FOR IMMEDIATE RELEASE
October 26, 2006

FY2006 First-Half Consolidated Financial Results(April 1, 2006 to September 30, 2006)

FDK CORPORATION(URL: http://www.fdk.com)
Listing Code No.6955 (Listing Stock Exchange: The First Section of Tokyo Stock Exchange)
Address : Hamagomu Bldg. 5-36-11 Shimbashi, Minato-ku, Tokyo 105-8677
Date of the meeting of the Board of Directors to approve the consolidated accounts: October 26, 2006
Parent Company : Fujitsu Limited (TSE:6702)
Contact : Corporate Communication Office, Business Strategy & Planning Department
E-mail: niida@fdk.co.jp
U.S. GAPP is not applied

1. Items Relevant to Preparation of Consolidated Financial Results(1)Changes in accounting methods: No(2)Changes in scope of consolidation or application of equity method: No(3)Weighted number of shares outstanding during corresponding periods
1H/FY2006 : 127,951,218
1H/FY2005 : 127,969,564
FY2005: 127,964,183(4)Number of shares outstanding at the end of the periods.
Six month ended September 30, 2006: 127,946,273
Six month ended September 30, 2005: 127,963,836
Year ended March 31, 2006
: 127,954,662
2.Consolidated Operating Results for the 1H of FY 2006
a. Consolidated Results of Operations

Net Sales
Operating Income
Income(Loss) Before Income Taxes
and Minority Interests
Net Income (Loss)
Amounts Per Share of Common Stock:
Basic Earnings (Loss)
Diluted Earnings

1H/FY2006
62,04386(51)

Yen(millions)
1H/FY2005
57,307
418
(519)

(359)

(833)

-

(3,326)(2.80) yen-(6.52) yen--(26.00) yen

Change(%)
8.3%-79.3%-

Yen(millions)
FY2005
118,109967(2502)

U.S.Dollars(millions)
1H/FY2006$530.280.74(3.07)-(2.39 cent)-(Notes)1.All amounts less than one million yen have been disregarded.
2. U.S. dollar amounts are translated from yen, for convenience only , at the rate of 117 yen = $1

b. Net Sales by Business Segment

Electronic Devices
Batteries
Total

Yen
(millions)
1H/FY2006
1H/FY2005
48,88346,362
13,16010,94562,04357,307

Change(%)
5.4
20.2
8.3

Yen
(millions)
FY200594,39423,715
118,109

U.S.Dollars(millions)
1H/FY2006$417.80112.47530.28

c. Consolidated Financial Position
Yen(millions)
2006/9/30
77,316
6,168
6,392
7.9%
(38.38) yen

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

2005/9/30
76,5548,193
10.7%(21.94) yen

Yen(millions)
2006/3/31
76,6166,340
8.3%(36.42) yen

d. Consolidated Statements of Cash Flows

Cash Flows fromOperating Activities
Cash Flows from
Investing Activities
Cash Flows from
Financing Activities
Cash and Cash Equivalents
at End of Period

Yen(millions)
1H/FY2006
1H/FY2005
3,630
3,939

Yen
(millions)
FY2005
3,352(1,284)(1,542)(3,509)(2,922)(3,225)(2,636)

7,062

9,290

7,577

Consolidated Subsidiaries
Unconsolidated Subsidiaries (equity method applied)
Affiliates (equity method applied only)

16 companies- companies
1 companies

3.Reference - FY2006 Consolidated Financial Forecast (April 1, 2006 - March 31, 2007)
Consolidated Financial Forecast
Yen
Change from FY2005(%)(million)
Net Sales
125,400+6.2%
Operating Income
2,200+127.5Net Income
200
Net Income per Share
1.56 yen-

Note for the use of the above 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/FY2006

1H/FY2005

FY2005(Apr-Sep'06)(Apr-Sep'05)(Apr'05-Mar'06)

62,043¥57,307¥

118,109

Operating costs and expenses
Cost of sales

56,48451,400106,271

Selling, general and administrative expenses

5,473

5,489

10,871

61,95756,889117,142

86

418

967

40

42

75

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

56

23

39

Interest charges

(211)

(383)

(641)

Other, net

(22)

(619)

(2,942)

