FOR IMMEDIATE RELEASE
October 27, 2005

FY 2005 First-Half Consolidated Financial Results(April 1, 2005 to September 30, 2005)

FDK CORPORATION
Listing Code No.6955 (Listing Stock Exchange: The first section of Tokyo Stock Exchange)
Location of the head office : Tokyo, Japan
Date of the meeting of the Board of Directors for interim financial results: October 27, 2005
URL: http://www.fdk.com
Contact : Corporate Communication Group, Business Strategy & Planning Dept.
E-mail: niida@fdk.co.jp
U.S. GAAP is not applied.
1.Consolidated Operating Results for the 1H of FY2005 (April 1, 2005 to September 30, 2005)
a. Summary of Consolidated Results of Operations
Yen
Yen(millions)(millions)
FY2005
1st. Half
Net Sales
Operating Income
Income(loss) before income taxes
and minority interests
Net Income (loss)

FY2004
1st. Half

Change(%)

FY2004

U.S.Dollars(millions)
FY2005
1st. Half¥57,307418(519)¥51,894
1,452
783

10.4
-71.2
-

¥100,441
1,542(1,721)$507.14$3.70($4.59)

(833)

226

-

(2,713)($7.37)(6.52) yen-

1.77 yen--(21.20) yen-

Amount Per Share of Common Stock:
Basic earnings (loss)
Diluted earnings(5.77cent)(Notes)1)Equity in earnings of affiliated companies (million yen):Six month ended September 30,2005 : 23
Six month ended September 30,2004 : n/a
Year ended March 31, 2005 : 22
2)Average number of shares (ordinary shares)
Six month ended September 30,2005 : 127,969,564 shares
Six month ended September 30,2004 : 127,989,759 sharesYear ended March 31, 2005 : 127,983,569 shares
3)Changes in accounting methods : No
4)Percentage figures for net sales and operating income represent year-on-year changes.
5)The percentage in the above statement presents rate of change compared with corresponding period of theprevious year.
6)All yen figures have been converted to U.S.dollars for convenience only at a uniform rate of $1=113 yenb. Summary of Consolidated Financial Position
Yen(millions)

Total Assets
Shareholders' Equity
Shareholders' Equity Ratio
Shareholders' Equity
Per Share

FY2005
1st. Half¥76,5548,193
10.7%(21.94) yen

Yen(millions)
FY2004
1st. Half¥76,433
4,368
5.7%
2.87 yen

FY2004¥71,366
1,234
1.7%(21.61)

Note: Number of shares issued and outstanding at the end of period:
Six month ended September 30,2005 : 127,963,836 shares
Six month ended September 30,2004 : 127,984,564 sharesYear ended March 31, 2005 : 127,972,977 sharesc. Summary of Consolidated Statements of Cash FlowsYen(millions)

Cash Flows fromOperating Activities
Cash Flows from
Investing Activities
Cash Flows from
Financing Activities
Cash and Cash Equivalents
at End of YearYen(millions)

FY2005
1st Half¥3,939FY2004
1st. Half¥3,136

FY2004¥3,254(1,542)(1,810)(3,034)(3,225)(1,498)

(462)

9,290

9,533

9,876

d. Scope of consolidation and equity method
Consolidated subsidiaries
Unconsolidated subsidiaries applied equity method
Affiliates (equity method applied only)

16 companies- companies
1 company

e. Changes in scope of consolidation and equity method
Consolidated subsidiearies
Increase : none
Decrease: 1 company
2.Reference - FY2005 Consolidated Financial Forecast (April 1, 2005 - March 31, 2006)
Consolidated Earnings Forecast
Yen(millions)change(%)
Net Sales¥119,500+19.0
Operating Income
3,150+104.2Net Income
500
Note : Net income(loss) per share of common stock forecast for fiscal year ended March 31, 2006 : 3.91 yen
Note for the use of our forecasted business results.
The forecast described above is based upon information available as of the present time. Actual results
may differ largely from the forecast due to changing conditions, potential risks and other uncertainties.

Consolidated Statements of Operations

Yen (millions)

Net sales¥

1H/FY2005

1H/FY2004

FY2004(Apr-Sep'05)(Apr-Sep'04)(Apr'04-Mar'05)

57,307¥51,894¥100,441

Operating costs and expenses
Cost of sales

51,40045,102

87,862

Selling, general and administrative expenses

5,489

5,340

11,03756,88950,442

98,899

418

1,452

1,542

42

29

66

Operating income (loss)
Other income (expenses)
Interest and dividend income
Equity in earnings (losses) of affiliates, net

23

-

22

Interest charges

(383)

(361)

(721)

Other, net

(619)

(337)

(2,630)

(937)

(669)

(3,263)

(519)

783

(1,721)

Current

287

452

854

Deferred

23

37

28

310

489

882

(829)

