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FORM 6-K

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D. C. 20549

Report of Foreign Private Issuer

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

the Securities Exchange Act of 1934

For the month of October 2010

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):    

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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.

 

Date: October 28, 2010

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Information furnished on this form:

EXHIBITS

 

Exhibit     Number
1.		Consolidated Financial Results of Kyocera Corporation and its Subsidiaries for the Six  Months Ended September 30, 2010

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Consolidated Financial Results of Kyocera Corporation and its Subsidiaries

for the Six Months Ended September 30, 2010

The consolidated financial information is prepared in accordance with accounting principles generally accepted in the United States of America.

1. Consolidated Financial Results for the Six Months Ended September 30, 2010

 

(1) Consolidated results of operations															(% of changes from previous period)
		Net sales								Profit from operations								Income before income taxes								Net income attributable to shareholders of Kyocera Corporation
		Million yen				%				Million yen				%				Million yen				%				Million yen				%
Six months ended September 30, 2010			637,392				31.7				81,758				823.0				89,493				421.9				61,960				609.9
Six months ended September 30, 2009			483,903				(26.5	)			8,858				(85.8	)			17,148				(76.8	)			8,728				(80.7	)

 

		Net income attributable to shareholders of Kyocera Corporation per share -Basic				Net income attributable to shareholders of Kyocera Corporation per share -Diluted
		Yen				Yen
Six months ended September 30, 2010			337.62				337.62
Six months ended September 30, 2009			47.56				47.56

(2) Consolidated financial position

 

		Total assets				Total equity				Kyocera Corporation shareholders’ equity				Kyocera  Corporation shareholders’ equity to total assets				Kyocera  Corporation shareholders’ equity per share
		Million yen				Million yen				Million yen				%				Yen
September 30, 2010			1,843,038				1,394,270				1,334,222				72.4				7,270.24
March 31, 2010			1,848,717				1,407,262				1,345,235				72.8				7,330.14

2. Dividends

 

		Dividends per share
		End of first quarter				End of second quarter				End of third quarter				Year-end				Annual
		Yen				Yen				Yen				Yen				Yen
Year ended March 31, 2010			—				60.00				—				60.00				120.00
Year ending March 31, 2011			—				60.00				—				60.00				120.00

Note:

Dividends per share for the year ending March 31, 2011 are forecasts other than results at end of first and second quarters.

3. Consolidated Financial Forecast for the Year Ending March 31, 2011

(% of changes from previous year)

		Net sales								Profit from operations								Income before income taxes								Net income attributable to shareholders of Kyocera Corporation								Net income attributable to shareholders of Kyocera Corporation per share
		Million yen				%				Million yen				%				Million yen				%				Million yen				%				Yen
Year ending March 31, 2011			1,260,000				17.3				147,000				130.2				160,000				163.2				105,000				161.9				572.15

Note:

Forecast of earnings per share attributable to shareholders of Kyocera Corporation is computed based on the diluted average number of shares outstanding during the six months ended September 30, 2010.

 

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4. Others

(1) Increase or decrease in significant subsidiaries during the three months ended September 30, 2010: None.

(2) Adoption of concise quarterly accounting method or procedure: None.

(3) Changes in accounting principles, procedures, and financial statements’ presentation:

(i) Changes due to adoption of new accounting standards: Please refer to the accompanying “2. Other Information” on page 12.

(ii) Changes due to other than adoption of new accounting standards: None.

(4) Number of shares (common stock):

(i) Number of shares issued:

 

191,309,290 shares at September 30, 2010		191,309,290 shares at March 31, 2010

(ii) Number of treasury stock:

 

7,790,817 shares at September 30, 2010		7,788,351 shares at March 31, 2010

(iii) Average number of shares outstanding:

 

183,519,374 shares in the six months ended September 30, 2010		183,526,234 shares in the six months ended September 30, 2009

Presentation of Situation of Review Procedure

The consolidated financial information included in this Form 6-K is out of scope of review procedure under the Financial Instruments and Exchange Law of Japan. Review procedure under the Financial Instruments and Exchange Law of Japan has not been completed at the date of submission of this Form 6-K.