(137)

(937)

(3,469)

(51)

(519)

(2,502)Current

314

287

755

Deferred

(28)

23

45

286

310

800

Income (loss) before minority interests

(337)

(829)

(3,302)

Minority interests in income of consolidates subsidiaries

(22)

(4)

(24)

¥ ( 359)¥ ( 833)¥ ( 3,326)

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

Net income (loss)

Consolidated Balance Sheets
Yen (millions)30-Sep-06

30-Sep-05

31-Mar-06

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¥ 7,081
1,182
29,930
10,159
196
2,885
(43)
51,390¥ 9,316
1,113
27,549
9,444
169
2,738
(87)
50,242¥ 7,598976
29,677
9,252
161
2,897
(45)
50,516

8,151
10,333
4,319
97
22,900

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

8,625
9,652
4,471
195
22,943

661

712

695

125
101
2,139
2,365

126
115
2,000
2,241

238
109
2,115
2,462

¥ 77,316¥ 76,554¥ 76,616¥ 121
32,61325,711
1,403
376
4,614
64,838¥ 257
28,751
24,356
3,642
303
3,718
61,027¥ 173
28,81328,159
1,444
292
4,336
63,217

825
5,396
89
6,310

1,752
4,977
83
6,812

1,162
5,237
102
6,501

71,14867,83969,718

Liabilities
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
Total liabilities

Net assets
Shareholders' equity
Common stock
Capital surplus
Retained earnings(Deficit)
Treasury stock
Total shareholders' equity
Valuation and translation ajustments
Unrealized gains (losses) on securities, net of taxes
Deferred gains (losses) on hedges
Foreign currency translation adjustments
Total Valuation and translation ajustments
Minority interests in consolidated subsidiaries
Total net assets
Total liabilities and net assets

22,756
17,167(33,504)
(27)
6,392
16
(14)
(306)
(304)
80
6,168
¥ 77,316

Minority interests in consolidated subsidiaries
Shareholders' equity
Common stock
Capital surplus
Retained earnings(Deficit)
Unrealized gains (losses) on securities, net of taxes
Foreign currency translation adjustments
Treasury stock
Total shareholders' equity

-

522

558

-

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

22,756
17,167(33,145)
22
(435)
(25)
6,340

Total Liabilities, minority interestsand shareholders' equity-¥ 76,554¥ 76,616

Consolidated Statements of Cash Flows

Yen (millions)
1H/FY2006

1H/FY2005

FY2005(Apr-Sep'06)(Apr-Sep'05)(Apr'05-Mar'06)

Cash flows from operating activities
Income (loss) before income taxes and minority interests¥ ( 51)¥ ( 519)¥ ( 2,502)

1,613

1,695

3,470

Equity in earnings of affiliates, net

(56)

(23)

(39)

(Increase) decrease in receivable-trade(257)(3,898)(4,954)(Increase) decrease in inventories(852)(1,298)(815)

Increase (decrease) in payable-trade

3,544

6,800

5,657

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

52

1,990

3,992

Cash generated from operations

3,993

4,747

4,809

Interest paid

(185)

(389)

(658)

55

42

75

(233)

(382)

(795)

-

(79)

(79)

3,630

3,939

3,352

(2,009)(1,497)(3,415)

460

13

309

(3)

(6)

(27)

268

(52)

(376)

(1,284)(1,542)(3,509)

-

7,000

7,000

Proceeds from long-term debt

230

1

1

Repayment of long-term debt

(605)

(3,794)(6,727)(2,537)(6,416)(2,923)

(10)

(16)

13

(2,922)(3,225)(2,636)

61

242

494

Net increase (decrease) in cash and cash equivalents

(515)

(586)

(2,299)Cash and cash equivalents at beginning of year

7,577

9,876

9,876

¥ 7,062¥ 9,290¥ 7,577

Other, net

Interest and dividends received
Income taxes paid
Other, net

Net cash provided by operating activities

Cash flows from investing activities
Purchase of tangible fixed assets
Proceeds from sales of tangible fixed assets
Purchase of intangible assets
Other, net
Net cash used in investing activities

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

Increase (decrease) in short-term borrowings
Other, net
Net cash provided by (used in) financing activities

