Edgar Filing: KYOCERA CORP

Form 6-K

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 February 2012

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): ¨

SIGNATURE

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned, thereto duly authorized.

KYOCERA CORPORATION

/s/ SHOICHI AOKI

Shoichi Aoki

Director,

Managing Executive Officer and

General Manager of

Corporate Financial and Business Systems

Administration Group

Date: February 13, 2012

Information furnished on this form:

EXHIBITS


Exhibit Number
1.		English translation of consolidated financial statements included in the Quarterly Report (“shihanki-houkokusho”) for the nine months and the three months ended December 31, 2011 submitted to the Director of the Kanto Local Finance Bureau of the Ministry of Finance pursuant to the Financial Instruments and Exchange Law of Japan

CONSOLIDATED BALANCE SHEETS (Unaudited)


	March 31, 2011			December 31, 2011
	(Yen in millions)
Current assets:
Cash and cash equivalents	¥	273,471		¥	253,830
Short-term investments in debt securities (Notes 4 and 5)		44,012			41,457
Other short-term investments (Note 4)		201,817			169,627
Trade receivables:
Notes		19,536			18,346
Accounts		208,404			204,805
Less allowances for doubtful accounts and sales returns		(4,795	)		(4,271	)

		223,145			218,880
Inventories (Note 6)		232,899			263,696
Advance payments		72,207			69,141
Deferred income taxes (Note 10)		43,035			44,606
Other current assets (Notes 5, 7 and 8)		38,915			39,485

Total current assets		1,129,501			1,100,722
Investments and advances:
Long-term investments in debt and equity securities (Notes 4 and 5)		377,075			348,297
Other long-term investments (Notes 4, 5 and 7)		16,804			18,942

Total investments and advances		393,879			367,239
Property, plant and equipment:
Land		59,638			59,843
Buildings		288,992			293,728
Machinery and equipment		706,474			699,677
Construction in progress		7,227			13,239
Less accumulated depreciation		(814,577	)		(813,744	)

Total property, plant and equipment		247,754			252,743
Goodwill (Note 3)		64,701			72,230
Intangible assets (Note 3)		42,160			44,778
Other assets (Notes 7 and 10)		68,571			62,394

Total assets	¥	1,946,566		¥	1,900,106

The accompanying notes are an integral part of these statements.

CONSOLIDATED BALANCE SHEETS (Unaudited)—(Continued)


	March 31, 2011			December 31, 2011
	(Yen in millions)
Current liabilities:
Short-term borrowings	¥	7,852		¥	4,888
Current portion of long-term debt (Note 5)		10,687			9,802
Trade notes and accounts payable		101,265			87,439
Other notes and accounts payable		61,226			56,633
Accrued payroll and bonus		49,092			41,658
Accrued income taxes		18,069			16,222
Other accrued liabilities		24,337			19,954
Other current liabilities (Notes 5 and 8)		28,087			32,403

Total current liabilities		300,615			268,999
Non-current liabilities:
Long-term debt (Note 5)		24,538			19,622
Accrued pension and severance liabilities (Note 9)		28,924			25,596
Deferred income taxes (Note 10)		90,005			74,703
Other non-current liabilities		19,125			16,805

Total non-current liabilities		162,592			136,726

Total liabilities		463,207			405,725
Commitments and contingencies (Note 11)

Kyocera Corporation shareholders’ equity:
Common stock		115,703			115,703
Additional paid-in capital		162,336			162,543
Retained earnings		1,268,548			1,316,805
Accumulated other comprehensive income (Note 8)		(75,633	)		(112,108	)
Common stock in treasury, at cost		(50,691	)		(51,222	)

Total Kyocera Corporation shareholders’ equity		1,420,263			1,431,721
Noncontrolling interests		63,096			62,660

Total equity (Note 12)		1,483,359			1,494,381

Total liabilities and equity	¥	1,946,566		¥	1,900,106

The accompanying notes are an integral part of these statements.

CONSOLIDATED STATEMENTS OF INCOME (Unaudited)


	Nine months ended December 31,
	2010			2011
	(Yen in millions and shares in thousands, except per share amounts)
Net sales (Note 8)	¥	956,914		¥	885,389
Cost of sales (Note 8)		672,363			635,035

Gross profit		284,551			250,354
Selling, general and administrative expenses (Notes 3 and 13)		164,782			161,981

Profit from operations		119,769			88,373
Other income (expenses):
Interest and dividend income		11,687			12,690
Interest expense (Note 8)		(1,673	)		(1,516	)
Foreign currency transaction gains, net (Note 8)		2,053			2,982
Other, net (Note 5)		1,300			75

Total other income (expenses)		13,367			14,231

Income before income taxes		133,136			102,604
Income taxes (Note 10)		33,713			25,328

Net income		99,423			77,276
Net income attributable to noncontrolling interests		(5,706	)		(5,166	)

Net income attributable to shareholders of Kyocera Corporation	¥	93,717		¥	72,110

Earnings per share (Note 15):
Net income attributable to shareholders of Kyocera Corporation:
Basic	¥	510.67		¥	393.07
Diluted		510.67			393.07
Average number of shares of common stock outstanding:
Basic		183,518			183,453
Diluted		183,518			183,453

The accompanying notes are an integral part of these statements.


	Three months ended December 31,
	2010			2011
	(Yen in millions and shares in thousands, except per share amounts)
Net sales (Note 8)	¥	319,522		¥	281,121
Cost of sales (Note 8)		224,244			207,713

Gross profit		95,278			73,408
Selling, general and administrative expenses (Note 13)		57,267			52,798

Profit from operations		38,011			20,610
Other income (expenses):
Interest and dividend income		5,176			5,679
Interest expense (Note 8)		(548	)		(500	)
Foreign currency transaction gains, net (Note 8)		984			1,097
Other, net (Note 5)		20			153

Total other income (expenses)		5,632			6,429

Income before income taxes		43,643			27,039
Income taxes (Note 10)		10,043			490

Net income		33,600			26,549
Net income attributable to noncontrolling interests		(1,843	)		(1,207	)

Net income attributable to shareholders of Kyocera Corporation	¥	31,757		¥	25,342

Earnings per share (Note 15):
Net income attributable to shareholders of Kyocera Corporation:
Basic	¥	173.05		¥	138.14
Diluted		173.05			138.14
Average number of shares of common stock outstanding:
Basic		183,516			183,445
Diluted		183,516			183,445

The accompanying notes are an integral part of these statements.

CONSOLIDATED STATEMENTS OF CASH FLOWS (Unaudited)


	Nine months ended December 31,
	2010			2011
	(Yen in millions)
Cash flows from operating activities:
Net income	¥	99,423		¥	77,276
Adjustments to reconcile net income to net cash provided by operating activities:
Depreciation and amortization		51,674			53,138
Provision for doubtful accounts and loss on bad debts		1,367			161
Write-down of inventories		3,014			6,869
Deferred income taxes (Note 10)		(4,731	)		(10,290	)
Foreign currency adjustments		709			138
Change in assets and liabilities:
Increase in receivables		(44,325	)		(5,127	)
Increase in inventories		(49,522	)		(50,346	)
(Increase) decrease in advance payments		(17,862	)		2,964
Increase in other current assets		(3,020	)		(5,888	)
Increase in notes and accounts payable		40,283			4,189
Increase (decrease) in accrued income taxes		6,864			(1,434	)
Decrease in other current liabilities		(4,160	)		(5,432	)
Decrease in other non-current liabilities		(4,725	)		(2,491	)
Other, net		(1,529	)		(1,513	)

Net cash provided by operating activities		73,460			62,214

Cash flows from investing activities:
Payments for purchases of available-for-sale securities		(10,854	)		(5,027	)
Payments for purchases of held-to-maturity securities		(56,881	)		(51,001	)
Proceeds from sales and maturities of available-for-sale securities		7,857			15,802
Proceeds from maturities of held-to-maturity securities		35,583			50,517
Acquisitions of businesses, net of cash acquired (Note 3)		(1,550	)		(21,137	)
Payments for purchases of property, plant and equipment		(45,471	)		(52,896	)
Payments for purchases of intangible assets		(5,598	)		(5,651	)
Proceeds from sales of property, plant and equipment, and intangible assets		476			620
Acquisition of time deposits and certificate of deposits		(220,315	)		(202,315	)
Withdrawal of time deposits and certificate of deposits		183,660			230,959
Other, net		317			950

Net cash used in investing activities		(112,776	)		(39,179	)

Cash flows from financing activities:
Decrease in short-term borrowings, net		(371	)		(2,507	)
Proceeds from issuance of long-term debt		8,165			6,797
Payments of long-term debt		(12,136	)		(10,406	)
Dividends paid (Note 12)		(23,287	)		(25,448	)
Purchase of common stock in treasury		(56	)		(533	)
Reissuance of common stock in treasury		2			3
Other, net		(1,636	)		(1,341	)

Net cash used in financing activities		(29,319	)		(33,435	)

Effect of exchange rate changes on cash and cash equivalents		(16,284	)		(9,241	)

Net decrease in cash and cash equivalents		(84,919	)		(19,641	)
Cash and cash equivalents at beginning of period		313,126			273,471

Cash and cash equivalents at end of period	¥	228,207		¥	253,830

The accompanying notes are an integral part of these statements.

