Edgar Filing: KYOCERA CORP

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Form 6-K

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D. C. 20549

FORM 6-K

Report of Foreign Private Issuer

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

the Securities Exchange Act of 1934

For the month of April 2018

Commission File Number: 1-07952

KYOCERA CORPORATION

(Translation of registrant’s name into English)

6 Takeda Tobadono-cho, Fushimi-ku,

Kyoto 612-8501, Japan

(Address of principal executive office)

Indicate by check mark whether the registrant files or will file annual reports under cover of Form 20-F or Form 40-F:

Form 20-F ☒ Form 40-F ☐

Indicate by check mark if the registrant is submitting the Form 6-K in paper as permitted by Registration S-T Rule 101(b)(1): ☐

Indicate by check mark if the registrant is submitting the Form 6-K in paper as permitted by Registration S-T Rule 101(b)(7): ☐

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

(Registrant)

/s/ SHOICHI AOKI

(Signature)

Shoichi Aoki

Director,

Managing Executive Officer and

General Manager of

Corporate Management Control Group

Date : April 26, 2018

Information furnished on this form:

EXHIBITS


Exhibit Number
1.		Consolidated Financial Results of Kyocera Corporation and its Subsidiaries for the Year Ended March 31, 2018
2.		Notice Relating to Repurchase of Own Shares

LOGO

Consolidated Financial Results of Kyocera Corporation and its Subsidiaries

for the Year Ended March 31, 2018

The consolidated financial information is prepared in accordance with generally accepted accounting principles in the United States of America (“U.S. GAAP”).

1. Consolidated Financial Results for the Year Ended March 31, 2018 (Fiscal 2018)


(1) Consolidated results of operations									(% of change from previous year)
	Net sales					Profit from operations					Income before income taxes					Net income attributable to Kyocera Corporation’s shareholders
	Million yen		%			Million yen		%			Million yen		%			Million yen		%
Fiscal 2018		1,577,039		10.8			95,575		(8.6	)		131,866		(4.3	)		81,789		(21.2	)
Fiscal 2017		1,422,754		(3.8	)		104,542		12.8			137,849		(5.3	)		103,843		(4.8	)

(Note) Comprehensive income:

48,650 million yen in the year ended March 31, 2018, (43.2)% of change from previous year

85,628 million yen in the year ended March 31, 2017, (22.1)% of change from previous year


	Net income attributable to Kyocera Corporation’s shareholders per share - Basic		Net income attributable to Kyocera Corporation’s shareholders per share - Diluted		Ratio of net income attributable to Kyocera Corporation’s shareholders’ equity		Ratio of income before income taxes to total assets		Ratio of profit from operations to net sales
	Yen		Yen		%		%		%
Fiscal 2018		222.43		222.43		3.5		4.2		6.1
Fiscal 2017		282.62		282.62		4.5		4.4		7.3

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


(1,564) million yen in the year ended March 31, 2018		(1,377) million yen in the year ended March 31, 2017

(2) Consolidated financial condition


	Total assets		Total equity		Kyocera Corporation’s shareholders’ equity		Kyocera Corporation’s shareholders’ equity to total assets		Kyocera Corporation’s shareholders’ equity per share
	Million yen		Million yen		Million yen		%		Yen
March 31, 2018		3,157,077		2,424,506		2,336,246		74.0		6,353.54
March 31, 2017		3,110,470		2,418,909		2,334,219		75.1		6,347.95

(3) Consolidated cash flows


	Operating activities		Investing activities			Financing activities			Cash and cash equivalents at end of year
	Million yen		Million yen			Million yen			Million yen
Fiscal 2018		158,953		(53,128	)		(51,620	)		424,938
Fiscal 2017		164,231		(112,089	)		(47,972	)		376,195

2. Dividends


	Dividends per share										Annual aggregate		Dividends to net income attributable to		Dividends to
	End of first quarter		End of second quarter		End of third quarter		Year-end		Annual		amount of dividends		Kyocera Corporation’s shareholders		Kyocera Corporation’s shareholders’ equity
	Yen		Yen		Yen		Yen		Yen		Million yen		%		%
Fiscal 2017		—		50.00		—		60.00		110.00		40,449		38.9		1.7
Fiscal 2018				60.00				60.00		120.00		44,125		53.9		1.9
Fiscal 2019 (forecast)		—		—		—		—		120.00				32.9

(Note) Dividends per share for the year ending March 31, 2019 are forecasted to be 120 yen on an annual basis.

3. Consolidated Financial Forecast for the Year Ending March 31, 2019 (Fiscal 2019)


										(% of change from the previous year)
	Net sales				Profit from operations				Income before income taxes				Net income attributable to Kyocera Corporation’s shareholders				Net income attributable to Kyocera Corporation’s shareholders per share
	Million yen		%		Million yen		%		Million yen		%		Million yen		%		Yen
Fiscal 2019		1,650,000		4.6		154,000		61.1		190,000		44.1		134,000		63.8		364.42

(Note 1) Forecast of net income attributable to Kyocera Corporation’s shareholders per share is calculated based on the diluted average number of shares outstanding during the year ended March 31, 2018.

(Note 2) As Kyocera Corporation plans to voluntarily adopt International Financial Reporting Standards (“IFRS”) from the three months ending June 30, 2018, the above consolidated financial forecast is made in accordance with IFRS.

Notes:

(1) Increase or decrease in significant subsidiaries during the year ended March 31, 2018: Yes

New companies : Not Applicable

Removal companies : 1 (Kyocera Crystal Device Corporation)

Please refer to “(5) Basis of Preparation of Consolidated Financial Statements” on page 18.

