and enhance disclosures about fair value measurements. The measurement and disclosure requirements related to financial assets and financial liabilities were effective April 1, 2008. The adoption of SFAS No. 157 for financial assets and financial liabilities had no material impact on Kyocera’s consolidated results of operations and financial position.

In September 2006, the FASB issued SFAS No. 158, “Employers’ Accounting for Defined Benefit Pension and Other Postretirement Plans-an amendment of FASB Statements No.87, 88, 106, and 132 (R).” SFAS No. 158 requires an employer to measure the funded status of a benefit plan as of the date of its fiscal year-end statement of financial position for the years ended after December 15, 2008. Kyocera adopted this measurement date provision in the year ended March 31, 2009 and measured the funded status of its benefit plans at the date of its fiscal year-end statement of financial position. As a result of applying the transition method of this provision, retained earnings and other comprehensive income at the beginning of the year decreased by ¥522 million and ¥418 million, respectively.

– 27 –

SEGMENT INFORMATION

1. Reporting segments :


	(Yen in millions)
	Years ended March 31,						Increase (Decrease)
	2008			2009			Increase (Decrease)
	Amount			Amount			Amount			%
Net sales :
Fine Ceramic Parts Group	¥	81,309		¥	61,730		¥	(19,579	)	(24.1	)
Semiconductor Parts Group		154,538			135,137			(19,401	)	(12.6	)
Applied Ceramic Products Group		149,942			148,917			(1,025	)	(0.7	)
Electronic Device Group		294,201			231,271			(62,930	)	(21.4	)
Telecommunications Equipment Group		220,817			218,758			(2,059	)	(0.9	)
Information Equipment Group		276,746			229,297			(47,449	)	(17.1	)
Others		138,494			126,043			(12,451	)	(9.0	)
Adjustments and eliminations		(25,611	)		(22,567	)		3,044		—

	¥	1,290,436		¥	1,128,586		¥	(161,850	)	(12.5	)

Operating profit (loss) :
Fine Ceramic Parts Group	¥	11,167		¥	(240	)	¥	(11,407	)	—
Semiconductor Parts Group		20,027			8,671			(11,356	)	(56.7	)
Applied Ceramic Products Group		32,655			27,469			(5,186	)	(15.9	)
Electronic Device Group		36,524			(4,070	)		(40,594	)	—
Telecommunications Equipment Group		6,786			(17,713	)		(24,499	)	—
Information Equipment Group		39,538			13,497			(26,041	)	(65.9	)
Others		9,635			14,106			4,471		46.4

		156,332			41,720			(114,612	)	(73.3	)
Corporate		12,497			7,632			(4,865	)	(38.9	)
Equity in earnings of affiliates and unconsolidated subsidiaries		6,091			6,460			369		6.1
Adjustments and eliminations		(78	)		170			248		—

Income before income taxes and minority interests	¥	174,842		¥	55,982		¥	(118,860	)	(68.0	)

Segment assets :
Fine Ceramic Parts Group	¥	53,713		¥	45,861		¥	(7,852	)	(14.6	)
Semiconductor Parts Group		100,041			79,148			(20,893	)	(20.9	)
Applied Ceramic Products Group		149,870			164,799			14,929		10.0
Electronic Device Group		400,851			339,616			(61,235	)	(15.3	)
Telecommunications Equipment Group		66,191			115,926			49,735		75.1
Information Equipment Group		203,248			251,477			48,229		23.7
Others		131,946			122,474			(9,472	)	(7.2	)

		1,105,860			1,119,301			13,441		1.2
Corporate		906,159			693,505			(212,654	)	(23.5	)
Investments in and advances to affiliates and unconsolidated subsidiaries		16,753			19,376			2,623		15.7
Adjustments and eliminations		(52,026	)		(58,380	)		(6,354	)	—

Total assets	¥	1,976,746		¥	1,773,802		¥	(202,944	)	(10.3	)

Depreciation and amortization :
Fine Ceramic Parts Group	¥	7,511		¥	7,986		¥	475		6.3
Semiconductor Parts Group		14,647			13,592			(1,055	)	(7.2	)
Applied Ceramic Products Group		9,685			11,100			1,415		14.6
Electronic Device Group		24,627			24,329			(298	)	(1.2	)
Telecommunications Equipment Group		8,753			16,946			8,193		93.6
Information Equipment Group		12,024			14,469			2,445		20.3
Others		6,922			6,407			(515	)	(7.4	)
Corporate		2,876			2,748			(128	)	(4.5	)