Instruction for Forecasts and Other Notes

With regard to premise of forecasts set forth elsewhere in this Form 6-K, please refer to the accompanying “Forward-Looking Statements” on page 11.

 

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Accompanying Information

1. Business Results, Financial Conditions and Prospects

(1)  Business Results for the Six Months Ended September 30, 2010

Economic Situation and Business Environment

During the six months ended September 30, 2010 (“the first half”), the U.S. economy showed trends of recovery relative to the six months ended September 30, 2009 (“the previous first half”), particularly in terms of capital investment, despite a lack of significant improvement in the employment environment and personal consumption. The European economy was solid, supported by expanding exports due to depreciation of the Euro, allaying fears of a slowdown of financial insecurity triggered by the financial crisis in Greece. The Asian economy continued to achieve high growth, led by China. The Japanese economy was robust due to increases in capital investment, and in exports, mainly to Asia, as well as a moderate improvement in personal consumption.

In the digital consumer equipment market, which is the principal market for Kyocera Corporation and its consolidated subsidiaries (“Kyocera Group” or “Kyocera”), production activities significantly increased. Despite inventory adjustments in the three months ended September 30, 2010 (“the second quarter”) for certain types of personal computers (PCs) and flat panel TVs, production volume of mobile phone handsets, such as smartphones, and digital cameras in particular expanded compared with the previous first half.

Consolidated Financial Results

Average exchange rates for the first half were ¥89 to the U.S. dollar and ¥114 to the Euro, marking appreciation of ¥6 (approximately 6%) and ¥19 (approximately 14%), respectively, compared with the previous first half. As a result, net sales and income before income taxes after translation into the yen for the first half were down approximately ¥32 billion and ¥14 billion, respectively, compared with the previous first half.

In spite of the yen’s appreciation, sales and profit increased in every reporting segment compared with the previous first half, due to an expansion of production capacity in the Components Business and vigorous new product introductions in the Equipment Business in line with a favorable business environment. In the Components Business, demand increased for digital consumer equipment and industrial machinery, as well as in automotive related markets. Demand for solar cells and modules also grew significantly, supported by subsidy policies in Japan and overseas. In the Equipment Business, sales increased substantially in the Telecommunications Equipment Group, due to aggressive new product launches and efforts to expand sales for mobile phone handsets worldwide. As a result, net sales for the first half increased by ¥153,489 million to ¥637,392 million, compared with ¥483,903 million in the previous first half.

Coupled with the increase in sales, efforts to enhance profitability, such as reducing costs and improving productivity in each business, culminated in a considerable improvement in profit. As a result, profit from operations for the first half increased by ¥72,900 million to ¥81,758 million compared with ¥8,858 million in the previous first half. In addition, income before income taxes totaled ¥89,493 million, an increase of ¥72,345 million from ¥17,148 million in the previous first half. Net income attributable to shareholders of Kyocera Corporation for the first half amounted to ¥61,960 million, an increase of ¥53,232 million from ¥8,728 million in the previous first half.

 

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		Six months ended September 30,																Increase (Decrease)
		2009								2010
		Amount				%				Amount				%				Amount				%
		(Yen in millions, except per share amounts and exchange rates)
Net sales		¥	483,903				100.0			¥	637,392				100.0			¥	153,489				31.7
Profit from operations			8,858				1.8				81,758				12.8				72,900				823.0
Income before income taxes			17,148				3.5				89,493				14.0				72,345				421.9
Net income attributable to shareholders of Kyocera Corporation			8,728				1.8				61,960				9.7				53,232				609.9
Diluted earnings per share attributable to shareholders of Kyocera Corporation			47.56				—				337.62				—				—				—
Average US$ exchange rate			95				—				89				—				—				—
Average Euro exchange rate			133				—				114				—				—				—

Consolidated Results by Reporting Segment

i) Components Business:

Sales in the Components Business for the first half increased by ¥98,892 million to ¥343,973 million, compared with ¥245,081 million in the previous first half. Operating profit for the first half increased by ¥56,127 million to ¥61,706 million from ¥5,579 million in the previous first half. The operating profit ratio to net sales was 17.9%.

