SECURITIES AND EXCHANGE COMMISSION
Washington, DC 20549

FORM 20-F
REGISTRATION STATEMENT PURSUANT TO SECTION 12(b) OR 12(g) OF THE
SECURITIES EXCHANGE ACT OF 1934
OR
⌧ ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIESEXCHANGE ACT OF 1934
For the fiscal year ended March 31, 2002
OR
TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
For the transition period from ___________ to ___________
Commission file number: 1-7952
Kyocera Kabushiki Kaisha(Exact name of Registrant as specified in its charter)
Kyocera Corporation(Translation of Registrant’s name into English)
6, Takeda, Tobadono-cho, Fushimi-ku,
Japan
Kyoto, Japan 612-8501(Jurisdiction of incorporation or organization)(Address of principal executive offices)
Securities registered or to be registered pursuant to Section 12(b) of the Act.
Name of Each Exchange On Which Registered
Title of Each Class
American Depositary Shares (“ADSs”)
New York Stock Exchange
Common Stock (“Shares”)*
New York Stock Exchange*Not for trading, but only in connection with the registration of the ADSs.
Securities registered or to be registered pursuant to Section 12(g) of the Act.
None
(Title of Class)

Securities for which there is a reporting obligation pursuant to Section 15(d) of the Act.
None
(Title of Class)

Indicate the number of outstanding shares of each of the issuer’s classes of capitalor common stock as of the close of the period covered by the annual report.
As of March 31, 2002, 189,041,518 shares of common stock were outstanding,comprised of 184,784,806 Shares and 4,256,712 ADSs (equivalent to 4,256,712 Shares).
Indicate by check mark whether the Registrant: (1) has filed all reports required to be
filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12months (or for such shorter period that the Registrant was required to file such reports), and (2)has been subject to such filing requirements for the past 90 days.
Yes X
No
Indicate by check mark which financial statement item the Registrant has elected tofollow.
Item 17
Item 18
X

TABLE OF CONTENTS
Page
Cautionary Statement Regarding Forward-Looking Statements ............................................. 3
PART I
Item 1.
Item 2.
Item 3.
Item 4.
Item 5.
Item 6.
Item 7.
Item 8.
Item 9.
Item 10.
Item 11.
Item 12.

Identity of Directors, Senior Management and Advisers ...................................... 5
Offer Statistics and Expected Timetable................................................................. 5
Key Information........................................................................................................ 5
Information on the Company................................................................................. 11
Operating and Financial Review and Prospects .................................................. 29
Directors, Senior Management and Employees ................................................... 34
Major Shareholders and Related Party Transactions ......................................... 44
Financial Information............................................................................................. 45
The Offer and Listing ............................................................................................. 47
Additional Information........................................................................................... 48
Quantitative and Qualitative Disclosures About Market Risk ........................... 61
Description of Securities Other Than Equity Securities...................................... 61
PART II

Item 13.
Item 14.
Item 15.
Item 16.

Defaults, Dividend Arrearages and Delinquencies............................................... 61
Material Modification to Rights of Security Holders and Use of Proceeds ....... 61
Controls and Procedures ...................................................................................... 61[Reserved] ................................................................................................................ 61
PART IV

Item 17.
Item 18.
Item 19.

Financial Statements............................................................................................... 61
Financial Statements............................................................................................... 62
Exhibits .................................................................................................................... 64-2-

Cautionary Statement Regarding Forward-Looking Statements
This annual report contains “forward-looking statements” within the meaning of Section
21E of the U.S. Securities and Exchange Act of 1934. To the extent that statements in this annual
report on Form 20-F do not relate strictly to historical or current facts, they may constituteforward-looking statements. These forward-looking statements are based upon our current
assumptions and beliefs in the light of the information currently available to us, but involve
known and unknown risks, uncertainties and other factors. Such risks, uncertainties and otherfactors may cause our actual actions or results to differ materially from those discussed in or
implied by the forward-looking statements. We undertake no obligation to publicly update any
forward-looking statement after the date of this annual report, but investors are advised to consult
any further disclosures by us in our subsequent filings pursuant to the U.S. Securities Exchange
Act of 1934.
Important risks, uncertainties and other factors that may cause our actual results to differ
materially from our expectations are generally set forth in Item 3.D of this annual report andinclude, without limitation:••

the effect of adverse economic trends in our principal markets–in particular, ourdependence for growth on the semiconductor and mobile phone handset
components markets and the current prolonged market downturn in each of thosemarkets;
the effect of foreign exchange fluctuations on our results of operations,particularly between the yen and each of the U.S. dollar and the Euro in which
we make significant sales;••

the level of continuing demand for, and timing of sales of, our existing products;
Kyocera’s ability to launch innovative products and otherwise meet theadvancing technical requirements of our customers, particularly in the highly
competitive markets for ceramics, semiconductors and electronic components;•

the level of continuing demand for existing products of our competitors and thepricing of those products, and their ability to introduce new products;
the extent and pace of future growth or contraction in information
technology-related markets around the world, including those forcommunications and personal computers;
declining prices for our products and services;•••

the effect of future acquisitions on our financial condition and results ofoperations;•the timing of new product introductions and market acceptance for our new
products;
an increase in the incidence of product returns;•

and other risks discussed under “Risk Factors” and elsewhere in this annual report.
As used in this annual report, references to “the Company” are to Kyocera Corporation;and references to “Kyocera”, “we”, “our” and “us” are to Kyocera Corporation and, except as
the context otherwise requires, its subsidiaries.
Also, as used in this annual report:

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•

“U.S. dollar” or “$” means the lawful currency of the United States of America,“yen” or “¥” means the lawful currency of Japan and “Euro” means the lawful
currency of the European Union.

•“U.S. GAAP” means accounting principles generally accepted in the UnitedStates of America, and “Japanese GAAP” means accounting principles generally
accepted in Japan.

•“ADS” means an America Depositary Share, each representing one share of
Kyocera’s common stock, and “ADR” means an American Depositary Receipt
evidencing ADSs.

•“fiscal 2002” and “fiscal year 2002” refer to Kyocera’s fiscal year ended March
31, 2002, and other fiscal years are referred to in a corresponding manner.

-4-PART I
Item 1.

Identity of Directors, Senior Management and Advisers

Not Applicable.
Item 2.

Offer Statistics and Expected Timetable

Not Applicable.
Item 3.
A.

Key Information
Selected Financial Data

The information required by this item appears in the Company’s 2002 Annual Report to
Stockholders on page 14, portions of which have been attached as Exhibit 10.2 to this Form 20-F
and are incorporated herein by reference.
Exchange Rate Data
Unless otherwise indicated, we have translated Japanese yen amounts presented in thisForm 20-F solely for your convenience. The rate we used for such translations was ¥133.00 =$1.00, which was the noon buying rate in New York City for cable transfers in foreign currencies
as certified for customs purposes by the Federal Reserve Bank of New York on March 31, 2002,
rounded to the nearest yen. These translations do not imply that the yen amounts actually
represent, or have been or could be converted into, equivalent amounts in U.S. dollars. The
following table shows the exchange rates for Japanese yen per $1.00 based upon the noon buying
rate in New York City for cash transfers in foreign currencies as certified for customs purposes by
the Federal Reserve Bank of New York:Year ended March 31,

High

Low

Average

Period-end

1998
1999
2000
2001
2002
Calendar Year 2002
March
April
May
June
July
August¥ 133.99
147.14124.45125.54134.77¥ 111.42
108.83101.53104.19115.89¥ 123.58
128.49110.67110.96125.05¥ 133.29
118.43102.73125.54132.70133.46133.40128.66125.64120.19121.14127.07128.13123.08119.38115.71116.53131.06130.77126.38123.29117.90118.99132.70128.45124.13119.85
119.77118.76

The noon buying rate for Japanese yen on September 16, 2002 was $1.00 = ¥122.17
The following is a five-year summary of dividends declared per share stated in Japanese
yen and U.S. dollars based on the exchange rates at each respective payment date.

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B.

Year ended
March 31,

Yen

Dollar

1998

60.00

0.44

1999

60.00

0.50

2000

60.00

0.57

2001

60.00

0.51

2002

60.00

0.49

Capitalization and Indebtedness

Not Applicable.
C.

Reasons for the Offer and Use of Proceeds

Not Applicable.
D.

Risk Factors

You should carefully read the risks described below before making an investment decision.
Weakness in the Japanese and global economy may significantly reduce demand for our
products
The Japanese economy has experienced a prolonged recession since the early 1990s, which has
grown increasingly serious. Price levels on the Tokyo Stock Exchange have declined to levels ofover 15 years ago. The banking system is reported to be in serious difficulty, which may result intightening of credit. In addition, the global economy has taken a downturn since the fourth quarterof calendar year 2000. These recessionary conditions have resulted in sluggish consumer
spending and weakened corporate capital expenditures on a variety of products, including manyof the products sold by the secondary manufacturers which are our primary customers. This hascaused these manufacturers to cut production. The markets for semiconductors and components
for mobile phone handsets and PC-related equipment, on which we are substantially dependent
for our growth, have been particularly hard hit since calendar year of 2001. This slow demand in
IT-related markets adversely affected sales volumes and prices of components. The Japanese andU.S. economies will not show a strong recovery through fiscal 2003.
In each of our businesses we are subject to intense competitive pressures, including in terms ofprice, technological change, product development, quality and speed of delivery. Selling adiverse variety of products, we are subject to a variety of competitive pressures and thesepressures are likely to increase in the near term
We sell a wide variety of products and therefore face a broad range of competitors from large
international companies to relatively small, rapidly growing, and highly specialized organizations.
We have a variety of businesses in different industries while many of our competitors specialize
in one or more of these business areas. As a result, we may not fund or invest in certain of ourbusinesses to the same degree as our competitors and these competitors may have greater
financial, technical, and marketing resources available to them than the portion of our businessagainst which they compete. While some of the factors that drive competition vary by productarea, price and speed of delivery are factors in all areas of our business. While price pressures-6-

always exist, in the coming fiscal year, we expect prices to decline continuously but to a lesser
degree than in fiscal 2002, in which the average price of components sharply declined. This trend
has been particularly evident in the telecommunications and information processing markets,
which contributed approximately 82% of our sales revenues in fiscal 2002.
In production areas in which we produce specialized parts for our customers’ consumer products,
our competitive position depends on being involved early in the process of creating a new product.
This requires maintaining close ties with customers so that we can ensure that we are able to meetrequired specifications and be the first to create and deliver the product.
Our gross margins may be reduced if we cannot maintain these important relationships or market
share or if we are forced in the future to further reduce prices in response to the actions of ourcompetitors as in fiscal 2002.
Our products are difficult to manufacture and small manufacturing defects can adversely
affect our production yields and our operating results
The manufacture of the majority of our products is a highly complex and precise process. We
ordinarily outsource the fabrication of certain components and sub-assemblies of our products,
often to sole source suppliers or a limited number of suppliers. We have experienced occasional
delays in obtaining components and subassemblies because the manufacturing process for these
items is very complex and requires a long lead time. The revenues derived from sales of our
products will be materially and adversely affected if we are unable to obtain a high quality,
reliable and timely supply of these components and subassemblies. In addition, any reduction in
the precision of these components will result in sub-standard end products and will cause delays
and interruptions in our production cycle.
Within our manufacturing facilities minute impurities, difficulties in the production process,defects in the layering of the devices’ constituent compounds or other factors can cause asubstantial percentage of our products to be rejected or non-functional. These factors can result in
lower than expected production yields, which would delay product shipments and may materiallyand adversely affect operating results. Because the majority of our costs of manufacture are
relatively fixed, the number of shippable products for a given product line is critical to ourfinancial results.
Since a large percentage of our revenues are from foreign sales, certain export risks may
disproportionately affect our revenues
Sales to customers located outside Japan accounted for 60.5% of our revenues in fiscal 2002. We
believe that international sales will continue to account for a significant percentage of ourrevenues. Therefore, the following export risks may disproportionately affect our revenues:•

a strong yen may make our products less attractive to foreign purchasers;•

political and economic instability may inhibit export of our products and limit
potential customers’ access to capital resources;•

we may experience difficulties in the timeliness of collection of foreign accounts
receivable and be forced to write off receivables from foreign customers;•

tariffs and other barriers may make our products less cost competitive;-7-•shipping costs of our products may increase;•

we may have difficulty in staffing and managing our international operations;and•the laws of certain foreign countries may not adequately protect our trade secrets
and intellectual property.

Sudden or unexpected changes in economic, political and legal conditions in China, in which
we are becoming increasingly active, may have an adverse effect on our business
Based on our expectation that the Chinese markets for cellular telephones and information
technology-related products, including personal computers and printers, will continue to growrapidly, we have been making substantial investments in new production facilities in China. We
now have three principal production facilities in Shanghai, Dongguan and Guiyang, and we plan
to make substantial additional investments to increase production capacity at these sites and toincrease our marketing and distribution capabilities in China. Although the Chinese economy has
been growing at a rapid rate in recent years, and the central government has been increasingly
utilizing market forces as opposed to central economic planning, growth has been uneven among
various regions of the country and among various sectors of the economy. Sudden or unexpectedchanges in the central government’s economic policy or in the business climate including thosedue to changes in political and economic systems in various parts of the country may adversely
affect its telecommunication and information technology-related markets, in which we seek tosell our products. In addition, China is in the process of developing a comprehensive system oflaws and regulations dealing with economic matters, and foreign businesses currently active inthe country, such as Kyocera, face risks and uncertainties including enforcement of contractual
terms, administrative intrusion by local governments and difficulty with expatriation of profits.

Currency exchange rate fluctuations could adversely affect our financial results
We conduct business in countries outside of Japan which exposes us to fluctuations in foreign
currency exchange rates. For example, when we sell products to our sales subsidiaries overseas,
we receive payment in foreign currency and generally collect within 90 days. We may enter into
short-term forward exchange or option contracts to hedge this risk according to our outlook on
future exchange rates; nevertheless, fluctuations in foreign currency exchange rates could have an
adverse effect on our business. Fluctuations in foreign currency exchange rates may affect our
results of operations and the value of our foreign assets, which in turn may adversely affectreported earnings and the comparability of period-to-period results of operations. Changes incurrency exchange rates may affect the relative prices at which we and foreign competitors sell
products in the same market. In addition, changes in the value of the relevant currencies may
affect the cost of imported items required in our operations.
Industry demand for skilled employees, particularly scientific and technical personnel, exceeds
the number of personnel available
Our future success depends, in part, on our ability to attract and retain certain key personnel,
including scientific, operational and management personnel. We anticipate that we will need tohire additional skilled personnel in all areas of our business. The competition for attracting andretaining these employees, especially scientists, is intense. Because of this intense competition forthese skilled employees, we may be unable to retain our existing personnel or attract additional
qualified employees in the future. If we are unable to retain skilled employees and attract-8-

additional qualified employees to keep up with our expansion, our business, financial condition
and results of operations will be materially and adversely affected.
Insufficient protection of our trade secrets and patents could have a significant adverse impact
on our competitive position
Our success and competitive position depend on protecting our trade secrets and other intellectual
property. Our strategy is to rely both on trade secrets and patents to protect our manufacturing
and sales processes and products, but reliance on trade secrets is only an effective businesspractice insofar as trade secrets remain undisclosed and a proprietary product or process is notreverse engineered or independently developed. We take certain measures to protect our trade
secrets, including executing non-disclosure agreements with our employees, joint venture partners,
customers and suppliers. If parties breach these agreements or the measures we take are notproperly implemented, we may not have an adequate remedy. Disclosure of our trade secrets orreverse engineering of our proprietary products, processes or devices could materially andadversely affect our business, financial condition and results of operations.
We are actively pursuing patents on some of our recent inventions, but these patents may not be
issued. Even if these patents are issued, they may be challenged, invalidated or circumvented. In
addition, the laws of certain other countries may not protect our intellectual property to the same
extent as Japanese laws.
We may require licenses to continue to manufacture and sell certain of our products, theexpense of which may adversely affect our results of operations
From time to time we have received, and may receive in the future, notice of claims ofinfringement of other parties’ proprietary rights and licensing offers to commercialize third party
patent rights. Although we are not currently involved in any litigations relating to our intellectual
property except in the ordinary course of our business, we cannot assure that:•

infringement claims (or claims for indemnification resulting from infringement
claims) will not be asserted against us,•

future assertions will not result in an injunction against the sale of infringing
products or otherwise significantly impair our business and results of operations;or•

we will not be required to obtain licenses, the expense of which may adversely
affect our results of operations.

Future initiatives and in-process research and development may not produce the desired results
We intend to expand our product lines to satisfy customer demand in our target markets.
Unexpected technical delays in completing these initiatives could lengthen development
schedules and result in lower revenues based on the products or technologies developed fromthese initiatives. There can be no assurance that the products derived from our in-process researchand development activities will achieve market acceptance.

-9-

We may have to incur impairment losses on our investments in equity securities of companies
not affiliated with us for business relationship purposes
We hold investments in equity securities of companies not affiliated with us, which we hold on along-term basis for business relationship purposes. A substantial portion of these investments
consists of shares of common stock of public companies in Japan, including Japanese banks andother financial institutions. We hold 13.5% of the outstanding shares of KDDI Corporation, atelecommunication services provider in Japan. As of March 31, 2002, the aggregate fair value ofequity securities included in available-for-sale securities was ¥216,100 million ($1,624,812
thousand), with gross unrealized gains in the amount of ¥6,163 million ($46,338 thousand) andgross unrealized losses in the amount of ¥52,102 million ($391,744 thousand). If there is a
decline in the fair value, i.e., the market price, of the shares we hold in those companies over a
period of time, and we determine that the decline is other than temporary under the guidance ofStatement of Financial Accounting Standards (SFAS) No. 115, “Accounting for Certain
Investments in Debt and Equity Securities”, we will need to record an impairment loss for theapplicable fiscal period. During fiscal 2002, we recorded losses on devaluation of investment
securities in the amount of ¥5,771 million ($43,391 thousand), mainly due to a substantial fall inthe market value of Japanese bank shares we hold. For some of these equity securities, including
the KDDI shares we own, we intend to keep our ownership at the current level in light of theimportance of our business relationships with the issuers of these equity securities. For other
equity securities in our portfolio, although we intend to dispose of them over time, market
conditions may not permit us to do so at the time, speed or price we may wish.
As a holder of ADSs, you will have fewer rights than a shareholder has and you will have to act
through the depositary to exercise those rights
The rights of shareholders under Japanese law to take actions including voting their shares,
receiving dividends and distributions, bringing derivative actions, examining a company’s
accounting books and records and exercising appraisal rights are available only to holders ofrecord. Because the depositary, through its custodian agents, is the record holder of the Shares
underlying the ADSs, only the depositary can exercise those rights in connection with thedeposited Shares. The depositary will make efforts to vote the Shares underlying your ADSs as
instructed by you and will pay to you the dividends and distributions collected from the Company.
However, in your capacity as an ADS holder, you will not be able to bring a derivative action,
examine the accounting books and records of the Company or exercise appraisal rights throughthe depositary.
Rights of shareholders under Japanese law may be more limited than under the law of otherjurisdictions

Our Articles of Incorporation, Regulations of the Board of Directors, Regulations of the Board of
Corporate Auditors and the Japanese Commercial Code govern our corporate affairs. Legal
principles relating to such matters as the validity of corporate procedures, directors’ and officers’
fiduciary duties and shareholders’ rights may be different from those that would apply if we werea U.S. company. Shareholders’ rights under Japanese law may not be as extensive asshareholders’ rights under the law of the United States. You may have more difficulty in assertingyour rights as a shareholder than you would as a shareholder of a U.S. corporation. In addition,
Japanese courts may not be willing to enforce liabilities against us in actions brought in Japan
which are based upon the securities laws of the United States or any U.S. state.