Total	¥	87,045		¥	97,577		¥	10,532		12.1

Capital expenditures :
Fine Ceramic Parts Group	¥	9,253		¥	5,405		¥	(3,848	)	(41.6	)
Semiconductor Parts Group		8,752			7,199			(1,553	)	(17.7	)
Applied Ceramic Products Group		10,714			14,396			3,682		34.4
Electronic Device Group		25,855			15,056			(10,799	)	(41.8	)
Telecommunications Equipment Group		2,317			3,898			1,581		68.2
Information Equipment Group		15,475			11,865			(3,610	)	(23.3	)
Others		6,056			2,461			(3,595	)	(59.4	)
Corporate		6,679			2,775			(3,904	)	(58.5	)

Total	¥	85,101		¥	63,055		¥	(22,046	)	(25.9	)

– 28 –

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


	(Yen in millions)
	Years ended March 31,						Increase (Decrease)
	2008			2009			Increase (Decrease)
	Amount			Amount			Amount			%
Net sales :
Japan	¥	538,729		¥	497,469		¥	(41,260	)	(7.7	)
Intra-group sales and transfer between geographic areas		387,196			360,150			(27,046	)	(7.0	)

		925,925			857,619			(68,306	)	(7.4	)

United States of America		282,677			245,463			(37,214	)	(13.2	)
Intra-group sales and transfer between geographic areas		30,542			23,983			(6,559	)	(21.5	)

		313,219			269,446			(43,773	)	(14.0	)

Europe		243,406			208,629			(34,777	)	(14.3	)
Intra-group sales and transfer between geographic areas		39,172			27,991			(11,181	)	(28.5	)

		282,578			236,620			(45,958	)	(16.3	)

Asia		200,675			156,762			(43,913	)	(21.9	)
Intra-group sales and transfer between geographic areas		178,184			193,838			15,654		8.8

		378,859			350,600			(28,259	)	(7.5	)

Others		24,949			20,263			(4,686	)	(18.8	)
Intra-group sales and transfer between geographic areas		15,076			12,684			(2,392	)	(15.9	)

		40,025			32,947			(7,078	)	(17.7	)
Adjustments and eliminations		(650,170	)		(618,646	)		31,524		—

	¥	1,290,436		¥	1,128,586		¥	(161,850	)	(12.5	)

Operating profit (loss) :
Japan	¥	101,176		¥	16,810		¥	(84,366	)	(83.4	)
United States of America		11,694			(6,086	)		(17,780	)	—
Europe		12,399			3,804			(8,595	)	(69.3	)
Asia		24,108			23,702			(406	)	(1.7	)
Others		2,922			725			(2,197	)	(75.2	)

		152,299			38,955			(113,344	)	(74.4	)
Corporate		12,497			7,632			(4,865	)	(38.9	)
Equity in earnings of affiliates and unconsolidated subsidiaries		6,091			6,460			369		6.1
Adjustments and eliminations		3,955			2,935			(1,020	)	(25.8	)

Income before income taxes and minority interests	¥	174,842		¥	55,982		¥	(118,860	)	(68.0	)

– 29 –

3. Geographic segments (Sales by region) :


	(Yen in millions)
	Years ended March 31,
	2008				2009				Increase (Decrease)
	Amount			%	Amount			%	Amount			%
Japan	¥	507,837		39.4	¥	473,387		41.9	¥	(34,450	)	(6.8	)
United States of America		248,760		19.3		201,502		17.9		(47,258	)	(19.0	)
Europe		229,830		17.8		200,483		17.8		(29,347	)	(12.8	)
Asia		232,425		18.0		183,347		16.2		(49,078	)	(21.1	)
Others		71,584		5.5		69,867		6.2		(1,717	)	(2.4	)

Net sales	¥	1,290,436		100.0	¥	1,128,586		100.0	¥	(161,850	)	(12.5	)

Sales outside Japan	¥	782,599			¥	655,199			¥	(127,400	)	(16.3	)
Sales outside Japan to net sales		60.6	%			58.1	%