(2) Changes in accounting policies:

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

(ii) Changes due to other than adoption of new accounting standards: Not Applicable

Please refer to “(5) Basis of Preparation of Consolidated Financial Statements” on page 18.

(3) Number of shares (common stock):

(i) Number of shares issued:


377,618,580 shares at March 31, 2018		377,618,580 shares at March 31, 2017

(ii) Number of treasury stock:


9,910,822 shares at March 31, 2018		9,906,197 shares at March 31, 2017

(iii) Average number of shares outstanding:


367,709,460 shares in the year ended March 31, 2018		367,428,405 shares in the year ended March 31, 2017

Instruction for Forecasts and Other Notes:

(1) Cautionary Statement for Forecasts:

With regard to forecasts set forth above, please refer to the accompanying “Cautionary Statement for Forecasts” on page 9.

(2) Presentation of Situation of Audit Procedure:

The consolidated financial information included in this Form 6-K is out of scope of audit procedure.

(3) English Translation:

This is an English translation of the Japanese original of “Consolidated Financial Results of Kyocera Corporation and its Subsidiaries for the Year Ended March 31, 2018”. The translation is prepared solely for the reference and convenience of foreigners. In the event of any discrepancy between this translation and the Japanese original, the latter shall prevail.

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

The non-consolidated financial information is prepared in accordance with generally accepted accounting principles in Japan.

Non-consolidated Financial Results for the Year Ended March 31, 2018


(1) Non-consolidated results of operations									(% of change from previous year)
	Net sales				Profit from operations						Recurring profit					Net income
	Million yen		%		Million yen			%			Million yen		%			Million yen		%
Fiscal 2018		742,066		12.0		(10,705	)		—			82,901		1.9			78,536		(6.2	)
Fiscal 2017		662,595		11.7		24,325			(13.6	)		81,339		(14.0	)		83,724		13.1


	Net income per share - Basic		Net income per share - Diluted
	Yen		Yen
Fiscal 2018		213.58		—
Fiscal 2017		227.86		—

(2) Non-consolidated financial condition


	Total assets		Net assets		Net assets to total assets		Net assets per share
	Million yen		Million yen		%		Yen
March 31, 2018		2,422,422		1,917,101		79.1		5,213.65
March 31, 2017		2,435,888		1,922,944		78.9		5,229.48

Accompanying Information

1. OUTLOOK OF BUSINESS RESULTS

(1) Business Results

[Business Results for the Year Ended March 31, 2018]

Consolidated Financial Results

For the year ended March 31, 2018 (“fiscal 2018”), sales increased in the Components Business due to strong component demand in information and communications, automotive-related and industrial machinery markets, coupled with vigorous expansion of production capacity. Sales in the Document Solutions Group also increased due to the launch of new products and aggressive sales promotion activities. Merger and acquisition activities also contributed. As a result, consolidated net sales for fiscal 2018 increased by ¥154,285 million, or 10.8%, compared with the year ended March 31, 2017 (“fiscal 2017”), to ¥1,577,039 million. This result is a record high for fiscal year sales.

Profit from operations decreased by ¥8,967 million, or 8.6%, to ¥95,575 million, income before income taxes decreased by ¥5,983 million, or 4.3%, to ¥131,866 million and net income attributable to Kyocera Corporation’s shareholders decreased by ¥22,054 million, or 21.2%, to ¥81,789 million, compared with fiscal 2017. These results were due to the recording of a write-down in the amount of ¥50,165 million relating to long-term purchase agreements for procurement of polysilicon material in the solar energy business, included within the Life & Environment Group, which more than offset improvements in profitability in the Components Business and the Document Solutions Group resulting from the sales growth and efforts to reduce costs and raise productivity. Tax expenses primarily resulting from amendments to U.S. tax law and incurred by subsidiaries such as our U.S. subsidiary AVX Corporation pushed down net income attributable to Kyocera Corporation’s shareholders by approximately ¥11 billion.

Average exchange rates for fiscal 2018 were ¥111 to the U.S. dollar, marking depreciation of ¥3 (2.8%), and ¥130 to the Euro, marking depreciation of ¥11 (9.2%), from fiscal 2017. As a result, net sales and income before income taxes after translation into yen for fiscal 2018 were pushed up by approximately ¥39 billion and ¥16 billion, respectively, compared with fiscal 2017.

For details regarding the write-down relating to long-term purchase agreements for procurement of polysilicon material in the solar energy business, please refer to “Consolidated Results by Reporting Segment 6) Life & Environment Group” on the following page.


	Years ended March 31,								Increase (Decrease)
	2017				2018				Increase (Decrease)
	Amount		%		Amount		%		Amount			%
	(Yen in millions, except per share amounts and exchange rates)
Net sales	¥	1,422,754		100.0	¥	1,577,039		100.0	¥	154,285			10.8
Profit from operations		104,542		7.3		95,575		6.1		(8,967	)		(8.6	)
Income before income taxes		137,849		9.7		131,866		8.4		(5,983	)		(4.3	)
Net income attributable to Kyocera Corporation’s shareholders		103,843		7.3		81,789		5.2		(22,054	)		(21.2	)
Diluted earnings per share attributable to Kyocera Corporation’s shareholders		282.62		—		222.43		—		—			—
Average US$ exchange rate		108		—		111		—		—			—
Average Euro exchange rate		119		—		130		—		—			—

Consolidated Results by Reporting Segment

1) Industrial & Automotive Components Group

Core businesses were very active in this reporting segment. Sales of industrial tools increased due to growing demand in automotive-related markets and merger and acquisition activities. Sales of automotive displays also increased. In addition, sales of fine ceramic parts increased in the booming semiconductor processing equipment market. As a result of these factors, sales in this reporting segment increased compared with fiscal 2017. Operating profit increased significantly due to the growth in sales and cost reductions. The operating profit ratio improved to the double-digit level.