Effect of exchange rate changes on cash and cash equivalents

Cash and cash equivalents at end of year

Consolidated Statements of Shareholders' Equity
1H/FY2006 (Apr-Sep'06)
Yen (millions)Shareholders' Equity

Beginning balanceCommon stock

Capital surplus¥ 22,756¥ 17,167

Retainedearnings(Deficit)

Treasury stock

Total
shareholders'equity¥ ( 25)¥ 6,753¥ ( 33,145)

Increase(decrease)during the term:
Net income (loss)

(359)

(359)

Acquisition of treasury stocks

(2)

(2)

Net increase(decrease)during theterm,except for items undershareholders'equity
Total
Ending balance

-

-

(359)

(2)

(361)

¥ 22,756¥ 17,167¥ ( 33,504)¥ ( 27)¥ 6,392

Valuation and Translation Ajustments
Unrealized gains(losses) on
securities, net oftaxes
Beginning balance

Deferred
gains(losses) onhedges¥ 22¥-

Foreign currencytranslation
adjustments

Total Valuationand translation
ajustments¥ ( 435)¥ ( 413)

Minority interests
in consolidated
subsidiaries

Total Net Assets¥ 558¥ 6,898

Increase(decrease)during the term:
Net income (loss)(359)

Acquisition of treasury stocks(2)

Net increase(decrease)during theterm,except for items undershareholders'equity

(6)

(14)

129

109

(478)

(369)

(6)

(14)

129

109

(478)

(730)

¥ 16

¥ ( 14)¥ ( 306)¥ ( 304)¥ 80¥ 6,168

Total
Ending balance

1H/FY2005 (Apr-Sep'05) and FY2005 (Apr'05-Mar'06)
Yen (millions)
1H/FY2005

FY2005

Common Stock:
Beginning balance
Increase from capital stock issued
Ending balance¥ 19,2563,500¥ 22,756¥ 19,2563,500¥ 22,756

Capital Surplus:
Beginning balance
Increase in capital surplus from capital stock issued
OthersEnding balance¥ 13,635
3,500¥ 17,135¥ 13,635
3,500
32¥ 17,167

Retained Earnings(Deficit)
Beginning balance
Increase in earnings from change of overseas subsidiary's functional currency¥ ( 29,893)
74¥ ( 29,893)
74

Net income(loss)
Ending balance(833)¥ ( 30,652)(3,326)¥ ( 33,145)

¥ 16
3
¥ 19

¥ 16
6
¥ 22

¥ ( 1,759)
717¥ ( 1,042)¥ ( 1,759)
1,324¥ ( 435)¥ ( 21)(2)¥ ( 23)¥ ( 21)(4)¥ ( 25)

Unrealized Gains(losses) 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/FY2006

1H/FY2005

FY2005(Apr-Sep'06)(Apr-Sep'05)(Apr'05-Mar'06)¥ 48,883
48,883(774)¥ 46,362
46,362(201)¥ 94,394
94,394(445)

Operating Income

13,16013,160860

10,945
10,945619

23,71523,715
1,412

Elimination

Net Sales
Operating Income

-

-

-

Total

Net Sales¥ 62,043¥ 62,043¥ 86¥ 57,307¥ 57,307¥ 418¥ 118,109¥ 118,109¥ 967

Operating Income (Loss)
Batteries

Net Sales
Unaffiliated Customers
Intersegment
Total

Unaffiliated Customers
Intersegment
Total

Operating Income (Loss)

Consolidated Geographic Segment Information
Yen (millions)Japan

1H/FY2006

1H/FY2005

FY2005(Apr-Sep'06)(Apr-Sep'05)(Apr'05-Mar'06)

Net Sales
Unaffiliated Customers
Intersegment
Total¥ 30,333
6,784
37,117(243)¥ 29,030
4,887
33,917(131)¥ 57,434
10,70068,134(474)

29,471
13,252
42,723637

26,417
10,14636,563
1,132

56,65620,991
77,647
2,522

1,060
1,060
29

875
875
(54)

1,710
8
1,718
(70)