294

(2,603)

(4)

(68)

(110)

¥ ( 833)¥ 226¥ ( 2,713)

Income (loss) before income taxes and minority interests
Income taxes

Income (loss) before minority interests
Minority interests in income of consolidates subsidiaries

Net income (loss)

Consolidated Balance Sheets
Yen (millions)30-Sep-05

30-Sep-04

31-Mar-05

AssetsCurrent assets
Cash and time deposit
Notes receivable-trade
Accounts receivable-trade
Inventories
Deferred tax assets
Other current assets
Less: Allowance for doubtful receivable
Total current assets
Tangible fixed assets
Building and structures
Other depreciable assets
Land
Construction in progress
Total tangible fixed assets
Intangible assets
Investments and long-term loans
Securities investments
Deferred tax assets
Other investments and long-term loans
Total investments
Total assets¥ 9,316
1,113
27,549
9,444
169
2,738
(87)
50,242¥ 9,575
1,541
24,645
9,439
136
2,901
(77)
48,160¥ 9,894968
23,072
7,991
82
3,792
(121)
45,678

9,427
9,394
4,390
148
23,359

9,911
10,912
4,409
1,222
26,454

9,086
9,259
4,393
58
22,796

712

960

724

126
115
2,000
2,241

135
159
565
859

120
230
1,818
2,168

¥ 76,554¥ 76,433¥ 71,366¥ 257
28,751
24,356
3,642
303
3,718
61,027¥ 286
21,90722,562
12,131359
3,989
61,234¥ 276
21,08929,916
7,506
452
3,226
62,465

1,752
4,977
83
6,812

4,941
4,402
62
9,405

2,306
4,749
78
7,133

522

1,426

534

22,756
17,135(30,652)
19(1,042)(23)
8,193

19,256
13,635(27,020)
13(1,498)(18)
4,368

19,256
13,635(29,893)16(1,759)(21)
1,234¥ 76,554¥ 76,433¥ 71,366

Liabilities, minority interests and shareholders' equity
Current liabilities
Notes Payable-trade
Account payable-trade
Short-term borrowings
Current portion of long-term debt
Accrued income taxes
Other current liabilities
Total current liabilities
Long-term liabilities
Long-term debt
Accrued retirement benefits
Other long-term liabilities
Total long-term liabilities
Minority interests in consolidated subsidiaries
Shareholders' equity
Common stock
Capital surplus
DeficitUnrealized gains (losses) on securities, net of taxes
Foreign currency translation adjustments
Treasury stock
Total shareholders' equity
Total Liabilities, minority interestsand shareholders' equity

Consolidated Statements of Cash Flows
Yen (millions)
1H/FY2005

1H/FY2004

FY2004(Apr-Sep'05)(Apr-Sep'04)(Apr'04-Mar'05)

Cash flows from operating activities
Income (loss) before income taxes and minority interests¥ ( 519)¥ 782¥ ( 1,721)

Adjustments to reconcile income before income taxes andminority interests to net cash provided by operating activities
Depreciation and amortization

1,695

1,957

3,846

Equity in earnings of affiliates, net

(23)

-

(22)

(Increase) decrease in receivable-trade(3,898)

4,173

4,604

(Increase) decrease in inventories(1,298)

(354)

891

Increase (decrease) in payable-trade

6,800(3,117)(3,401)Other, net

1,990

369

761

Cash generated from operations

4,747

3,810

4,958

Interest paid

(389)

(367)

(731)

42

36

66

Income taxes paid

(382)

(343)

(752)

Other, net

(79)

-

(287)

3,939

3,136

3,254

(1,497)(1,897)(2,934)

Proceeds from sales of tangible fixed assets

13

93

373

Purchase of intangible assets

(6)

(8)

(54)

Other, net

(52)

2

(419)

(1,542)(1,810)(3,034)

7,000

-

-

Proceeds from long-term debt

1

30

646

Repayment of long-term debt

(3,794)(1,067)(8,559)

Increase (decrease) in short-term borrowings(6,416)

(439)

7,527

(16)

(22)

(76)

(3,225)(1,498)(462)

Effect of exchange rate changes on cash and cash equivalents

242

187

96

Net increase (decrease) in cash and cash equivalents

(586)

15

(146)

Cash and cash equivalents at beginning of year

Interest and dividends received

Net cash provided by operating activities

Cash flows from investing activities
Purchase of tangible fixed assets

Net cash used in investing activities

Cash flows from financing activities
Proceeds from issuance of new common stock

Other, net
Net cash provided by (used in) financing activities

9,876

9,098

9,098

Increase in cash and cash equivalents from change of consolidated accounting
period of consolidated subsidiaries

-

440

440

Increase in cash and cash equivalents from new consolidation

-

-

660

Decrease in cash and cash equivalents due to exclusion from consolidation

Cash and cash equivalents at end of year

-

-

(176)