1) Fine Ceramic Parts Group

Component demand for industrial machinery, such as semiconductor fabrication equipment, and parts for the automotive industry, expanded significantly compared with the previous first half, due to recovery in production activities in respective markets. Component demand for digital consumer equipment also increased. As a result, overall sales in this reporting segment for the first half increased considerably compared with the previous first half. Operating profit improved substantially from an operating loss in the previous first half, due to sales growth and the positive effect of cost reductions.

2) Semiconductor Parts Group

Demand for ceramic packages mainly for crystal and SAW devices and for CCD/CMOS image sensors expanded significantly compared with the previous first half, due to an increase in global demand for mobile phone handsets and digital cameras, as well as an increase in the number of components incorporated into digital consumer equipment, such as smartphones in line with enhanced sophistication. Demand for organic packages mainly for network equipment also grew. As a result, overall sales in this reporting segment for the first half increased significantly compared with the previous first half. Operating profit increased substantially compared with the previous first half, due to an increase in sales and an improvement in productivity.

3) Applied Ceramic Products Group

In the solar energy business, despite the adverse impact of the yen’s appreciation, sales increased significantly compared with the previous first half, due to efforts to boost production capacity and to expand Kyocera’s sales networks worldwide to meet strong global demand for solar cells and modules. In addition, sales in the cutting tool business increased compared with the previous first half, due to a recovery in production activity in automotive related markets. As a result, sales and operating profit in this reporting segment for the first half increased significantly compared with the previous first half.

 

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4) Electronic Device Group

Demand for capacitors and crystal-related components for digital consumer equipment and industrial use increased. In addition, Kyocera’s acquisition of thin film transistor (TFT) liquid crystal display (LCD) business of Yasu facility from Sony Mobile Display Corporation in June 2010 contributed to an increase in sales in this reporting segment. As a result, overall sales in this reporting segment increased compared with the previous first half despite the adverse impact of the yen’s appreciation. In addition to the increase in sales, the positive effect from Kyocera’s efforts to reduce costs and enhance profitability contributed to a considerable increase in operating profit for this reporting segment compared with the previous first half.

ii) Equipment Business:

Sales in the Equipment Business for the first half increased by ¥48,391 million to ¥239,291 million, compared with ¥190,900 million in the previous first half. Operating profit for the first half increased by ¥15,452 million to ¥16,309 million from ¥857 million in the previous first half. The operating profit ratio was 6.8%.

1) Telecommunications Equipment Group

Sales in this reporting segment for the first half increased significantly compared with the previous first half, due to strong sales of mobile phone handsets in Japan coupled with an increase in mobile phone handset sales marketed outside Japan through new product introduction. Despite the recognition of an additional bad debt loss of approximately ¥700 million on receivables from WILLCOM, Inc., operating profit improved significantly from an operating loss in the previous first half. This was due to an increase in sales and a positive effect of structural reforms posted in the year ended March 31, 2010, which was reflected in an improvement in profitability, particularly in the mobile phone handset business overseas.

2) Information Equipment Group

Despite the adverse effect of the yen’s appreciation, moderate recovery in information technology investment by customers both in Japan and overseas culminated in robust sales of multifunction peripherals, particularly for mid-speed and color machines. As a result, sales in this reporting segment for the first half increased compared with the previous first half. Operating profit increased compared with the previous first half, due to increases in sales of high-value-added products, notably mid-speed and color machines, as well as improvements in profitability.

iii) Others:

Sales at Kyocera Communication Systems Co., Ltd. increased over the previous first half, due to a moderate recovery in information technology related investment in the corporate sector compared with the previous first half. As production activity in the semiconductor market expanded, demand for molding compounds for semiconductor encapsulation increased, and sales at Kyocera Chemical Corporation also increased over the previous first half. As a result, overall sales in this reporting segment for the first half increased by ¥10,246 million to ¥68,071 million compared with ¥57,825 million in the previous first half. Operating profit increased by ¥2,835 million to ¥4,633 million from ¥1,798 million in the previous first half.