NOTES TO THE UNAUDITED QUARTERLY CONSOLIDATED FINANCIAL STATEMENTS (Unaudited)

1. ACCOUNTING PRINCIPLES, PROCEDURES AND FINANCIAL STATEMENTS’ PRESENTATION

In December 1975, Kyocera Corporation filed a registration statement, Form S-1 and a registration form for American Depositary Receipt (ADR) with the United States Securities and Exchange Commission (SEC) in accordance with the Securities Exchange Act of 1933 and made a registration of its common stock and ADR there. In February 1980, Kyocera Corporation again filed Form S-1 and a registration form for ADR with the SEC in accordance with the mentioned act, and in May 1980, listed its ADR on the New York Stock Exchange.

Kyocera Corporation has filed Form 20-F as an annual report with the SEC, which includes the consolidated financial statements prepared in accordance with accounting principles generally accepted in the United States of America, under section 13 of the Securities Exchange Act of 1934. Kyocera Corporation has also prepared quarterly consolidated financial statements in accordance with accounting principles generally accepted in the United States of America for interim financial statements. Accounting principles generally accepted in the United States of America consist of the Financial Accounting Standards Board (FASB)’s Accounting Standards Codification (ASC) and the SEC’s regulations for filing and reporting.

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

(1) Revenue recognition

Kyocera adopts ASC 605, “Revenue Recognition.” Kyocera recognizes revenue when the risks and rewards of ownership have been transferred to the customer and revenue can be reliably measured.

(2) Business combinations

Kyocera adopts ASC 805, “Business Combinations.” Kyocera adopts the acquisition method and measures identifiable assets, liabilities and noncontrolling interests at fair value. Kyocera recognizes transaction and restructuring costs as expenses, and recognizes any tax adjustment made after the measurement period as income tax expenses. Kyocera records in-process research and development at fair value on acquisition date as a part of fair value of acquired business. In addition, Kyocera recognizes an asset acquired or a liability assumed in a business combination that arise from a contingency at fair value, at the acquisition date, if the acquisition date fair value of that asset or liability can be determined during the measurement period.

(3) Goodwill and other intangible assets

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

(4) Lease accounting

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

(5) Benefit plans

Kyocera adopts ASC 715, “Compensation—Retirement Benefits.” Kyocera recognizes the overfunded or underfunded status of its defined benefit postretirement plans as an asset or liability in the consolidated balance sheet and recognizes changes in that funded status in the year in which the changes occur through comprehensive income. Prior service cost is amortized by the straight-line method over the average remaining service period of employees. Actuarial gain or loss is recognized by amortizing a portion in excess of 10% of the greater of the projected benefit obligations or the market-related value of plan assets by the straight-line method over the average remaining service period of employees.

(6) Unused compensated absence

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

(7) Income taxes

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

(8) Stock issuance costs

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

2. SUMMARY OF ACCOUNTING POLICIES

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

The quarterly consolidated financial statements include the accounts of Kyocera Corporation, its subsidiaries in which Kyocera has a controlling financial interest and a variable interest entity for which Kyocera Corporation is the primary beneficiary under ASC 810, “Consolidation.” All significant inter-company transactions and accounts are eliminated. Investments in 20% to 50% owned companies are accounted for by the equity method, whereby Kyocera includes in net income its equity in the earnings or losses from these companies.

The consolidated variable interest entity for which Kyocera Corporation is the primary beneficiary does not have a material impact on Kyocera’s consolidated results of operations, financial condition and cash flows.

(2) Revenue recognition

Kyocera generates revenue principally through the sale of industrial components and telecommunications and information equipment. Kyocera’s operations consist of the following seven reporting segments: 1) Fine Ceramic Parts Group, 2) Semiconductor Parts Group, 3) Applied Ceramic Products Group, 4) Electronic Device Group, 5) Telecommunications Equipment Group, 6) Information Equipment Group and 7) Others.

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

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

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

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

Sales Incentives

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

(a) Distributor Stock Rotation Program

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

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

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

Sales Rebates

In the case of sales to distributors in the Applied Ceramic Products Group and Information Equipment Group, Kyocera provides cash rebates when predetermined sales targets are achieved during a certain period. Provisions for sales rebates are recorded as a reduction of revenue at the time of revenue recognition based on the best estimate of forecasted sales to each distributor in accordance with ASC 605-50.

Sales Returns

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

Products Warranty

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

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

(3) Cash and cash equivalents

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

(4) Translation of foreign currencies

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

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

(5) Allowance for doubtful accounts

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

(6) Inventories

Inventories are accounted for under ASC 330, “Inventory.” Inventories are stated at the lower of cost or market. For finished goods and work in process, cost is mainly determined by the average method, and by other methods including the first-in, first-out method for the others. For raw materials and supplies, cost is mainly determined by the first-in, first-out method, and by other methods, including the average method for the others. Kyocera recognizes estimated write-down of inventories for excess, slow-moving and obsolete inventories.

(7) Securities

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

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

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

(8) Property, plant and equipment and depreciation

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


Buildings		2 to 50 years
Machinery and equipment		2 to 20 years

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

(9) Goodwill and other intangible assets

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

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


Software		2 to 10 years
Patent rights		2 to 12 years
Customer relationships		3 to 20 years

(10) Impairment of long-lived assets

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

Long-lived assets are considered to be impaired when the expected undiscounted cash flows from the asset group is less than its carrying value. A loss on impairment is recognized based on the amount by which the carrying value exceeds the fair value of the long-lived assets.

(11) Derivative financial instruments

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

Kyocera designates certain foreign currency forward contracts and interest rate swaps as cash flow hedges. Most of Kyocera’s foreign currency forward contracts are entered into as hedges of existing foreign currency denominated assets and liabilities. Accordingly, Kyocera records changes in fair value of these foreign currency forward contracts in income. It is expected that such changes will be offset by corresponding gains or losses on the underlying assets and liabilities.

Kyocera formally documents all relationships between hedging instruments and hedged items, as well as its risk management objective and strategy for undertaking various hedge transactions. This process includes linking all derivatives designated as cash flow hedge to specific assets and liabilities on the balance sheet or forecasted transactions. Kyocera also formally assesses, both at the hedge’s inception and on an ongoing basis, whether the derivatives that are used in hedging transactions are highly effective in offsetting cash flows of hedged items.

When it is determined that a derivative is not highly effective hedge or that it has ceased to be a highly effective hedge, Kyocera discontinues hedge accounting prospectively. When a cash flow hedge is discontinued, the net derivative gains or losses remain in accumulated other comprehensive income, unless it is probable that the forecasted transaction will not occur at which point the derivative gains or losses are reclassified into income immediately.

(12) Stock-based compensation

Costs resulting from share-based payment transactions are accounted for under ASC 718, “Compensation—Stock Compensation,” Kyocera recognizes such costs in the quarterly consolidated financial statements by fair value based on measurement method. Under the modified prospective method, Kyocera recognizes compensation costs which include:

(a)

compensation cost for all stock options granted prior to, but not yet vested as of April 1, 2006, and

(b)

compensation cost for all stock options granted or modified subsequent to April 1, 2006.