¥ 9,290¥ 9,553¥ 9,876

Consolidated Statements of Shareholders' Equity
Yen (millions)30-Sep-05

30-Sep-04

31-Mar-05¥ 19,256¥ 19,256¥ 19,256

3,500

-

-

¥ 22,756¥ 19,256¥ 19,256¥ 13,635¥ 13,635¥ 13,635

3,500

-

-

¥ 17,135¥ 13,635¥ 13,635¥ ( 29,893)¥ ( 27,023)¥ ( 27,023)

74

-

-

Increase in earnings from addition of consolidated companies

-

-

¥ 67

Net increase(decrease) in deficit from change of consolidated accounting period of
consolidated subsidiaries

-

(223)

(224)

Net income(loss)

(833)

226

(2,713)Ending balance¥ ( 30,652)¥ ( 27,020)¥ ( 29,893)

¥ 16

¥ 12

¥ 12

3

1

4

¥ 19

¥ 13

¥ 16

¥ ( 1,759)¥ ( 1,662)¥ ( 1,662)

717

164

(97)

¥ ( 1,042)¥ ( 1,498)¥ ( 1,759)¥ ( 21)¥ ( 15)¥ ( 15)

(2)

(3)

(6)

¥ ( 23)¥ ( 18)¥ ( 21)

Common Stock:
Beginning balance
Increase from capital stock issued
Ending balance

Capital Surplus:
Beginning balance
Increase in capital surplus from capital stock issued
Ending balance

Retained Earnings(Deficit)
Beginning balance
Increase in earnings from change of overseas subsidiary's functional currency

Unrealized Gain(loss) on Securities,net of taxes:
Beginning balance
Net increase in unrealized gain(loss) on securities
Ending balance

Foreign Currency Translation Adjustments:
Beginning balance
Net increase in foreign currency transaction adjustment
Ending balance

Treasury Stock:
Beginning balance
Net decrease(increase) Treasury stock
Ending balanceConsolidated Business Segment Information
Yen (millions)Electronic Materials

Net Sales

Unaffiliated Customers
Intersegment
Total

1H/FY2005

1H/FY2004

FY2004(Apr-Sep'05)(Apr-Sep'04)(Apr'04-Mar'05)¥ 46,362¥ 46,362(201)¥ 40,272¥ 40,272
399

Operating Income

10,945
10,945619

11,622
11,622
1,053

Elimination

Net Sales
Operating Income

-

-

Total

Net Sales
57,30757,307418

51,89451,894
1,452

Operating Income (Loss)
Batteries¥ 76,368¥ 76,368¥ ( 331)Net Sales
Unaffiliated Customers
Intersegment
Total

Unaffiliated Customers
Intersegment
Total

Operating Income (Loss)¥ 24,073¥ 24,073¥ 1,873-¥ 100,441¥ 100,441¥ 1,542

Consolidated Geographic Segment Information
Yen (millions)Japan

1H/FY2005

1H/FY2004

FY2004(Apr-Sep'05)(Apr-Sep'04)(Apr'04-Mar'05)

Net Sales
Unaffiliated Customers
Intersegment
Total¥ 29,030
4,887¥ 33,917(131)¥ 32,368
3,853¥ 36,221
1,062¥ 57,191
10,895¥ 68,086¥ 424

26,417
10,14636,563
1,132

18,351
10,847
29,198773¥ 38,314
19,951¥ 58,265¥ 1,653

875
875
(54)

1,175
1,175
(44)

¥ 2,267¥ 2,267¥ ( 96)

Operating Income

985
38
1,023
25

-

¥ 2,669
63¥ 2,732¥ 63

Elimination

Net Sales
Operating Income(15,071)(554)(14,700)(339)(30,909)
(502)

Total

Net Sales¥ 57,307¥ 51,894¥ 100,441

Operating Income (Loss)
Asia

Net Sales
Unaffiliated Customers
Intersegment
Total

Operating Income
North America

Net Sales
Unaffiliated Customers
Intersegment
Total

Operating Income
EuropeNet Sales
Unaffiliated Customers
Intersegment
Total

Unaffiliated Customers
Intersegment
Total

Operating Income (Loss)¥ 57,307¥ 418¥ 51,894¥ 1,452¥ 100,441¥ 1,542Net Overseas Sales by Customer's Geographic Location
Yen (millions)

Asia
North America
Other countries
Total

1H/FY2005

1H/FY2004

FY2004(Apr-Sep'05)(Apr-Sep'04)(Apr'04-Mar'05)¥27,351
2,649
2,782
32,782¥ 21,688
3,644
2,756
28,088¥ 40,387
6,041
6,232
¥ 52,660