 

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Net Sales by Reporting Segment

 

		Six months ended September 30,																Increase (Decrease)
		2009								2010
		Amount				%				Amount				%				Amount				%
		(Yen in millions)
Fine Ceramic Parts Group		¥	21,521				4.4			¥	36,674				5.8			¥	15,153				70.4
Semiconductor Parts Group			62,216				12.9				88,125				13.8				25,909				41.6
Applied Ceramic Products Group			66,883				13.8				95,620				15.0				28,737				43.0
Electronic Device Group			94,461				19.5				123,554				19.4				29,093				30.8
Total Components Business			245,081				50.6				343,973				54.0				98,892				40.4
Telecommunications Equipment Group			79,749				16.5				122,282				19.2				42,533				53.3
Information Equipment Group			111,151				23.0				117,009				18.3				5,858				5.3
Total Equipment Business			190,900				39.5				239,291				37.5				48,391				25.3
Others			57,825				11.9				68,071				10.7				10,246				17.7
Adjustments and eliminations			(9,903	)			(2.0	)			(13,943	)			(2.2	)			(4,040	)			—
Net sales		¥	483,903				100.0			¥	637,392				100.0			¥	153,489				31.7
Operating Profit (Loss) by Reporting Segment
		Six months ended September 30,																Increase (Decrease)
		2009								2010
		Amount				%*				Amount				%*				Amount				%
		(Yen in millions)
Fine Ceramic Parts Group		¥	(3,583	)			—			¥	5,314				14.5			¥	8,897				—
Semiconductor Parts Group			4,470				7.2				18,452				20.9				13,982				312.8
Applied Ceramic Products Group			4,364				6.5				15,692				16.4				11,328				259.6
Electronic Device Group			328				0.3				22,248				18.0				21,920				—
Total Components Business			5,579				2.3				61,706				17.9				56,127				—
Telecommunications Equipment Group			(7,503	)			—				1,904				1.6				9,407				—
Information Equipment Group			8,360				7.5				14,405				12.3				6,045				72.3
Total Equipment Business			857				0.4				16,309				6.8				15,452				—
Others			1,798				3.1				4,633				6.8				2,835				157.7
Operating profit			8,234				1.7				82,648				13.0				74,414				903.7
Corporate			7,312				—				7,393				—				81				1.1
Equity in earnings of affiliates and unconsolidated subsidiaries			1,497				—				221				—				(1,276	)			(85.2	)
Adjustments and eliminations			105				—				(769	)			—				(874	)			—
Income before income taxes		¥	17,148				3.5			¥	89,493				14.0			¥	72,345				421.9

*	% to net sales of each corresponding segment

 

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Net Sales by Geographic Area

1) Japan

Sales in the Telecommunications Equipment Group increased, due to strong sales of mobile phone handsets, and sales in the solar energy business in the Applied Ceramic Products Group increased. As a result, sales for Japan increased significantly compared with the previous first half.

2) United States of America

Sales in the Telecommunications Equipment Group increased, due to an increase in sales of mobile phone handsets through new product introduction. Sales in the Electronic Device Group also increased, due to an increase in component demand for digital consumer equipment. As a result, sales for the United States of America increased compared with the previous first half.

3) Asia

Sales in the Electronic Device Group and the Semiconductor Parts Group increased, due to an increase in component demand for digital consumer equipment. Sales in the cutting tool business in the Applied Ceramic Products Group also increased, due to a recovery in production activity in automotive related markets. As a result, sales for Asia increased compared with the previous first half.

4) Europe

Sales in the solar energy business in the Applied Ceramic Products Group increased. Sales in the Electronic Device Group increased, due to an increase in demand for components for digital consumer equipment. As a result, sales for Europe increased compared with the previous first half.

5) Others

Sales in the Semiconductor Parts Group and the Electronic Device Group increased. Sales in the Information Equipment Group also increased. As a result, sales for Others increased compared with the previous first half.