- 10 -

Item 4.
A.

Information on the Company
History and Development of the Company

The Company is a joint stock corporation that was incorporated under the laws of Japan in 1959
with the name Kyoto Ceramic Kabushiki Kaisha. The name of the Company was changed to
Kyocera Kabushiki Kaisha (or Kyocera Corporation) in 1982. Our corporate headquarters is at 6
Takeda Tobadono-cho, Fushimi-ku, Kyoto 612-8501, Japan. Our telephone number is+81-75-604-3500.
Our business originally consisted of the manufacture of ceramic parts for electronic equipment. In
the 1960’s, we moved into the design and production of fine ceramic parts, ceramic integrated
circuit (“IC”) packages, and electronic components. In the 1970s, we began to produce ceramic
cutting tools, ceramics for medical and dental uses, recrystallized jewelry and solar energy
products.
In the 1980’s we diversified into new strategic fields. In 1982, we merged with Cybernet
Electronics Corporation, a communications equipment maker in which we had made an equity
investment three years earlier. We expanded into another new business field through theacquisition of Yashica Co., Ltd., a camera and camera lens manufacturer, and played a leadingrole in the establishment of DDI Corporation (now KDDI Corporation (“KDDI”)), which has
become one of Japan’s leading providers of telecommunications services. In 1989, we gained apresence in the electronic connector market through our acquisition of Elco Corporation.
In the 1990’s, we strengthened our position as an internationally integrated electronic components
manufacturer with our 1990 acquisition of AVX Corporation (“AVX”), a maker of capacitors andother passive electronic components.
In 2000, we further enhanced our position as a market leader in telecommunications andinformation equipment. In February 2000, we acquired the consumer code division multiple
access (CDMA) mobile phone handset business of QUALCOMM Inc. to create our United States
subsidiary Kyocera Wireless Corp (“KWC”). In April 2000, we invested ¥12,000 million in
Kyocera Mita Corporation (“KMC”), a manufacturer of copiers and other document imaging
equipment, to transform it into a wholly-owned subsidiary and we merged our ECOSYS printeroperations into KMC in October 2000 to create a single document solutions business. Following
approval by the Osaka District Court on March 5, 2002, Kyocera Mita Corporation implemented
its ten years rehabilitation plan seven years ahead of schedule. This enabled the integration of
Kyocera’s remaining printer business and the merger of Kyocera Mita Hirakata, which produces
information equipment, into the Kyocera Mita Corporation, in order to further enhance
management of our document solutions business by creating a unified business structure.
With the aim of becoming a truly global enterprise, we have been expanding production at
Chinese manufacturing bases and making inroads into the local Chinese market. In December
2001, to become a leader in the CDMA-protocol mobile handset market in China, we establisheda local joint venture, Kyocera Zhenhua Communication Equipment Co., Ltd (“KZC”), in Guiyang,
China, for the development, manufacture, sale and after-sales servicing of telecommunications
equipment. KZC commenced production of CDMA handsets for the Chinese market in January
2002. In September 2001, we also completed a facility at Shilong, Dongguan, Guangdong, China
mainly for the production of information equipment and optical instruments.
- 11 -

Restructuring initiatives at overseas subsidiaries included reorganization of operating bases,
personnel reductions and inventory write-down. Additional moves included personnel
rearrangements designed to optimize the efficiency of the Company’s manufacturing bases inJapan as well as ongoing efforts to expand production in China.
B.

Business Overview

Overview
We are engaged in numerous high-tech fields, including electronics, telecommunications, metal
processing, automotive components, medical and dental implants, solar energy and IT solutions,services and networks. Our manufacturing and distribution operations are conducted worldwide.
We currently have 128 subsidiaries and 11 affiliates outside Japan and 23 subsidiaries and seven
affiliates in Japan. Our customers include individuals, corporations, governments andgovernmental agencies. For information on our sales by category of activity, see “Results ofOperations” under Item 5.A. of this Form 20-F. For information on our sales by geographic areaand product segment, see “Sales and Distribution”.
Business Strategy
Kyocera’s business strategy aims to promote “high-value-added diversification” to be a creative
company that continues to grow. To achieve this goal, we seek to expand sales and enhance
profitability of our Equipment Group and to enhance profitability of our Components Group(Fine Ceramics Group and Electronic Device Group) through structural reforms. In the
Equipment Group, we seek to expand our telecommunications equipment business to achievemarket leadership in business fields such as the development, manufacture, sale and after-saleservicing of CDMA handset and personal handyphone system (PHS)-related equipment, in
addition to developing a highly profitable document solutions business. In the Components Group,
we seek to reform our production structure, strengthen new product development and improve
AVX’s business performance. In addition, we seek to expand production and develop newmarkets in China, including for automotive, digital consumer electronics and solar energy
products.
In order to achieve our growth, we are now focusing on businesses that support
telecommunications and information processing, environmental protection and the quality of life
areas. Approximately 82% of our revenue for fiscal 2002 was derived from products related totelecommunications and information-processing. These range from end-user offerings, such as
wireless phones and office machines, to network products, such as electronic and fiber-optic
components, semiconductor parts and wireless local loop (“WLL”) systems.
Our material technologies have great potential in environmental protection. Advanced
crystal-processing expertise has made us a leading producer of solar cells and solar electric
generation systems. Our pollution-reducing ceramic engine parts, film-less digital cameras andcartridge-free page printers further reflect our commitment to the environment and the well-beingof future generations.
To enhance the quality of life, we have developed electronic and structural components for the
medical industry. As the average life expectancy increases, we are striving to improve the qualityof life through the manufacture of products such as BIOCERAM medical and dental implants,
recrystallized gemstones, high-quality cameras, Internet-capable wireless handsets, and eventelecommunications and multimedia services.
- 12 -

In the years to come, we will pursue growth using our abundant internal resources in materials,
components, equipment, IT solutions, services and networks. Through ongoing,
customer-oriented research and development, we will seek to create new technologies, products,
and markets that contribute to the advancement of society and mankind.
Operations
Our business is highly diversified. For the purpose of reporting, our operations are now classified
into four operating segments: (1) Fine Ceramics Group, (2) Electronic Device Group, (3)Equipment Group and (4) Others.
Our principal products and services offered in each segment are shown below.
(1)

Fine Ceramics Group
Surface Mount Device (“SMD”) Packages, Optical Communications Packages,
Microprocessor Unit (“MPU”) Packages, Parts for Semiconductor/Liquid Crystal Display(“LCD”) Fabrication Equipment, Gas Turbine Parts, Exhaust Gas Purification
Components, Solar Photovoltaic Cells and Modules, Solar Power Generation Systems,
Cutting Tools, BIOCERAM Orthopedic Implants, BIOCERAM Dental Implants, Applied
Ceramic Products.

(2)

Electronic Device Group
Capacitors, Timing Devices, High-Frequency Modules, Connectors, Thermal Printheads,
LCDs, Amorphous Silicon Drums.

(3)

Equipment Group
Code Division Multiple Access (“CDMA”) Handsets, Personal Digital Communication(“PDC”) Handsets, Personal Handyphone System (“PHS”) Handsets, PHS Base Stations,
Wireless Local Loop (“WLL”) Systems, ECOSYS Cartridge-Free Printers, Digital
Copiers, Single-Lens Reflex (“SLR”) Cameras, Digital Cameras, Compact Cameras,Interchangeable Camera Lenses.

(4)

OthersTelecommunications Engineering, Network Systems, IT Solutions Services, Financial
Services such as Leasing and Credit Financing.

(a)Fine Ceramics Groupi.

Fine ceramic parts:
Products in this sub-category are widely used in the computing, communications,
automotive and industrial sectors. These products are made from a variety of ceramicmaterials, such as silicon carbide, silicon nitrides and zircon, as well as alumina, utilizing
their characteristics of heat, corrosion and wear resistance.
This product sub-category includes: alumina substrates which are thin ceramic bases usedby manufacturers for hybrid integrated circuit (“IC”) foundations, thermal printheads andresistors; slide pads for computer disk memories; ceramic parts for fiber-optic
communications equipment; parts for semiconductor fabrication equipment; mechanical- 13 -

seals for pumps; engine components for the automobile industry; friction discs and thread
guides for yarn texturing machines in the textile industry; rings for fishing rods; nozzles;
and parts for paper-making machinery.
We are developing a new line of ceramic components for use in the semiconductor,
precision processing and optical fiber communication industries. We are also planning to
introduce spacers and ceramic substrates for the magnetic-resistive (“MR”) heads used in
hard disk drives.
We are also conducting substantial research and development in this area. In addition tocreating components for semiconductor fabrication equipment and other fields ofindustrial manufacturing, we are developing components to reduce environmentallyhazardous emissions from waste incineration facilities. We are also planning to develop
ceramic products for use in intelligent transportation systems.

ii.

Semiconductor parts:
This product sub-category mostly comprises ceramic IC packages and ceramic packages
for other semiconductor products and for electronic components. Ceramic packages havethe characteristics of being air and water tight and corrosion resistant and also have theability to dissipate heat efficiently; in addition, they have a superior capacity for use inhigh frequency and embedded passive components.
The most common types of the ceramic IC packages we make are primarily multilayer
packages, including pin grid arrays and SMD packages. We also mass-produce
metallized products for telecommunication related devices. Pin grid arrays are sold tomanufacturers of MPUs and of other logic ICs, which are principally inserted into
information equipment and peripherals. SMD packages are used for surface acoustic
wave (“SAW”) filters and oscillators, which are mostly inserted into cellular handsets.
We established a new facility in Shanghai, China in November 2000, which expanded
our production capacity of SMD packages.
We supplement our semiconductor parts production with a range of plastic packages.

iii.

Consumer-related products:
The principal products in this sub-category are ceramic cutting tools, recrystallized
jewelry, solar energy products, dental and orthopedic implants, and applied ceramic
products.
Ceramic cutting tools are used for metal processing in industrial production. In January
2001 we acquired Tycom Corporation (renamed to Kyocera Tycom Corporation), a major
U.S. manufacturer of carbide cutting tools for the PCB industry with the largest share of
the North American market and the second largest share globally. We are pursuingsynergy between its global manufacturing and sales facilities and our cutting tools
business and aim to become a leader in this market.
Recrystallized jewelry comprises mainly synthetic emeralds, alexandrines and rubies
which, as manufactured using the single crystal growth technology developed by us, arechemically and physically equivalent to natural stones. In December 2001 we received
the rights to merchandise Sarah Jordan accessories in Japan and intend to increase ourinvolvement in the retail jewelry business through our new Lil Lili brand of accessories- 14 -

and retail outlets, which we introduced in January 2002, and the expansion of our
Crescent Vert brand of accessories, for which we opened a new retail outlet in fiscal 2002.
Additionally in fiscal 2002, we were to our knowledge the first in the world to artificiallydevelop Fire Opal, naturally produced primarily in Mexico, which we began sellingthrough our Crescent Vert boutiques in November 2001.
In the implant segment, we are focusing on our BIOCERAM product lines and plan to
introduce new products with a wide range of orthopedic and dental applications,
including artificial knee joint replacement systems, ceramic materials to help heal hip
fractures and a system for setting dentures magnetically in ceramic-based dental implants.
We manufacture two types of solar energy products: a solar photovoltaic cell system forgenerating electricity and a solar energy accumulating system used for heating water inresidential home, and public facilities. In August 1999, we acquired Golden Genesis
Company, a leading U.S. solar energy systems distributor for ¥5,812 million, which led
to the creation of Kyocera Solar, Inc., a new wholly-owned subsidiary. We plan toexpand our solar cell production capacity and continue to expand our sales ofphotovoltaic solar power generating systems for individual homes in the Japanese market.
In this segment, we focus our research and development on solar energy products andcutting tools. With regard to solar energy products, we endeavor to enhance the energy
conversion efficiency of solar photovoltaic cells and modules. With regard to cutting
tools, we are developing products for application in high technology industries such as
PCB drills as well as in automotive manufacturing.
(b)

Electronic Device GroupOur Electronic Device Group focuses on electronic components and devices fortelecommunications and computing equipment. These fields create demand for miniaturetiming devices, such as temperature-compensated crystal oscillators (“TCXOs”),
voltage-controlled oscillators (“VCOs”), miniature ceramic capacitors with highcapacitance, tantalum capacitors, color LCDs, and high-frequency modules. Today’s
wireless phones, for example, utilize all of these essential, high-value-added components.
However, while we expect continuing demand in these fields, we are currently coming
under considerable downward price pressure in the Electronic Device Group. It has been
our experience that component prices in the high technology components area tend to
decline each year. Component prices for mobile phones are particularly affected by thisprice decline.
Timing devices, chip capacitors, thin-film devices, such as thermal printheads,
amorphous silicon drums and LCDs, TCXOs, VCOs, high-frequency modules andelectronic connectors are the principal products in this group. We believe that we are oneof the leading suppliers of TCXOs on a worldwide basis.
While chip capacitors are commonly used in electronic equipment, thin-film devices canbe found generally in office automation (“OA”) equipment and TCXOs and VCOs aremostly found in telecommunications equipment.
In 1995, we established a subsidiary in Shanghai, China to manufacture and sell ceramic
capacitors and other electronic components in this fast-growing market. We arecontinuing to expand our offshore production of electronic device, both to improveearnings and to raise price competitiveness. As part of this strategy, in fiscal 2002 we- 15 -

commenced full-scale production of timing devices in Shanghai, in addition to productionof ceramic capacitors commenced there in January 2001, to supply future demand forelectronic components used in telecommunications and information equipment.
U.S.-based AVX, which manufactures ceramic and tantalum capacitors fortelecommunications and computing equipment, is an important part of our strategy in theElectronic Device Group. With its global manufacturing and sales network, AVX is amajor contributor to our sales worldwide.
(c)

Equipment Groupi.

Telecommunications equipment:This product sub-category includes cellular telephones and PHS related products such as
handsets and public relay stations. These products are produced mainly for KDDI andKDDI’s subsidiaries, as well as for other Asian and U.S. telecommunications companies.
KDDI is a telecommunications service company which we established in 1984 as anaffiliated company when the telecommunications business, which had previously beenmonopolized by a national telephone company, was opened to private companies. KDDIis engaged in providing long distance and international telephone services, cellular
service, and PHS services through subsidiaries.
One of our major areas in the telecommunications equipment segment is cellular handsets.
We plan to become a leading producer of CDMA handsets. This technology has become
one of the fastest growing mobile phone protocols. In February 2000, we acquired theconsumer CDMA mobile phone handset business of QUALCOMM Inc. for ¥23,225
million to create our United States subsidiary KWC. In a separate related transaction inJune 2000, KWC acquired additional assets for ¥3,158 million. To date we have been
focusing on improving the profitability of KWC and have made strides toward this goal.
In addition to KWC, our principal manufacturing, sales and development bases also
include SK Teletech Co., Ltd., our joint venture with SK Telecom in South Korea; andKyocera Corporation in Japan, which collaborates closely with KDDI. In addition tothese three production companies, in December 2001, we established another local joint
venture in Guiyang, China, called Kyocera Zhenhua Communication Equipment, Co.,
Ltd., for the development, manufacture, sale and after-sales servicing of
telecommunications equipment. This joint venture commenced production ofCDMA-protocol mobile phone handsets for the Chinese market in January 2002.

ii.

Information Equipment:
The major products in this sub-category comprise page printers marketed under the name
“ECOSYS”, which are based on cartridge-free technology.
In April 2000, KMC, which manufactures photocopiers and printers, joined the Kyocera
Group and became one of our wholly-owned subsidiaries. The Company’s ECOSYS
printer unit has now been merged into KMC, enabling us to build a unified presence inthe document solutions business. Further synergy has resulted from the merger of ourrespective printer and copier sales operations. In addition, we are reducing costs byconsolidating development and manufacturing facilities, both in Japan and overseas, andby building copiers and printers on common engines and components. We have also
strengthened our product lines. In July 2001 KMC introduced the ECOSYS FS-1000+, a
new, economical, 10 page-per-minute model designed primarily for the medium-speed,- 16 -

economy business printer market. The new series has already experienced steady sales
growth domestically and overseas in the second half of fiscal 2002. In fiscal 2002 we also
introduced domestically and in the U.S. and Europe new color printers and color copiersthat use the same engine. To bolster price competitiveness, we commenced full-scale
production of printers and copiers in a new, integrated manufacturing facility in China in
December 2001. In January 2002, to accelerate the continued expansion of its document
solutions business, Kyocera resolved to spin off its printer business at the parent company
and merge this business into KMC, along with the merger of Kyocera Mita Hirakata
Corporation, which produces information equipment into KMC. KMC paid all of the debt
under its court-approved rehabilitation plan in February 2002. The rehabilitation period
was shortened by approximately seven years from its original length of ten years and
KMC officially implemented the plan on March 5, 2002, when it received approval by
the Osaka District Court. Following this, the actual operational transfer of the printerbusiness and merger of Kyocera Mita Hirakata Corporation took effect on April 1, 2002.

iii.

Optical instruments:
The major products in this sub-category consist of compact cameras, SLR cameras andlenses, digital cameras and advanced photo system (“APS”) cameras. These products are
sold under the brand names “Kyocera” in Japan and “Yashica” overseas, while our“CONTAX” brand high-end cameras are sold worldwide.
In fiscal 2002, we introduced a miniature, lightweight digital camera with image
resolution exceeding three million pixels. We have also begun expanding into a newmarket niche with digital camera attachments for cellular and PHS phones, which enable
the user to transmit digital images. We are reorganizing our digital camera development
and production facilities to reduce costs and raise margins through local production in
China. At our new Dongguan Shilong plant, we began production of optical instruments
through our joint venture, Dongguan Shilong Kyocera Optics Co., Ltd. and parts for
optical lenses through our subsidiary, Kyocera Optec Corporation in the second quarterof fiscal 2002.