2) Semiconductor Components Group

Sales in this reporting segment increased compared with fiscal 2017 due mainly to an increase in sales of ceramic packages for smartphones and organic packages for automotive applications. Operating profit increased due to the sales growth and cost reductions. The operating profit ratio also improved.

3) Electronic Devices Group

Sales and profit increased in this reporting segment compared with fiscal 2017. Sales of capacitors and crystal components increased due to the launch of new products and expansion of production capacity on the back of solid demand for smartphone parts. Demand for printing devices for industrial equipment and merger and acquisition activities at AVX Corporation also contributed to this result. Operating profit increased significantly due to the sales growth coupled with the impact of new product introductions and cost reductions. The operating profit ratio also improved.

4) Communications Group

Sales and profit both increased in the information and communications services business, which provides engineering services, etc. On the other hand, profitability in the telecommunications equipment business declined due to a decline in sales of mobile phones for the U.S. market. As a result, sales in this reporting segment remained relatively unchanged and operating profit decreased compared with fiscal 2017.

5) Document Solutions Group

Sales in this reporting segment increased compared with fiscal 2017 due to an increase in sales volume resulting from the launch of new products and aggressive sales promotion activities, as well as a contribution from merger and acquisition activity. Operating profit increased significantly due to the increase in sales, cost reductions, enhanced productivity and the impact of foreign exchange rate fluctuations. The operating profit ratio improved to the double-digit level.

6) Life & Environment Group

Sales in this reporting segment decreased compared with fiscal 2017 due to downsizing of the solar energy business in the United States and lower sales in the key solar energy market of Japan. Operating loss was recorded due mainly to the recording of a write-down relating to long-term purchase agreements for procurement of polysilicon material in the solar energy business.

Kyocera has entered into long-term purchase agreements for the procurement of polysilicon material for use in its solar energy business. As a result of a decline in the profitability of such business, the net realizable value of polysilicon material was less than the purchase prices under these agreements; and pursuant to the lower of cost or net realizable value approach, Kyocera decided to record a write-down in an amount equivalent to the difference between net realizable value and purchase price.

The total amount of the write-down was ¥50,165 million, including a write-down of future material purchase commitments and the current polysilicon materials already purchased pursuant to the agreements, and the write-down was included in “cost of sales” in Kyocera’s consolidated income statements for fiscal 2018.

Net Sales by Reporting Segment


	Years ended March 31,												Increase (Decrease)
	2017						2018						Increase (Decrease)
	Amount			%			Amount			%			Amount			%
	(Yen in millions)
Industrial & Automotive Components Group	¥	230,229			16.2		¥	287,620			18.2		¥	57,391			24.9
Semiconductor Components Group		245,727			17.3			257,237			16.3			11,510			4.7
Electronic Devices Group		240,798			16.9			305,145			19.4			64,347			26.7

Total Components Business		716,754			50.4			850,002			53.9			133,248			18.6
Communications Group		252,641			17.7			255,535			16.2			2,894			1.1
Document Solutions Group		324,012			22.8			371,058			23.5			47,046			14.5
Life & Environment Group		149,207			10.5			112,212			7.1			(36,995	)		(24.8	)

Total Equipment & Systems Business		725,860			51.0			738,805			46.8			12,945			1.8
Others		22,066			1.5			18,827			1.2			(3,239	)		(14.7	)
Adjustments and eliminations		(41,926	)		(2.9	)		(30,595	)		(1.9	)		11,331			—

Net sales	¥	1,422,754			100.0		¥	1,577,039			100.0		¥	154,285			10.8


Operating Profit (Loss) by Reporting Segment
	Years ended March 31,												Increase (Decrease)
	2017						2018						Increase (Decrease)
	Amount			%*			Amount			%*			Amount			%
	(Yen in millions)
Industrial & Automotive Components Group	¥	22,442			9.7		¥	32,557			11.3		¥	10,115			45.1
Semiconductor Components Group		25,310			10.3			32,476			12.6			7,166			28.3
Electronic Devices Group		30,558			12.7			47,285			15.5			16,727			54.7

Total Components Business		78,310			10.9			112,318			13.2			34,008			43.4
Communications Group		8,528			3.4			5,061			2.0			(3,467	)		(40.7	)
Document Solutions Group		28,080			8.7			41,141			11.1			13,061			46.5
Life & Environment Group		1,345			0.9			(55,010	)		—			(56,355	)		—

Total Equipment & Systems Business		37,953			5.2			(8,808	)		—			(46,761	)		—
Others		(1,759	)		—			1,621			8.6			3,380			—

Operating profit		114,504			8.0			105,131			6.7			(9,373	)		(8.2	)
Corporate gains and Equity in earnings of affiliates and an unconsolidated subsidiary		24,636			—			28,460			—			3,824			15.5
Adjustments and eliminations		(1,291	)		—			(1,725	)		—			(434	)		—

Income before income taxes	¥	137,849			9.7		¥	131,866			8.4		¥	(5,983	)		(4.3	)

*	% to net sales of each corresponding segment

Note: Kyocera has changed the classification of its reporting segments from the year ended March 31, 2018. Business results for the year ended March 31, 2017 have been reclassified in line with the change to reporting segment classifications.