 

		Six months ended September 30,																Increase (Decrease)
		2009								2010
		Amount				%				Amount				%				Amount				%
		(Yen in millions)
Japan		¥	199,716				41.3			¥	284,707				44.7			¥	84,991				42.6
United States of America			84,750				17.5				110,691				17.4				25,941				30.6
Asia			82,156				17.0				106,758				16.7				24,602				29.9
Europe			93,750				19.4				105,082				16.5				11,332				12.1
Others			23,531				4.8				30,154				4.7				6,623				28.1
Net sales		¥	483,903				100.0			¥	637,392				100.0			¥	153,489				31.7

 

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(2)  Consolidated Financial Position

Consolidated Cash Flows

Cash and cash equivalents at September 30, 2010 decreased by ¥25,547 million to ¥287,579 million compared with those at March 31, 2010.

1) Cash flows from operating activities

Net cash provided by operating activities in the first half increased by ¥14,823 million to ¥82,629 million from ¥67,806 million in the previous first half. This was due mainly to an increase in net income.

2) Cash flows from investing activities

Net cash used in investing activities in the first half increased by ¥75,247 million to ¥80,251 million from ¥5,004 million in the previous first half. This was due mainly to increases in purchases of held-to-maturity securities and property, plant and equipment as well as a decrease in withdrawals of certificate deposits and time deposits.

3) Cash flows from financing activities

Net cash used in financing activities in the first half decreased by ¥7,442 million to ¥15,691 million from ¥23,133 million in the previous first half. This was due mainly to decreases in payments of short-term borrowings and long-term debt.

 

		Six months ended September 30,
		2009				2010
		(Yen in millions)
Cash flows from operating activities		¥	67,806			¥	82,629
Cash flows from investing activities			(5,004	)			(80,251	)
Cash flows from financing activities			(23,133	)			(15,691	)
Effect of exchange rate changes on cash and cash equivalents			(9,288	)			(12,234	)
Net increase (decrease) in cash and cash equivalents			30,381				(25,547	)
Cash and cash equivalents at beginning of period			269,247				313,126
Cash and cash equivalents at end of period		¥	299,628			¥	287,579

 

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(3)  Consolidated Forecasts for the Year Ending March 31, 2011 (“fiscal 2011”)

Kyocera revises its consolidated financial forecasts and average exchange rates for fiscal 2011 as follows.

During the first half of fiscal 2011, the Component Business and the Equipment Business recorded sales and profit beyond expectations at the beginning of fiscal 2011. With respect to the second half of fiscal 2011 (October 1, 2010 to March 31, 2011), Kyocera expects a continuing yen’s appreciation coupled with certain unstable aspects of economic trends worldwide. However, consolidated sales and profit for fiscal 2011 will exceed the forecasts previously announced, mainly due to an increase in demand for digital consumer equipment and industrial machinery, etc., and an increase in sales in the Telecommunications Equipment Group.

Kyocera will make ongoing efforts to achieve its consolidated forecasts by capturing orders, reducing costs and improving productivity.

Considering the business results for the first half and the business circumstances in the second half of fiscal 2011, Kyocera also revises its consolidated forecasts of net sales and operating profit by reporting segment for fiscal 2011 as shown on page 10.

Consolidated Forecasts for the Year Ending March 31, 2011

 

		Results for  the year ended March 31, 2010				Forecasts for the year ending March 31, 2011								Increase (Decrease) to results %
						Previously announced				Announced on October 28, 2010
		(Yen in millions, except per share amounts and exchange rates)
Net sales		¥	1,073,805			¥	1,200,000			¥	1,260,000				17.3
Profit from operations			63,860				122,000				147,000				130.2
Income before income taxes			60,798				132,000				160,000				163.2
Net income attributable to shareholders of Kyocera Corporation			40,095				85,000				105,000				161.9
Diluted earnings per share attributable to shareholders of Kyocera Corporation			218.47				463.16				572.15				—
Average US$ exchange rate			93				88				85				—
Average Euro exchange rate			131				110				112				—

Notes:

1.

The above previously announced forecasts of net sales, profit from operations, income before income taxes and net income attributable to shareholders of Kyocera Corporation were announced on April 27, 2010. The above previously announced forecasts of diluted earnings per share attributable to shareholders of Kyocera Corporation and average exchange rates for fiscal 2011 were revised on July 29, 2010.