(d)

OthersThis segment includes revenues from telecommunication network systems and financial
services such as leasing and credit financing, office renting and other services in Japanand Asia.
Kyocera Leasing Co., Ltd. (“KLC”), a wholly-owned subsidiary in Japan, is principally
involved in providing credit financing services and commercial leasing services forcopiers, printers and other equipment. It therefore supports the expansion of ourEquipment Group.
Kyocera Communication Systems Co., Ltd. (“KCCS”), a Japanese subsidiary, is involvedin the IT solutions business by providing Internet data center services, which is a rapidly
expanding business segment of the telecommunications and information processing
market. KCCS also offers network system and telecommunication engineering services,such as constructing mobile communications network base stations.
KCCS opened an Internet data center in conjunction with KDDI in October 1999. The
center offers an e-commerce platform with a comprehensive package of services
specifically designed for users of mobile phones, Personal Digital Assistants (“PDAs”)- 17 -

and PCs. The center provides all necessary functions to facilitate business transactions
over the Internet, including content distribution, certification and payment. In addition tocommerce, the center will offer a number of diverse business-to-consumer services(“B2C”), ranging from downloadable mobile-phone “ring” melodies to the distribution ofdigital character icons from popular video games. In order to expand the center’s revenue
and profit, KCCS is developing business-to-business (“B2B”) and Application Service
Provider (“ASP”) services as well.
Effective August 1, 2002, we acquired through a share exchange 100% of the shares ofToshiba Chemical Corporation, which was listed on the Second Section of the Tokyo
Stock Exchange prior to the acquisition. We issued 990,990 shares of common stock to
the former shareholders of Toshiba Chemical in connection with this share exchange.
Toshiba Chemical, which changed its name to Kyocera Chemical Corporation, is amanufacturer of various electronic parts and materials, electric insulators, synthetic resin
molded parts and molding dies and machinery with net sales of ¥30,960 million and net
income of ¥(11,334) million in the year ended March 31, 2002, according to consolidated
financial statements prepared in accordance with Japanese GAAP filed publicly in Japanby Toshiba Chemical.
Sales and Distribution
Our products are marketed worldwide by our own sales personnel, as well as through independent
manufacturers’ representatives who are compensated solely on a commission basis and byindependent distributors. We have regional sales and design application personnel in strategic
locations to provide technical and sales support for independent manufacturers’ representatives
and independent distributors. We believe that this combination of distribution channels provides ahigh level of market penetration and efficient coverage of our customers on a cost-effective basis.
Most of our sales of fine ceramic components and electronic devices worldwide are made directly
to manufacturers who incorporate them into their own products. However, end products
manufactured by us, such as ceramic cutting tools, recrystallized jewelry, solar energy products
and various other consumer related goods, tend to be sold to distributors and wholesalers. Jewelry
sales are made through 11 direct sales shops in Japan. Sales of consumer solar energy products
are made through two direct sales shops opened in calendar year 2002, as well as through sales
distributors. Dental and orthopedic implants are supplied in some cases directly to dentists andhospitals. Our domestic sales of telecommunications equipment comprise sales mainly to KDDIgroup. Most of our page printer and copier sales, both in the domestic market and abroad, aremade under our own brand name through distributors and wholesalers. Sales of optical
instruments are made mainly to retail shops in Japan and overseas and, to a lesser extent,
distributors abroad. Finance revenues are generated from services provided to companies within
and outside our group in Japan. Office renting and other services are mainly provided tocompanies outside our group in Asia. Our telecommunication network systems and services
support mobile and PHS carriers through the installation and maintenance of base stations andoptical fiber networks.
Domestic sales are made in yen, while overseas sales are made in a variety of currencies, but
predominantly in U.S. dollars and Euro. During the year ended March 31, 2002, our sales toKDDI group amounted to ¥105,018 million ($789,609 thousand) and exceeded slightly 10% of
Kyocera’s net sales. In the year ended March 31, 2001, there was no single customer to whichsales exceeded 10% of our net sales.

- 18 -

The following table shows a breakdown of our total consolidated net sales for each of the last
three years, distinguishing between domestic and overseas sales and, in respect of overseas sales,
showing the geographical areas in which such sales were made:Years ended March 31,(Yen in millions and U.S. dollars in thousands)

Japan
United States
Asia
EuropeOthers

¥

Total

¥

2000
400,247
148,927
131,650
108,342
23,460812,626¥

2001
490,923
348,109
217,456
163,487
65,078¥ 1,285,053¥

2002
408,561
289,517
148,349
141,493
46,654¥ 1,034,574

$

$

2002
3,071,887
2,176,820
1,115,406
1,063,857
350,782
7,778,752

Note: * Translated into U.S. dollars at the rate of ¥133.00=$1, the rate prevailing on March 31, 2002.

In the above table, the amounts shown under each geographical area reflect sales made by us toour customers there.

- 19 -

The following table shows a breakdown of net sales and operating profit during the past threefiscal years for our four operating segments: Fine Ceramics Group, Electronic Device Group,
Equipment Group and Others.
Years ended March 31(Yen in millions and U.S. dollars in thousands)
2000

2001

2002(1)

2002

¥

%

¥

%

¥

%

$

%

Fine ceramics group

270,960

33.3

363,02628.3

252,879

24.5 1,901,346

24.5

Electronic device group267,907

33.0

392,700

30.6

234,93822.7 1,766,451

22.7

Equipment group

215,105

26.5

467,36236.3

478,29346.2 3,596,188

46.2

Others70,101

8.6

79,7906.2

86,116

8.3

647,489

8.3

Adjustments and eliminations(11,447)(1.4)(17,825)(1.4)(17,652)(1.7)(132,722)(1.7)

Net sales:

812,626 100.0 1,285,053 100.0 1,034,574 100.0 7,778,752 100.0
Operating profit(2):Fine ceramics group43,30916.0

90,60325.0

22,582

8.9

169,789

8.9

Electronic device group

41,06715.3

128,047

32.6

6,216

2.6

46,737

2.6

Equipment group

16,143

7.5

28,907

6.2

26,013

5.4

195,586

5.4

Others(4,197)

(6.0)

2,826

3.5

1,549

1.8

11,647

1.8

96,322

11.9

250,383

19.5

56,3605.4

423,759

5.4

Corporate
Equity in earnings (losses) ofaffiliates and unconsolidated
subsidiaries
Gains on stock issuance of anaffiliate
Gain on sale of investment in a
subsidiary
Amortization of additional
investment in excess of net
assets of a subsidiary(19,170)(2.4)(25,243)(2.0)(2,508)(0.2)(18,857)(0.2)(6,980)

(0.9)

2,209

0.2

1,559

0.2

11,7220.2--

174,076

13.5

-

-

-

-

28,175

3.5

-

-

-

-

-

-

-

-

-

-

-

-

-

-

Adjustments and eliminations

(879)

(0.1)

(1,203)

(0.1)

(13)

(0.0)

(98)

(0.0)

Income before income taxes

97,46812.0

400,22231.1

55,3985.4

416,526

5.4

Other(3):Note: (1) Translated into U.S. dollars at the rate of ¥133.00=$1, the rate prevailing on March 31, 2002.
(2) Percentage amounts in this table refer to percentage of net sales for the corresponding segment.
(3) Percentage amounts in this table refer to percentage of net sales.

Sources and Availability of Raw Materials and Supplies
We purchase a variety of raw materials. The principal ones in terms of volume are alumina (amineral substance produced from bauxite and from which aluminum is made), zircon, andmagnesia and are each subject to price volatility. On a cost basis, gold, which is primarily used in- 20 -

the production process for IC packages and is also subject to price volatility, is the mostsignificant raw material. Our policy is to protect ourselves from fluctuations in the price of goldby keeping a small gold inventory and by pricing products generally on a “gold adder” system sothat customers pay for the gold contained in semiconductor parts at a rate which approximates ourcost.
Our main supplies are ICs for use in the production of thin-film devices, electronic equipment,
and optical instruments. We typically receive our supply of ICs from several large companies
which we feel are reliable sources. We also purchase lead frames for semiconductor parts from adiverse group of both large and small companies.
No single supplier accounted for a significant amount of our consolidated purchases of raw
materials and supplies during the year ended March 31, 2002. We have not generally experienced,
and we do not anticipate, any difficulty in obtaining raw materials, supplies, or fuel requirements.
Patents and Licenses
Our success and competitive position depend on a number of significant patents, licenses andtrade secrets relating to our manufacturing and sales processes and products. The following tablesets forth information, as of March 31, 2002, with respect to our significant patents and license
agreements. Under all of the following agreements, we are permitted to produce products using
the licensed technology and we pay a fee to the counter party based on the amount of sales of
those products.
Counter Party

Country

Contents

PeriodHitachi, Ltd.

Japan

License under patents regarding From April 1, 1993
liquid crystal display elements
to March 31, 2004

Philips Electronics N.V.

The
License under patents regarding
Netherlands optical disk system

Semiconductor Energy
Laboratory Co., Ltd.

Japan

License under patents regarding From February 15,
amorphous silicon drums and1994 to patentdevices using such drums
expiration

International Business
Machines Corporation

UnitedStates• License under patents
regarding ceramic products,
electric/electronic parts andcomponents

From June 28, 1993
to patent expiration

From June 30, 1995
to patent expiration• License under patents
regarding information
processing systems
Qualcomm Incorporated

UnitedStatesLicense under patents regarding
cellular phones using CDMAtechnology

From August 31,
1996 to patent
expiration

Solar Physics
Corporation

UnitedStatesLicense under patents regarding
amorphous silicon drums anddevices using such drums

From February 5,
1997 to patent
expiration- 21 -

Counter Party

Country

Contents

PeriodDefense Evaluation andResearch Agency

UnitedKingdom

License under patents regarding
liquid crystal panels

From April 1, 1997
to patent expiration

Johnson Marthey
Semiconductor
Packages, Inc.

UnitedStatesLicense under patents regarding
semiconductor packages andprinted circuit boards

From June 11, 1997
to June 11, 2007

Toshiba CorporationJapan

License under patents regarding From September 10,
aluminum nitride
1997 to December
31, 2002

Seiko Epson
CorporationJapan

License under patents regarding From January 1, 1998
LCD panel modules (Super
to December 31,
twisted nematic (“STN”)
2002

Philips Electronics N.V.

The
License under patents regarding
Netherlands global system mobile
communication (“GSM”)
cellular handsets

NEC CorporationJapan

License under patents regarding From July 1, 2000 to
PDC handsets and PHS
September 14, 2010
handsets

Advanced Ceramics
Research Incorporated

UnitedStatesLicense to use technology andpatents regarding ceramic fiber

Ricoh Company, LTDJapan

License under patents regarding From June 1, 2001 toelectronic photo printerMay 31, 2006

Lucent Technologies
GRL Corporation

UnitedStatesLicense under patents regarding
wireless subscriber equipment

From February 15,
1999 to February 11,
2009

From September 15,
2000 to patent
expiration

From August 28,
2001 to December
31, 2004

Our licenses with Toshiba Corporation under patents regarding aluminum nitride and with Seiko
Epson Corporation under patents regarding STN type LCD panel modules are each scheduled to
expire on December 31, 2002. We expect we will be able to renew these licenses upon theirtermination on terms acceptable to us.
Competitive Position(a)Fine Ceramics Group

Products in this group are specialized so competitive position is largely dependent on maintaining
close contacts with and being first to meet the needs of secondary manufacturers. We are theworld market leader by sales volume in the manufacture of ceramic IC packages. However,competition with plastic packages exists, particularly in the area of packages for MPUs. In theface of this competition, our management has developed plans to expand our lines of ceramic
packages and to implement further cost reductions. Our goal is to further strengthen ourcompetitive position by becoming a “Total Package Supplier” in the world market. To meet this- 22 -

goal, we are strengthening our R&D activities to develop new applications for telecommunication
areas such as wireless and optical communications, which offer opportunities forhigher-added-value products. In addition to establishing a new production base in China tostrengthen our price competitiveness of SMD packages, our management believes that we canmaintain our market leadership in the area of ceramic packages and satisfy customer needs byapplying our technological and managerial expertise.
(b)Electronic Device GroupWe entered this area of production as we increased our capability to produce technologicallyadvanced products for the Fine Ceramics Group, so we are a relative late comer in the field. The
products in this group are standardized so competition is based on price, quality and delivery time.
Kyocera is one of the major manufacturers by sales volume of capacitors and timing devices.
Most of our competitors in this group are Japanese manufacturers, however, AVX, a U.S.
subsidiary, competes against overseas manufacturers when producing tantalum capacitors.
(c)Equipment GroupIn the Japanese market, our main competitors for cellular handsets are Japanese manufacturers. In
the U.S. cellular handset market, Kyocera competes with U.S., European and Asian
manufacturers and we are a leading producer of CDMA cellular handsets by units sold. We also
compete with Japanese and U.S. manufacturers producing information equipment such as copiersand printers on a global basis. In the optical instruments field, Japanese manufacturers are ourmain competitors.
Government Regulation
There are no governmental regulations specifically applicable to Kyocera’s industry that have amaterial effect on Kyocera’s business.
C.

Organizational Structure

We have 160 subsidiaries and affiliates as of March 31, 2002. Our management structure is basedon our group segments structure. Therefore, the management of each segment is conducted
uniformly regardless of whether a group’s operations are conducted by us as the parent company
or one of our subsidiaries.
The following table sets forth information, as of March 31, 2002, with respect to our significant
subsidiaries, organized by group.

Name

Country ofIncorporation

Percentage
held by
KyoceraMain Business

Fine Ceramics Group
Kyocera Solar
Corporation
Kyocera America, Inc.

Japan

100.00%

Sale of solar energy products

United States

100.00%

Manufacture and sale ofsemiconductor parts- 23 -

Country ofIncorporation

Percentage
held by
KyoceraKyocera Industrial
Ceramics Corporation

United States

100.00%

Manufacture and sale of fineceramic-related products and sale ofelectronic devices

Kyocera Solar, Inc.

United States

100.00%

Manufacture and sale of solar energy
products

Kyocera Tycom
Corporation

United States

100.00%

Manufacture and sale of PCB drills

Kyocera Mexicana, S.A.
de C.V.

Mexico100.00%Assembly and plating services

Kyocera Asia Pacific Pte.
Ltd.

Singapore

100.00%

Sale of fine ceramic-related products
and electronic devices

China

90.00%

Manufacture and sale of fineceramic-related products andelectronic devices

Kyocera Precision Tools
Korea Co., Ltd.

South Korea

90.00%

Manufacture and sale of cutting
tools

Kyocera Fineceramics
GmbH

Germany

100.00%

Sale of fine ceramic-related products
and electronic devices

Japan

100.00%

Manufacture and sale of electronic
devices

United States

69.06%

Manufacture and sale of electronic
devices

P.T. Kyocera Indonesia

Indonesia

100.00%

Manufacture and sale of electronic
devices

Kyocera Elco Korea Co.,Ltd.

South Korea

100.00%

Manufacture and sale of electronic
devices

Kyocera Elco Hong
Kong Ltd.

Hong Kong

100.00%

Sale of electronic devices

Japan

100.00%

Manufacture and sale of informationequipment

Name

Shanghai Kyocera
Electronics Co., Ltd.

Main BusinessElectronic Device Group
Kyocera Elco
Corporation
AVX Corporation

Equipment Group
Kyocera Mita
Corporation- 24 -

Name

Country ofIncorporation

Percentage
held by
KyoceraMain Business

Kyocera Mita Japan
CorporationJapan

100.00%

Sale of information equipment

Kyocera Optec Co., Ltd.

Japan

100.00%

Manufacture and sale of optical
instruments

Kyocera Wireless Corp.

United States

100.00%

Manufacture and sale oftelecommunications equipment

Kyocera Mita America,
Inc.

United States

100.00%

Sale of information equipment

Kyocera Mita IndustrialCo., (H.K.) Ltd.

Hong Kong

100.00%

Manufacture of informationequipment

Kyocera Mita Office
Equipment (Dongguan)Co., Ltd.

China

90.00%

Manufacture and sale of informationequipment

Kyocera Mita Europe
B.V.

The
Netherlands

100.00%

Sale of information equipment

Kyocera Mita
Deutschland GmbHGermany

100.00%

Sale of information equipment

Kyocera Mita (U.K.) Ltd.

England100.00%

Sale of information equipment

Kyocera Mita France
S.A.

France100.00%

Sale of information equipment

Kyocera Mita Italia
S.P.A.

Italy

100.00%

Sale of information equipment

Kyocera Mita Australia
PTY. LTD.

Australia

100.00%

Sale of information equipment

Kyocera Optics, Inc.

United States

100.00%

Sale of optical instruments

Kyocera Yashica do
Brasil Indústria eComércio Ltda.

Brazil100.00%

Manufacture and sale of optical
instruments

Kyocera Zhenhua
Communication
Equipment Co., Ltd.

China

70.00%

Manufacture and sale oftelecommunications equipment- 25 -

Country ofIncorporation

Percentage
held by
KyoceraYashica Hong Kong, Co.,Ltd.

Hong Kong

100.00%

Sale of optical instruments andintermediary services as to sale of
optical instruments

Universal OpticalIndustries, Ltd.

Hong Kong

100.00%

Manufacture and sale of optical
instruments

Dongguan Shilong
Kyocera Optics Co., Ltd.

China

90.00%

Manufacture and sale of optical
instruments

Yashica Kyocera GmbHGermany

100.00%

Sale of optical instruments

Kyocera Leasing Co.,
Ltd.

Japan

100.00%

Various leasing services, property
management and financing services

Kyocera Communication
Systems Co., Ltd.

Japan

76.30%Development and sale of software

Kyocera Realty
Development Co., Ltd.

Japan

100.00%Real estate services

Hotel Kyocera Co., Ltd.

Japan

100.00%Hotel management and operations

Kyocera International
Co., Ltd.
Piazza Investment Co.,
Ltd.

Japan

100.00%Insurance and travel agency

Hong Kong

100.00%Real estate leasing

China

100.00%Real estate leasing

Name

Main Business

OthersShanghai Kyocera Realty
Development Co., Ltd.