[Consolidated Forecasts for the Year Ending March 31, 2019]

In the year ending March 31, 2019 (“fiscal 2019”), we expect the information and communications market, automotive-related markets and the semiconductor industry markets to remain favorable. We expect an increase in demand for high-performance components for these markets, and proactive efforts to expand production capacity since fiscal 2018, as well as merger and acquisition activities are expected to contribute to sales in fiscal 2019.

We also expect an increase in profit due to sales growth and production cost reductions, as well as enhanced productivity through use of AI and robots.

In light of these forecasts, Kyocera projects financial results for fiscal 2019 as shown in the table below.

Assumed exchange rates for fiscal 2019 are ¥105 to the U.S. dollar, marking appreciation of ¥6 (5.4%) compared with ¥111 for fiscal 2018, and ¥130 to the Euro, unchanged for fiscal 2018.

As Kyocera plans to voluntarily adopt IFRS from the three months ending June 30, 2018, forecasts for fiscal 2019 is made in accordance with IFRS.


	Results for the year ended March 31, 2018				Forecasts for the year ending March 31, 2019				Increase (Decrease)
	U.S.GAAP				IFRS				Increase (Decrease)
	Amount		%		Amount		%		Amount		%
	(Yen in millions, except per share amounts and exchange rates)
Net sales	¥	1,577,039		100.0	¥	1,650,000		100.0	¥	72,961		4.6
Profit from operations		95,575		6.1		154,000		9.3		58,425		61.1
Income before income taxes		131,866		8.4		190,000		11.5		58,134		44.1
Net income attributable to Kyocera Corporation’s shareholders		81,789		5.2		134,000		8.1		52,211		63.8
Diluted earnings per share attributable to Kyocera Corporation’s shareholders		222.43		—		364.42		—		—		—
Average US$ exchange rate		111		—		105		—		—		—
Average Euro exchange rate		130		—		130		—		—		—

Note:

Forecast of diluted earnings per share attributable to Kyocera Corporation’s shareholders is computed based on the diluted average number of shares outstanding during the year ended March 31, 2018.

Net Sales by Reporting Segment


	Results for the year ended March 31, 2018						Forecasts for the year ending March 31, 2019						Increase (Decrease)
	U.S.GAAP						IFRS						Increase (Decrease)
	Amount			%			Amount			%			Amount			%
	(Yen in millions)
Industrial & Automotive Components Group	¥	287,620			18.2		¥	313,000			19.0		¥	25,380			8.8
Semiconductor Components Group		257,237			16.3			259,000			15.7			1,763			0.7
Electronic Devices Group		305,145			19.4			345,000			20.9			39,855			13.1

Total Components Business		850,002			53.9			917,000			55.6			66,998			7.9
Communications Group		255,535			16.2			245,000			14.9			(10,535	)		(4.1	)
Document Solutions Group		371,058			23.5			385,000			23.3			13,942			3.8
Life & Environment Group		112,212			7.1			111,000			6.7			(1,212	)		(1.1	)

Total Equipment & Systems Business		738,805			46.8			741,000			44.9			2,195			0.3
Others		18,827			1.2			17,800			1.1			(1,027	)		(5.5	)
Adjustments and eliminations		(30,595	)		(1.9	)		(25,800	)		(1.6	)		4,795			—

Net sales	¥	1,577,039			100.0		¥	1,650,000			100.0		¥	72,961			4.6


Operating Profit (Loss) by Reporting Segment

	Results for the year ended March 31, 2018						Forecasts for the year ending March 31, 2019						Increase (Decrease)
	U.S.GAAP						IFRS						Increase (Decrease)
	Amount			%*			Amount			%*			Amount			%
	(Yen in millions)
Industrial & Automotive Components Group	¥	32,557			11.3		¥	36,000			11.5		¥	3,443			10.6
Semiconductor Components Group		32,476			12.6			35,800			13.8			3,324			10.2
Electronic Devices Group		47,285			15.5			48,000			13.9			715			1.5

Total Components Business		112,318			13.2			119,800			13.1			7,482			6.7
Communications Group		5,061			2.0			5,200			2.1			139			2.7
Document Solutions Group		41,141			11.1			41,500			10.8			359			0.9
Life & Environment Group		(55,010	)		—			(3,000	)		—			52,010			—

Total Equipment & Systems Business		(8,808	)		—			43,700			5.9			52,508			—
Others		1,621			8.6			(400	)		—			(2,021	)		—

Operating profit		105,131			6.7			163,100			9.9			57,969			55.1
Corporate and others		26,735			—			26,900			—			165			0.6

Income before income taxes	¥	131,866			8.4		¥	190,000			11.5		¥	58,134			44.1

*	% to net sales of each corresponding segment

Note:

Cautionary Statement for Forecasts

Certain of the statements made in this document are forward-looking statements, which are based on our current assumptions and beliefs in light of the information currently available to us. These forward-looking statements involve known and unknown risks, uncertainties and other factors. Such risks, uncertainties and other factors include, but are not limited to the following:

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

(18)	Credit risk on trade receivables;

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

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

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

(22)	Changes in accounting principles.