(13) Net income attributable to shareholders of Kyocera Corporation

Earnings per share is accounted for under ASC 260, “Earnings Per Share.” Basic earnings per share attributable to shareholders of Kyocera Corporation is computed based on the average number of shares of common stock outstanding during each period, and diluted earnings per share attributable to shareholders of Kyocera Corporation is computed based on the diluted average number of shares of stock outstanding during each period.

(14) Research and development expenses and advertising expenses

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

(15) Use of estimates

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

(16) Recently adopted accounting standards

On April 1, 2011, Kyocera adopted the FASB’s Accounting Standards Update (ASU) No. 2009-13, “Multiple-Deliverable Revenue Arrangements—a consensus of the FASB Emerging Issues Task Force” which addressed the accounting for multiple-deliverable arrangements to enable vender to account for products or services separately rather than as a combined unit. This accounting standard addresses how to separate deliverables and how to measure and allocate arrangement consideration to one or more units of accounting. The adoption of this accounting standard did not have a material impact on Kyocera’s consolidated results of operations, financial condition and cash flows.

On April 1, 2011, Kyocera adopted the FASB’s ASU No. 2010-28, “When to Perform Step 2 of the Goodwill Impairment Test for Reporting Units with Zero or Negative Carrying Amounts.” This accounting standard modifies Step 1 of the goodwill impairment test for reporting units with zero or negative carrying amounts. For those reporting units, an entity is required to perform Step 2 of the goodwill impairment test if it is more likely than not that a goodwill impairment exists. The adoption of this accounting standard did not have a material impact on Kyocera’s consolidated results of operations, financial condition and cash flows.

On April 1, 2011, Kyocera adopted the FASB’s ASU No. 2010-29, “Disclosure of Supplementary Pro Forma Information for Business Combinations.” The amendments in this Update require a public entity that enters into business combination(s) to disclose revenue and earnings of the combined entity in the comparative financial statements as though the business combination(s) that occurred during the current year had occurred as of the beginning of the comparable prior annual reporting period only. As this accounting standard is a provision for disclosure, the adoption of this accounting standard did not have an impact on Kyocera’s consolidated results of operations, financial condition and cash flows.

(17) Recently issued accounting standards

In May 2011, the FASB issued ASU No. 2011-04, “Amendments to Achieve Common Fair Value Measurement and Disclosure Requirements in U.S. GAAP and IFRSs.” This accounting standard amends current U.S. GAAP to create more commonality with IFRSs by harmonizing definitions and disclosure requirements in U.S. GAAP for measuring fair value and for disclosing information about fair value measurements. This accounting standard will be effective during interim and annual periods beginning after December 15, 2011. The adoption of this accounting standard is not expected to have a material impact on Kyocera’s consolidated results of operations, financial condition and cash flows.

In June 2011, the FASB issued ASU No. 2011-05, “Presentation of Comprehensive Income.” In presenting other comprehensive income and its components in financial statement, this accounting standard eliminates the current option which is to present the components of other comprehensive income as part of the statement of equity. This standard also requires reclassifications between other comprehensive income and net income to be disclosed on the face of financial statements. This accounting standard will be effective retrospectively for fiscal years, and interim periods within those years, beginning after December 15, 2011. As this accounting standard is a provision for presentation, the adoption of this accounting standard will not have an impact on Kyocera’s consolidated results of operations, financial condition and cash flows.

In September 2011, the FASB issued ASU No. 2011-08, “Testing Goodwill for Impairment.” This accounting standard permit an entity to first assess qualitative factors to determine whether it is more likely than not that the fair value of a reporting unit is less than its carrying amount as a basis for determining whether it is necessary to perform the two-step goodwill impairment test. An entity is not required to calculate the fair value of a reporting unit unless the entity determines that it is more likely than not that its fair value is less than its carrying amount. This accounting standard will be effective for annual and interim goodwill impairment tests performed for fiscal years beginning after December 15, 2011. As this accounting standard does not actually change how the impairment would be calculated, the adoption of this accounting standard will not have an impact on Kyocera’s consolidated results of operations, financial condition and cash flows.

In December 2011, the FASB issued ASU No. 2011-10, “Derecognition of in Substance Real Estate—a Scope Clarification.” This accounting standard requires the reporting entity to apply the guidance in Subtopic 360-20 to determine whether it should derecognize the in substance real estate when a parent ceases to have a controlling financial interest in a subsidiary that is in substance real estate as a result of default on the subsidiary’s nonrecourse debt. This accounting standard will be effective for fiscal years, and interim periods within those years, beginning on or after June 15, 2012. The adoption of this accounting standard is not expected to have a material impact on Kyocera’s consolidated results of operations, financial condition and cash flows.

In December 2011, the FASB issued ASU No. 2011-11, “Disclosures about Offsetting Assets and Liabilities.” This accounting standard requires entities to disclose both gross information and net information about both instruments and transactions eligible for offset in the statement of financial position and instruments and transactions subject to an agreement similar to a master netting arrangement. This accounting standard will be effective for annual reporting periods beginning on or after January 1, 2013, and interim periods within those annual periods. As this accounting standard is a provision for disclosure, the adoption of this accounting standard will not have an impact on Kyocera’s consolidated results of operations, financial condition and cash flows.

In December 2011, the FASB issued ASU No. 2011-12, “Deferral of the Effective Date for Amendments to the Presentation of Reclassifications of Items Out of Accumulated Other Comprehensive Income in Accounting Standards Update No. 2011-05.” In order to defer only changes in Update No. 2011-05 that relate to the presentation of reclassification adjustments, this accounting standard supersedes certain pending paragraphs in Update No. 2011-05. This accounting standard will be effective retrospectively for fiscal years, and interim periods within those years, beginning after December 15, 2011. As this accounting standard is a provision for presentation, the adoption of this accounting standard will not have an impact on Kyocera’s consolidated results of operations, financial condition and cash flows.

(18) Reclassifications

Certain reclassifications and format changes have been made to the consolidated balance sheets at March 31, 2011, the consolidated statements of income for the nine and the three months ended December 31, 2010 and the consolidated statements of cash flows for the nine months ended December 31, 2010 to conform to the current presentation.

3. BUSINESS COMBINATION

On July 11, 2011, Kyocera Fineceramics GmbH, a consolidated German subsidiary of Kyocera Corporation, acquired 100% of the outstanding common stock of Unimerco Group A/S, a Denmark-based industrial cutting tool manufacturing and sales company and made it a consolidated subsidiary with the aim of strengthening its cutting tool business. Unimerco Group A/S has changed its name to Kyocera Unimerco A/S on July 21, 2011.

By making Kyocera Unimerco A/S a consolidated subsidiary, Kyocera has added Kyocera Unimerco A/S’s high-quality, high-precision, custom-made solid-type cutting tools for automobile engine processing as well as aviation and wind-power generation markets to its lineup while also expanding its sales network, mainly in Europe. Going forward, Kyocera will strive to further expand its cutting tool business through the pursuit of synergies with Kyocera Unimerco A/S.

The result of operation of the acquired business was included into Kyocera’s quarterly consolidated financial statements since the acquisition date. For segment reporting, it is reported in the Applied Ceramic Products Group. Kyocera has used the acquisition method of accounting to record assets acquired and liabilities assumed in accordance with ASC 805, “Business Combinations.”

The allocation of fair value to the acquired assets and assumed liabilities in this business combination was completed during the three months ended September 30, 2011. The related assets and liabilities were recorded based upon their estimated fair values at the date of acquisition with the excess being allocated to goodwill as shown in the following table. Acquisition-related costs of ¥160 million were included in selling, general and administrative expenses in the consolidated statement of income for the nine months ended December 31, 2011.


	July 11, 2011
	(Yen in millions)
Current assets	¥	5,400
Intangible assets		7,691
Other non-current assets		4,765

Total assets		17,856

Current liabilities		1,810
Non-current liabilities		4,872

Total liabilities		6,682

Total identified assets and liabilities		11,174

Purchase price (Cash)		22,494

Goodwill	¥	11,320

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

The pro forma results are not presented as the amounts were immaterial.

