UNITED STATESSECURITIES AND EXCHANGE COMMISSION
Washington, DC 20549

FORM 20-F‘
È

REGISTRATION STATEMENT PURSUANT TO SECTION 12(b) OR (g) OF THE SECURITIES EXCHANGE ACT
OF 1934OR
ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
For the fiscal year ended March 31, 2013

OR
‘ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF
1934
For the transition period fromtoOR
‘ SHELL COMPANY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT
OF 1934
Date of event requiring this shell company report
Commission file number: 1-7952

Kyocera Kabushiki Kaisha
Kyocera Corporation(Exact name of Registrant as specified in its charter)(Translation of Registrant’s name into English)

Japan

6, Takeda Tobadono-cho, Fushimi-ku,
Kyoto 612-8501, Japan(Jurisdiction of incorporation or organization)(Address of principal executive offices)

Shoichi Aoki, +81-75-604-3556, kyocera-ir@kyocera.jp, +81-75-604-3557,
6, Takeda Tobadono-cho, Fushimi-ku, Kyoto 612-8501, Japan(Name, Telephone, E-mail and/or Facsimile number and Address of Company Contact Person)

Securities registered or to be registered pursuant to Section 12(b) of the Act.
Title of Each Class

Name of Each Exchange On Which Registered

Common Stock (Shares)*
New York Stock Exchange
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 capital or common stock as of the close of the period covered by the annual
report.
As of March 31, 2013, 183,439,820 shares of common stock were outstanding, comprised of 181,353,780 Shares and 2,086,040 American Depositary Shares(equivalent to 2,086,040 Shares).
Indicate by check mark if the registrant is a well-known seasoned issuer, as defined in Rule 405 of the Securities Act. Yes È No ‘
If this report is an annual or transition report, indicate by check mark if the registrant is not required to file reports pursuant to Section 13 or 15(d) of the
Securities Exchange Act of 1934. Yes ‘ No È
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 12 months (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 È No ‘
Indicate by check mark whether the registrant has submitted electronically and posted on its corporate Web site, if any, every Interactive Data File required tobe submitted and posted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that theregistrant was required to submit and post such files). Yes È No ‘
Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, or a non-accelerated filer. See definition of “accelerated filer andlarge accelerated filer” in Rule 12b-2 of the Exchange Act. (Check One):
Large accelerated filer È
Accelerated filer ‘
Non-accelerated filer ‘
Indicate by check mark which basis of accounting the registrant has used to prepare the financial statements included in this filing:
U.S. GAAP È International Financial Reporting Standards as issued by the International Accounting Standards Board ‘ Other ‘
If “Other” has been checked in response to the previous question, indicate by check mark which financial statement item the registrant has elected to follow.
Item 17 ‘ Item 18 ‘
If this is an annual report, indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes ‘ No È
* Not for trading, but only in connection with the registration of the American Depositary Shares, each representing one share of Common Stock.

TABLE OF CONTENTS
Page

Cautionary Statement Regarding Forward-Looking Statements . . . . . . . . . . . . . . . . . . . . . . . . . . .

4PART I . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Item 1. Identity of Directors, Senior Management and Advisers . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Item 2. Offer Statistics and Expected Timetable . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Item 3. Key Information . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
A. Selected Financial Data . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
B. Capitalization and Indebtedness . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
C. Reasons for the Offer and Use of Proceeds . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
D. Risk Factors . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Item 4. Information on Kyocera Corporation and its Consolidated Subsidiaries . . . . . . . . . . . . . . . . .
A. History and Development of Kyocera Corporation and its Consolidated Subsidiaries . . . . . . .
B. Business Overview . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
C. Organizational Structure . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
D. Property, Plants and Equipment . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Item 4A. Unresolved Staff Comments . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Item 5. Operating and Financial Review and Prospects . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
A. Operating Results . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
B. Liquidity and Capital Resources . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
C. Research and Development, Patents and Licenses, etc. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
D. Trend Information . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
E. Off-Balance Sheet Arrangements . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
F. Tabular Disclosure of Contractual Obligations . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Item 6. Directors, Senior Management and Employees . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
A. Directors and Senior Management . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
B. Compensation . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
C. Board Practices . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
D. Employees . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
E. Share Ownership . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Item 7. Major Shareholders and Related Party Transactions . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
A. Major Shareholders . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
B. Related Party Transactions . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
C. Interests of Experts and Counsel . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Item 8. Financial Information . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
A. Consolidated Statements and Other Financial Information . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
B. Significant Changes . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Item 9. The Offer and Listing . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
A. Offer and Listing Details . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
B. Plan of Distribution . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
C. Markets . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
D. Selling Shareholders . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
E. Dilution . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
F. Expenses of the Issue . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Item 10. Additional Information . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
A. Share Capital . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
B. Memorandum and Articles of Association . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
C. Material Contracts . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
D. Exchange Controls . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
E. Taxation . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