2.	Forecast of diluted earnings per share attributable to shareholders of Kyocera Corporation announced on October 28, 2010 was computed based on the diluted average number of shares outstanding during the first half.

3.	Forecast of diluted earnings per share attributable to shareholders of Kyocera Corporation announced on July 29, 2010 was computed based on the diluted average number of shares outstanding during the first quarter of fiscal 2011.

 

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Consolidated Forecasts of Net Sales by Reporting Segment for the Year Ending March 31, 2011

 

		Results for the year ended March 31, 2010								Forecasts for the year ending March 31, 2011 announced on																Increase (Decrease) to results
										April 27, 2010								October 28, 2010
		Amount				%				Amount				%				Amount				%				%
		(Yen in millions)
Fine Ceramic Parts Group		¥	53,056				5.0			¥	64,000				5.3			¥	71,500				5.7				34.8
Semiconductor Parts Group			140,507				13.1				158,000				13.2				172,000				13.6				22.4
Applied Ceramic Products Group			157,033				14.6				201,000				16.8				201,000				16.0				28.0
Electronic Device Group			199,939				18.6				217,000				18.1				237,500				18.8				18.8
Total Components Business			550,535				51.3				640,000				53.4				682,000				54.1				23.9
Telecommunications Equipment Group			189,118				17.6				200,000				16.7				228,000				18.1				20.6
Information Equipment Group			232,365				21.6				243,000				20.2				236,000				18.7				1.6
Total Equipment Business			421,483				39.2				443,000				36.9				464,000				36.8				10.1
Others			124,577				11.6				142,000				11.8				142,000				11.3				14.0
Adjustments and eliminations			(22,790	)			(2.1	)			(25,000	)			(2.1	)			(28,000	)			(2.2	)			—
Net sales		¥	1,073,805				100.0			¥	1,200,000				100.0			¥	1,260,000				100.0				17.3
Consolidated Forecasts of Operating Profit by Reporting Segment for the Year Ending March 31, 2011
		Results for the year ended March 31, 2010								Forecasts for the year ending March 31, 2011 announced on																Increase (Decrease) to results
										April 27, 2010								October 28, 2010
		Amount				%*				Amount				%*				Amount				%*				%
		(Yen in millions)
Fine Ceramic Parts Group		¥	(788	)			—			¥	10,000				15.6			¥	11,000				15.4				—
Semiconductor Parts Group			17,235				12.3				25,000				15.8				33,500				19.5				94.4
Applied Ceramic Products Group			19,858				12.6				29,000				14.4				29,500				14.7				48.6
Electronic Device Group			13,230				6.6				28,000				12.9				39,500				16.6				198.6
Total Components Business			49,535				9.0				92,000				14.4				113,500				16.6				129.1
Telecommunications Equipment Group			(14,726	)			—				6,000				3.0				6,000				2.6				—
Information Equipment Group			22,091				9.5				22,100				9.1				24,500				10.4				10.9
Total Equipment Business			7,365				1.7				28,100				6.3				30,500				6.6				314.1
Others			6,769				5.4				7,800				5.5				8,500				6.0				25.6
Operating profit			63,669				5.9				127,900				10.7				152,500				12.1				139.5
Corporate and others			(2,871	)			—				4,100				—				7,500				—				—
Income before income taxes		¥	60,798				5.7			¥	132,000				11.0			¥	160,000				12.7				163.2

*	% to net sales of each corresponding segment

 

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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 countries where we operate;

 

(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 the Euro, respectively, in which we make significant sales;

 

(7)	Exposure to credit risk on trade receivables due to customers’ worsening financial condition;

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

(15)	The possibility of future tightening of environmental laws and regulations in Japan and other countries which may increase our environmental liability and costs and expenses to observe the obligations;

 

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

 

(17)	The possibility that deferred tax assets may not be realized or additional liabilities for unrecognized tax benefits may be required; and

 

(18)	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.