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


	July 11, 2011
	(Yen in millions)
Intangible assets subject to amortization:
Customer relationships	¥	3,296
Unpatented technologies		2,735
Trademarks		1,318
Others		342

Total	¥	7,691

The weighted average amortization periods for customer relationships, unpatented technology and trademark are 20 years, 20 years and 10 years, respectively.

On August 31, 2011, Kyocera Mita India Pte. Ltd., a subsidiary of Kyocera Mita Corporation, acquired information equipment sales business, related assets and liabilities from Kilburn Office Automation Ltd. to expand its sales channels in India.

On October 1, 2011, Kyocera Mita Canada, Ltd, a subsidiary of Kyocera Mita Corporation, acquired 100% of the common stock of Copicom Inc. to expand its sales channels in Canada.

The results of operations of the acquired businesses were included into Kyocera’s quarterly consolidated financial statements since the acquisition date. For reporting segment, they are reported in the Information Equipment Group. The acquisitions did not have material impacts on Kyocera’s consolidated results of operations, financial condition and cash flows.

On February 1, 2012, Kyocera acquired 100% of the common stock of Optrex Corporation, a specialized manufacturer of liquid crystal displays and related products, with the aim of strengthening its liquid crystal displays business. The total purchase price for this acquisition is ¥18,312 million. The calculation of the amounts of the identifiable assets and liabilities has not yet been completed.

4. DEBT SECURITIES, EQUITY SECURITIES AND OTHER INVESTMENTS

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

Investments in debt and equity securities at March 31, 2011 and December 31, 2011, included in short-term investments in debt securities and in long-term investments in debt and equity securities are summarized as follows:


	March 31, 2011								December 31, 2011
	Cost*		Aggregate Fair Value		Gross Unrealized Gains		Gross Unrealized Losses		Cost*		Aggregate Fair Value		Gross Unrealized Gains		Gross Unrealized Losses
	(Yen in millions)
Available-for-sale securities:
Marketable equity securities	¥	271,874	¥	327,684	¥	57,151	¥	1,341	¥	269,548	¥	309,314	¥	41,664	¥	1,898
Investment trusts		3,454		3,590		225		89		3,446		2,943		72		575

Total equity securities		275,328		331,274		57,376		1,430		272,994		312,257		41,736		2,473

Corporate bonds		5,122		4,395		37		764		6,883		5,751		1		1,133
Hybrid financial instruments		11,976		11,976		—		—		1,997		1,997		—		—
Government bonds and public bonds		2,789		2,423		19		385		1,676		1,391		—		285
Other debt securities		563		554		32		41		—		—		—		—

Total debt securities		20,450		19,348		88		1,190		10,556		9,139		1		1,418

Total available-for-sale securities		295,778		350,622		57,464		2,620		283,550		321,396		41,737		3,891

Held-to-maturity securities:
Corporate bonds		51,901		52,035		208		74		55,513		55,436		111		188
Government bonds and public bonds		18,264		18,189		6		81		11,845		11,845		7		7
Others		300		300		0		—		1,000		1,000		—		—

Total held-to-maturity securities		70,465		70,524		214		155		68,358		68,281		118		195

Total	¥	366,243	¥	421,146	¥	57,678	¥	2,775	¥	351,908	¥	389,677	¥	41,855	¥	4,086

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

(2) Other investments

Kyocera holds time deposits and certificates of deposits which are due over three months to original maturity, non-marketable equity securities, long-term loans and investments in affiliates and unconsolidated subsidiaries. Carrying amounts of these investments at March 31, 2011 and December 31, 2011, included in other short-term investments and in other long-term investments, are summarized as follows:


	March 31, 2011		December 31, 2011
	(Yen in millions)
Time deposits and certificates of deposits (due over 3 months)	¥	201,879	¥	171,659
Non-marketable equity securities		15,376		15,306
Long-term loans		147		115
Investments in affiliates and unconsolidated subsidiaries		1,219		1,489

Total	¥	218,621	¥	188,569

5. FAIR VALUE

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

Level 1:

Unadjusted quoted prices in active markets for identical assets and liabilities.

Level 2:

Observable inputs other than those included in Level 1. For example, quoted prices for similar assets or liabilities in active markets or quoted prices for identical assets or liabilities in inactive markets.

Level 3:

Unobservable inputs reflecting management’s own assumptions about the inputs used in pricing the asset or liability.

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


	March 31, 2011								December 31, 2011
	Level 1		Level 2		Level 3		Total		Level 1		Level 2		Level 3		Total
	(Yen in millions)
Current Assets:
Corporate bonds	¥	630	¥	12	¥	6	¥	648	¥	598	¥	—	¥	—	¥	598
Hybrid financial instruments		—		11,976		—		11,976		—		1,997		—		1,997
Other debt securities		—		180		30		210		—		—		—		—

Total debt securities		630		12,168		36		12,834		598		1,997		—		2,595

Foreign currency forward contracts		—		331		—		331		—		4,051		—		4,051
Currency swaps		—		7		—		7		—		8		—		8

Total derivatives		—		338		—		338		—		4,059		—		4,059

Total current assets		630		12,506		36		13,172		598		6,056		—		6,654

Non-Current Assets:
Marketable equity securities		327,684		—		—		327,684		309,314		—		—		309,314
Investment trusts		331		3,259		—		3,590		279		2,664		—		2,943

Total equity securities		328,015		3,259		—		331,274		309,593		2,664		—		312,257

Corporate bonds		3,719		19		9		3,747		5,153		—		—		5,153
Government bonds and public bonds		2,423		—		—		2,423		1,391		—		—		1,391
Other debt securities		—		295		49		344		—		—		—		—

Total debt securities		6,142		314		58		6,514		6,544		—		—		6,544

Total non-current assets		334,157		3,573		58		337,788		316,137		2,664		—		318,801

Total assets	¥	334,787	¥	16,079	¥	94	¥	350,960	¥	316,735	¥	8,720	¥	—	¥	325,455

Current Liabilities:
Foreign currency forward contracts	¥	—	¥	3,626	¥	—	¥	3,626	¥	—	¥	677	¥	—	¥	677
Interest rate swaps		—		20		—		20		—		34		—		34

Total derivatives		—		3,646		—		3,646		—		711		—		711

Total current liabilities	¥	—	¥	3,646	¥	—	¥	3,646	¥	—	¥	711	¥	—	¥	711

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

The fair value of Level 2 investments is other than quoted price included within Level 1 that is observable for the asset or liability, either directly or indirectly through corroboration with observable market data. Kyocera did not recognize any transfers between Levels 1 and 2 for the nine months ended December 31, 2010 and 2011.

The fair value of Level 3 investments is determined using input that is both unobservable and significant to the values of instruments being measured.

The fair value of Level 2 derivatives is estimated based on quotes from financial institutions. With respect to the detail information of derivatives, please refer to the Note 8 to the Quarterly Consolidated Financial Statements.

In accordance with the provisions of ASC 815-15, “Embedded Derivatives”, Kyocera elects the fair value option for all hybrid financial instruments. Gains on hybrid financial instruments in the amount of ¥100 million and ¥18 million were recorded in other, net on the consolidated statements of income for the nine months ended December 31, 2010 and 2011, respectively. Gains on hybrid financial instruments in the amount of ¥15 million and ¥2 million were recorded in other, net on the consolidated statements of income for the three months ended December 31, 2010 and 2011, respectively.

(2) Fair value of financial instruments

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


	March 31, 2011				December 31, 2011
	Carrying Amount		Fair Value		Carrying Amount		Fair Value
	(Yen in millions)
Assets (a):
Short-term investments in debt securities	¥	44,012	¥	44,054	¥	41,457	¥	41,404
Long-term investments in debt and equity securities		377,075		377,092		348,297		348,273
Other long-term investments (excluding investments in affiliates and unconsolidated subsidiaries)		15,585		15,585		17,453		17,459

Total	¥	436,672	¥	436,731	¥	407,207	¥	407,136

Liabilities (b):
Long-term debt (including due within one year)	¥	35,225	¥	35,332	¥	29,424	¥	29,637

Total	¥	35,225	¥	35,332	¥	29,424	¥	29,637

(a)

For investments with active markets, fair value is based on quoted market prices. For non-marketable equity securities, it is not practicable to estimate the fair value of non-marketable equity securities because of the lack of the market price and difficulty in estimating fair value without incurring excessive cost. In addition, Kyocera did not identify any events or changes in circumstances that may have had a significant adverse effect on these investments. The aggregated carrying amounts of these investments included in the above table at March 31, 2011 and December 31, 2011 were ¥15,363 million and ¥15,293 million, respectively.