In addition to the above consolidated subsidiaries, Kyocera has 97 other consolidated subsidiaries
including Kyocera International Inc., a 100% owned U.S. subsidiary which is a holding company
established to own Kyocera’s subsidiaries in North America. Kyocera also has interests in two
subsidiaries accounted for by the equity method and 19 affiliates accounted for by the equity
method.
AVX, in our Electric Device Group, is a one of our most significant subsidiaries. Most of theelectronic devices we produce for overseas sales are distributed by AVX by utilizing AVX’s wide
range of marketing channels. In addition, we market passive components produced by AVX to theJapanese market. With respect to manufacturing and research and development, we utilize AVX’s
manufacturing process for ceramic capacitors to improve productivity and to enhance ourcompetitiveness. AVX also introduced materials technologies from us into its ceramic capacitor
production. We have been seeking better ways to cooperate in expanding our electronic device
businesses. Currently, six of our directors (not counting AVX’s chief executive officer) and one of
our subsidiaries’ directors are members of AVX’s board of directors. AVX’s chief executive- 26 -

officer is one of our directors. Within our Electronic Device Group, we have a close relationshipwith AVX in marketing, manufacturing, and research and development, and we are seeking andpursuing synergies to be a leading passive component manufacturer.
AVX posted a net loss of $7,232 thousand in its fiscal year ended March 31, 2002, compared to
net income of $567,537 thousand in its prior fiscal year. As a result of this net loss, our results ofoperations and financial condition for fiscal 2002 were materially and adversely affected. See
Item 5.A of this annual report.
D.

Property, Plants and Equipment

Our manufacturing operations are conducted in Japan, the United States, Mexico, El Salvador,
Brazil, the United Kingdom, Germany, France, Czech, Singapore, South Korea, Hong Kong,
China, Taiwan, Malaysia, Indonesia and Israel. As of March 31, 2002, we had property, plants
and equipment with a net book value of ¥268,623 million ($2,019,722 thousand). During the five
years ended March 31, 2002, we invested ¥350,623 million ($2,636,263 thousand) for additions
to property, plants and equipment. Our property, plants and equipment are not subject to any
material encumbrances or environmental issues.
The following table sets forth information, as of March 31, 2002, with respect to ourmanufacturing facilities with floor space of more than 100,000 square feet.

Name of Plant

Floor
Lease
Space
Expires(thousands ofsquare feet)

Principal Products
Manufactured

Location

StatusHokkaido Kitami Plant

Kitami, Hokkaido

Owned

294

Fukushima Tanakura Plant

Tanakura, Fukushima

Owned

124

Nagano Okaya Plant

Okaya, Nagano

Owned

400

Mie Plant

Ise and Tamaki, Mie

Owned

261

Shiga Plant

Gamo and Yokaichi,
Shiga

Owned

1,659

Osaka Hirakata Plant

Hirakata, Osaka

Owned

428

Kagoshima Sendai Plant

Sendai, Kagoshima

Owned

1,500

Kagoshima Kokubu Plant

Kokubu, Kagoshima

Owned

1,941

Kagoshima Hayato Plant

Hayato, Kagoshima

Owned

231

Semiconductor parts,
electronic components, fineceramic parts
Semiconductor parts,
electronic components, fineceramic parts
Electronic components

Balboa Plant

San Diego, California

Owned

288

Semiconductor parts

Campus Plant

San Diego, California

Leased424

Japan
Fine ceramic parts,
telecommunications
equipment, electronic
components
Telecommunications
equipment
Optical instruments,
electronic components
Information handlingequipment, page printers,
solar cells
Semiconductor parts,
electronic components, fineceramic parts, solar heatcollectors, solar cells
Information handlingequipment, page printers

United States- 27 -

2005

Telecommunications
equipment

Name of Plant

Location

Mountain Home Plant

Mountain Home, North Owned
Carolina
Vancouver, Washington Owned

Vancouver Plant
Myrtle Plant
Olean Plant
Raleigh Plant
South Carolina Plant

Status

Floor
Lease
Space
Expires(thousands ofsquare feet)137

Fine ceramic parts

Owned

559

Electronic components, fineceramic parts
Electronic components

Owned

110

Electronic components

Raleigh, North
Owned
Carolina
Fountain Inn, Carolina Owned

206

Electronic components

350

Information handlingequipment, page printers

Tijuana, Baja
Owned
California
Chihuahua, Chihuahua Owned

120
124

Semiconductor parts,
electronic components
Electronic components

San Salvador

233

Electronic components

Myrtle Beach, South
Carolina
Olean, New York42

Principal Products
Manufactured

MexicoTijuana Plant
Chihuahua Plant
El Salvador
San Salvador Plant

Owned

United Kingdom
Paignton Plant

Paignton, England

Owned

128

Electronic components

Coleraine Plant

Coleraine, Northern
Ireland

Owned

185

Electronic components

Betzdorf

Owned

102

Electronic components

BeauneLeased228

Germany
Betzdorf Plant
FranceBeaune Plant

2007

Electronic components

Saint-Apollinaire Plant

Saint-Apollinaire

Leased321

2007

Electronic components

Seurre Plant

SeurreLeased134

2007

Electronic components

Lanskroun Plant

Lanskroun

Leased268

2017

Lanskroun Plant

Lanskroun

Owned

230

Electronic components

Uherske Hradiste Plant

Uherske Hradiste

Owned

149

Electronic components

New Territories, Hong Owned
Kong

457

Information handlingequipment, page printers,
solar cells

Shilong Plant

Dongguan, Canton

Leased470

2026

Shanghai Pudong Plant
Shanghai Putuo Plant

Shanghai Pudong
Shanghai Putuo

Owned
Leased

109
438

2003

Czech
Electronic components

Hong Kong
New Territories Plant

China- 28 -

Optical instruments,
electronic components
Electronic components
Electronic components

Name of Plant

Floor
Lease
Space
Expires(thousands ofsquare feet)

Location

StatusPenangOwned

149

Jerusalem Plant

Leased100

Principal Products
Manufactured

Malaysia
Penang Plant

Electronic components

IsraelJerusalem Plant

Item 5.
A.

2004

Electronic components

Operating and Financial Review and Prospects
Results of Operations

You should read the discussion of our financial condition and results of operations together withour consolidated financial statements and information included in this annual report. This
discussion and analysis contains forward-looking statements that involve risks, uncertainties andassumptions. Our actual results may differ materially from those anticipated in theseforward-looking statements as a result of certain factors, including, but not limited to, those set
forth under Item 3.D and elsewhere in this Form 20-F.
The information required by this item appears in our 2002 Annual Report to Stockholders on
page 15-20, which have been attached as Exhibit 10.2 to this Form 20-F and are incorporated
herein by reference, and in the rest of this Item 5.A.
LaPine Litigation
The Company has petitioned for rehearing of its appeal of an adverse judgment in the litigation
between the Company and LaPine Technology Corporation (LTC), which is described under“Legal Proceedings” in Item 8.A of this annual report, before an en banc panel of eleven judgesof the U.S. Ninth Circuit Court of Appeals. As of September 19, 2002, no decision has been madeby that court on the Company’s petition. If we are unsuccessful in reversing this adverse
judgment on appeal, we may be required to pay damages, inclusive costs and interest to date, of atleast $453 million. The Company owns one third of the outstanding stock of LaPine Holding
Company, which in turn owns 100% of the stock of LTC. Therefore, the Company will ultimately
recover one third of the portion of any judgment payable to LTC, less one third of LTC’s valid
remaining debts. Taking into account this equity interest, we have set aside a contingency ofapproximately $338 million as of March 31, 2002 in respect of any potential adverse judgment inthis case, and any shortfall in excess of this contingency would be incurred as an expense. In lightof this contingency, the Company believes that such an expense would not have a significant
effect on Kyocera’s financial condition and results of operations in fiscal 2003.
Application of Critical Accounting Policies
The following information supplements the information presented under the heading “Critical
Accounting Policies and Estimates” on pages 20 and 21 of the Company’s 2002 Annual Report to
Stockholders, which have been attached as Exhibit 10.2 to this Form 20-F
Kyocera’s consolidated financial statements are prepared in conformity with accounting
principles generally accepted in the United States of America. The preparation of these financial
statements requires the use of estimates, judgments, and assumptions that affect the reported- 29 -

amounts of assets and liabilities at the date of financial statements and the reported amounts ofrevenues and expenses during the periods presented. Actual results may differ from theseestimates, judgments and assumptions.
An accounting estimate in Kyocera’s financial statements is a critical accounting estimate if it
requires Kyocera to make assumptions about matters that are highly uncertain at the time theaccounting estimate is made, and either different estimates that Kyocera reasonably could haveused in the current period, or changes in the accounting estimate that are reasonably likely tooccur from period to period, would have a material impact on the presentation of Kyocera’s
financial condition, changes in financial condition or results of operations. Kyocera has identified
the following critical accounting policies with respect to its financial presentation.
Allowances for doubtful accounts
Kyocera maintains allowances for doubtful accounts related to both trade and finance receivables
for estimated losses resulting from customers’ inability to make timely payments, includinginterest on finance receivables. Kyocera’s estimates are based on various factors including thelength 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. As a result, if the financial condition of
Kyocera’s customers worsens, additional allowances for doubtful accounts may be required in the
future. Deterioration of economic conditions in Japan or in Kyocera’s major overseas markets
may contribute to this. Moreover, a decline in the fair value of assets pledged by Kyocera’s
customers as collateral for Kyocera’s receivables will have a material effect on the amount ofallowances for doubtful accounts provided.
A substantial portion of allowances for doubtful accounts are recorded with respect to receivablesof KLC, in the Others segment, which provides credit financing services and commercial leasing
services. Based on the factors discussed above, KLC sets estimated recovery percentages that are
applied to the amounts of receivables to determine future cash flow. On a case-by-case basis,
adjustments are made to the amount of allowances so determined in light of particular customers’
circumstances. KLC continuously monitors the correlation between the allowances so determined
and the actual loss experienced, and makes an appropriate modification to the schedule ofpercentages for determining allowance amounts.
Inventory valuation
Kyocera estimates the amount of write-downs required to properly value inventory. Write-downs
are provided for excess, slow-moving and obsolete inventory as well as valuation losses required
to adjust recorded cost to its market value. Kyocera generally considers all inventory aged over
12 months to be slow-moving or obsolete. Kyocera records further inventory write-downs basedon its projections of future demand, market conditions and related management-led initiatives at
each balance sheet date. The majority of Kyocera’s inventories are produced for the information
technology industry. Therefore, if market conditions and demand in the information technology
industry are less favorable than Kyocera’s projections, additional write-downs may be required.
A substantial portion of inventory write-downs are recorded with respect to components formobile handsets and computer-related equipment, and mobile handsets themselves, each of which
generally have short product lives, as well as optical fiber communications devices, which aresusceptible to market demand and price fluctuations. Inventory write-downs primarily affect theFine Ceramics Group, Electronic Device Group and Equipment Group segments.
- 30 -

During fiscal 2002, there were a substantial number of order cancellations on the types of
products described above, mainly due to depressed global market conditions. In light of thisexperience, Kyocera currently focuses on the results of its direct negotiations with customers forpurposes of projecting future demand. As management assumes that global market conditions
will continue to be depressed, Kyocera may need to record substantial inventory write-downs forfiscal 2003 and possibly for subsequent fiscal periods.
Impairment of securities and investments
Kyocera records impairment charges for debt and equity securities and investments in affiliates
and unconsolidated subsidiaries accounted for by the equity method when it believes that the
decline of value is considered to be other than temporary. Kyocera regularly reviews eachsecurity and investment for impairment based on the extent to which the fair value is less thancost, the duration of the decline, the anticipated recoverability of fair value in the future and thefinancial conditions of the issuer. Poor operating results of the issuers of these securities, which
include Japanese banks, or adverse changes in the market may cause additional impairment losses
in future periods. Kyocera records impairment charges, if any, as Corporate losses.
Kyocera is currently a major shareholder of KDDI. The price fluctuation of KDDI stock may
affect Kyocera’s financial conditions. Detailed information appears in Note 3 to The
Consolidated Financial Statements in our 2002 Annual Report to Stockholders on page 35, which
has been attached as Exhibit 10.2 to this Form 20-F and is incorporated herein by reference.
Impairment of long-lived assets
At least annually, although in some cases more often if events or changes in circumstances
require such a review, Kyocera reviews the carrying value of its long-lived assets held and used
and to be disposed of, including goodwill and other intangible assets.
The carrying value of a long-lived asset is considered impaired when the anticipatedundiscounted cash flow from the asset is less than its carrying value. In that event, a loss isrecognized based on the amount by which the carrying value exceeds the fair value of thelong-lived asset. Fair value is determined primarily using the anticipated cash flows discounted ata current interest rate. The cash flows used in both assessing impairment and determining fairvalue are typically derived from the expected cash flows determined by management’s estimatesand judgments. Significant impairment losses may be incurred in future periods if information
technology market conditions deteriorate and Kyocera determines that the carrying amount oflong-lived assets cannot be recovered through future cash flows. New accounting standards forgoodwill and other intangible assets and for the impairment or disposal of long-lived assets havebeen announced and Kyocera will adopt these standards from fiscal 2003. Detailed information
appears in our 2002 Annual Report to Stockholders on page 21, which has been attached as
Exhibit 10.2 to this Form 20-F and is incorporated herein by reference.
Deferred tax assets
Kyocera records deferred tax assets with valuation allowances to adjust their carrying amounts
when it believes that it is more likely than not that the assets will not be realized. The valuation ofdeferred tax assets principally depends on the estimation of future taxable income and feasible tax
planning strategies. If future taxable income is lower than expected due to future market
conditions or poor operating results, significant adjustments to deferred tax assets may berequired.
- 31 -

There were no material discrepancies between expected and actual taxable income in terms ofdeferred tax assets calculation in recent years.
Benefit plans
Projected benefit obligations and plan assets are determined on an actuarial basis and are
significantly affected by the assumptions used in their calculation, such as the expected long-term
rate of return on plan assets, discount rates, the rate of increase in compensation levels and otherassumptions. Kyocera determines the discount rate by referencing the yield on high quality fixedincome securities such as Japanese Government Bonds. The expected return on plan assets isdetermined based on the rate of historical earnings and Kyocera’s expectation of future
performance of the funds in which plan assets are invested. The rate of increase in compensationlevels is determined based mainly on results of operations and inflation. Kyocera annuallyreviews the assumptions underlying its actuarial calculations, making adjustments based on
current market conditions, if necessary. Future unfavorable changes in market conditions, such asa decrease in the discount rate, may have a significant effect on Kyocera’s financial condition andresults of operations.
Increases or decreases in projected benefit obligations affect accrued pension and severance costsin the consolidated balance sheet and labor costs included in cost of sales and selling, general andadministrative expenses in the consolidated statement of income.
A substantial portion of benefit obligations are derived from the Company and domestic
subsidiaries. The following table sets forth the current assumed rates used for projecting benefit
obligations at the Company and domestic subsidiaries:
Years ended March 31,

2000

2001

2002

3.00%

2.5% - 3.0%

2.50%

Rate of Increase inCompensation Levels

4.00%

3.0% - 4.0%

3.00%

Rate of Return on Plan
Assets

6.00%

3.5% - 4.5%

3.5% - 4.5%

Discount Rate

As described in Item 3.D. “Risk Factors”, the Japanese economy is currently experiencing a
prolonged recession, and accordingly, the weak economic conditions have negatively affecteddiscount rate and rate of return on plan assets used by Kyocera in making its projections ofbenefit obligations. These conditions also have prevented the rate of increase in compensationlevels from rising. We assume that these rates will be at the same level or lower in the future.
Contingencies
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 outcomes of thesecontingencies. Detailed information appears in Note 13 to The Consolidated Financial Statements
in our 2002 Annual Report to Stockholders on page 48, which has been attached as Exhibit 10.2
- 32 -

to this Form 20-F and is incorporated herein by reference. Kyocera records liabilities for thesecontingencies when the likelihood of an adverse outcome is probable and the amount isreasonably estimable. In making these estimates, Kyocera considers the progress of the lawsuits,
the situations of other companies that are subject to similar lawsuits and other relevant factors.
The amounts of liabilities accrued are based on estimates and may be significantly affected byfurther developments or the resolution of these contingencies in the future.
Purchase of Own Stock
Pursuant to resolution of the Company’s Board of Directors on May 15, 2002, the Company
submitted a proposal to the General Meeting of Shareholders on June 26, 2002 to authorize thepurchase of its own stock for the purpose of implementing flexible capital policies in response to
the current difficult business environment, including purchases of stock for delivery pursuant to
the Company’s stock option plan, up to the lesser of an aggregate amount of 5,000,000 shares oran aggregate purchase price of ¥ 50,000 million. This purchase of stock of the Company was
authorized at the General Meeting of Shareholders of the Company on June 26, 2002 pursuant to
Article 210 of the Commercial Code of Japan. The Company completed this purchase of its own
stock on September 9, 2002, having purchased an aggregate amount of 5,000,000 shares
representing an aggregate purchase price of ¥41,414 million.
B.

Liquidity and Capital Resources

The information required by this item appears in our 2002 Annual Report to Stockholders on
page 22-24, which have been attached as Exhibit 10.2 to this Form 20-F and are incorporated
herein by reference.
C.

Research and Development, Patent and Licenses, etc.

We are deeply committed to the constant pursuit of technological advancement in order to inventand develop new materials and new products, to improve and enhance existing products and to
identify new applications for them and for the technology related to them.
Basic research and development activities are carried out at three research laboratories: theKagoshima R&D Center, which concentrates on ceramic materials and processing technology,
the Yokohama R&D Center, which works on technology relating to communications equipment,
and the Keihanna R&D Center located in Kyoto, which carries out research on electronic andoptical devices. In addition, each product division which is in charge of a product category or
sub-category has its own research and development department staffed with a number ofengineers working on improving existing products and manufacturing processes, as well as
developing new products.
Research and development expenses for the years ended March 31, 2002, 2001 and 2000
amounted to ¥40,399 million ($303,752 thousand), ¥35,128 million and ¥28,362 million,
respectively.
Although we have a variety of patents in Japan and other countries, and hold licenses for the useof patents from others, we believe that no one of these patents or licenses is currently material to
our business.

- 33 -

D.