 

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2. Other Information

Changes in accounting principles, procedures and financial statements’ presentation:

Recently Adopted Accounting Standards

Kyocera adopted the Financial Accounting Standards Board (FASB)’s Accounting Standards Update (ASU) No. 2009-16, “Accounting for Transfers of Financial Assets” on April 1, 2010. This accounting standard codified former Statement of Financial Accounting Standards (SFAS) No. 166, “Accounting for Transfers of Financial Assets, an amendment of FASB Statement No. 140” issued in June 2009 in the Accounting Standards Codification (ASC) 860, “Transfers and Servicing.” This accounting standard removes the concept of a qualifying special purpose entity from former SFAS No. 140 and removes the exception from applying former FASB Interpretation No. 46 (revised December 2003), Consolidation of Variable Interest Entities, to qualifying special purpose entities and establishes specific conditions for reporting a transfer of a portion of a financial asset as a sale. The adoption of this accounting standard did not have a material impact on Kyocera’s consolidated results of operations, financial position and cash flows.

Kyocera adopted the ASU No. 2009-17, “Improvements to Financial Reporting by Enterprises Involved with Variable Interest Entities” on April 1, 2010. This accounting standard codified former SFAS No. 167, “Amendments to FASB Interpretation No. 46(R)” issued in June 2009 in the ASC 810, “Consolidation.” This accounting standard requires an enterprise to perform an analysis to identify the primary beneficiary of a variable interest entity and also requires ongoing reassessments of whether an enterprise is the primary beneficiary of a variable interest entity. The adoption of this accounting standard did not have a material impact on Kyocera’s consolidated results of operations, financial position and cash flows.

 

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3. Consolidated Financial Statements

(1) CONSOLIDATED BALANCE SHEETS (Unaudited)

 

		September 30, 2010								March 31, 2010								Increase (Decrease)
		Amount				%				Amount				%
		(Yen in millions)
Current assets:
Cash and cash equivalents		¥	287,579							¥	313,126							¥	(25,547	)
Investments in debt securities, current			26,284								11,644								14,640
Other short-term investments			230,988								200,413								30,575
Trade notes receivables			14,378								16,421								(2,043	)
Trade accounts receivables			204,802								190,903								13,899
Less allowances for doubtful accounts and sales returns			(3,858	)							(3,971	)							113
Inventories			199,054								177,361								21,693
Advance payments			50,915								52,316								(1,401	)
Deferred income taxes			43,724								40,872								2,852
Other current assets			34,657								35,370								(713	)
Total current assets			1,088,523				59.1				1,034,455				56.0				54,068
Non-current assets:
Investments and advances:
Investments in and advances to affiliates and unconsolidated subsidiaries			1,248								1,261								(13	)
Investments in debt and equity securities, long-term			311,782								370,124								(58,342	)
Other long-term investments			10,519								10,534								(15	)
Total investments and advances			323,549				17.5				381,919				20.6				(58,370	)
Property, plant and equipment:
Land			57,987								56,870								1,117
Buildings			286,276								290,516								(4,240	)
Machinery and equipment			694,219								689,608								4,611
Construction in progress			10,108								8,842								1,266
Less accumulated depreciation			(803,832	)							(805,737	)							1,905
Total property, plant and equipment			244,758				13.3				240,099				13.0				4,659
Goodwill			64,529				3.5				67,602				3.6				(3,073	)
Intangible assets			45,857				2.5				49,593				2.7				(3,736	)
Other assets			75,822				4.1				75,049				4.1				773
Total non-current assets			754,515				40.9				814,262				44.0				(59,747	)
Total assets		¥	1,843,038				100.0			¥	1,848,717				100.0			¥	(5,679	)

 