– 30 –

EARNINGS PER SHARE

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


	(Japanese yen)
	Years ended March 31,
	2008	2009
Stockholders’ equity per share	¥7,659.72	¥7,212.32
Basic earnings per share	566.58	157.27
Diluted earnings per share	565.80	157.23

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,
	2008	2009
Net income	¥107,244	¥29,506

Basic earnings per share
Net income	566.58	157.27

Diluted earnings per share
Net income	565.80	157.23

Basic average number of shares outstanding (shares in thousands)	189,283	187,618
Dilutive effect of stock options (shares in thousands)	261	43
Diluted average number of shares outstanding (shares in thousands)	189,544	187,661

– 31 –

BALANCE SHEETS


	(Yen in millions)
	March 31,								Increase (Decrease)
	2008				2009
	Amount			%	Amount			%
Current assets :
Cash and bank deposits	¥	123,465			¥	39,939			¥	(83,526	)
Trade notes receivable		18,658				4,147				(14,511	)
Trade accounts receivable		113,025				99,853				(13,172	)
Marketable securities		223,900				201,597				(22,303	)
Finished goods and merchandise		21,246				20,535				(711	)
Work in process		19,978				20,702				724
Raw materials		15,232				—				(15,232	)
Supplies		1,527				—				(1,527	)
Raw materials and Supplies		—				13,573				13,573
Advance payments		19,415				28,426				9,011
Prepaid expenses		87				387				300
Deferred income taxes		13,915				12,525				(1,390	)
Short-term loans to subsidiaries		8,552				7,987				(565	)
Other accounts receivable		12,498				6,281				(6,217	)
Refundable income tax		—				10,178				10,178
Other current assets		2,500				1,735				(765	)
Allowances for doubtful accounts		(1,022	)			(116	)			906

Total current assets		592,976		40.4		467,749		36.6		(125,227	)

Non-current assets :
Tangible fixed assets :
Buildings		38,108				39,800				1,692
Structures		1,967				2,113				146
Machinery and equipment		42,701				35,082				(7,619	)
Vehicles		19				13				(6	)
Tools, furniture and fixtures		7,823				8,040				217
Land		33,871				35,415				1,544
Leased assets		—				86				86
Construction in progress		1,432				2,613				1,181

Total tangible fixed assets		125,921		8.6		123,162		9.6		(2,759	)

Intangible assets :
Goodwill		—				9,638				9,638
Patent rights		5,335				3,170				(2,165	)
Trademark		104				1,864				1,760
Software		633				679				46
Leased Assets		—				60				60
Other intangible assets		14				7,114				7,100

Total intangible assets		6,086		0.4		22,525		1.8		16,439

Investments and other assets :
Investments in securities		400,838				315,615				(85,223	)
Investments in subsidiaries and affiliates		260,833				268,877				8,044
Investments in subsidiaries and affiliates other than equity securities		27,623				30,412				2,789
Long-term loans to subsidiaries		23,181				27,594				4,413
Impaired loans		229				516				287
Long-term prepaid expenses		1,521				1,252				(269	)
Long-term deposits		25,000				19,000				(6,000	)
Security deposits		1,773				1,689				(84	)
Other investments		242				243				1
Allowances for doubtful accounts		(263	)			(559	)			(296	)

Total investments and other assets		740,977		50.6		664,639		52.0		(76,338	)

Total non-current assets		872,984		59.6		810,326		63.4		(62,658	)

Total assets	¥	1,465,960		100.0	¥	1,278,075		100.0	¥	(187,885	)

– 32 –


	(Yen in millions)
	March 31,
	2008					2009					Increase (Decrease)
	Amount			%		Amount			%		Increase (Decrease)
Current liabilities :
Trade accounts payable	¥	53,146				¥	32,979				¥	(20,167	)
Lease obligations		—					43					43
Other payables		38,312					31,837					(6,475	)
Accrued expenses		8,288					7,661					(627	)
Income taxes payables		13,616					283					(13,333	)
Advance received		604					267					(337	)
Deposits received		2,378					2,433					55
Unearned income		15					—					(15	)
Accrued bonuses		11,726					10,336					(1,390	)
Accrued bonuses for directors		133					24					(109	)
Warranty reserves		5,363					6,879					1,516
Allowances for sales returns		149					122					(27	)
Other current liabilities		—					1,150					1,150

Total current liabilities		133,730		9.1			94,014		7.4			(39,716	)