Business Performance and Finances
Business Performance Overview
In the first half of the FY 2005, inventory adjustment in digital appliance market was almost
completed and market environment on the electronic component industry was slowly recovered,though severe price competition in digital appliances caused pressure on further pricemarkdowns for electronic component manufactures. In addition, soaring crude oil prices
affected to the raw material prices. Thus, severe business environment was continued.
,
In this circumstance, the FDK Group shifted to the new business structure riding on thestrength of its material technology and deployed company-wide production reform to establish
low-cost manufacturing system, seeking for establishment of strong business structure as a
mid-term goal.
By the termination of some products and strategic product development, consolidated net
sales for the 1H of FY2005 were 57,307 million yen, increased 5,412 million yen from the same
term last year. Since the above termination of some products temporarily caused operationalloss, consolidated operating income was 418 million yen of the decrease of 71.2 %. Consolidated
net loss for the interim period was 833 million yen.
Divisional sales overview would be reported as follows. Please note that the Company
reorganized the organization of electronic component business from this fiscal year. Thus its
business segments were also changed.

Electronic Component Business[Module System]
This business segment mainly consists of board assembly products such as signal processing
modules for LCDs, inverter modules of backlights for LCDs, and switching power supplies
Sales of signal processing modules for LCDs were increased from the same term last year
due to the increased orders from companies in China and Taiwan. Sales of inverter modules ofbacklights for LCDs were also increased mostly for the large display panels, from the orders by
Korean companies. These were received high marks in the market. From the second half year,
orders from the Japanese companies will be expected to add. Sales of hybrid modules for PDPs
and switching power supplies were decreased. Switching power supplies would be shifted from
customized power supplies to standard DC-DC converters.
As a result, net sales of this division were 34,187 million yen of 26.4% increase from the same
term last year.
[Component]
This business segment includes products utilizing the original material technology such ascoil devices, VCO, multilayer power chip inductors, micro DC-DC converters, HF multilayer
chip inductors, optical devices, developing powder, and stepper motors.
Sales of coil devices were much increased from the same term last year, due to the increased
sales of inverter modules which use inverter transformers of backlights for LCDs as they got
high marks in the market.
Sales of multilayer power chip inductors and micro DC-DC converters were increased fromthe same term last year due to the extensive sales efforts and expansion of product lineup.
Sales of stepper motors for OA equipment were decreased from the same term last year.
Although the extended sales effort was made for multi functional printers, the demand forstepper motors was drastically declined in printers. However, sales of compact stepper motors
for digital cameras and camera phones were increased from the same term last year.
Net sales of this division were 12,175 million yen of 7.9% decrease from the same term lastyear as all ferrite business was transferred to the new JV in last December, which used to be alarge weight in this division.
According to the above-mentioned situation, net sales of the electronic component businesswere 46,362 million yen of 15.1% increase from the same term last year.

Battery BusinessThis business includes alkaline batteries, carbon zinc batteries, lithium batteries, and so on.
In domestic market, FDK strengthened sales promotion of the core products such as thehigh-performance alkaline battery “G series” and the higher performance alkaline battery“G-Plus”. Overseas sales were decreased since an expected large order from a customer inNorth America was postponed. Consequently, net sales of this business were 10,945 million yenof 5.8% decrease from the same term last year.

Projections
The demand for the electronic component market will be gradually expanding towards year-end
sales season, though the market environment will be expected to be severe due to theescalating prices of raw materials caused by soaring crude oil.
The present business forecast of the fiscal year ended March 2006 is as follows.
Projections for FY2005 (April 1,2005 - March 31, 2006)
Consolidated Earnings Forecast
Yen (million)change (%)
Net Sales
119,500+19.0%
Operating Income
3,150+104.2%Net Income
500
Non-consolidated Earnings Forecast
Yen (million)change (%)
Net Sales
61,300+5.8%
Operating Income
1,650
Net Income200
The above forecast takes a consideration of the estimated impact of worldwide economic
deceleration and some uncertain ramifications which might diminish the objectivity somehow
and cause a slight difference with the actual achievements, these factors include thesupply-and-demand trend of the products and components in major markets, the exchange rate,
Japan-U.S. stock quotations, etc.

Cash Flow Condition
The cash flow from the operating activities increased to 3,939 million yen by the increase of
the liquidation of receivables and the increase in the account payables, though there were somedecrease due to the interim loss before income taxes and the minority taxes and the temporally
increase in account receivables and inventories accrued by the increased sales.
The cash flow from the investing activities decreased 1,542 million yen resulting frominvestment to the facilities primarily on module business for LCDs.
The cash flow from the financing activities decreased 3,225 million yen due to the redemptionof borrowing, though 7,000 million yen was accrued by the issuance of new shares.
As a result, cash and cash equivalents at the end of the first half of FY2005 decreased 585
million yen from the end of the last fiscal year, and totaled 9,290 million yen.