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		September 30, 2010								March 31, 2010								Increase (Decrease)
		Amount				%				Amount				%
		(Yen in millions)
Current liabilities:
Short-term borrowings		¥	3,269							¥	4,073							¥	(804	)
Current portion of long-term debt			11,380								13,456								(2,076	)
Trade notes and accounts payable			104,656								89,750								14,906
Other notes and accounts payable			77,607								63,779								13,828
Accrued payroll and bonus			48,045								47,131								914
Accrued income taxes			23,199								15,602								7,597
Other accrued liabilities			24,471								26,800								(2,329	)
Other current liabilities			32,480								28,721								3,759
Total current liabilities			325,107				17.6				289,312				15.7				35,795
Non-current liabilities:
Long-term debt			25,343								29,067								(3,724	)
Accrued pension and severance liabilities			28,461								31,828								(3,367	)
Deferred income taxes			53,143								75,619								(22,476	)
Other non-current liabilities			16,714								15,629								1,085
Total non-current liabilities			123,661				6.7				152,143				8.2				(28,482	)
Total liabilities			448,768				24.3				441,455				23.9				7,313
Kyocera Corporation shareholders’ equity:
Common stock			115,703								115,703								—
Additional paid-in capital			163,144								163,044								100
Retained earnings			1,219,071								1,168,122								50,949
Accumulated other comprehensive income			(113,052	)							(51,010	)							(62,042	)
Treasury stock, at cost			(50,644	)							(50,624	)							(20	)
Total Kyocera Corporation shareholders’ equity			1,334,222				72.4				1,345,235				72.8				(11,013	)
Noncontrolling interests			60,048				3.3				62,027				3.3				(1,979	)
Total equity			1,394,270				75.7				1,407,262				76.1				(12,992	)
Total liabilities and equity		¥	1,843,038				100.0			¥	1,848,717				100.0			¥	(5,679	)

Note: Accumulated other comprehensive income is as follows:

 

		September 30, 2010				March 31, 2010				Increase (Decrease)
		(Yen in millions)
Net unrealized gains (losses) on securities		¥	(8,973	)		¥	23,468			¥	(32,441	)
Net unrealized losses on derivative financial instruments		¥	(112	)		¥	(82	)		¥	(30	)
Pension adjustments		¥	240			¥	1,053			¥	(813	)
Foreign currency translation adjustments		¥	(104,207	)		¥	(75,449	)		¥	(28,758	)

 

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(2) CONSOLIDATED STATEMENTS OF INCOME (Unaudited)

 

		Six months ended September 30,																Increase (Decrease)
		2009								2010
		Amount				%				Amount				%				Amount				%
		(Yen in millions and shares in thousands, except per share amounts)
Net sales		¥	483,903				100.0			¥	637,392				100.0			¥	153,489				31.7
Cost of sales			369,646				76.4				448,119				70.3				78,473				21.2
Gross profit			114,257				23.6				189,273				29.7				75,016				65.7
Selling, general and administrative expenses			105,399				21.8				107,515				16.9				2,116				2.0
Profit from operations			8,858				1.8				81,758				12.8				72,900				823.0
Other income (expenses):
Interest and dividend income			6,540				1.3				6,511				1.0				(29	)			(0.4	)
Interest expense			(1,500	)			(0.3	)			(1,125	)			(0.2	)			375				—
Foreign currency transaction gains, net			852				0.2				1,069				0.2				217				25.5
Equity in earnings of affiliates and unconsolidated subsidiaries			1,497				0.3				221				0.0				(1,276	)			(85.2	)
Other, net			901				0.2				1,059				0.2				158				17.5
Total other income (expenses)			8,290				1.7				7,735				1.2				(555	)			(6.7	)
Income before income taxes			17,148				3.5				89,493				14.0				72,345				421.9
Income taxes			6,273				1.3				23,670				3.7				17,397				277.3
Net income			10,875				2.2				65,823				10.3				54,948				505.3
Net income attributable to noncontrolling interests			(2,147	)			(0.4	)			(3,863	)			(0.6	)			(1,716	)			—
Net income attributable to shareholders of Kyocera Corporation		¥	8,728				1.8			¥	61,960				9.7			¥	53,232				609.9
Earnings per share:
Net income attributable to shareholders of Kyocera Corporation:
Basic		¥	47.56							¥	337.62
Diluted		¥	47.56							¥	337.62
Average number of shares of common stock outstanding:
Basic			183,526								183,519
Diluted			183,526								183,519

Note:

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

(3) CAUTIONARY STATEMENT FOR PREMISE OF A GOING CONCERN

None.

(4) CAUTIONARY STATEMENT FOR SIGNIFICANT CHANGES IN EQUITY

None.

 

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