Trend Information

In fiscal 2002, Kyocera’s net sales decreased over fiscal 2001. These sales declines were due
mainly to decreased sales of our Components Groups (Fine Ceramics Group and Electronic
Device Group), caused by the rapid global downturn in IT-related markets and depressed demandfor our products, especially components for mobile phones, PC-related equipment and opticalcommunication devices. In addition, lower components demand and inventory reduction byelectronics manufacturers created significant price erosion for components used in their products.
Utilization of facilities relating to the manufacture of components was at a very low level throughfiscal 2002 compared with fiscal 2001, when components demand was relatively high. We believe
IT-related industries will return to growth in the mid and long term, and the market situation formobile phones and PC-related equipment may be slightly better in fiscal 2003 than fiscal 2002 interms of volumes, as inventory adjustments by electronics manufactures have largely been
completed, returning demand for components closer to actual demand for the equipment
production. In addition, we believe production in China will increase and contribute to expanded
sales of products manufactured overseas during fiscal 2003. We started mass-producing CDMAhandset for the Chinese market in Guiyang in January 2002, and anticipate expanding production
volume of components in Shanghai and information equipment in Dongguan Shilong in fiscal
2003.
Regarding price erosion, severe price competition is expected to continue in fiscal 2003. We will
make efforts to reduce costs such as material and labor costs by expanding production volume in
China, and to improve profitability through introduction of new high-value-added components
such as miniature size products.
Though demand for components for optical communication such as ceramic ferrules and ceramic
packages for optical devices was strong until the first quarter of fiscal 2002, demand for thesecomponents started to decline sharply in the second quarter of fiscal 2002. We think the opticalcommunication market will not recover during fiscal 2003, and it may take a few years to recover.
However, we believe that the optical communication market has growth potential in the mid- tolong-term, and seek to develop new products for markets such as ferrules and ceramic packages
for higher capacitance optical communication network systems.
Kyocera’s business situation in the first half of fiscal 2003 is improving compared to the previous
half, due mainly to increased demand for components used in mobile phone handsets. However,the current continued slowdown in the U.S. economy makes it difficult for Kyocera to foresee
future components demand in IT-related markets. Kyocera has some concern about the negative
impact on sales and profits in the second half of fiscal 2003 that the slow U.S. economy andrelated slowdown in IT-related markets may create compared to what we expected earlier in fiscal
2003.
Item 6.
A.

Directors, Senior Management and Employees
Directors and Senior Management

Our Directors and Corporate Auditors as of June 30, 2002 were:
Shares Owned

Name

Date of Birth

Position

Since(Thousands)

Kazuo Inamori

January 30,
1932

Chairman Emeritus

1959

6,806

- 34 -

Shares Owned

Name

Date of Birth

Position

Since(Thousands)

Kensuke Itoh

December 17,
1937

Chairman of the Board andRepresentative Director

1975

563

Yasuo Nishiguchi

October 9,
1943

President andRepresentative Director

1987(President
1999)

4

Noboru Nakamura

October 6,
1944

Vice President andRepresentative Director

1991

3

Michihisa
Yamamoto

November 13,
1942

Vice President andRepresentative Director

1987

9

Masahiro
UmemuraAugust 8,
1943

Vice President andRepresentative Director

1991

5

Yasuo Akashi

May 29,1944

Senior Managing andRepresentative Director

1991

6

Rodney N.
Lanthorne

February 5,
1945

Senior Managing andRepresentative Director

1989

-

Isao Kishimoto

November 30,
1943

Senior Managing Director

1993

3

Isao Yukawa

November 28,
1942

Managing Director

1995

1

Hisashi Sakumi

March 6,
1947

Managing Director

1995

9

Hideki Ishida

August 11,
1948

Managing Director

1997

1

John S. Gilbertson

December 4,
1943

Managing Director

1995

-

Akiyoshi Okamoto

January 16,
1946

Director

1991

4

Takashi ItohJuly 31,1944

Director

1991

9

Hisao Hisaki

July 2,1946

Director

1991

3

Masato Takeda

July 27,
1943

Director

1991

1

Minoru Fujiyoshi

February 1,
1942

Director

1987

1

Yoshihiko
Nishikawa

September 11,
1945

Director

1995

2

Tsutomu Yamori

September 25,
1949

Director

1997

1- 35 -

Shares Owned

Name

Date of Birth

Position

Since(Thousands)

Masahiro Inoue

November 7,
1952

Director

1997

1

Eiichi Toriyama

September 25,
1947

Director

2001

1

Susumu Ohshima

July 24,
1948

Director

2001

0

Koji Mae

January 19,
1949

Director

2001

2

Makoto Kawamura

August 13,
1949

Director

2001

0

Tatsumi Maeda

January 1,
1953

Director

2001

1

Yuji Itoh

November 6,
1936

Full-time Corporate Auditor

1998

2

Atsushi Mori

September 9,1937

Full-time Corporate Auditor

2002

7

Osamu Nishieda

January 10,
1943

Corporate Auditor

1993

1,000

Mitsuru Akimoto

August 25,
1927

Corporate Auditor

2001

1

Kazuo Inamori has served as the Chairman Emeritus of Kyocera Corporation since 1997. He
became a Director when he founded the Kyocera Corporation in 1959, a Managing Director in
1962, and a Senior Managing Director in 1964.
Kensuke Itoh has served as the Chairman of the Board and Representative Director of Kyocera
Corporation since 1999. He became a Director in 1975, a Managing Director in 1979, and a
Senior Managing Director in 1981. He joined Kyocera Corporation in 1959 and has served as
Representative Director of Kyocera Realty Development Co., Ltd. and Representative Director of
Hotel Kyocera Co., Ltd.
Yasuo Nishiguchi has served as the President and Representative Director of Kyocera Corporation
since 1999. He became a Director in 1987, a Managing Director in 1989 and a Senior Managing
and Representative Director in 1992. He joined Kyocera Corporation in 1975 and has served as
the Representative Director of Kyocera Mita Corp., Representative Director of Kyocera Leasing
Co., Ltd., Representative Director of Kyocera Communication Systems Co., Ltd., Representative
Director of Kyocera ELCO Corp., Chairman of the Board of Directors of Shanghai Kyocera
Electronic Co., Ltd., Chairman of the Board of Directors of Dongguan Shilong Kyocera Optics
Co., Ltd., Chairman of the Board of Directors of Kyocera Zhenhua Communication Equipment
Co., Ltd. and Chairman of the Board of Directors of Kyocera Mita Office Equipment (Dongguan)Co., Ltd.
Noboru Nakamura has served as a Vice President and Representative Director of Kyocera
Corporation since 1999. He became a Director in 1991, a Managing Director in 1995 and a Senior- 36 -

Managing and Representative Director in 1997. He joined Kyocera Corporation in 1967 and has
served as a Vice President and Representative Director of Kyocera Chemical Corporation.
Michihisa Yamamoto has served as a Vice President and Representative Director of Kyocera
Corporation since 1999. He became a Director in 1987, a Managing Director in 1989 and a Senior
Managing and Representative Director in 1992. He joined Kyocera Corporation in 1970 and has
served as a General Manager of the Corporate Business Strategy Division of the Company and
Chairman of the Board of Directors of Shanghai Kyocera Trading Co., Ltd.
Masahiro Umemura has served as a Vice President and Representative Director of Kyocera
Corporation since 1999. He became a Director in 1991, a Managing Director in 1993 and a Senior
Managing and Representative Director in 1997. He joined Kyocera Corporation in 1966 and has
served as General Manager of the Corporate Development Division of the Company and
Chairman of the Board of Directors of Shanghai Kyocera Realty Development Co., Ltd.
Yasuo Akashi has served as a Senior Managing and Representative Director of Kyocera
Corporation since 1997. He became a Director in 1991 and a Managing Director in 1993. He
joined Kyocera Corporation in 1967 and has served as a General Manager of the Corporate
General Affairs Division of the Company and Representative Director of Kyocera Precision
Tools Korea Co., Ltd.
Rodney N. Lanthorne has served as a Senior Managing and Representative Director of Kyocera
Corporation since 1999. He became a Director in 1989 and a Managing Director in 1990. He
joined Kyocera International, Inc. in 1979 and has served as the President and Director of
Kyocera International, Inc.
Isao Kishimoto has served as a Senior Managing Director of Kyocera Corporation since 2001. He
became a Director in 1993 and a Managing Director in 1997. He joined Kyocera Corporation in1967 and has served as the President and Representative Director of Kinseki, Ltd.
Isao Yukawa has served as a Managing Director of Kyocera Corporation since 2001. He became a
Director in 1995. He joined Kyocera Corporation in 1976 and has served as a General Manager of
the Corporate Solar-Energy Division of the Company and the President and Representative
Director of Kyocera Solar Corporation.
Hisashi Sakumi has served as a Managing Director of Kyocera Corporation since 2001. He
became a Director in 1995. He joined Kyocera Corporation in 1965 and has served as a Deputy
General Manager of the Corporate General Affairs Division of the Company.
Hideki Ishida has served as a Managing Director of Kyocera Corporation since 2001. He becamea Director in 1997. He joined Kyocera Corporation in 1976 and has served as a General Managerof the Corporate Business Systems Administration Division of the Company.
John S. Gilberston has served as a Managing Director of Kyocera Corporation since 1999. He
became a Director in 1995. He joined AVX Corporation in 1981 and has served as the President
and Chief Executive Officer of AVX Corporation.
Akiyoshi Okamoto has served as a Director of Kyocera Corporation since 1991. He joined
Kyocera Corporation in 1969.
Takashi Itoh has served as a Director of Kyocera Corporation since 1991. He joined Kyocera
Corporation in 1967 and has served as a General Manager of the Corporate Purchasing Divisionof the Company.
- 37 -

Hisao Hisaki has served as a Director of Kyocera Corporation since 1991. He joined Kyocera
Corporation in 1969 and has served as a General Manager of the Corporate Communication
Systems Sales Division of the Company.
Masato Takeda has served as a Director of Kyocera Corporation since 1991. He joined Kyocera
Corporation in 1979 and has served as a General Manager of the Corporate R&D Division for
Components and Devices of the Company.
Minoru Fujiyoshi has served as a Director of Kyocera Corporation since 1987. He joined Kyocera
Corporation in 1977 and has served as a General Manager of the Corporate Legal and Intellectual
Property Division of the Company.
Yoshihiko Nishikawa has served as a Director of Kyocera Corporation since 1995. He joined
Kyocera Corporation in 1970 and has served as a Deputy General Manager of the Corporate
Legal and Intellectual Property Division of the Company.
Tsutomu Yamori has served as a Director of Kyocera Corporation since 1997. He joined Kyocera
Corporation in 1972.
Masahiro Inoue has served as a Director of Kyocera Corporation since 1997. He joined Kyocera
Corporation in 1978 and has served as a Deputy General Manager of the Corporate Optical
Equipment Division of the Company.
Eiichi Toriyama has served as a Director of Kyocera Corporation since 2001. He joined Kyocera
Corporation in 1972 and has served as a General Manager of the Corporate Electronic
Components Sales Division of the Company.
Susumu Ohsima has served as a Director of Kyocera Corporation since 2001. He joined Kyocera
Corporation in 1977 and has served as a General Manager of the Corporate Semiconductor
Components Sales Division of the Company.
Koji Mae has served as a Director of Kyocera Corporation since 2001. He joined Kyocera
Corporation in 1972 and has served as a General Manager of the Organic Material Components
Division of the Company.
Makoto Kawamura has served as a Director of Kyocera Corporation since 2001. He joined
Kyocera Corporation in 1973 and has served as a General Manager of the Corporate Cutting Tool
Division of the Company and the President and Representative Director of Kyocera Tycom JapanInc.
Tatsumi Maeda has served as a Director of Kyocera Corporation since 2001. He joined Kyocera
Corporation in 1975 and has served as a Deputy General Manager of the Corporate Business
Strategy Division of the Company.
Yuji Itoh has served as a Full-time Corporate Auditor of Kyocera Corporation since 1998. He
became a Director in 1989 and a Managing Director in 1993. He joined Kyocera Corporation in1972.
Atsushi Mori has served as a Full-time Corporate Auditor of Kyocera Corporation since 2002. He
became a Director in 1989, a Managing Director in 1995 and a Senior Managing andRepresentative Director of Kyocera Corporation in 1997. He joined Kyocera Corporation in 1989.
- 38 -

Osamu Nishieda has served as a Corporate Auditor of Kyocera Corporation since 1993. He hasserved as an In-House Council of the Company.
Mitsuru Akimoto has served as a Corporate Auditor of Kyocera Corporation since 2001. He hasserved as the Chairman and Representative Director of the Bank of Kyoto, Limited.
B.

Compensation

The aggregate amount of compensation, including bonuses, paid by the Company and its
subsidiaries in the fiscal year ended March 31, 2002 to all Directors, Officers and Corporate
Auditors of the Company and its subsidiaries was ¥894 million ($6,718 thousand).
In accordance with customary Japanese business practice, when a Director or Corporate Auditor
retires, a proposal to pay a lump sum retirement allowance is submitted to the ordinary general
meeting of shareholders for approval. After such approval, the amount to be paid is fixed by the
Board of Directors in accordance with the Company’s internal regulations. Annual provisions are
made in the accounts of the Company for the estimated cost of the retirement plan for Directors
and Corporate Auditors.
The annual provisions and costs charged to income for such retirement plan for the year ended
March 31, 2002 were ¥116 million ($869 thousand).
We have neither disclosed to our shareholders nor otherwise made public any of the information
specified in this item for individually named Directors, Officers or Corporate Auditors.
C.

Board Practices

In accordance with the requirements of the Commercial Code of Japan (the “Commercial Code”),
our Articles of Incorporation provide for not less than three Corporate Auditors. Corporate
Auditors, of whom at least one (or, in the case of Corporate Auditors to be elected at the ordinary
general meeting of shareholders in or after June 2006, at least half of them) must be from outsideof the Company, are elected at a general meeting of shareholders, and the normal term of officeof a Corporate Auditor is three years (or four years in the case of Corporate Auditors to be elected
at the ordinary general meeting of shareholders in or after June 2003), although they may serve
any number of consecutive terms. Corporate Auditors form the Board of Corporate Auditors.
Corporate Auditors are under a statutory duty to oversee the administration of our affairs by the
Directors, to examine our financial statements and business reports to be submitted by the Boardof Directors to the general meetings of shareholders and to report their opinions thereon to theshareholders. They are obliged to attend meetings of the Board of Directors and to express theiropinions, but they are not entitled to vote. Corporate Auditors also have a statutory duty toprovide their report on the audit report prepared by our independent certified public accountants
to the Board of Corporate Auditors, which must submit its audit report to the Board of Directors.
The Board of Corporate Auditors will also determine matters relating to the duties of the
Corporate Auditors, such as audit policy and methods of investigation of our affairs.
The Company has no remuneration committee. Matters of remuneration are decided by top
management as a group. None of our directors have contracts with us providing for benefits upon
termination. While we have no legal obligation, it is customary to provide lump-sum severance
benefits to director and corporate auditors upon retirement and we provide such benefits.
There is no arrangement or understanding between any Director or Corporate Auditor and anyother person pursuant to which he was elected as a Director or a Corporate Auditor.
- 39 -

There is no family relationship between any Director or Corporate Auditor and any other Directoror Corporate Auditor.
Pursuant to the home country practices exception granted to us by the New York Stock Exchange,
we are permitted to follow corporate governance practices complying with relevant Japanese laws
and Japanese stock exchange rules, which are different from those followed by U.S. domestic
companies under the New York Stock Exchange’s listing standards. The New York Stock
Exchange rules and our current practices relating to corporate governance have the following
significant differences:●

Audit Committee. The New York Stock Exchange requires that a listed company
have an audit committee consisting of at least three independent directors, andthat the audit committee be charged with the responsibility of selecting,monitoring and communicating with the outside auditor of the company to ensure
the outside auditor’s independence. Pursuant to the home country practices
exception, we do not have an audit committee with functions called for by the
New York Stock Exchange rules.

●

Shareholder Approval Policy. The New York Stock Exchange requires thatshareholder approval be obtained prior to issuance of stock options to officers ordirectors except, among others, where no single officer or director may acquire
more than 1% of the number of shares of common stock outstanding at the time
the stock option plan is adopted, and the stock option plan, together with all plansof the issuer other than those for which shareholder approval is not required, does
not authorize the issuance of more than 5% of the issuer’s common stock
outstanding at the time the stock option plan is adopted. Pursuant to the homecountry practices exception, we only follow relevant Japanese laws which, as
discussed in “Capital stock—Voting rights” under Item 10.B of this annual report,
generally require us to obtain shareholder approval if stock options are to beissued with “specially favorable conditions”.
The New York Stock Exchange also requires that, with certain exceptions
specified in its rules, shareholder approval be obtained prior to issuance ofcommon stock or securities convertible into or exercisable for common stock (1)to a director, an officer, a substantial security holder or a party related to any ofthem if the number of shares of common stock which are to be issued or are
issuable upon conversion exceeds 1% of the number of shares of common stockor voting power outstanding before the issuance, (2) in any transaction or seriesof transactions, if the voting power of the common stock is equal to or exceeds
20% of the voting power outstanding before the issuance or if the number ofshares of the common stock is equal to or exceeds 20% of the number of shares
outstanding before the issuance, and (3) that will result in a change of control of
the issuer. Pursuant to the home country practices exception, we only follow
relevant Japanese laws which, as discussed in “Capital stock—Voting rights”
under Item 10.B of this annual report, generally require us to obtain shareholder
approval with respect to the issuance of common stock or securities convertible
into or exercisable for common stock if common stock is to be issued at a
“specially favorable price” or convertible securities are to be issued with“specially favorable conditions”.

The New York Stock Exchange has proposed to the Securities and Exchange Commission for
approval significant changes in its corporate governance listing standards requirements, as well as- 40 -

recommendations relating to the SEC’s disclosure and corporate governance requirements. The
Sarbanes-Oxley Act of 2002, enacted subsequent to the New York Stock Exchange’s initial reportin June 2002 recommending these changes, includes significant provisions relating to corporate
governance that differ in many respects from the New York Stock Exchange’s proposals. Theselaws and rulemaking initiatives may result in additional significant differences other than those
discussed above between the New York Stock Exchange rules and our current practices relating tocorporate governance.
The rights of ADR holders, including their rights relating to corporate governance practice, areprovided in the Amended and Restated Deposit Agreement and an amendment thereto which areincluded in an exhibit to this annual report. See also Item 10.B of this annual report.

D.

Employees

As of March 31, 2002 we had 44,235 employees, of whom 10,621 work in the Fine Ceramics
Group, 17,664 work in the Electronic Device Group, 12,206 work in the Equipment Group, 2,569
work in Others and 1,175 work in our Corporate Department. Our total number of employees
decreased by 6,878 for the year ended March 31, 2002 mainly due to the restructuring of foreignsubsidiaries.
Most regular employees of Kyocera Corporation, other than management, become members of
the Kyocera Union. Over 90% of Kyocera Corporation’s regular employees are members of thisunion. The Kyocera Union is only open to Kyocera Corporation employees, not to our Japaneseor overseas subsidiaries. The employees at three of our subsidiaries in Japan are unionized,
otherwise employees at our Japanese subsidiaries are not unionized. In the United States our
employees are generally unionized and in other countries subsidiaries are unionized on a case bycase basis. Employees of our overseas subsidiaries belong to labor unions organized by industry,
as opposed to a company specific union like Kyocera Union. We believe that our employee
relations are good.
E.