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

(2) Financial Condition

Consolidated Cash Flows

Cash and cash equivalents at March 31, 2018 increased by ¥48,743 million to ¥424,938 million from ¥376,195 million at March 31, 2017.

i) Cash flows from operating activities

Net cash provided by operating activities for fiscal 2018 decreased by ¥5,278 million to ¥158,953 million from ¥164,231 million for fiscal 2017. This was due mainly to a decrease in net income, which exceeded cash flow adjustments related to an increase in accrued income taxes.

ii) Cash flows from investing activities

Net cash used in investing activities for fiscal 2018 decreased by ¥58,961 million to ¥53,128 million from ¥112,089 million for fiscal 2017. This was due mainly to a decrease in purchases of held-to-maturity securities, which was partly offset by an increase in payments for acquisitions of businesses.

iii) Cash flows from financing activities

Net cash used in financing activities for fiscal 2018 increased by ¥3,648 million to ¥51,620 million from ¥47,972 million for fiscal 2017. This was due mainly to an increase in dividends paid.

Consolidated Cash Flows


	Years ended March 31,						Increase (Decrease)
	2017			2018			Increase (Decrease)
	(Yen in millions)
Cash flows from operating activities	¥	164,231		¥	158,953		¥	(5,278	)
Cash flows from investing activities		(112,089	)		(53,128	)		58,961
Cash flows from financing activities		(47,972	)		(51,620	)		(3,648	)
Effect of exchange rate changes on cash and cash equivalents		(1,995	)		(5,462	)		(3,467	)
Net increase in cash and cash equivalents		2,175			48,743			46,568
Cash and cash equivalents at beginning of year		374,020			376,195			2,175
Cash and cash equivalents at end of year	¥	376,195		¥	424,938		¥	48,743

(3) Basic Profit Distribution Policy and Dividends for the Year Ended March 31, 2018 and for the Year Ending March 31, 2019

i) Basic profit distribution policy

Kyocera Corporation believes that the best way to increase corporate value and meet shareholders’ expectations is to improve future consolidated performance on an ongoing basis.

Kyocera Corporation therefore has adopted a principal guideline that dividend amounts be within a range based on net income attributable to Kyocera Corporation’s shareholders on a consolidated basis, and has set its dividend policy to maintain a payout ratio of around 40% of consolidated net income attributable to Kyocera Corporation’s shareholders. In addition, Kyocera Corporation determines dividend amounts based on an overall assessment, taking into account various factors including the amount of capital expenditures necessary for medium-to-long-term corporate growth.

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

ii) Dividends for the year ended March 31, 2018

Pursuant to the basic policy set forth above and based on full-year performance for the year ended March 31, 2018, Kyocera Corporation will distribute a year-end dividend for the year ended March 31, 2018 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, 10 yen increase as compared with the year ended March 31, 2017.

iii) Dividend forecast for the year ending March 31, 2019

Dividend amounts for the year ending March 31, 2019 will be decided pursuant to the basic policy set forth above. At present, Kyocera Corporation forecasts a total annual dividend in the amount of 120 yen per share, based on its financial forecast for the year ending March 31, 2019.

2. BASIC RATIONALE FOR SELECTION OF ACCOUNTING STANDARD

Kyocera plans to voluntarily adopt IFRS to its consolidated financial statements in place of the current U.S. GAAP from the three months ending June 30, 2018 in order to further enhance its management control on a global basis.

3. CONSOLIDATED FINANCIAL STATEMENTS

(1) Consolidated Balance Sheets


	March 31,										Increase (Decrease)
	2017					2018
	Amount			%		Amount			%
	(Yen in millions)
ASSETS
Current assets:
Cash and cash equivalents	¥	376,195				¥	424,938				¥	48,743
Short-term investments in debt securities		84,703					38,023					(46,680	)
Other short-term investments		212,668					158,779					(53,889	)
Trade notes receivables		28,370					26,072					(2,298	)
Trade accounts receivables		291,485					331,570					40,085
Less allowances for doubtful accounts and sales returns		(5,593	)				(5,490	)				103
Inventories		331,155					364,875					33,720
Other current assets		119,714					137,849					18,135

Total current assets		1,438,697			46.3		1,476,616			46.8		37,919

Non-current assets:
Investments and advances:
Long-term investments in debt and equity securities		1,130,756					1,050,537					(80,219	)
Other long-term investments		22,246					25,858					3,612

Total investments and advances		1,153,002			37.0		1,076,395			34.1		(76,607	)

Property, plant and equipment:
Land		59,963					62,141					2,178
Buildings		351,431					363,714					12,283
Machinery and equipment		841,973					880,918					38,945
Construction in progress		14,097					23,996					9,899
Less accumulated depreciation		(1,000,860	)				(1,029,845	)				(28,985	)

Total property, plant and equipment		266,604			8.6		300,924			9.5		34,320

Goodwill		110,470			3.5		144,268			4.6		33,798
Intangible assets		61,235			2.0		80,186			2.5		18,951
Other assets		80,462			2.6		78,688			2.5		(1,774	)

Total non-current assets		1,671,773			53.7		1,680,461			53.2		8,688

Total assets	¥	3,110,470			100.0	¥	3,157,077			100.0	¥	46,607


	March 31,										Increase (Decrease)
	2017					2018
	Amount			%		Amount			%
	(Yen in millions)
LIABILITIES AND EQUITY
Current liabilities:
Short-term borrowings	¥	191				¥	145				¥	(46	)
Current portion of long-term debt		8,235					9,293					1,058
Trade notes and accounts payable		129,460					149,734					20,274
Other notes and accounts payable		60,881					66,970					6,089
Accrued payroll and bonus		62,868					68,664					5,796
Accrued income taxes		15,707					19,436					3,729
Other accrued liabilities		51,062					50,727					(335	)
Other current liabilities		36,257					55,017					18,760

Total current liabilities		364,661			11.7		419,986			13.3		55,325

Non-current liabilities:
Long-term debt		16,409					20,237					3,828
Accrued pension and severance liabilities		31,720					28,723					(2,997	)
Deferred income taxes		258,859					223,530					(35,329	)
Other non-current liabilities		19,912					40,095					20,183