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

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

6. INVENTORIES

Inventories at March 31, 2011 and December 31, 2011 are as follows:


	March 31, 2011		December 31, 2011
	(Yen in millions)
Finished goods	¥	111,487	¥	124,359
Work in process		47,388		47,076
Raw materials and supplies		74,024		92,261

Total	¥	232,899	¥	263,696

7. ALLOWANCE FOR DOUBTFUL ACCOUNTS

(1) Allowance for doubtful accounts that are deducted from the related receivables

Allowance for doubtful accounts that are deducted from the related receivables at March 31, 2011 and December 31, 2011 are as follows:


	March 31, 2011		December 31, 2011
	(Yen in millions)
Other current assets	¥	619	¥	551
Other long-term investments	¥	329	¥	57
Other assets	¥	1,876	¥	1,654

(2) Allowance for doubtful accounts related to lease receivables

Lease receivables represent capital leases which consist of sales-type leases. Most of the lease receivables are recognized at TA Triumph-Adler GmbH and its consolidated subsidiaries (TA), consolidated German subsidiaries of Kyocera Mita Corporation. These receivables typically have terms ranging from one year to seven years.

A reconciliation of the beginning and end amounts of allowance for doubtful accounts relates to lease receivables are as follows:

TA estimates allowance for doubtful accounts related to lease receivables at the portfolio level.


	Nine months ended December 31,
	2010			2011
	(Yen in millions)
Balance at beginning of period	¥	571		¥	493
Charged to costs or expenses, or charge-offs		182			12
Others*		(86	)		(76	)

Balance at end of period	¥	667		¥	429


	Three months ended December 31,
	2010			2011
	(Yen in millions)
Balance at beginning of period	¥	680		¥	442
Charged to costs or expenses, or charge-offs		24			0
Others*		(37	)		(13	)

Balance at end of period	¥	667		¥	429

Others consist mainly of foreign currency translation.

The amounts of lease receivables less allowances for doubtful accounts at March 31, 2011 and December 31, 2011 were ¥34,369 million and ¥28,736 million, respectively, which are included in other current assets and other assets in the consolidated balance sheets.

8. DERIVATIVES AND HEDGING

Kyocera’s activities are exposed to varieties of market risks, including the effects of changes in foreign currency exchange rates, interest rates and stock prices. Approximately 55% of Kyocera’s net sales are generated from overseas customers, which expose Kyocera to foreign currency exchange rates fluctuations. These financial exposures are monitored and managed by Kyocera as an integral part of its overall risk management program. Kyocera’s risk management program focuses on the unpredictability of financial markets and seeks to reduce the potentially adverse effects that the volatility of these markets may have on its operating results.

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

Kyocera maintains an interest rate risk management strategy that uses derivative financial instruments, such as interest rate swaps to minimize significant, unanticipated cash flow fluctuations caused by interest rate volatility.

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

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

Cash Flow Hedges:

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

Other Derivatives:

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

The aggregate contractual amounts of derivative financial instruments at March 31, 2011 and December 31, 2011 are as follows:


	March 31, 2011		December 31, 2011
	(Yen in millions)
Derivatives designated as hedging instruments:
Foreign currency forward contracts	¥	13,852	¥	11,871
Interest rate swaps		590		896

Total	¥	14,442	¥	12,767

Derivatives not designated as hedging instruments:
Foreign currency forward contracts	¥	144,006	¥	123,088
Currency swaps		226		183

Total	¥	144,232	¥	123,271

Total derivatives	¥	158,674	¥	136,038

The location and fair value of derivative financial instruments in the consolidated balance sheets at March 31, 2011 and December 31, 2011 are as follows:


	Location	March 31, 2011		December 31, 2011
		(Yen in millions)
Derivative Assets:
Derivatives designated as hedging instruments:
Foreign currency forward contracts	Other current assets	¥	72	¥	94

Total		¥	72	¥	94

Derivatives not designated as hedging instruments:
Foreign currency forward contracts	Other current assets	¥	259	¥	3,957
Currency swaps	Other current assets		7		8

Total		¥	266	¥	3,965

Total derivatives		¥	338	¥	4,059

Derivative Liabilities:
Derivatives designated as hedging instruments:
Foreign currency forward contracts	Other current liabilities	¥	117	¥	179
Interest rate swaps	Other current liabilities		20		34

Total		¥	137	¥	213

Derivatives not designated as hedging instruments:
Foreign currency forward contracts	Other current liabilities	¥	3,509	¥	498

Total		¥	3,509	¥	498

Total derivatives		¥	3,646	¥	711

The location and amount of derivative financial instruments in the comprehensive income for the nine months ended December 31, 2010 and 2011 are as follows:

Derivatives designated as cash flow hedge:

Gains (losses) recognized in other comprehensive income


	Nine months ended December 31,
	2010		2011
	(Yen in millions)
Foreign currency forward contracts	¥	65	¥	(31	)
Interest rate swaps		18		8

Total	¥	83	¥	(23	)

Gains (losses) reclassified from accumulated other comprehensive income into income (effective portion)


		Nine months ended December 31,
	Location	2010			2011
		(Yen in millions)
Foreign currency forward contracts	Net sales	¥	(84	)	¥	(33	)
Foreign currency forward contracts	Cost of sales		149			87
Interest rate swaps	Interest expense		15			13

Total		¥	80		¥	67

Gains (losses) recognized in income (ineffective portion and amount excluded from effectiveness testing)


		Nine months ended December 31,
	Location	2010		2011
		(Yen in millions)
Foreign currency forward contracts	Foreign currency transaction gains, net	¥	9	¥	(4	)

Total		¥	9	¥	(4	)

Derivatives not designated as hedging instruments:

Gains (losses) recognized in income


		Nine months ended December 31,
	Location	2010		2011
		(Yen in millions)
Foreign currency forward contracts	Foreign currency transaction gains, net	¥	2,173	¥	6,709
Currency swaps	Foreign currency transaction gains, net		5		1

Total		¥	2,178	¥	6,710

The location and amount of derivative financial instruments in the comprehensive income for the three months ended December 31, 2010 and 2011 are as follows:

Derivatives designated as cash flow hedge:

Gains (losses) recognized in other comprehensive income


		Three months ended December 31,
		2010			2011
		(Yen in millions)
Foreign currency forward contracts		¥	106		¥	(69	)
Interest rate swaps			7			9

Total		¥	113		¥	(60	)


Gains (losses) reclassified from accumulated other comprehensive income into income (effective portion)
		Three months ended December 31,
	Location	2010			2011
		(Yen in millions)
Foreign currency forward contracts	Net sales	¥	(93	)	¥	73
Foreign currency forward contracts	Cost of sales		31			(116	)
Interest rate swaps	Interest expense		5			4

Total		¥	(57	)	¥	(39	)


Gains (losses) recognized in income (ineffective portion and amount excluded from effectiveness testing)
		Three months ended December 31,
	Location	2010			2011
		(Yen in millions)
Foreign currency forward contracts	Foreign currency transaction gains, net	¥	4		¥	(5	)

Total		¥	4		¥	(5	)


Derivatives not designated as hedging instruments:

Gains (losses) recognized in income
		Three months ended December 31,
	Location	2010			2011
		(Yen in millions)
Foreign currency forward contracts	Foreign currency transaction gains, net	¥	2,174		¥	(2,899	)
Currency swaps	Foreign currency transaction gains, net		4			3

Total		¥	2,178		¥	(2,896	)

9. BENEFIT PLANS

Domestic:

Net periodic pension costs at Kyocera Corporation and its major domestic subsidiaries for the nine months ended December 31, 2010 and 2011 include the following components:


	Nine months ended December 31,
	2010			2011
	(Yen in millions)
Service cost	¥	6,493		¥	6,974
Interest cost		1,978			1,877
Expected return on plan assets		(2,441	)		(2,517	)
Amortization of prior service cost		(3,247	)		(3,247	)
Recognized actuarial loss		579			855

Net periodic pension costs	¥	3,362		¥	3,942

Net periodic pension costs at Kyocera Corporation and its major domestic subsidiaries for the three months ended December 31, 2010 and 2011 include the following components:


	Three months ended December 31,
	2010			2011
	(Yen in millions)
Service cost	¥	2,169		¥	2,325
Interest cost		660			626
Expected return on plan assets		(813	)		(839	)
Amortization of prior service cost		(1,083	)		(1,083	)
Recognized actuarial loss		193			285

Net periodic pension costs	¥	1,126		¥	1,314

Foreign:

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

Net periodic pension costs at KII, AVX and TA Triumph-Adler GmbH for the nine months ended December 31, 2010 and 2011 include the following components:


	Nine months ended December 31,
	2010			2011
	(Yen in millions)
Service cost	¥	236		¥	229
Interest cost		1,403			1,329
Expected return on plan assets		(837	)		(910	)
Amortization of prior service cost		7			7
Recognized actuarial loss		178			180

Net periodic pension costs	¥	987		¥	835

Net periodic pension costs at KII, AVX and TA Triumph-Adler GmbH for the three months ended December 31, 2010 and 2011 include the following components:


	Three months ended December 31,
	2010			2011
	(Yen in millions)
Service cost	¥	76		¥	74
Interest cost		452			426
Expected return on plan assets		(266	)		(296	)
Amortization of prior service cost		2			3
Recognized actuarial loss		56			59

Net periodic pension costs	¥	320		¥	266

10. INCOME TAXES

The effective tax rates for the nine months and the three months ended December 31, 2011 decreased to 24.7% and 1.8% respectively, compared to the rates for the nine months and the three months ended December 31, 2010 of 25.3% and 23.0% respectively. The decreases are due mainly to the enactment of new Japanese tax rates during the three months ended December 31, 2011 which decreased the statutory tax rates from approximately 41%, to approximately 38% for temporary differences expected to be realized during the years ending March 31, 2013 to 2015, and approximately 36% for temporary differences expected to be realized after the years ending March 31, 2015. The effect of the change in tax rates, which resulted in a reduction of income tax because deferred tax liabilities exceeded deferred tax assets, has been recorded currently in income tax expense for the period.

11. COMMITMENTS AND CONTINGENCIES

As of December 31, 2011, Kyocera had contractual obligations for the acquisition or construction of property, plant and equipment aggregating ¥11,798 million principally due within one year.

Kyocera is a lessee under long-term operating leases primarily for office space and equipment. Future minimum lease commitments under non-cancelable operating leases as of December 31, 2011 are as follows:


	December 31, 2011
	(Yen in millions)
Due within 1 year	¥	4,533
Due after 1 year but within 2 years		3,157
Due after 2 years but within 3 years		1,914
Due after 3 years but within 4 years		1,283
Due after 4 years but within 5 years		853
Thereafter		1,101

Total	¥	12,841

Kyocera has entered into purchase agreements for a certain portion of an anticipated quantity of materials used in its operations. Under those agreements, during the nine months and the three months ended December 31, 2011, Kyocera purchased ¥13,820 million and ¥4,627 million, respectively and is obligated to purchase ¥199,676 million in total by the end of December 2020.

Kyocera guarantees the debt of employees, an investee and an unconsolidated subsidiary. As of December 31, 2011, the total amount of these guarantees was ¥611 million. The financial guarantees are made in the form of commitments and letters of awareness issued to financial institutions and generally obligate Kyocera to make payments in the event of default by the borrowers.

AVX has been identified by the United States Environmental Protection Agency (EPA), state governmental agencies or other private parties as a potentially responsible party (PRP) under the Comprehensive Environmental Response, Compensation and Liability Act (CERCLA) or equivalent state or local laws for clean-up and response costs associated with sites at which remediation is required. Because CERCLA imposes joint and several liability, the EPA could seek to recover all clean-up costs from any one of the PRPs at a site despite the involvement of other PRPs. At certain sites, financially responsible PRPs other than AVX also are, or have been, involved in site investigation and clean-up activities. We believe that any liability resulting from these sites will be apportioned among AVX and other PRPs.

To resolve AVX’s liability at each of the sites at which AVX has been named a PRP, AVX has entered into various administrative orders and consent decrees with federal and state regulatory agencies governing the timing and nature of investigation and remediation. AVX has paid, or reserved for, all estimated amounts required under the terms of these orders and decrees corresponding to its apportioned share of the liabilities. As is customary, the orders and decrees regarding sites where the PRPs are not themselves implementing the chosen remedy contain provisions allowing the EPA to reopen the agreement and seek additional amounts from settling PRPs in the event that certain contingencies occur, such as the discovery of significant new information about site conditions during clean-up or substantial cost overruns for the chosen remedy.

In 2007, AVX received notification from the EPA and the U.S. Department of Justice indicating that the United States is preparing to exercise the reopener provision under a 1991 consent decree relating to the environmental conditions at, and remediation of, New Bedford Harbor in the Commonwealth of Massachusetts. In 1991, in connection with that consent decree, AVX paid ¥5,148 million, plus interest, toward the environmental conditions at, and remediation of, the harbor in settlement with the EPA and the Commonwealth of Massachusetts, subject to reopener provisions, including a reopener if certain remediation costs for the site exceed ¥10,179 million. The EPA has indicated that remediation costs through October 22, 2010 were approximately ¥33,361 million, not all of which is subject to the reopener provisions. In March 2011, EPA issued a proposal providing alternative remedial action plan to the existing plan for which the future cost estimates ranging from ¥28,236 million to ¥31,278 million, net present value.

AVX has not received complete documentation of past response cost from EPA and therefore has not yet completed an investigation of the monies spent or its available defenses in light of the notification. AVX has also not yet determined whether it can avoid responsibility for all, or some portion, of these past or future costs because the remediation method has changed over time and costs can be appropriately allocated to parties other than AVX. AVX anticipates further discussions with the U.S. Department of Justice, the EPA, and the Commonwealth of Massachusetts. AVX is continuing to investigate the claim as well as potential defenses and other actions with respect to the site. In light of the foregoing, AVX is not able to estimate any amount of loss or range of loss. No accrual for costs has been recorded at AVX. Therefore, the potential impact of this notification on Kyocera’s consolidated results of operations, financial condition and cash flows cannot be determined at this time.

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

12. EQUITY

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

Based on the resolution at the ordinary general shareholders’ meeting held on June 28, 2011, Kyocera Corporation declared year-end cash dividends totaling ¥12,846 million, ¥70 per share of common stock effective June 29, 2011 to shareholders of record on March 31, 2011.

Based on the resolution at the board of directors held on October 27, 2011, Kyocera Corporation declared interim cash dividends totaling ¥11,007 million, ¥60 per share of common stock effective December 5, 2011 to shareholders of record on September 30, 2011.