Share Ownership

On May 19, 1999, the Board of Directors decided to implement the Company’s first stock option
plan (“Plan 1”) for all Directors and certain key employees and to purchase shares of theCompany’s own common stock for transfer to them under the plan. Upon the approval ofshareholders at the ordinary general meeting of shareholders held on June 29, 1999, stock options
were granted as of September 7, 1999 to 36 Directors to acquire 6,000 to 16,000 shares ofcommon stock each, and to 858 key employees to acquire 1,200 shares of common stock each.
The exercise price has been set at ¥8,029 per share.
In order to cover the options for Plan 1, the Company purchased 1,325,600 shares of common
stock during August 1999 on the Tokyo Stock Exchange at an aggregate purchase price ofapproximately ¥9,714 million.
On May 17, 2000, the Board of Directors introduced a second stock option plan (“Plan 2”) for
certain key employees and authorized the purchase of 76,800 shares of the Company’s common
stock. This stock option plan was approved by shareholders at the ordinary general meeting ofshareholders held on June 29, 2000. Stock options were granted as of September 8, 2000 to 64
key employees to acquire 1,200 shares of common stock each. The exercise price has been set at¥18,900 per share.
- 41 -

In order to cover the options for Plan 2, the Company purchased 76,800 shares of common stockduring August 2000 on the Tokyo Stock Exchange at an aggregate purchase price ofapproximately ¥1,283 million.
On May 16, 2001 the Board of Directors decided to introduce a third stock option plan (“Plan 3”)
for certain Directors and key employees and to purchase 59,200 shares of the Company’scommon stock. In accordance with the approval of shareholders at the ordinary general meetingof shareholders held on June 27, 2001, stock options were granted as of September 7, 2001 tonine Directors to acquire amounts ranging from 1,000 to 2,400 shares of common stock each, and72 key employees to acquire 600 shares of common stock each. The exercise price has been set at¥9,470 per share.
In order to cover the options for Plan 3, the Company purchased 59,200 shares of its own
common stock in August 2001 on the Tokyo Stock Exchange at an aggregate purchase price ofapproximately ¥506 million.
The stock options issued under Plan 1, Plan 2 and Plan 3 are exercisable at their respective
exercise prices, which are determined by multiplying by 1.1 the average market price of theCompany’s common stock in the month proceeding the date of grant, unless there is a share split
or issuance of new stock at an issue price less than the then current market price per share ofcommon stock (excluding the issuance of shares of common stock as a result of the conversion of
convertible bonds), in which case the exercise price shall be adjusted to protect the option holders
against dilution in accordance with a formula set forth in the stock option agreement.
As of August 31, 2002, the aggregate amount of common stock to be issued upon the exercise of
all outstanding options issued is set forth in further detail in the following table. Note, however,that there can be no assurances that the options described above will be exercised in whole or in
part.
SUMMARY TABLE OF OPTIONS HELD BY DIRECTORS ANDEMPLOYEES OF KYOCERA CORPORATION
Option Holder

Title

Total Options
Outstanding

Exercise Price

Expiration Date

Kazuo Inamori

Chairman Emeritus

16,0008,029 Yen / Share

September 30, 2003

Kensuke Itoh

Chairman of the Board
and Representative
Director

16,0008,029 Yen / Share

September 30, 2003

Yasuo Nishiguchi

President andRepresentative Director

10,9008,029 Yen / Share

September 30, 2003

Noboru Nakamura

Vice President andRepresentative Director

12,0008,029 Yen / Share

September 30, 2003

Michihisa Yamamoto Vice President andRepresentative Director

9,000

8,029 Yen / Share

September 30, 2003

Masahiro Umemura

12,0008,029 Yen / Share

September 30, 2003

Other Directors(Plan 1)99,3008,029 Yen / Share

September 30, 2003

Other Directors(Plan 3)
Total Directors

16,0009,470 Yen / Share

September 30, 2003

Vice President andRepresentative Director

191,200- 42 -

Option Holder

Total Options
Outstanding

Exercise Price

Expiration Date

Employees (Plan 1)

845,900

8,029 Yen / Share

September 30, 2003

Employees (Plan 2)76,80018,900 Yen / Share

September 30, 2004

Employees (Plan 3)

43,2009,470 Yen / Share

September 30, 2003

Total Employees

965,900

Total Directors andEmployees

1,157,100

*

Title

With respect to each period below, each option holder may exercise the stock options and require thetransfer of shares of common stock from the Company only within the following percentages of thetotal number of Shares provided under Plan 1, Plan 2 and Plan 3:

Plan 1
From 10/01/99 to 09/30/00: Up to 25% of the total Shares
From 10/01/00 to 09/30/01: Up to 50% of the total Shares
From 10/01/01 to 09/30/02: Up to 75% of the total Shares
From 10/01/02 to 09/30/03: Up to 100% of the total Shares
Plan 2
From 10/01/00 to 09/30/01: Up to 25% of the total Shares
From 10/01/01 to 09/30/02: Up to 50% of the total Shares
From 10/01/02 to 09/30/03: Up to 75% of the total Shares
From 10/01/03 to 09/30/04: Up to 100% of the total Shares
Plan 3
From 10/01/01 to 09/30/02: Up to 50% of the total Shares
From 10/01/02 to 09/30/03: Up to 100% of the total Shares
On April 26, 2002, the Company’s Board of Directors decided to grant stock acquisition rights(as a result of the recent amendments to the Commercial Code, “stock options” are now called“stock acquisition rights”) to Directors, Corporate Auditors and certain key employees of theCompany and its subsidiaries. Such stock acquisition rights entitle the holders thereof to acquire
150,000 shares of common stock of the Company in the aggregate. This decision was approvedby shareholders at the ordinary general meeting of shareholders held on June 26, 2002. The
definitive terms and conditions of these stock acquisition rights have been set as follows:
1. Issue date of stock acquisition rights:
September 2, 2002
2. Amount to be paid in upon exercise of stock acquisition rights (exercise price):
929,000 yen per stock acquisition right(9,290 yen per share)
3. Aggregate issue price of shares to be issued upon exercise of stock acquisition rights:
1,334,044,000 yen
4. Amount of issue price of new shares to be accounted for as paid-in capital of the Company:
4,645 yen per share- 43 -

Item 7.
A.

Major Shareholders and Related Party Transactions
Major Shareholders

As far as is known to the Company, it is not, directly or indirectly, owned or controlled by anyother corporation or by the Japanese or any foreign government.
As of March 31, 2002, as a group, the Company’s Directors, Officers, and Corporate Auditors
owned 8,448 thousand or 4.4%, of the shares of common stock of the Company.
The following table shows the ten largest shareholders of record of the Company as of March 31,
2002.
Name

Shares Owned(in thousands)

Ownership (%)

Japan Trustee Services Bank, Ltd.
(Trust Account)

11,242

5.91%

The Bank of Kyoto, Ltd.

7,218

3.79%

Mitsubishi Trust Banking Corporation(Trust Account)

7,143

3.75%

Kazuo Inamori

6,806

3.58%

UFJ Trust Bank Limited(Trust Account A)

6,132

3.22%

The Inamori Foundation

4,680

2.46%

UFJ Bank Limited

3,911

2.06%

The Chase Manhattan Bank N.A., London
SL Omnibus Account(Standing proxy: The Fuji Bank, Limited)

3,670

1.93%

Keiai Kosan K.K.

3,549

1.87%

The Chase Manhattan Bank N.A., London(Standing proxy: The Fuji Bank, Limited)

3,113

1.64%

Total

57,46730.20%The Company’s major shareholders are not entitled to voting rights different from those of othershareholders.
As far as is known to the Company, there is no arrangement which may at a subsequent dateresult in a change in control of the Company.
Under the Securities and Exchange Law of Japan, any person that becomes a holder (together
with its related persons) of 5% of the total issued voting shares of a company listed on any
Japanese stock exchange (including ADSs representing such shares) must file a report with the
Director of the relevant Local Finance Bureau and send a copy of such report to the company. A
similar report must also be filed if the percentage holding of a holder of more than 5% of the total
issued voting shares of a company increases or decreases by 1% or more. According to such
- 44 -

reports filed with the Company between January 1, 1998 and June 26, 2002, currently there are
no 5% or greater beneficial shareholders of the Company.
According to Citibank N.A., depositary for Kyocera’s ADSs, as of March 31, 2002, 4,256,712
shares of Kyocera’s common stock were held in the form of ADSs and there were 929 ADS
holders of record in the United States. According to Kyocera’s register of shareholders, as ofMarch 31, 2002, there were 78,397 holders of the Company’s common stock of record worldwide.
As of March 31, 2002, there were 122 record holders of Kyocera’s common stock with addresses
in the United States, holding 14,673,609 shares of the outstanding common stock on that date.
Because some of these shares were held by brokers or other nominees, the number of record
holders with addresses in the United States might not fully show the number of beneficial owners
in the United States.
B.

Related Party Transactions

The information required by this item appears in the Company’s 2002 Annual Report to
Stockholders on pages 24 and 39, which has been attached as Exhibit 10.2 to this Form 20-F and
is incorporated herein by reference. There are no loans between the Company and its
management.
C.

Interests of Experts and Counsel

Not Applicable.
Item 8.
A.

Financial Information
Consolidated Statements and Other Financial Information

Financial Statements
The information required by this item has been attached hereto as Exhibit 10.2 to this Form 20-F
and is incorporated herein by reference.
Legal Proceedings
The following are material pending, concluded and settled legal proceedings (other than routine
litigation incidental to the business) to which the Company or any of its subsidiaries is a party or
to which any of their property is subject.

1.

LaPine Technology Corporation vs. Kyocera Corporation, C-87 20316 WAI, (May 7,1987), U.S. District Court, Northern District of California, and LaPine Technology
Corporation and Prudential-Bache Trading Corporation v. Kyocera Corporation (October30, 1987) (Arbitration); International Chamber of Commerce, Case No. 6070/BGD.

On September 1, 1994, the International Chamber of Commerce issued its award with respect tothe arbitration between the Company and LaPine Technology Corporation (LTC),
Prudential-Bache Trade Corporation (PBTC) (presently renamed Prudential-Bache Trade
Services, Inc.), et al. for the alleged breach of an agreement by the Company in connection withthe reorganization of LTC. The award ordered the Company to pay to LTC and PBTC as
damages, approximately ¥34,181 million ($257,000 thousand), including interest, arbitration
costs and attorneys’ fees. The Company filed a motion to vacate, modify and correct the award in
the U.S. District Court for the Northern District of California pursuant to an agreement between
the parties providing for broad judicial examination of arbitration awards.
- 45 -

LTC and PBTC filed a motion to confirm the award. On December 11, 1995 the District Court
ruled that the agreement between the parties concerning judicial examination of the award wasinvalid and granted the motion filed by LTC and PBTC without examining the merits ofarbitration award. On January 9, 1996, the Company appealed to the Ninth Circuit Court ofAppeals. On December 9, 1997, the Ninth Circuit Court, reversed the District Court, concluded
that the provisions in the parties’ arbitration agreement providing for broad judicial review werevalid and ordered the case returned to the District Court for review of the award under the
standards agreed to by the parties.
On April 4, 2000, the District Court issued an order confirming the arbitrators’ conclusions of law
in Phase 1 of the arbitration. On October 2, 2000, the District Court entered its initial decision on
Phase 2 of the arbitration award, which consists of the money damages award. The Court
confirmed all of the arbitrators’ findings of facts and conclusions of law, except for one important
finding of fact about LTC’s profitability in the second quarter of 1987. The Court ruled that thearbitrators’ finding that LTC achieved an operating profit in the second quarter of 1987 was notsupported by substantial evidence.
Subsequently, on March 6, 2001, the District Court entered an order confirming Phase 2 of theaward, except for the one finding of fact vacated by its October 2, 2000 ruling. The Court’sMarch 6, 2001 order includes the confirmation of the Arbitrators’ award of damages. On April 3,
2001, the Company filed its Notices of Appeal of the District Court’s orders confirming thearbitral award.
On May 17, 2001, the District Court entered its amended judgment, ordering compensation to be
paid by the Company to LTC and PBTC in an aggregate amount of approximately ¥56,888
million ($427,728 thousand) plus prejudgment and postjudgment interest. On May 25, theCompany filed Notices of Appeal of the judgment.
On June 21, 2001, the District Court entered an order awarding PBTC and LTC attorneys' feesand disbursements. On July 5, 2001, the Company filed Notices of Appeal of that order. The
Company's appeal brief was filed in the Ninth Circuit Court of Appeals on August 29, 2001.
The Company filed a Reply Brief on December 5, 2001. A hearing was held in the Ninth Circuit
Court of Appeals on May 13, 2002. The Ninth Circuit Court of Appeals issued its opinion on July23, 2002, affirming the District Court’s judgment and award in its entirety. The Company filed a
Petition for Rehearing and Rehearing En Banc on August 6, 2002, seeking a rehearing of its appeal
before the panel that issued the opinion, and before an en banc panel of eleven Ninth Circuit
Judges.
As of September 19, 2002, no decision has been made by that court on the Company’s petition. If
we are unsuccessful in reversing this adverse judgment on appeal, we may be required to pay
damages, inclusive costs and interest to date, of at least $453 million.
In connection with this litigation, in 1995 the Company purchased from a bank a letter of credit,
which remains in place as security for the arbitral award. In order to minimize facility fees for theletter of credit, the Company deposited ¥59,509 million ($447,436 thousand) in cash on hand
restricted for use on March 31, 2002.
Dividend Policy
Since becoming public, we have endeavored to increase dividends to our shareholders as ourbusiness improves. We have also sought to provide substantial dividends through share- 46 -

distributions and stock splits when appropriate, in order to benefit shareholders. We will continue
to seek to improve profits and cash flow per share in order to increase our dividends toshareholders while maintaining a sufficiently high level of capital to undertake strategic
investments.
B.

Significant Changes

Except as disclosed in this annual report, there have been no significant changes since March 31,
2002.
Item 9.
A.

The Offer and Listing
Offering and Listing Details

Price Range of Shares
The principal non-United States market on which the shares of Common Stock of the Company
are traded is the Tokyo Stock Exchange, the largest stock exchange in Japan. The American
Depositary Shares of the Company, each representing one share of Common Stock of theCompany, are traded on the New York Stock Exchange. Citibank, N.A. acts as the Depositary inrespect of the American Depositary Shares.
Tokyo Stock Exchange

New York Stock Exchange

Price per Share ofCommon Stock (yen)Price per American
Depositary Share(dollars)*

Fiscal Year ended March 31
1998
1999
2000
2001
2002

High
¥ 10,200
7,460
28,00019,50012,900

Most Recent 6 months
March, 2002
April, 2002
May, 2002
June, 2002
July, 2002
August, 2002

High
10,390
9,390
9,260
9,300
9,130
9,070

*

¥

Low
5,540
4,800
6,200
9,000
7,000
Low
7,960
8,300
8,530
7,800
7,700
7,740

$

High
85.50
59.00
280.94186.60105.72
High
77.74
70.90
72.00
74.25
76.60
75.00

$

Low
43.32
39.13
50.75
73.82
53.77
Low
61.54
62.76
66.01
66.00
65.00
65.00

The prices of American Depositary Shares are based upon reports by the NYSE, with all fractional figuresrounded up to the nearest two decimal points.

The information about high and low sales prices for each quarterly period in the two fiscal years
ended March 31, 2002 in respect of the shares of Common Stock of the Company on the Tokyo
Stock Exchange, and the American Depositary Shares on the New York Stock Exchange, appears
in the Company’s 2002 Annual Report to Stockholders on page 14, which has been attached as
Exhibit 10.2 to this Form 20-F and is incorporated herein by reference.

- 47 -

B.

Plan of Distribution

Not Applicable.
C.

Markets

See Item 9.A. of this Form 20-F for information on the markets on which our common stock islisted or quoted.
D.

Selling Shareholders

Not Applicable.
E.

Dilution

Not Applicable.
F.

Expenses of the Issue

Not Applicable.
Item 10.
A.

Additional Information

Share Capital

Not Applicable.
B.

Memorandum and Articles of Association

Organization
The Company is a joint stock corporation (kabushiki kaisha) incorporated in Japan under theCommercial Code. It is registered in the Commercial Register maintained by the Kyoto Local
Registry Office of the Ministry of Justice.
Objects and Purposes
The objects of the Company are set forth in Article 2 of its Articles of Incorporation, as follows:(1)

Manufacture and sale of and research on fine ceramics and various kinds of products
utilizing fine ceramics;(2)

Manufacture and sale of and research on single crystal materials and various kinds ofproducts utilizing single crystal materials;(3)

Manufacture and sale of and research on composite materials;(4)

Manufacture and sale of and research on specialty plastics;(5)

Manufacture and sale of and research on measurement instruments for electronics;(6)

Manufacture and sale of and research on electronic and electric instruments and parts
thereof;- 48 -

(7)Manufacture and sale of and research on component parts of automobiles;(8)

Manufacture and sale of and research on precious metals, precious stones andsemiprecious stones and various kinds of products utilizing precious metals, precious
stones and semiprecious stones;(9)

Manufacture and sale of and research on accessories and interior and exterior decorations
and ornaments;(10)

Wholesales and retail sale of health foods;(11)

Manufacture and sale of and research on material and equipment for medical use;

(12)

Manufacture and sale of and research on equipment utilizing solar energy;(13)

Manufacture and sale of and research on optical machinery and instruments and precision
machinery and instruments and parts hereof;(14)

Manufacture and sale of and research on machinery and equipment for business use andmachinery and equipment for industrial use and parts thereof;(15)

Manufacture and sale of and research on photosensitive materials for photographic use;

(16)

Design, control and contract of construction relating to public works, building, electric
equipment and piping construction;(17)

Sale, purchase, lease, maintenance and brokerage of real estate;(18)

Lease, maintenance and management of facilities relating to sports, recreation, medicalcare, hotels and restaurants, and the travel agency business;(19)

Road freight handling and warehousing;(20)

Business relating to non-life insurance agency and life insurance canvassing, and generalleasing, factoring and finance business;(21)

Sale and purchase of various kinds of plants and technology related thereto;(22)

Design and sale of software relating to computers;(23)

Disposition through sale and the like and acquisition through purchase and the like ofpatents and other industrial property rights and know-how appertaining to the preceding
items and acting as intermediary in such transactions;(24)

Businesses relating to import and export of any of the foregoing items; and(25)

All commercial activities relating or incidental to any of the foregoing.