Total non-current liabilities		326,900			10.5		312,585			9.9		(14,315	)

Total liabilities		691,561			22.2		732,571			23.2		41,010

Kyocera Corporation’s shareholders’ equity:
Common stock		115,703					115,703					—
Additional paid-in capital		165,230					165,125					(105	)
Retained earnings		1,638,116					1,675,780					37,664
Accumulated other comprehensive income		447,479					411,980					(35,499	)
Common stock in treasury stock, at cost		(32,309	)				(32,342	)				(33	)

Total Kyocera Corporation’s shareholders’ equity		2,334,219			75.1		2,336,246			74.0		2,027

Noncontrolling interests		84,690			2.7		88,260			2.8		3,570

Total equity		2,418,909			77.8		2,424,506			76.8		5,597

Total liabilities and equity	¥	3,110,470			100.0	¥	3,157,077			100.0	¥	46,607


Note: Accumulated other comprehensive income is as follows:

	March 31,										Increase (Decrease)
	2017					2018					Increase (Decrease)
	(Yen in millions)
Net unrealized gains on securities	¥	499,650				¥	459,559				¥	(40,091	)
Net unrealized losses on derivative financial instruments		(449	)				(407	)				42
Pension liability adjustment		(35,362	)				(29,261	)				6,101
Foreign currency translation adjustments		(16,360	)				(17,911	)				(1,551	)
Total	¥	447,479				¥	411,980				¥	(35,499	)

(2) Consolidated Statements of Income and Consolidated Statements of Comprehensive Income

Consolidated Statements of Income


	Years ended March 31,												Increase (Decrease)
	2017						2018						Increase (Decrease)
	Amount			%			Amount			%			Amount			%
	(Yen in millions and shares in thousands, except per share amounts)
Net sales	¥	1,422,754			100.0		¥	1,577,039			100.0		¥	154,285			10.8
Cost of sales		1,049,472			73.8			1,200,911			76.1			151,439			14.4

Gross profit		373,282			26.2			376,128			23.9			2,846			0.8
Selling, general and administrative expenses		268,740			18.9			280,553			17.8			11,813			4.4

Profit from operations		104,542			7.3			95,575			6.1			(8,967	)		(8.6	)

Other income (expenses):
Interest and dividend income		32,364			2.3			40,498			2.6			8,134			25.1
Interest expense		(901	)		(0.0	)		(1,395	)		(0.1	)		(494	)		—
Foreign currency transaction gains (losses), net		1,278			0.1			(827	)		(0.1	)		(2,105	)		—
Gains on sales of securities, net		193			0.0			1,629			0.1			1,436			744.0
Other, net		373			0.0			(3,614	)		(0.2	)		(3,987	)		—

Total other income (expenses)		33,307			2.4			36,291			2.3			2,984			9.0

Income before income taxes		137,849			9.7			131,866			8.4			(5,983	)		(4.3	)
Income taxes		28,442			2.0			46,881			3.0			18,439			64.8

Net income		109,407			7.7			84,985			5.4			(24,422	)		(22.3	)
Net income attributable to noncontrolling interests		(5,564	)		(0.4	)		(3,196	)		(0.2	)		2,368			—

Net income attributable to Kyocera Corporation’s shareholders	¥	103,843			7.3		¥	81,789			5.2		¥	(22,054	)		(21.2	)

Per share information:
Net income attributable to Kyocera Corporation’s shareholders:
Basic	¥	282.62					¥	222.43
Diluted	¥	282.62					¥	222.43
Average number of shares of common stock outstanding:
Basic		367,428						367,709
Diluted		367,428						367,709

Note:

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

Consolidated Statements of Comprehensive Income


	Years ended March 31,						Increase (Decrease)
	2017			2018			Increase (Decrease)
	Amount			Amount			Amount
	(Yen in millions)
Net income	¥	109,407		¥	84,985		¥	(24,422	)

Other comprehensive income—net of taxes
Net unrealized losses on securities		(17,597	)		(40,087	)		(22,490	)
Net unrealized gains on derivative financial instruments		45			27			(18	)
Pension liability adjustment		7,252			6,428			(824	)
Foreign currency translation adjustments		(13,479	)		(2,703	)		10,776

Total other comprehensive income		(23,779	)		(36,335	)		(12,556	)

Comprehensive income		85,628			48,650			(36,978	)
Comprehensive income attributable to noncontrolling interests		(4,066	)		(2,398	)		1,668

Comprehensive income attributable to Kyocera Corporation’s shareholders	¥	81,562		¥	46,252		¥	(35,310	)

(3) Consolidated Statements of Changes in Equity


Number of shares outstanding	Common stock		Additional paid-in capital			Retained earnings			Accumulated other comprehensive income			Treasury stock			Kyocera Corporation’s shareholders’ equity			Noncontrolling interests			Total equity
	( Yen in millions and shares in thousands)
Balance at March 31, 2016 (366,857)	¥	115,703	¥	162,844		¥	1,571,002		¥	469,803		¥	(35,088	)	¥	2,284,264		¥	89,498		¥	2,373,762
Comprehensive income:
Net income							103,843									103,843			5,564			109,407
Other comprehensive income										(22,281	)					(22,281	)		(1,498	)		(23,779	)