Operating Income

1,179
40
1,219
31

985
38
1,023
25

2,309
73
2,382
61

Elimination

Net Sales
Operating Income(20,076)(368)(15,071)(554)(31,772)(1,072)Total

Net Sales¥ 62,043¥ 57,307¥ 118,109

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)¥ 62,043¥ 86¥ 57,307¥ 418¥ 118,109¥ 967

Net Overseas Sales by Customer's Geographic Location
Yen (millions)

Asia
North America
Other countries
Total

1H/FY2006

1H/FY2005

FY2005(Apr-Sep'06)(Apr-Sep'05)(Apr'05-Mar'06)¥ 30,223
3,814
3,364
¥ 37,401¥ 27,351
2,649
2,782
¥ 32,782¥ 59,046
5,205
5,525
¥ 69,776

Business Performance and Finances
Business Performance Overview
During the first six months of FY2006, the global electronic device market showed steady
growth and the digital equipment market, such as flat panel TVs, mobile phones and PCs,
expanded. This was backed by a steady economy in the United States and the recovery ofindividual consumption in Japan, though the profitability of companies slowed down due to theappreciation of material prices and the decline in market prices.
Under these circumstances, FDK announced its Midterm Business Plan early this year. The
plan is aimed at the revival of its business based on sales of applied products developed from its
competitive material technologies. FDK has strategically focused its strengths on the flat panel
display market with a central focus on the LCD and mobile phone markets, which are expected to
grow continuously. In addition, FDK is emphasizing next generation power supply and energy
devices.
During the first six months of the fiscal year, FDK concentrated on reorganizing its
subsidiaries to achieve a more effective business structure. Active sales promotions for alkaline
dry batteries were made globally, and financial resources were invested in LCD backlightinverter modules, which went into mass production last year. Furthermore, in order to reinforce
FDK’s manufacturing capabilities and its pursuit of management efficiency, production
innovation activities were extended from targeting just production sites to targeting the entire
operation.
As sales increased in most categories, net sales were 62,043 million yen, an 8.3% increase overthe same term last year, despite the production adjustment for LCD products. Although net sales
increased because of the increase in quantity sold, the appreciation of material prices and theprice decline of LCD products affected profits. As a result, operating income was 86 million yen, adecrease of 332 million yen from the same term last year. The loss before income taxes was 51
million yen. Due to the posting of 467 million yen as extraordinary profit on the sale of FDK’s
subsidiaries’ stocks and so on, net loss for the first half of the year was 358 million yen, an
improvement of 341 million yen from the forecast.
Divisional sales overview is reported as follows:

Electronic Device BusinessIn the electronic device business, sales of timing control boards and backlight inverter modules
for LCDs increased from the same term last year, thanks to strong demand for LCD TVs. Sales ofswitching power supplies increased from the same term last year due to the increased sales ofservers. Under tough price competition, sales of motors for OA equipment and its compact models
for digital cameras also increased. Expansion of FDK’s product lineup to satisfy customer needs
and extensive sales activities to mobile phone manufacturers resulted in increased sales ofmultilayer power chip inductors.
As a result, sales for the electronic device business were 48,882 million yen, a 5.4% increase
from the same term last year.

Battery BusinessIn sales of alkaline batteries, FDK strengthened sales promotion of its new alkaline battery
series G, D and R in a highly competitive domestic market, which reflected consumer needs.
Sales of alkaline batteries in North America and Europe increased. Under a revision to the Fire
Defense Law, it is compulsory to install fire alarms in newly built homes. As cylindrical typelithium batteries are used for fire alarms, their sales increased accordingly.
As a result, sales for the battery business were 13,160 million yen, a 20.2% increase from thesame term last year.

Cash Flow Condition
Cash flow from operating activities increased 3,630 million yen from the end of the last fiscal
year by promoting fiscal efficiency of working capital, such as the increase in retained earnings
and the promotion of the liquidation of receivables.
Cash flow from investment activities decreased 1,284 million yen from the end of the last fiscal
year due to the investment in production facilities for LCD inverter modules and so on.
Cash flow from financing activities decreased 2,922 million yen from the end of the last fiscal
year due to the redemption of borrowing.
As a result, the balance of cash and cash equivalents at the end of the first half of FY2006 was
7,062 million yen, a decrease of 515 million yen from the balance at the end of the last fiscal year.