Changes in Kyocera Corporation shareholders’ equity, noncontrolling interests and total equity for the nine months ended December 31, 2010 and 2011 are as follows:


	Nine months ended December 31,
	2010									2011
	Kyocera Corporation shareholders’ equity			Noncontrolling interests			Total equity			Kyocera Corporation shareholders’ equity			Noncontrolling interests			Total equity
	(Yen in millions)
Balance at beginning of period	¥	1,345,235		¥	62,027		¥	1,407,262		¥	1,420,263		¥	63,096		¥	1,483,359
Comprehensive income (loss)		46,513			(1,093	)		45,420			35,770			1,455			37,225
Cash dividends to Kyocera Corporation’s shareholders		(22,022	)		—			(22,022	)		(23,853	)		—			(23,853	)
Cash dividends to noncontrolling interests		—			(1,353	)		(1,353	)		—			(1,481	)		(1,481	)
Other		(760	)		295			(465	)		(459	)		(410	)		(869	)

Balance at end of period	¥	1,368,966		¥	59,876		¥	1,428,842		¥	1,431,721		¥	62,660		¥	1,494,381

Comprehensive income (loss) for the nine months ended December 31, 2010 and 2011 are as follows:


	Nine months ended December 31,
	2010									2011
	Kyocera Corporation shareholders’ equity			Noncontrolling interests			Total equity			Kyocera Corporation shareholders’ equity			Noncontrolling interests			Total equity
	(Yen in millions)
Net income	¥	93,717		¥	5,706		¥	99,423		¥	72,110		¥	5,166		¥	77,276
Net unrealized gains (losses) on securities		(6,776	)		66			(6,710	)		(10,060	)		3			(10,057	)
Net unrealized gains (losses) on derivative financial instruments		83			26			109			(23	)		(9	)		(32	)
Pension adjustments		(1,090	)		(3	)		(1,093	)		(1,003	)		59			(944	)
Foreign currency translation adjustments		(39,421	)		(6,888	)		(46,309	)		(25,254	)		(3,764	)		(29,018	)

Comprehensive income (loss)	¥	46,513		¥	(1,093	)	¥	45,420		¥	35,770		¥	1,455		¥	37,225

Comprehensive income (loss) for the three months ended December 31, 2010 and 2011 are as follows:


	Three months ended December 31,
	2010									2011
	Kyocera Corporation shareholders’ equity			Noncontrolling interests			Total equity			Kyocera Corporation shareholders’ equity			Noncontrolling interests			Total equity
	(Yen in millions)
Net income	¥	31,757		¥	1,843		¥	33,600		¥	25,342		¥	1,207		¥	26,549
Net unrealized gains (losses) on securities		25,665			16			25,681			(13,931	)		67			(13,864	)
Net unrealized gains (losses) on derivative financial instruments		113			(18	)		95			(60	)		(26	)		(86	)
Pension adjustments		(279	)		37			(242	)		(455	)		(1	)		(456	)
Foreign currency translation adjustments		(10,714	)		(2,008	)		(12,722	)		1,594			314			1,908

Comprehensive income (loss)	¥	46,542		¥	(130	)	¥	46,412		¥	12,490		¥	1,561		¥	14,051

13. SUPPLEMENTAL EXPENSE INFORMATION

Supplemental expense information is as follows:


	Nine months ended December 31,
	2010		2011
	(Yen in millions)
Research and development expenses	¥	36,694	¥	35,118
Advertising expenses	¥	4,965	¥	5,563
Shipping and handling cost included in selling, general and administrative expenses	¥	12,518	¥	12,869

	Three months ended December 31,
	2010		2011
	(Yen in millions)
Research and development expenses	¥	13,231	¥	11,453
Advertising expenses	¥	1,846	¥	2,067
Shipping and handling cost included in selling, general and administrative expenses	¥	4,345	¥	4,322

14. SEGMENT REPORTING

Kyocera manufactures and sells a highly diversified range of products, including components involving fine ceramic technologies and applied ceramic products, telecommunications and information equipment etc.

Kyocera categorizes its operations into seven reporting segments: (1) Fine Ceramic Parts Group, (2) Semiconductor Parts Group, (3) Applied Ceramic Products Group, (4) Electronic Device Group, (5) Telecommunications Equipment Group, (6) Information Equipment Group, and (7) Others.

Main products or businesses of each reporting segment are as follows:

(1) Fine Ceramic Parts Group

Components for Semiconductor Processing Equipment and LCD Manufacturing Equipment,

Information & Telecommunication Components,

General Industrial Ceramic Components,

Sapphire Substrates,

Automotive Components

(2) Semiconductor Parts Group

Ceramic Packages for Crystal and SAW Devices,

Ceramic Packages for CMOS/CCD Sensors,

LSI Ceramic Packages,

Wireless Communication Device Packages,

Optical Communication Device Packages and Components,

Organic Multilayer Packages and Substrates

(3) Applied Ceramic Products Group

Residential and Industrial Solar Power Generating Systems,

Solar Cells and Modules,

Cutting Tools, Micro Drills,

Medical and Dental Implants,

Jewelry and Fine Ceramic Application Products

(4) Electronic Device Group

Ceramic Capacitors, Tantalum Capacitors,

Surface Acoustic Wave (SAW) Devices, RF Modules, Electro Magnetic Interference (EMI) Filters,

Timing Devices such as Temperature Compensated Crystal Oscillators (TCXOs), Crystal Units, Clock Oscillators and Ceramic Resonators,

Connectors,

Thermal Printheads,

Inkjet Printheads,

Amorphous Silicon Photoreceptor Drums,

Liquid Crystal Displays (LCDs),

Touch Panels

(5) Telecommunications Equipment Group

Mobile Phone Handsets,

Personal Handy Phone System (PHS) Related Products such as PHS Mobile Phone Handsets and PHS Base Stations

(6) Information Equipment Group

Color and Black & White Office Equipment such as ECOSYS Printers and Multifunction Peripherals,

Wide Format Multifunctional Systems,

Printer and Multifunction Peripherals Supplies,

Business Solution Services such as Managed Print Service

(7) Others

Information Systems & Telecommunication Services,

Electrical Insulation and Sheet Materials, Synthetic Resin Molded Parts,

Real Estate Business

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

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

Kyocera’s sales to KDDI Corporation and its consolidated subsidiaries (KDDI group) which are mainly recorded in the Telecommunications Equipment Group are as follows:


	Nine months ended December 31,
	2010		2011
Amount of sales to KDDI group (Yen in millions)	¥	104,652	¥	94,596
Ratio of amount of sale to KDDI group to consolidated net sales (%)		10.9		10.7


	Three months ended December 31,
	2010		2011
Amount of sales to KDDI group (Yen in millions)	¥	26,426	¥	36,784
Ratio of amount of sale to KDDI group to consolidated net sales (%)		8.3		13.1

Information by reporting segments for the nine and three months ended December 31, 2010 and 2011 is summarized as follows:

Reporting Segments


	Nine months ended December 31,
	2010			2011
	(Yen in millions)
Net sales:
Fine Ceramic Parts Group	¥	56,251		¥	61,346
Semiconductor Parts Group		132,640			117,733
Applied Ceramic Products Group		150,500			133,600
Electronic Device Group		183,840			165,360
Telecommunications Equipment Group		175,768			136,568
Information Equipment Group		176,553			178,967
Others		102,433			111,265
Adjustments and eliminations		(21,071	)		(19,450	)

Net sales	¥	956,914		¥	885,389

Income before income taxes:
Fine Ceramic Parts Group	¥	8,466		¥	9,618
Semiconductor Parts Group		28,405			22,294
Applied Ceramic Products Group		23,194			7,231
Electronic Device Group		33,271			21,897
Telecommunications Equipment Group		(954	)		811
Information Equipment Group		20,333			22,607
Others		7,567			5,532

Total operating profit		120,282			89,990
Corporate gains and Equity in earnings of affiliates and unconsolidated subsidiaries		14,246			13,394
Adjustments and eliminations		(1,392	)		(780	)

Income before income taxes	¥	133,136		¥	102,604

Depreciation and amortization:
Fine Ceramic Parts Group	¥	3,513		¥	4,802
Semiconductor Parts Group		7,670			8,477
Applied Ceramic Products Group		9,605			10,853
Electronic Device Group		10,139			9,697
Telecommunications Equipment Group		7,739			6,665
Information Equipment Group		8,023			7,588
Others		3,465			3,448
Corporate		1,520			1,608

Total	¥	51,674		¥	53,138

Capital expenditures:
Fine Ceramic Parts Group	¥	8,090		¥	9,734
Semiconductor Parts Group		9,562			10,333
Applied Ceramic Products Group		13,227			7,931
Electronic Device Group		8,052			12,008
Telecommunications Equipment Group		2,935			3,280
Information Equipment Group		5,890			4,346
Others		1,959			2,361
Corporate		1,355			1,451