Total comprehensive income																81,562			4,066			85,628

Cash dividends paid to Kyocera Corporation’s shareholders							(36,729	)								(36,729	)					(36,729	)
Cash dividends paid to noncontrolling interests																			(3,204	)		(3,204	)
Purchase of treasury stock (4)													(25	)		(25	)					(25	)
Reissuance of treasury stock (0)				2									2			4						4
Stock option plan of subsidiaries				189												189			71			260
Acquisition of noncontrolling interests with the consolidated subsidiary merger (859)				2,232									2,802			5,034			(6,474	)		(1,440	)
Other				(37	)					(43	)					(80	)		733			653

Balance at March 31, 2017 (367,712)	¥	115,703	¥	165,230		¥	1,638,116		¥	447,479		¥	(32,309	)	¥	2,334,219		¥	84,690		¥	2,418,909
Comprehensive income:
Net income							81,789									81,789			3,196			84,985
Other comprehensive income										(35,537	)					(35,537	)		(798	)		(36,335	)

Total comprehensive income																46,252			2,398			48,650

Cash dividends paid to Kyocera Corporation’s shareholders							(44,125	)								(44,125	)					(44,125	)
Cash dividends paid to noncontrolling interests																			(4,182	)		(4,182	)
Purchase of treasury stock (4)													(33	)		(33	)					(33	)
Reissuance of treasury stock (0)				1									0			1						1
Stock option plan of subsidiaries				273												273			104			377
Other				(379	)					38						(341	)		5,250			4,909

Balance at March 31, 2018 (367,708)	¥	115,703	¥	165,125		¥	1,675,780		¥	411,980		¥	(32,342	)	¥	2,336,246		¥	88,260		¥	2,424,506

(4) Consolidated Statements of Cash Flows


	Years ended March 31,
	2017			2018
	(Yen in millions)
Cash flows from operating activities:
Net income	¥	109,407		¥	84,985
Adjustments to reconcile net income to net cash provided by operating activities:
Depreciation and amortization		77,445			82,804
Provision for doubtful accounts and loss on bad debts		566			356
Write-down of inventories		9,215			28,721
Deferred income taxes		(8,389	)		(10,913	)
Gains on sales of securities, net		(193	)		(1,639	)
(Gains) losses on sales of property, plant and equipment, net		(1,142	)		164
Foreign currency adjustments		4,160			7,380
Change in assets and liabilities:
Increase in receivables		(30,035	)		(29,547	)
Increase in inventories		(16,349	)		(49,132	)
(Increase) decrease in other current assets		9,023			(4,419	)
Increase in notes and accounts payable		3,524			9,854
Increase (decrease) in accrued income taxes		(7,370	)		10,991
Increase in other current liabilities		17,560			12,971
Increase (decrease) in other non-current liabilities		(5,045	)		10,139
Other, net		1,854			6,238

Net cash provided by operating activities		164,231			158,953

Cash flows from investing activities:
Payments for purchases of available-for-sale securities		(2	)		(3,712	)
Payments for purchases of held-to-maturity securities		(146,832	)		(30,135	)
Payments for purchases of other securities		(2,646	)		(6,911	)
Proceeds from sales of available-for-sale securities		237			2,438
Proceeds from maturities of held-to-maturity securities		132,501			102,679
Acquisitions of businesses, net of cash acquired		(19,673	)		(75,322	)
Payments for purchases of property, plant and equipment		(66,901	)		(84,195	)
Payments for purchases of intangible assets		(5,810	)		(7,194	)
Proceeds from sales of property, plant and equipment		3,416			1,886
Acquisition of time deposits and certificate of deposits		(454,998	)		(420,556	)
Withdrawal of time deposits and certificate of deposits		449,747			466,962
Other, net		(1,128	)		932

Net cash used in investing activities		(112,089	)		(53,128	)

Cash flows from financing activities:
Decrease in short-term borrowings, net		(4,729	)		(3,240	)
Proceeds from issuance of long-term debt		9,778			13,203
Payments of long-term debt		(11,177	)		(12,771	)
Dividends paid		(39,982	)		(47,936	)
Purchases of noncontrolling interests		(1,942	)		(454	)
Other, net		80			(422	)

Net cash used in financing activities		(47,972	)		(51,620	)

Effect of exchange rate changes on cash and cash equivalents		(1,995	)		(5,462	)

Net increase in cash and cash equivalents		2,175			48,743
Cash and cash equivalents at beginning of year		374,020			376,195

Cash and cash equivalents at end of year	¥	376,195		¥	424,938

(5) Basis of Preparation of Consolidated Financial Statements

i) Scope of consolidation:

ii) Changes in scope of consolidation:

iii) Summary of significant accounting policies

Kyocera’s consolidated financial statements are prepared in conformity with U.S. GAAP.

iv) Recently Adopted Accounting Standards

The accounting standards which Kyocera adopted on or after April 1, 2017 did not have material impacts on Kyocera’s consolidated results of operations, financial condition and cash flows.