Non-current liabilities :
Lease obligations		—					114					114
Long-term accounts payable		703					96					(607	)
Deferred income taxes		102,102					54,941					(47,161	)
Accrued pension and severance costs		8,809					9,065					256
Retirement allowances for directors and executive officers		1,030					1,063					33
Other non-current liabilities		171					168					(3	)

Total non-current liabilities		112,815		7.7			65,447		5.1			(47,368	)

Total liabilities		246,545		16.8			159,461		12.5			(87,084	)

Net assets
Stockholders’ equity :
Common stock		115,703		7.9			115,703		9.1			—
Capital surplus:
Additional paid-in capital		192,555					192,555					—
Other capital surplus		381					486					105
Total capital surplus		192,936		13.2			193,041		15.1			105
Retained earnings :
Legal reserves		17,207					17,207					—
Other retained earnings :		716,316					707,584					(8,732	)
Reserve for special depreciation		555					396					(159	)
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		643,837					688,837					45,000
Unappropriated retained earnings		68,624					15,051					(53,573	)

Total retained earnings		733,523		50.0			724,791		56.7			(8,732	)
Treasury stock, at cost		(15,289	)	(1.0	)		(50,568	)	(4.0	)		(35,279	)
Total stockholders’ equity		1,026,873		70.1			982,967		76.9			(43,906	)
Difference of appreciation and conversion
Net unrealized gains on other securities		192,542		13.1			135,647		10.6			(56,895	)

Total net assets		1,219,415		83.2			1,118,614		87.5			(100,801	)

Total liabilities and net assets	¥	1,465,960		100.0		¥	1,278,075		100.0		¥	(187,885	)

– 33 –

STATEMENTS OF INCOME


	(Yen in millions)
	Years ended March 31,										Increase (Decrease)
	2008					2009					Increase (Decrease)
	Amount			%		Amount			%		Amount			%
Net sales	¥	539,320		100.0		¥	521,993		100.0		¥	(17,327	)	(3.2	)
Cost of sales		413,420		76.7			448,285		85.9			34,865		8.4

Gross profit		125,900		23.3			73,708		14.1			(52,192	)	(41.5	)
Selling, general and administrative expenses		77,349		14.3			82,244		15.7			4,895		6.3

Profit (Loss) from operations		48,551		9.0			(8,536	)	(1.6	)		(57,087	)	—
Non-operating income :
Interest and dividend income		35,839		6.6			33,754		6.4			(2,085	)	(5.8	)
Foreign currency transaction gains, net		1,200		0.2			2,068		0.4			868		72.3
Other non-operating income		7,860		1.5			3,493		0.7			(4,367	)	(55.6	)

Total non-operating income		44,899		8.3			39,315		7.5			(5,584	)	(12.4	)
Non-operating expenses :
Interest expense		20		0.0			23		0.0			3		12.1
Depriciation expense in subsidiaries		—		—			738		0.1			738		—
Loss on disposal of inventories		1,508		0.3			—		—			(1,508	)	—
Loss on sale of securities		471		0.1			—		—			(471	)	—
Loss on discontinuation of development		—		—			362		0.1			362		—
Loss on reduction of fixed assets		636		0.1			235		0.0			(401	)	(63.1	)
Other non-operating expenses		604		0.1			429		0.1			(175	)	(28.9	)

Total non-operating expenses		3,239		0.6			1,787		0.3			(1,452	)	(44.8	)

Recurring profit		90,211		16.7			28,992		5.6			(61,219	)	(67.9	)
Non-recurring gain :
Gain on sale of tangible fixed assets		46		0.0			286		0.1			240		516.5
Reversal of allowance for doubtful accounts		7		0.0			2		0.0			(5	)	(67.2	)
Repatriation of settlement with foreign tax authorities		1,832		0.3			32		0.0			(1,800	)	(98.2	)
Other non-recurring gain		375		0.1			18		0.0			(357	)	(95.3	)

Total non-recurring gain		2,260		0.4			338		0.1			(1,922	)	(85.1	)
Non-recurring loss :
Depreciation expense		2,851		0.5			—		—			(2,851	)	—
Loss on sale and disposal of tangible fixed assets		671		0.1			589		0.1			(82	)	(12.1	)
Impairment losses		—		—			2,309		0.5			2,309		—
Loss on impairment of investment securities		—		—			1,651		0.3			1,651		—
Loss on impairment of stocks of investment in subsidiaries		—		—			10,156		2.0			10,156		—
Other non-recurring loss		102		0.0			119		0.0			17		16.8