Directors
Under the Commercial Code, the Board of Directors has the ultimate responsibility for the
management of the Company and each Representative Director, who is elected from among themembers of the Board of Directors, has the statutory authority to represent the Company in all- 49 -

respects. Under both the Commercial Code and the Regulations of the Board of Directors of theCompany, the Directors must refrain from engaging in any business competing with the Company
unless approved by the Board of Directors and any Director who has a material interest in thesubject matter of a resolution to be taken by the Board of Directors cannot vote in such resolution.
The Commercial Code and the Articles of Incorporation of the Company provide that
remuneration of Directors and Corporate Auditors shall be determined at a general meeting ofshareholders.
Except as stated below, neither the Commercial Code nor the Company’s Articles ofIncorporation make any special provision as to a Director’s or Corporate Auditor’s power to votein connection with their compensation; or the borrowing powers exercisable by a Representative
Director (or a Director who is given power by a Representative Director to exercise such powers),
their retirement age or requirement to hold any shares of capital stock of the Company.
The Commercial Code specifically requires a resolution of the Board of Directors for a joint stock
corporation to acquire or dispose of material assets; to borrow substantial amounts of money; toemploy or discharge from employment important employees, such as executive officers; and toestablish, change or abolish a material corporate organization such as a branch office. The
Regulations of the Board of Directors of the Company require a resolution of the Board of
Directors for the Company’s borrowing or lending of significant amounts of money or giving of aguarantee of a significant amount of debt. There is no written rule as to what constitutes a“significant” amount in these contexts. The Regulations of the Board of Directors of theCompany also require a resolution of the Board of Directors to approve any transaction between a
Director and the Company, allocation of the remuneration and bonuses of Directors as previously
determined or approved by the general meeting of shareholders and determination of the amountand manner of payment of retirement allowances or condolence money payable to Directors, thedetermination of which has been previously entrusted to the Board of Directors by the general
meeting of shareholders.
Capital Stock
Authorized capital
Article 5 of the Articles of Incorporation of the Company provides that the total number of sharesauthorized for issuance by the Company is 600,000,000 shares. If shares of common stock are
retired, the number of shares so retired shall be deducted from the total number of sharesauthorized to be issued by the Company.
Dividends
The Articles of Incorporation of the Company provide that the fiscal year of the Company shallbe a period commencing on April 1 in each year and ending on March 31 of the following year,
and the accounts of each fiscal year shall be settled on March 31 of each year. Correspondingly,
the Articles of Incorporation provide that dividends shall be paid to shareholders or pledgees who
are registered on the shareholders register of the Company as of the end of March 31 in each year.
After the close of the fiscal period, the Board of Directors prepares, among other things, a
proposed allocation of profits for dividends and other purposes; this proposal is submitted to the
Corporate Auditors of the Company and to independent certified public accountants and thensubmitted for approval to the ordinary general meeting of shareholders, which is normally held in
June each year. In addition to provisions for dividends, if any, and for the legal reserve and otherreserves, the allocation of profits customarily includes a bonus to Directors and Corporate
Auditors. In addition to year-end dividends, the Company may, by resolution of the Board of- 50 -

Directors, distribute cash as interim dividends, pursuant to Article 293-5 of the Commercial Code(an “interim dividend”) to shareholders or pledgees of record at the end of each September 30,
without shareholders’ approval, but subject to the limitation described below.
The Commercial Code provides that a company may not make any distribution of profit by way
of dividends or interim dividends for any fiscal period unless it sets aside in its legal reserve anamount equal to at least (A) one-tenth of the amount paid out by it as appropriation of retained
earnings (including any payments of annual dividend and bonuses to Directors and Corporate
Auditors) for such fiscal period or (B) one-tenth of any interim dividend, as the case may be, until
the sum of its legal reserve and its additional paid-in capital is at least one-quarter of its statedcapital.
Under the Commercial Code, the Company is permitted to distribute profits by way of year-end
dividends out of the excess of its net assets over the aggregate of:(i) its stated capital;(ii) its additional paid-in capital;(iii) its accumulated legal reserve;(iv) the legal reserve to be set aside in respect of the fiscal period concerned;(v) the excess, if any, of unamortized expenses incurred in preparation for commencementof business and in connection with research and development over the aggregate of amounts
referred to in (ii), (iii) and (iv) above; and(vi) if certain assets of the Company are stated at market value pursuant to the provisions of
the Commercial Code, the aggregate amount of the difference between their market value andacquisition cost.
In the case of interim dividends, the net assets are calculated by reference to the non-consolidatedbalance sheet as at the last closing of the Company’s accounts, and adjustments are made toreflect (x) any subsequent payment by way of appropriation of retained earnings and the relatedtransfer to legal reserve, (y) any subsequent transfer of retained earnings to stated capital, and (z)if the Company has been authorized to purchase its shares pursuant to a resolution of an ordinary
general meeting of shareholders, the total amount of the purchase price of such shares to be paidby the Company. Interim dividends may not be paid where there is a risk that at the end of the
fiscal year net assets might be less than the aggregate of the amounts referred to in (i) through (vi)above.
In Japan the “ex-dividend” date and the record date for dividends precede the date ofdetermination of the amount of the dividend to be paid. The market price of shares generally goesex-dividend on the third business day prior to the record date.
Under its Articles of Incorporation, the Company is not obligated to pay any dividends that are
not collected within three years from the date when the payment thereof became due.

- 51 -

General Meeting of Shareholders
Pursuant to the Articles of Incorporation of the Company, an ordinary general meeting ofshareholders of the Company shall be convened within three months after the last day of eachfiscal year, either in Kyoto City or at the Shiga Factory of the Company. In addition, theCompany may hold an extraordinary general meeting of shareholders whenever necessary.
Notice of a shareholders’ meeting, setting forth the place, time and purpose thereof, must be
mailed to each shareholder having voting rights (or, in the case of a non-resident shareholder, tothe resident proxy or mailing address thereof in Japan) at least two weeks prior to the date set forthe meeting. Under the Commercial Code, such notice may be given to shareholders by electronicmeans, subject to the consent by the relevant shareholders.
Any shareholder holding at least 300 voting rights (see “’Unit’ share system” below) or one
percent of the total number of voting rights for six months or more may propose a matter to beconsidered at a general meeting of shareholders by submitting a written request to a
Representative Director at least six weeks prior to the date set for such meeting.
Voting rights
A holder of shares constituting one or more whole units is entitled to one vote for each whole unitof shares, except that neither the Company nor a corporate shareholder of which more than
one-quarter of the total voting rights are directly or indirectly held by the Company has voting
rights in respect of the shares held by it. Except as otherwise provided by law or by the Articles ofIncorporation of the Company, a resolution can be adopted at a general meeting of shareholders
by a majority of the total number of voting rights. Under the Commercial Code and theCompany’s Articles of Incorporation, however, the quorum for the election of Directors andCorporate Auditors is one-third of the total number of voting rights. The Company’s shareholders
are not entitled to cumulative voting in the election of Directors. A corporate shareholder, morethan one-quarter of the total voting rights of which are directly or indirectly exercisable by theCompany at a general meeting of shareholders, may not exercise its voting rights with respect toshares of capital stock of the Company that it owns. Shareholders may exercise their voting rights
through proxies, provided that the proxies are also shareholders holding voting rights. The
Company’s shareholders also may cast their votes in writing. Holders of shares who do not attend
a general meeting of shareholders may also exercise their voting rights by electronic means if theBoard of Directors approves such method of exercising voting rights.
The Commercial Code provides that certain important matters shall be approved by a “special
resolution” of a general meeting of shareholders, where the quorum is a majority of the total
number of voting rights and the approval of at least two-thirds of the voting rights represented at
the meeting is required. Such matters include any amendment to the Articles of Incorporation(except for increasing the number of the authorized shares in connection with a stock split andreducing the number of shares constituting a full unit or abolishing the concept of a unit shareentirely in connection with the unit share system), the reduction of stated capital, the removal of a
Director or Corporate Auditor, the dissolution, merger or consolidation, the “share transfer” or“share exchange” (which creates a parent and a wholly-owned subsidiary relationship between
the Company and another company pursuant to the Commercial Code), the transfer of the whole
or a substantial part of the Company's business, the takeover of the entire business of anothercompany, the corporate split, the offering to persons other than the shareholders of new shares orexisting shares held by the Company at a “specially favorable” price, the granting to persons
other than the shareholders of rights to subscribe for or acquire shares from the Company(shinkabu-yoyakuken; “stock acquisition rights”) subject to “specially favorable” conditions, or- 52 -

the offering to persons other than the shareholders of bonds with stock acquisition rights subject
to “specially favorable” conditions.
Under the Commercial Code, the Company’s shareholders will possess various rights, such as theright to review and make copies of its Articles of Incorporation and the register of shareholders,to convene a general meeting of shareholders, to propose a matter to be considered at a general
meeting of shareholders, and to bring derivative actions, depending upon the number of shares
held by them and the duration of their shareholding.
Subscription rights
Holders of the Company’s shares of capital stock have no pre-emptive rights under its Articles ofIncorporation. Authorized but unissued shares may be issued at such times and upon such terms
as the Board of Directors determines, subject to the limitations as to the offering of new shares at
a “specially favorable” price mentioned under “Voting rights” above. The Board of Directors may,
however, determine that shareholders of a particular class of stock shall be given subscription
rights regarding a particular issue of new shares of that class, in which case such rights must be
given on uniform terms to all shareholders of that class of stock as at a record date of which notless than two weeks’ prior public notice must be given. Each of the shareholders to whom suchrights are given must also be given notice of the expiry thereof at least two weeks prior to the dateon which such rights expire.
Liquidation rights
In the event of a liquidation of the Company, the assets remaining after payment of all debts andliquidation expenses and taxes will be distributed among the holders of its shares in proportion to
the respective numbers of shares held.
Record date
March 31 is the record date for the Company’s year-end dividends and the determination ofshareholders entitled to vote at the ordinary general meeting of shareholders with respect to thefiscal year ending on such March 31. September 30 is the record date for interim dividends. In
addition, the Company may set a record date for determining the shareholders and/or beneficial
shareholders entitled to other rights and for other purposes by giving at least two weeks priorpublic notice.
Repurchase by the Company of its capital stock
The Company may acquire shares (i) by way of purchase on any Japanese stock exchange on
which shares are listed or by way of tender offer (in either case pursuant to an ordinary resolutionof an ordinary general meeting of shareholders), (ii) from a specific shareholder other than the
Company’s subsidiaries (pursuant to a special resolution of an ordinary general meeting ofshareholders) or (iii) from any of the Company’s subsidiaries (pursuant to a resolution of theBoard of Directors). In the case of (ii) above, any other shareholder may make a request directly
to a Representative Director, more than five days prior to the relevant shareholders’ meeting, that
the Company acquire the shares held by this shareholder.
Any such acquisition of shares must satisfy certain requirements, including that the total amountof the purchase price may not exceed the amount of the retained earnings available for annual
dividend payments plus the amount of any reduction of the stated capital, additional paid-in
capital or legal reserve (if this reduction is authorized by a resolution of the relevant general- 53 -

meeting of shareholders) minus the sum of the amount to be paid by way of appropriation ofretained earnings and the amount of retained earnings to be transferred to the stated capital inrespect of the relevant fiscal year pursuant to a resolution of the general meeting of shareholders.
However, if it is anticipated that the net assets, as stated on the Company’s non-consolidatedbalance sheet at the end of the immediately following fiscal year, will be less than the aggregate
amount of the items described in (i) through (vi) in “Capital stock – Dividends” above, theCompany may not purchase these shares.
The Commercial Code permits the Company to hold shares acquired by it as treasury stock.
Treasury stock may be held by the Company for any time period and may be cancelled byresolution of its Board of Directors. The Company may also transfer to any person shares held by
it as treasury stock, subject to a resolution of its Board of Directors, and subject also to otherrequirements similar to those applicable to the issuance of new shares. The Company may alsoutilize its treasury stock for the purpose of transfer to any person upon exercise of stockacquisition rights or for the purpose of acquiring another company by way of merger, shareexchange or corporate split through exchange of treasury stock for shares or assets of the acquiredcompany. No specific approval by the Board of Directors or shareholders at a shareholders
meeting is required for this utilization of treasury stock, although the grant of the relevant stockacquisition rights or the relevant merger, share exchange or corporate split must be approved by
the Board of Directors or shareholders at the Company’s shareholders’ meeting.
“Unit” share system
Under the Company’s Articles of Incorporation, 100 shares constitute one “unit”. The Board of
Directors will be permitted to reduce the number of shares constituting a unit or to abolish theunit in its entirety by amending the Company's Articles of Incorporation without approval byshareholders. The number of shares constituting a unit may not exceed 1,000 shares or one-two
hundredths (1/200) of the number of all issued shares, whichever is smaller.
No share certificates may be issued with respect to any shares constituting less than one unit.
Consequently, no certificates for shares other than a full unit or an integral multiple thereof will
be issued (except for protection of the holders of shares constituting less than one unit). As thetransfer of shares normally requires delivery of the relevant share certificates, any fraction of aunit for which no share certificates are issued will not be transferable.
A holder of shares constituting less than one unit may require the Company to purchase suchshares at their market value.
Under the unit share system, a shareholder will have one vote for each unit of shares held by it.
Shares not constituting a full unit will carry no voting rights. Except as otherwise described above,
holders of shares constituting less than one unit will have all the rights granted to shareholders
under the Commercial Code.
A holder who owns ADRs evidencing less than 100 ADSs will indirectly own less than a wholeunit. Although, as discussed above, under the unit share system holders of less than a unit havethe right to require the Company to purchase their shares, holders of ADRs evidencing ADSs that
represent other than integral multiples of whole units are unable to withdraw the underlying
shares of capital stock representing less than a unit and, therefore, are unable, as a practical matter,to exercise the rights to require the Company to purchase such underlying shares. As a result,access to the Japanese markets by holders of ADRs through the withdrawal mechanism will not
be available for dispositions of shares in lots less than a unit. The unit share system does notaffect the transferability of ADSs, which may be transferred in lots of any size.
- 54 -

Miscellaneous
The Securities and Exchange Law of Japan requires any person who has become, beneficially andsolely or jointly, a holder of more than five percent of the total issued voting shares of theCompany to file a report concerning such shareholdings with the Director of the relevant Local
Finance Bureau of the Ministry of Finance within five business days.
For this purpose, share to be issued or transferred to these persons upon the exercise of stockacquisition rights are included in determining both the size of the holding and the Company's total
issued voting share capital.
A similar report must also be filed in respect of any subsequent change of one percent or more inany such holding, with certain exceptions. (For this purpose, any shares of the Company issuable
to such person upon conversion of convertible securities or exercise of stock acquisition rights, ofwhich none are currently outstanding, would be taken into account in determining both thenumber of shares held by such holder and the Company’s total issued share capital.) Copies ofsuch report must also be furnished to the Company and to all Japanese stock exchanges on which
the shares of the Company are listed.
Except for the general limitation under Japanese anti-trust and anti-monopoly regulations against
holding of shares of capital stock of a Japanese corporation which leads or may lead to a restraintof trade or monopoly, and except for general limitations under the Commercial Code or theCompany’s Articles of Incorporation on the rights of shareholders applicable regardless ofresidence or nationality, there is no limitation under Japanese laws and regulations applicable to
the Company or under its Articles of Incorporation on the rights of non-resident or foreign
shareholders to hold or exercise voting rights on the shares of capital stock of the Company.
There is no provision in the Company’s Articles of Incorporation that would have an effect ofdelaying, deferring or preventing a change in control of the Company and that would operate onlywith respect to merger, acquisition or corporate restructuring involving the Company.
C.

Material Contracts

During the preceding two years we have not entered into any material contracts, other than in theordinary course of business.
D.

Exchange Controls

There is no foreign exchange control in Japan that may materially affect the import or export ofcapital, including the availability of cash and cash equivalents for use by the Company, or theremittance of dividends or other payments to nonresident holders of the Company’s shares or of
ADRs evidencing ADSs.
E.

Taxation

Japanese Taxation
The following is a discussion summarizing material Japanese tax consequences to an owner ofshares or ADSs who is a non-resident of Japan or a non-Japanese corporation without apermanent establishment in Japan to which the relevant income is attributable. The statements
regarding Japanese tax laws set forth below are based on the laws in force and as interpreted by
the Japanese taxation authorities as at the date hereof. These statements are subject to changes in
the applicable Japanese laws or double taxation conventions occurring after that date. This
- 55 -

summary is not exhaustive of all possible tax considerations which may apply to a particularinvestor. Potential investors should satisfy themselves as to:•the overall tax consequences of the ownership and disposition of sharesor ADSs, including specifically the tax consequences under Japanese law,•

the laws of the jurisdiction of which they are a resident, and•any tax treaty between Japan and their country of residence, byconsulting their own tax advisers.

Generally, a non-resident of Japan or a non-Japanese corporation is subject to Japanese
withholding tax on dividends paid by Japanese corporations. Stock splits, subject to the following,
are not subject to Japanese income tax.
The Convention Between the United States of America and Japan for the Avoidance of Double
Taxation and the Prevention of Fiscal Evasion with Respect to Taxes on Income (“Treaty”),
establishes the maximum rate of Japanese withholding tax which may be imposed on dividends
paid to an United States resident or corporation not having a “permanent establishment” in Japan.
A “permanent establishment” in Japan is generally a fixed place of business for industrial orcommercial activity in Japan. Under the Treaty, the maximum withholding rate for mostshareholders is limited to 15% of the gross amount actually distributed. However, the maximum
rate is 10% of the gross amount actually distributed, if the recipient is a corporation and•during the part of the paying corporation’s taxable year which precedes
the date of payment of the dividend and during the whole of its
immediately preceding taxable year, if any, at least 10% of the voting
shares of the paying corporation were owned by the recipient corporation,and•the amount of interest or dividends received by the paying corporation
during such immediately preceding taxable year is not more than 25% of
its gross income.