(6) Segment Information

i) Reporting segments:


	Years ended March 31,				Increase (Decrease)
	2017		2018		Increase (Decrease)
	Amount		Amount		Amount			%
	(Yen in millions)
Depreciation and amortization:
Industrial & Automotive Components Group	¥	12,464	¥	15,504	¥	3,040			24.4
Semiconductor Components Group		17,216		17,535		319			1.9
Electronic Devices Group		16,667		20,230		3,563			21.4
Communications Group		6,460		6,532		72			1.1
Document Solutions Group		14,867		12,954		(1,913	)		(12.9	)
Life & Environment Group		6,367		6,128		(239	)		(3.8	)
Others		1,539		1,336		(203	)		(13.2	)
Corporate		1,865		2,585		720			38.6

Total	¥	77,445	¥	82,804	¥	5,359			6.9


Capital expenditures:
Industrial & Automotive Components Group	¥	11,793	¥	21,184	¥	9,391			79.6
Semiconductor Components Group		16,411		15,820		(591	)		(3.6	)
Electronic Devices Group		19,095		26,512		7,417			38.8
Communications Group		1,836		4,813		2,977			162.1
Document Solutions Group		6,891		6,013		(878	)		(12.7	)
Life & Environment Group		6,185		5,454		(731	)		(11.8	)
Others		921		1,346		425			46.1
Corporate		4,649		5,377		728			15.7

Total	¥	67,781	¥	86,519	¥	18,738			27.6


Research and Development:
Industrial & Automotive Components Group	¥	10,728	¥	10,571	¥	(157	)		(1.5	)
Semiconductor Components Group		3,743		3,550		(193	)		(5.2	)
Electronic Devices Group		9,297		10,898		1,601			17.2
Communications Group		2,953		3,849		896			30.3
Document Solutions Group		21,674		22,259		585			2.7
Life & Environment Group		3,157		4,268		1,111			35.2
Others		3,859		2,878		(981	)		(25.4	)

Total	¥	55,411	¥	58,273	¥	2,862			5.2

(Note 1) Kyocera has changed the classification of its reporting segments from the year ended March 31, 2018. Business results for the year ended March 31, 2017 have been reclassified in line with the change to reporting segment classifications.

(Note 2) With regard to Reporting segment information of Net sales and Income before income taxes, please refer to the accompanying “1.OUTLOOK OF BUSINESS RESULTS (1) Business Results Consolidated Results by Reporting Segment” on page 5.

ii) Geographic segments (Net sales by geographic area) :


	Years ended March 31,								Increase (Decrease)
	2017				2018				Increase (Decrease)
	Amount		%		Amount		%		Amount			%
	(Yen in millions)
Japan	¥	598,639		42.1	¥	614,043		38.9	¥	15,404			2.6
Asia		304,013		21.4		363,649		23.1		59,636			19.6
Europe		235,355		16.5		312,669		19.8		77,314			32.8
United States of America		228,968		16.1		224,791		14.3		(4,177	)		(1.8	)
Others		55,779		3.9		61,887		3.9		6,108			11.0

Net sales	¥	1,422,754		100.0	¥	1,577,039		100.0	¥	154,285			10.8

(7) Earnings per Share

With regard to earnings per share, please refer to “Consolidated Financial Results of Kyocera Corporation and its Subsidiaries for the Year Ended March 31, 2018” on page 1 and “3. CONSOLIDATED FINANCIAL STATEMENTS (2) Consolidated Statements of Income and Consolidated Statements of Comprehensive Income” on page 14.

(8) Material Subsequent Event

Repurchase of Own Shares

Kyocera Corporation has resolved at a meeting of its Board of Directors held on April 26, 2018 to undertake a repurchase of its own shares under the provisions of the Articles of Incorporation of the Company pursuant to Article 165, Paragraph 2 of the Companies Act of Japan.

1. Reason for repurchase of own shares

The repurchase of own shares is intended to facilitate flexible capital strategies in the future, such as stock swaps.

2. Details of matters relating to the repurchase


Type of shares to be repurchased		Common stock
Total number of shares to be repurchased		Up to 7,200,000 shares (Percentage to total number of shares issued excluding treasury shares: 1.96 %)
Total amount of repurchase price		Up to 40 billion yen
Period of repurchase		From April 27, 2018 to September 20, 2018
Method of repurchase		Market purchases through the Tokyo Stock Exchange

(9) Cautionary Statement for Premise of a Going Concern

Not Applicable

April 26, 2018

To All Persons Concerned


Name of Company Listed:		Kyocera Corporation

Name of Representative:		Hideo Tanimoto, President and Director

		(Code number: 6971, The First Section of the Tokyo Stock Exchange)

Person for Inquiry:		Shoichi Aoki Director, Managing Executive Officer and General Manager of Corporate Management Control Group (Tel: +81-75-604-3500)

Notice Relating to Repurchase of Own Shares

(Repurchase of Own Shares under Articles of Incorporation Pursuant to Article 165, Paragraph 2 of the Companies Act of Japan)

This is to advise you that Kyocera Corporation (the “Company”) has resolved at a meeting of its Board of Directors held on April 26, 2018 to undertake a repurchase of its own shares under the provisions of the Articles of Incorporation of the Company pursuant to Article 165, Paragraph 2 of the Companies Act of Japan.

A summary description of this repurchase of own shares is set forth below.

1. Reason for repurchase of the Company’s own shares

The repurchase of the Company’s own shares is intended to facilitate flexible capital strategies in the future, such as stock swaps.

2. Details of matters relating to the repurchase


(1) Type of shares to be repurchased		Common stock
(2) Total number of shares to be repurchased		Up to 7,200,000 shares (Percentage to total number of shares issued excluding treasury shares: 1.96 %)
(3) Total amount of repurchase price		Up to 40 billion yen
(4) Period of repurchase		From April 27, 2018 to September 20, 2018
(5) Method of repurchase		Market purchases through the Tokyo Stock Exchange

(For your information)

Status of treasury shares held by the Company as of March 31, 2018


(1) Total number of shares issued (excluding treasury shares held by the Company)			367,707,758 shares
(2) Number of treasury shares held by the Company			9,910,822 shares

Number of consolidated subsidiaries

Kyocera Document Solutions Inc.

AVX Corporation

Kyocera International, Inc. and others

Number of affiliates accounted for by the equity method