Total non-recurring loss		3,624		0.6			14,824		2.9			11,200		309.0

Income before income taxes		88,847		16.5			14,506		2.8			(74,341	)	(83.7	)
Income taxes – current		26,837		5.0			(1,077	)	(0.2	)		(27,914	)	—
Refund of income taxes – previous years		(2,442	)	(0.5	)		(578	)	(0.1	)		1,864		—
Income taxes – deferred		(3,407	)	(0.6	)		2,138		0.4			5,545		—

Net income	¥	67,859		12.6		¥	14,023		2.7		¥	(53,836	)	(79.3	)

– 34 –

STATEMENT OF CHANGES IN NET ASSETS


	(Yen in millions)
	Years ended March 31,
	2008			2009
Stockholders’ equity
Common stock
Balance, March 31, 2008	¥	115,703		¥	115,703
Changes in net assets
Total changes in net assets		—			—

Balance, March 31, 2009		115,703			115,703

Capital surplus
Additional paid-in capital
Balance, March 31, 2008		192,555			192,555
Changes in net assets
Total changes in net assets		—			—

Balance, March 31, 2009		192,555			192,555

Other capital surplus
Balance, March 31, 2008		127			381
Changes in net assets
Reissuance of treasury stock		254			105

Total changes in net assets		254			105

Balance, March 31, 2009		381			486

Total capital surplus
Balance, March 31, 2008		192,682			192,936
Changes in net assets
Reissuance of treasury stock		254			105

Total changes in net assets		254			105

Balance, March 31, 2009		192,936			193,041

Retained earnings
Legal reserves
Balance, March 31, 2008		17,207			17,207
Changes in net assets
Total changes in net assets		—			—

Balance, March 31, 2009		17,207			17,207

Other retained earnings
Reserve for special depreciation
Balance, March 31, 2008		991			555
Changes in net assets
Appropriation to reserve for special depreciation		31			98
Reversal of reserve for special depreciation		(467	)		(257	)

Total changes in net assets		(436	)		(159	)

Balance, March 31, 2009	¥	555		¥	396

– 35 –

STATEMENT OF CHANGES IN NET ASSETS


	(Yen in millions)
	Years ended March 31,
	2008			2009
Reserve for research and development
Balance, March 31, 2008	¥	1,000		¥	1,000
Changes in net assets
Total changes in net assets		—			—

Balance, March 31, 2009		1,000			1,000

Reserve for dividends
Balance, March 31, 2008		1,000			1,000
Changes in net assets
Total changes in net assets		—			—

Balance, March 31, 2009		1,000			1,000

Reserve for retirement benefits
Balance, March 31, 2008		300			300
Changes in net assets
Total changes in net assets		—			—

Balance, March 31, 2009		300			300

Reserve for overseas investments
Balance, March 31, 2008		1,000			1,000
Changes in net assets
Total changes in net assets		—			—

Balance, March 31, 2009		1,000			1,000

General reserve
Balance, March 31, 2008		603,837			643,837
Changes in net assets
Appropriation to general reserve		40,000			45,000

Total changes in net assets		40,000			45,000

Balance, March 31, 2009		643,837			688,837

Unappropriated retained earnings
Balance, March 31, 2008		63,012			68,624
Changes in net assets
Appropriation to reserve for special depreciation		(31	)		(98	)
Reversal of reserve for special depreciation		467			257
Appropriation to general reserve		(40,000	)		(45,000	)
Dividends		(22,684	)		(22,755	)
Net income		67,859			14,023

Total changes in net assets		5,612			(53,573	)

Balance, March 31, 2009		68,624			15,051

Total retained earnings
Balance, March 31, 2008		688,347			733,523
Changes in net assets
Appropriation to reserve for special depreciation		—			—
Reversal of reserve for special depreciation		—			—
Appropriation to general reserve		—			—
Dividends		(22,684	)		(22,755	)
Net income		67,859			14,023

Total changes in net assets		45,176			(8,732	)