For purposes of the Treaty and Japanese tax law, U.S. holders of ADRs will be treated as theowners of the shares underlying the ADSs evidenced by the ADRs.
Unless an applicable tax treaty, convention or agreement reduces the maximum rate ofwithholding tax, the rate of Japanese withholding tax applicable to dividends paid by Japanese
corporations to a non-resident or non-Japanese corporation is 20%. Japan has entered into income
tax treaties, conventions or agreements, reducing the above-mentioned withholding tax rate to
15% for investors with a number of countries. These countries include, among others, Australia,
Belgium, Canada, Denmark, Finland, France, Germany, Ireland, Italy, Luxembourg, The
Netherlands, New Zealand, Norway, Singapore, Spain, Sweden, Switzerland, the United
Kingdom and the United States of America. The withholding tax rate is further reduced if
investors and the Company have some capital relationship as provided for in an applicable tax
treaty.
Non-resident holders who are entitled to a reduced rate of Japanese withholding tax on payment
of dividends by the Company must submit the required form in advance through the Company tothe relevant tax authority before payment of dividends. The required form is the Application
Form for Income Tax Convention regarding Relief from Japanese Income Tax on Dividends. A- 56 -

standing proxy for non-resident holders may provide such application service. With respect to
ADSs, the reduced rate is applicable if Citibank, N.A., as depositary, or its agent submits
Application Forms for Income Tax Convention. To claim the reduced rate, a non-resident holderof ADSs will be required to file proof of taxpayer status, residence and beneficial ownership, asapplicable. The non-resident holder will also be required to provide information or documents
clarifying its entitlement to the tax reduction as may be required by the depositary.
A non-resident holder of shares or ADSs who does not submit an application in advance will beentitled to claim from the relevant Japanese tax authority a refund of withholding taxes withheld
in excess of the rate of an applicable tax treaty.
Gains derived from the sale outside Japan of the shares or ADSs by a non-resident of Japan or a
non-Japanese corporation are in general not subject to Japanese income or corporation taxes. In
addition, gains derived from the sale of shares or ADSs within Japan by a non-resident of Japanor non-Japanese corporation not having a permanent establishment in Japan are in general not
subject to Japanese income or corporation taxes. Japanese inheritance and gift taxes may bepayable at progressive rates by an individual who has acquired shares or ADSs as a legatee, heiror donee.
The Company has paid or will pay any stamp, registration or similar tax imposed by Japan inconnection with the issue of the shares, except that the Company will not pay any tax payable inconnection with the transfer or sale of the shares by a holder thereof.
Japanese inheritance and gift taxes at progressive rates may be payable by an investor who has
acquired shares or ADRs as legatee, heir or donee.
United States Taxation
The following discusses United States federal income tax consequences of the ownershipof shares or ADSs. It only applies to holders of shares who hold their ADSs as capital assets. It
does not address special classes of holders, some of whom may be subject to special rules
including:
•
•
•
•
•
•
•
•

tax-exempt entities,
certain insurance companies,
broker-dealers,
traders in securities that elect to mark to market,
investors liable for alternative minimum tax,
investors that hold shares or ADSs as part of a straddle or a hedging or
conversion transaction,
investors whose functional currency is not the U.S. dollar, orinvestors that actually or constructively own 10% or more of the Company’s
voting stock.

This discussion is based on the tax laws of the United States, including the Internal
Revenue Code of 1986, as amended, its legislative history, existing and proposed regulations andadministrative and judicial interpretations, as currently in effect, as well as on the Treaty. Theselaws are subject to change, possibly on a retroactive basis. In addition, this discussion is based inpart upon the representations of the depositary and the assumption that each obligation in thedeposit agreement relating to the ADRs and any related agreement will be performed inaccordance with its terms.
- 57 -

For purposes of this discussion, a “U.S. holder” is a beneficial owner of shares or ADSs
that is:••••a citizen or resident of the United States,
a domestic corporation,an estate whose income is subject to United States federal income tax
regardless of its source, ora trust if a United States court can exercise primary supervision over thetrust’s administration and one or more United States persons areauthorized to control all substantial decisions of the trust.

This discussion addresses only United States federal income taxation. An investor should
consult his own tax advisor regarding the United States federal, state and local and other tax
consequences of owning and disposing of shares or ADSs in his particular circumstances.
In general, and taking into account the earlier assumptions, for United States federal
income tax purposes, if the investor holds ADRs evidencing ADSs, the investor will be treated as
the owner of the shares represented by those ADSs. Exchanges of shares for ADSs, and ADSs forshares, generally will not be subject to United States federal income tax.
The discussion under the headings “Taxation of Dividends” and “Taxation of Capital
Gains” assumes that the Company will not be treated as a passive foreign investment company(PFIC) for U.S. federal income tax purposes. For a discussion of the rules that apply if theCompany is treated as a PFIC, see the discussion under the heading below “PFIC Rules.”Taxation of Dividends
Under the United States federal income tax laws, if the investor is a U.S. holder, theinvestor must include in the investor’s gross income the gross amount of any dividend paid by theCompany out of its current or accumulated earnings and profits, as determined for United Statesfederal income tax purposes. The investor must include any Japanese tax withheld from thedividend payment in this gross amount even though he does not in fact receive it.
The dividend is ordinary income that the investor must include in income when theinvestor, in the case of shares, or the depositary, in the case of ADSs, receive the dividend,
actually or constructively. The dividend will not be eligible for the dividends-received deduction.
The amount of the dividend distribution that the investor must include in his income as a
U.S. holder will be the U.S. dollar value of the Japanese yen payments made, determined at the
spot Japanese yen/U.S. dollar rate on the date the dividend distribution is includible in theinvestor’s income, regardless of whether the payment is in fact converted into U.S. dollars.
Generally, any gain or loss resulting from currency exchange fluctuations during the period fromthe date the investor includes the dividend payment in income to the date he converts the payment
into U.S. dollars will be treated as ordinary income or loss. The gain or loss generally will befrom sources within the United States for foreign tax credit limitation purposes.
Distributions in excess of current and accumulated earnings and profits, as determined forUnited States federal income tax purposes, will be treated as a return of capital to the extent of theinvestor’s basis in the shares or ADSs and thereafter as capital gain.
Subject to certain limitations, the Japanese tax withheld in accordance with the Treaty
and paid over to Japan will be creditable against the investor’s United States federal income tax- 58 -

liability. To the extent a refund of the tax withheld is available to the investor under Japanese law
or under the Treaty, the amount of tax withheld that is refundable will not be eligible for credit
against the investor’s United States federal income tax liability. Please see “Japanese Taxation,”above, for the procedures for obtaining a tax refund.
Dividends constitute income from sources outside the United States, but generally will be“passive income” or “financial services income.” Passive income or financial services incomemust be treated separately from other types of income for purposes of computing the foreign tax
credit allowable to the investor.
Distributions of additional shares to the investor with respect to shares or ADSs that are
made as part of a pro rata distribution to all shareholders of the Company generally will not be
subject to United States federal income tax.
Taxation of Capital Gains
If the investor is a U.S. holder and the investor sells or otherwise disposes of his shares or
ADSs, the investor will recognize capital gain or loss for United States federal income tax
purposes equal to the difference between the U.S. dollar value of the amount that the investor
realizes and his tax basis, determined in U.S. dollars, in his shares or ADSs. Capital gain of anon-corporate U.S. holder is generally taxed at a maximum rate of 20% for property held morethan one year. Additionally, gain or loss will generally be from sources within the United States
for foreign tax credit limitation purposes.
PFIC Rules
The Company believes that shares and ADSs should not be treated as stock of a PFIC for
United States federal income tax purposes for its most recent taxable year. However, thisconclusion is a factual determination made annually and thus may be subject to change.
In general, if the investor is a U.S. holder, the Company will be a PFIC with respect tothe investor if for any of its taxable years in which the investor held the Company’s ADSs or
shares:••at least 75% of the Company’s gross income for the taxable year is passive
income, orat least 50% of the value, determined on the basis of a quarterly average of thecompany’s assets, are attributable to assets that produce or are held for the
production of passive income.

Passive income generally includes dividends, interest, royalties, rents (other than certain
rents and royalties derived in the active conduct of a trade or business), annuities and gains fromassets that produce passive income. If a foreign corporation owns at least 25% by value of thestock of another corporation, the foreign corporation is treated for purposes of the PFIC tests asowning its proportionate share of the assets of the other corporation, and as receiving directly its
proportionate share of the other corporation’s income.
If the Company is treated as a PFIC, and the investor is a U.S. holder that did not make amark-to-market election, as described below, the investor will be subject to special rules withrespect to:- 59 -

••any gain the investor realizes on the sale or other disposition of his shares or
ADSs andany “excess distribution” that the Company makes to the investor (generally, any
distributions to the investor during a single taxable year that are greater than
125% of the average annual distributions received by the investor in respect of
the shares or ADSs during the three preceding taxable years or, if shorter, theinvestor’s holding period for the shares or ADSs.)

Under these rules:••••

the gain or excess distribution will be allocated ratably over the investor’sholding period for the shares or ADSs,
the amount allocated to the taxable year in which the investor realized the gain orexcess distribution will be taxed as ordinary income,the amount allocated to each prior year, with certain exceptions, will be taxed at
the highest tax rate in effect for that year, andthe interest charge generally applicable to underpayments of tax will be imposedin respect of the tax attributable to each such year.

Special rules apply for calculating the amount of the foreign tax credit with respect toexcess distributions by a PFIC.
If the investor owns shares or ADSs in a PFIC that is treated as marketable stock, theinvestor may make a mark-to-market election. If the investor makes this election, the investor will
not be subject to the PFIC rules described above. Instead, in general, the investor will include as
ordinary income each year the excess, if any, of the fair market value of his shares or ADSs at theend of the taxable year over his adjusted basis in his shares or ADSs, and the investor willrecognize the additional gain, if any, on sale or other disposition of his shares or ADSs as
ordinary income for that taxable year. The investor will also be allowed to take an ordinary loss inrespect of the excess, if any, of the adjusted basis of his shares or ADSs over their fair market
value at the end of the taxable year or over their final sale or disposition prices, but only to theextent of the net amount of previously included income as a result of the mark-to-market election.
The investor’s basis in the shares or ADSs will be adjusted to reflect any such income or loss
amounts.
If the investor owns shares or ADSs during any year that Kyocera is a PFIC he must file
Internal Revenue Service Form 8621.
F.

Dividends and Paying Agents

Not Applicable.
G.

Statement by Experts

Not Applicable.
H.

Documents on Display

We are subject to the informational requirements of the Securities Exchange Act of 1934 and, in
accordance therewith, we will file annual reports on Form 20-F within six months of our fiscal
year-end and other reports and information on Form 6-K with the Securities and Exchange
Commission. These reports and other information can be inspected at the public reference room
- 60 -

at the Securities and Exchange Commission at 450 Fifth Street, N.W., Washington, D.C. 20549.
You can also obtain copies of such material by mail from the public reference room of the
Securities and Exchange Commission at prescribed fees. You may obtain information on theoperation of the Securities and Exchange public reference room by calling the Securities andExchange Commission in the United States at 1-800-SEC-0330. The Securities and Exchange
Commission also maintains a web site at www.sec.gov at contains reports, proxy statements andother information regarding registrants that file electronically with the Securities and Exchange
Commission. We currently do not file reports and information electronically with the Securities
and Exchange Commission. Also, as a foreign private issuer, we are exempt from the rules under
the Securities Exchange Act of 1934 prescribing the furnishing and content of proxy statements toshareholders.
I.

Subsidiary Information

Not Applicable.
Item 11.

Quantitative and Qualitative Disclosures About Market Risk

The information required by this item appears in the Company’s 2002 Annual Report to
Stockholders on pages 24 to 27 which have been attached as Exhibit 10.2 to this Form 20-F and
are incorporated herein by reference.
Item 12.

Description of Securities Other Than Equity Securities

Not Applicable.
PART II
Item 13.

Defaults, Dividend Arrearages and Delinquencies

None.
Item 14.

Material Modification to Rights of Security Holders and Use of Proceeds

None.
Item 15.

Controls and Procedures

Not Applicable.
Item 16.

[Reserved]

PART IV
Item 17.

Financial Statements

In lieu of responding to this item, we have responded to Item 18 of this Form 20-F.

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Item 18.

Financial Statements

The following pages of the Company’s 2002 Annual Report to Stockholders have been attached
as Exhibit 10.2 to this Form 20-F and are incorporated herein by reference:

Description

Page

(1)

Consolidated Balance Sheets at March 31, 2002 and 2001

28 & 29(2)

Consolidated Statements of Income for the years ended March 31,
2002, 2001 and 2000

30

(3)

Consolidated Statements of Stockholders’ Equity for the years ended
March 31, 2002, 2001 and 2000

31

(4)

Consolidated Statements of Cash Flows for the years ended March
31, 2002, 2001 and 2000

32

(5)

Notes to The Consolidated Financial Statements

33 to 58

(6)

Report of Independent Accountants related to theConsolidated Financial Statements listed above

59

Schedules
Report of Independent Accountants related to Schedules appears on page 69 of this Form
20-F.

- 62 -SCHEDULE II.

Valuation and Qualifying Accounts

KYOCERA CORPORATION AND SUBSIDIARIESSCHEDULE II – VALUATION AND QUALIFYING ACCOUNTS
For the years ended March 31, 2002, 2001 and 2000
Yen in millions
Column A

Column B

Column C

Column D

Column E

Deductions

Balanceat End ofPeriodAdditions

Description
For the year ended March 31, 2002:
Allowance for doubtful accounts

Balanceat
Beginningof Period

Charged to
Costs andExpenses

Charged(Credited)to otherAccounts(A)¥ 60,087

¥

¥

2,428

1,103

(B)

¥

4,953

¥ 58,665

Allowance for sales returns

5,830

1,185

463

-

7,478

Allowance for valuation losses on inventories

7,490

1,281

-

-

8,771

Total

¥ 73,407

¥

4,894

¥

1,566

¥

4,953

¥ 74,914¥ 59,807

¥

4,867

¥

3,064

¥

7,651

¥ 60,087

For the year ended March 31, 2001:
Allowance for doubtful accounts
Allowance for sales returns

4,196

1,279

763

408

5,830

Allowance for valuation losses on inventories

13,293

-

-

5,803

7,490

Total

¥ 77,296

¥

6,146

¥

3,827

¥

13,862¥ 73,407¥ 51,580¥

10,587

¥

(241)

¥

2,119

¥ 59,807

For the year ended March 31, 2000:
Allowance for doubtful accounts
Allowance for sales returns

3,558

3,026

925

3,313

4,196

Allowance for valuation losses on inventories

14,620

-

-

1,327

13,293

Total¥ 69,758

6,759¥ 77,296¥

13,613¥684¥(A) Foreign currency translation adjustments and beginning balance of newly consolidated subsidiaries(B) Charge-offs

Schedules other than that above are omitted for the reason that they are not required or
are not applicable, or the required information is shown in the financial statements ornotes thereto.
Financial statements of unconsolidated subsidiaries and 50% or less owned persons
accounted for by the equity method have been omitted because they are in the aggregate
not significant and the conditions for inclusion otherwise are not present.

- 63 -

Item 19.

Exhibits

Exhibit
NumberDescription

1.1

Articles of Incorporation (with English translation)

1.2

Share Handling Regulations of the Company (with English translation)

1.3

Regulations of the Board of Directors of the Company (with English
translation)

1.4

Regulations of the Board of Corporate Auditors of the Company (withEnglish translation)

2.1

Specimen common stock certificate of the Company (incorporated byreference to the Registrant’s annual report on Form 20-F filed on
September 24, 2001)

2.2

Amended and Restated Deposit Agreement, dated as of June 29, 1998
among the Company, Citibank N.A. as Depositary and all owners andholders from time to time of American Depositary Receipts, including theform of American Depositary Receipt, as amended by Amendment No.1
thereto, dated as of January 5, 1999 (incorporated by reference to theRegistrant’s annual report on Form 20-F filed on September 24, 2001)

8.1

List of Significant Subsidiaries (See “Organizational Structure” in Item
4.C. of this Form 20-F)

10.1

Consent of PricewaterhouseCoopers with respect to the financial
statements included in this registration statement

10.2

Company’s 2002 Annual Report to Stockholders, pages 14 to 59 only.

- 64 -

SIGNATURE
Pursuant to the requirements of Section 12 of the Securities Exchange Act of 1934, the Company
certifies that it meets all of the requirements for filing on Form 20-F and has duly caused thisannual report to be signed on its behalf by the undersigned, thereunto duly authorized.
Kyocera Corporation(Company)
By
Hideki Ishida
Managing Director
General Manager of Corporate Business Systems
Administration Division

September 19, 2002

- 65 -

CERTIFICATION
I, Yasuo Nishiguchi, certify that:1.

I have reviewed this annual report on Form 20-F of Kyocera Corporation;2.

Based on my knowledge, this annual report does not contain any untrue statement of amaterial fact or omit to state a material fact necessary to make the statements made, inlight of the circumstances under which such statements were made, not misleading withrespect to the period covered by this annual report; and3.

Based on my knowledge, the financial statements, and other financial information
included in this annual report, fairly present in all material respects the financial
condition, results of operations and cash flows of the registrant as of, and for, the periods
presented in this annual report.

Date: September 19, 2002

Name: Yasuo Nishiguchi
Title: President andRepresentative Director(Principal Executive Officer)- 66 -

CERTIFICATION
I, Hideki Ishida, certify that:1.

I have reviewed this annual report on Form 20-F of Kyocera Corporation;2.

Based on my knowledge, this annual report does not contain any untrue statement of amaterial fact or omit to state a material fact necessary to make the statements made, inlight of the circumstances under which such statements were made, not misleading withrespect to the period covered by this annual report; and3.

Based on my knowledge, the financial statements, and other financial information
included in this annual report, fairly present in all material respects the financial
condition, results of operations and cash flows of the registrant as of, and for, the periods
presented in this annual report.

Date: September 19, 2002

Name: Hideki Ishida
Title: Managing Director(Principal Financial Officer)- 67 -

INDEX OF EXHIBITS
Exhibit
NumberDescription

1.1

Articles of Incorporation (with English translation)

1.2

Share Handling Regulations of the Company (with English translation)

1.3

Regulations of the Board of Directors of the Company (with English
translation)

1.4

Regulations of the Board of Corporate Auditors of the Company (withEnglish translation)

2.1

Specimen common stock certificate of the Company (incorporated byreference to the Registrant’s annual report on Form 20-F filed on
September 24, 2001)

2.2

Amended and Restated Deposit Agreement, dated as of June 29, 1998
among the Company, Citibank N.A. as Depositary and all owners andholders from time to time of American Depositary Receipts, including theform of American Depositary Receipt, as amended by Amendment No.1
thereto, dated as of January 5, 1999 (incorporated by reference to theRegistrant’s annual report on Form 20-F filed on September 24, 2001)

8.1

List of Significant Subsidiaries (See “Organizational Structure” in Item
4.C. of this Form 20-F)

10.1

Consent of PricewaterhouseCoopers with respect to the financial
statements included in this registration statement

10.2

Company’s 2002 Annual Report to Stockholders, pages 14 to 59 only.

- 68 -

Report of Independent Accountants on
Financial Statement Schedules

To the Board of Directors and Stockholdersof Kyocera Corporation:

Our audits of the consolidated financial statements referred to in our report dated June 7, 2002
appearing in the 2002 Annual Report to Stockholders of Kyocera Corporation (which report andconsolidated financial statements are incorporated by reference in this Annual Report on Form
20-F) also included an audit of the financial statement schedules listed in Item 18 of this Form
20-F. In our opinion, these financial statement schedules present fairly, in all material respects,
the information set forth therein when read in conjunction with the related consolidated financial
statements.

PricewaterhouseCoopers
Osaka, Japan
June 7, 2002.

- 69 -