Total	¥	51,070		¥	51,444

Reporting Segments


	Three months ended December 31,
	2010			2011
	(Yen in millions)
Net sales:
Fine Ceramic Parts Group	¥	19,577		¥	19,365
Semiconductor Parts Group		44,515			35,979
Applied Ceramic Products Group		54,880			42,888
Electronic Device Group		60,286			49,530
Telecommunications Equipment Group		53,486			46,544
Information Equipment Group		59,544			57,777
Others		34,362			35,079
Adjustments and eliminations		(7,128	)		(6,041	)

Net sales	¥	319,522		¥	281,121

Income before income taxes:
Fine Ceramic Parts Group	¥	3,152		¥	2,350
Semiconductor Parts Group		9,953			4,421
Applied Ceramic Products Group		7,502			875
Electronic Device Group		11,023			4,274
Telecommunications Equipment Group		(2,858	)		485
Information Equipment Group		5,928			6,779
Others		2,934			2,037

Total operating profit		37,634			21,221
Corporate gains and Equity in earnings of affiliates and unconsolidated subsidiaries		6,632			6,035
Adjustments and eliminations		(623	)		(217	)

Income before income taxes	¥	43,643		¥	27,039

Depreciation and amortization:
Fine Ceramic Parts Group	¥	1,334		¥	1,836
Semiconductor Parts Group		2,909			3,114
Applied Ceramic Products Group		3,760			3,775
Electronic Device Group		3,569			3,412
Telecommunications Equipment Group		2,344			2,289
Information Equipment Group		2,859			2,581
Others		1,172			1,186
Corporate		536			552

Total	¥	18,483		¥	18,745

Capital expenditures:
Fine Ceramic Parts Group	¥	3,788		¥	3,316
Semiconductor Parts Group		2,880			3,426
Applied Ceramic Products Group		4,878			2,617
Electronic Device Group		2,155			2,693
Telecommunications Equipment Group		1,196			1,097
Information Equipment Group		2,080			2,594
Others		836			947
Corporate		570			230

Total	¥	18,383		¥	16,920

Geographic segments (Net sales by region)


	Nine months ended December 31,
	2010		2011
	(Yen in millions)
Net sales:
Japan	¥	424,512	¥	419,364
Asia		161,641		154,377
Europe		158,843		151,249
United States of America		166,428		118,861
Others		45,490		41,538

Net sales	¥	956,914	¥	885,389


	Three months ended December 31,
	2010		2011
	(Yen in millions)
Net sales:
Japan	¥	139,805	¥	143,407
Asia		54,883		44,916
Europe		53,761		47,645
United States of America		55,737		32,985
Others		15,336		12,168

Net sales	¥	319,522	¥	281,121

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

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


	Nine months ended December 31,
	2010			2011
	(Yen in millions)
Net sales:
Japan	¥	435,870		¥	428,164
Intra-group sales and transfer between geographic areas		338,628			292,044

		774,498			720,208

Asia		137,227			133,133
Intra-group sales and transfer between geographic areas		136,018			121,835

		273,245			254,968

Europe		166,172			158,112
Intra-group sales and transfer between geographic areas		25,028			23,180

		191,200			181,292

United States of America		199,667			147,930
Intra-group sales and transfer between geographic areas		22,618			16,228

		222,285			164,158

Others		17,978			18,050
Intra-group sales and transfer between geographic areas		10,146			8,661

		28,124			26,711

Adjustments and eliminations		(532,438	)		(461,948	)

Net sales	¥	956,914		¥	885,389

Income before income taxes:
Japan	¥	74,244		¥	54,792
Asia		14,473			14,393
Europe		13,507			7,597
United States of America		15,589			12,207
Others		2,228			586

		120,041			89,575
Corporate gains and Equity in earnings of affiliates and unconsolidated subsidiaries		14,246			13,394
Adjustments and eliminations		(1,151	)		(365	)

Income before income taxes	¥	133,136		¥	102,604


	Three months ended December 31,
	2010			2011
	(Yen in millions)
Net sales:
Japan	¥	143,869		¥	145,719
Intra-group sales and transfer between geographic areas		112,932			75,759

		256,801			221,478

Asia		46,197			38,634
Intra-group sales and transfer between geographic areas		42,687			35,998

		88,884			74,632

Europe		56,539			49,439
Intra-group sales and transfer between geographic areas		8,626			6,128

		65,165			55,567

United States of America		66,593			42,276
Intra-group sales and transfer between geographic areas		6,009			4,773

		72,602			47,049

Others		6,324			5,053
Intra-group sales and transfer between geographic areas		3,249			2,347

		9,573			7,400

Adjustments and eliminations		(173,503	)		(125,005	)

Net sales	¥	319,522		¥	281,121

Income before income taxes:
Japan	¥	22,122		¥	12,190
Asia		4,774			3,071
Europe		4,299			755
United States of America		5,022			3,047
Others		770			(249	)

		36,987			18,814
Corporate gains and Equity in earnings of affiliates and unconsolidated subsidiaries		6,632			6,035
Adjustments and eliminations		24			2,190

Income before income taxes	¥	43,643		¥	27,039

15. PER SHARE INFORMATION

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


	Nine months ended December 31,
	2010		2011
	(Yen in millions and shares in thousands, except per share amounts)
Net income attributable to shareholders of Kyocera Corporation	¥	93,717	¥	72,110

Basic earnings per share:
Net income attributable to shareholders of Kyocera Corporation	¥	510.67	¥	393.07
Diluted earnings per share:
Net income attributable to shareholders of Kyocera Corporation	¥	510.67	¥	393.07

Basic weighted average number of shares outstanding		183,518		183,453
Diluted weighted average number of shares outstanding		183,518		183,453


	Three months ended December 31,
	2010		2011
	(Yen in millions and shares in thousands, except per share amounts)
Net income attributable to shareholders of Kyocera Corporation	¥	31,757	¥	25,342

Basic earnings per share:
Net income attributable to shareholders of Kyocera Corporation	¥	173.05	¥	138.14
Diluted earnings per share:
Net income attributable to shareholders of Kyocera Corporation	¥	173.05	¥	138.14

Basic weighted average number of shares outstanding		183,516		183,445
Diluted weighted average number of shares outstanding		183,516		183,445

Reference Information (Unaudited)

1. Production (Sales price)


	Nine months ended December 31,												Increase (Decrease) %
	2010						2011
	Amount			% to the total			Amount			% to the total
	(Yen in millions)
Fine Ceramic Parts Group	¥	56,928			5.9		¥	62,502			7.2			9.8
Semiconductor Parts Group		137,863			14.2			116,970			13.4			(15.2	)
Applied Ceramic Products Group		151,983			15.7			137,245			15.8			(9.7	)
Electronic Device Group		187,782			19.3			164,739			18.9			(12.3	)

Total Components Business		534,556			55.1			481,456			55.3			(9.9	)
Telecommunications Equipment Group		178,318			18.4			131,293			15.1			(26.4	)
Information Equipment Group		181,345			18.7			183,113			21.0			1.0

Total Equipment Business		359,663			37.1			314,406			36.1			(12.6	)
Others		76,049			7.8			74,866			8.6			(1.6	)

Production	¥	970,268			100.0		¥	870,728			100.0			(10.3	)


2. Orders
	Nine months ended December 31,												Increase (Decrease) %
	2010						2011
	Amount			% to the total			Amount			% to the total
	(Yen in millions)
Fine Ceramic Parts Group	¥	59,284			6.0		¥	60,527			6.8			2.1
Semiconductor Parts Group		137,727			13.9			116,830			13.2			(15.2	)
Applied Ceramic Products Group		154,976			15.6			137,759			15.6			(11.1	)
Electronic Device Group		196,813			19.9			161,706			18.3			(17.8	)

Total Components Business		548,800			55.4			476,822			53.9			(13.1	)
Telecommunications Equipment Group		180,202			18.2			136,307			15.4			(24.4	)
Information Equipment Group		175,750			17.7			178,675			20.2			1.7

Total Equipment Business		355,952			35.9			314,982			35.6			(11.5	)
Others		106,732			10.8			112,543			12.7			5.4
Adjustments and eliminations		(21,028	)		(2.1	)		(19,410	)		(2.2	)		—

Orders	¥	990,456			100.0		¥	884,937			100.0			(10.7	)