Balance, March 31, 2009	¥	733,523		¥	724,791

– 36 –

STATEMENT OF CHANGES IN NET ASSETS


	(Yen in millions)
	Years ended March 31,
	2008			2009
Treasury stock
Balance, March 31, 2008	¥	(21,855	)	¥	(15,289	)
Changes in net assets
Purchase of treasury stock		(211	)		(38,219	)
Reissuance of treasury stock		6,777			2,940

Total changes in net assets		6,566			(35,279	)

Balance, March 31, 2009		(15,289	)		(50,568	)

Total Stockholders’ equity
Balance, March 31, 2008		974,877			1,026,873
Changes in net assets
Dividends		(22,684	)		(22,755	)
Net income		67,859			14,023
Purchase of treasury stock		(211	)		(38,219	)
Reissuance of treasury stock		7,031			3,045

Total changes in net assets		51,996			(43,906	)

Balance, March 31, 2009		1,026,873			982,967

Difference of appreciation and conversion
Net unrealized gains on other securities
Balance, March 31, 2008		311,484			192,542
Changes in net assets
Net change in items other than stockholders’ equity		(118,942	)		(56,895	)

Total changes in net assets		(118,942	)		(56,895	)

Balance, March 31, 2009		192,542			135,647

Total unrealized gain(loss) on apprciation and conversion
Balance, March 31, 2008		311,484			192,542
Changes in net assets
Net change in items other than stockholders’ equity		(118,942	)		(56,895	)

Total changes in net assets		(118,942	)		(56,895	)

Balance, March 31, 2009		192,542			135,647

Total net assets
Balance, March 31, 2008		1,286,361			1,219,415
Changes in net assets
Dividends		(22,684	)		(22,755	)
Net income		67,859			14,023
Purchase of treasury stock		(211	)		(38,219	)
Reissuance of treasury stock		7,031			3,045
Net change in items other than stockholders’ equity		(118,942	)		(56,895	)

Total changes in net assets		(66,946	)		(100,801	)

Balance, March 31, 2009	¥	1,219,415		¥	1,118,614

– 37 –

APPENDIX

1. Change in Directors :

This information was disclosed in Form 6-K as of February 17, 2009 and March 30, 2009.

2. Consolidated Production and Orders by Reporting Segment :

Consolidated Production by Reporting Segment


	(Yen in millions)
	Years ended March 31,						Increase (Decrease) (%)
	2008			2009
	Amount		%	Amount		%
Fine Ceramic Parts Group	¥	81,683	6.4	¥	60,550	5.6	(25.9	)
Semiconductor Parts Group		155,949	12.3		132,730	12.2	(14.9	)
Applied Ceramic Products Group		155,933	12.3		152,532	14.0	(2.2	)
Electronic Device Group		285,901	22.6		215,548	19.9	(24.6	)

Total Components Business		679,466	53.6		561,360	51.7	(17.4	)
Telecommunications Equipment Group		215,282	17.0		210,241	19.4	(2.3	)
Information Equipment Group		270,120	21.3		224,239	20.6	(17.0	)

Total Equipment Business		485,402	38.3		434,480	40.0	(10.5	)
Others		103,369	8.1		89,529	8.3	(13.4	)

Production	¥	1,268,237	100.0	¥	1,085,369	100.0	(14.4	)

– 38 –

Consolidated Orders by Reporting Segment


	(Yen in millions)
	Years ended March 31,										Increase (Decrease) (%)
	2008					2009
	Amount			%		Amount			%
Fine Ceramic Parts Group	¥	82,028		6.4		¥	57,633		5.3		(29.7	)
Semiconductor Parts Group		155,057		12.1			128,948		11.7		(16.8	)
Applied Ceramic Products Group		152,617		11.9			148,386		13.5		(2.8	)
Electronic Device Group		298,144		23.2			222,362		20.3		(25.4	)

Total Components Business		687,846		53.6			557,329		50.8		(19.0	)
Telecommunications Equipment Group		207,885		16.2			214,213		19.5		3.0
Information Equipment Group		276,712		21.5			222,894		20.3		(19.4	)

Total Equipment Business		484,597		37.7			437,107		39.8		(9.8	)
Others		135,495		10.6			123,389		11.2		(8.9	)
Adjustments and eliminations		(24,048	)	(1.9	)		(20,315	)	(1.8	)	—

Orders	¥	1,283,890		100.0		¥	1,097,510		100.0		(14.5	)

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