6
6
6
6
6
7
7
7
14
14
15
25
28
30
30
30
52
57
59
59
60
60
60
65
66
67
69
70
70
71
71
71
71
72
72
72
73
73
73
73
73
74
74
74
83
83
83

2

Page

F. Dividends and Paying Agents . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
G. Statement by Experts . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
H. Documents on Display . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
I. Subsidiary Information . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Item 11. Quantitative and Qualitative Disclosures about Market Risk . . . . . . . . . . . . . . . . . . . . . . . . .
Item 12. Description of Securities Other than Equity Securities . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
A. Debt Securities . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
B. Warrants and Rights . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
C. Other Securities . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
D. American Depositary Shares . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

88
88
88
88
88
90
90
90
90
91

PART II . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Item 13. Defaults, Dividend Arrearages and Delinquencies . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Item 14. Material Modifications to the Rights of Security Holders and Use of Proceeds . . . . . . . . . .
Item 15. Controls and Procedures . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Item 16. [Reserved] . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Item 16A. Audit Committee Financial Expert . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Item 16B. Code of Ethics . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Item 16C. Principal Accountant Fees and Services . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Item 16D. Exemptions from the Listing Standards for Audit Committees . . . . . . . . . . . . . . . . . . . . . . .
Item 16E. Purchases of Equity Securities by the Issuer and Affiliated Purchasers . . . . . . . . . . . . . . . .
Item 16F. Change in Registrant’s Certifying Accountant . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Item 16G. Corporate Governance . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Item 16H. Mine Safety Disclosure . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

92
92
92
92
92
92
93
93
94
95
96
96
98

PART III . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Item 17. Financial Statements . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Item 18. Financial Statements . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Item 19. Exhibits . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

99
99
99
99

3

Cautionary Statement Regarding Forward-Looking Statements
This annual report on Form 20-F 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 constitute forward-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 other factors 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 forwardlooking statements after the date of this annual report on Form 20-F, 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. “Risk Factors” of this annual report on Form 20-F and include,
without limitation:(1) general conditions in the Japanese or global economy;(2) unexpected changes in economic, political and legal conditions in countries where we operate;(3) various export risks which may affect the significant percentage of our revenues derived from overseas
sales;(4) the effect of foreign exchange fluctuations on our results of operations;(5) intense competitive pressures to which our products are subject;(6) manufacturing delays or defects resulting from outsourcing or internal manufacturing processes;(7) shortages and rising costs of electricity affecting our production and sales activities;(8) the possibility that future initiatives and in-process research and development may not produce thedesired results;(9) companies or assets acquired by us not produce the returns or benefits, or bring in business
opportunities;(10) inability to secure skilled employees, particularly engineering and technical personnel;(11) insufficient protection of our trade secrets and intellectual property rights including patents;(12) expenses associated with licenses we require to continue to manufacture and sell products;(13) environmental liability and compliance obligations by tightening of environmental laws andregulations;(14) unintentional conflict with laws and regulations or newly enacted laws and regulations;(15) our market or supply chains being affected by terrorism, plague, wars or similar events;(16) earthquakes and other natural disasters affecting our headquarters and major facilities as well as our
suppliers and customers;(17) credit risk on trade receivables;(18) fluctuations in the value of, and impairment losses on, securities and other assets held by us;(19) impairment losses on long-lived assets, goodwill and intangible assets;(20) unrealized deferred tax assets and additional liabilities for unrecognized tax benefits;(21) changes in accounting principles;and other risks discussed under Item 3.D. “Risk Factors” and elsewhere in this annual report on Form 20-F.
4

Presentation of Certain Information
As used in this annual report on Form 20-F, references to “Kyocera,” “we,” “our” and “us” are to Kyocera
Corporation and, except as the context otherwise requires, its consolidated subsidiaries.
Also, as used in this annual report on Form 20-F:•“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 United States 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 2013” refers to Kyocera’s fiscal year ended March 31, 2013, and other fiscal years are referred
to in a corresponding manner.

5PART I
Item 1.

Identity of Directors, Senior Management and Advisers

Not applicable.
Item 2.

Offer Statistics and Expected Timetable

Not applicable.
Item 3.

Key Information

A. Selected Financial Data
The selected consolidated financial data set forth below for each of the five fiscal years ended March 31 havebeen derived from Kyocera’s consolidated financial statements that are prepared in accordance with accounting
principles generally accepted in the United States of America.
You should read the U.S. GAAP selected consolidated financial data set forth below together with Item 5.
“Operating and Financial Review and Prospects” and Kyocera’s consolidated financial statements included inthis annual report on Form 20-F.
2009
2010
2011
2012
2013
(Yen in millions and shares in thousands, except per share amounts)

For the years ended March 31:
Net sales . . . . . . . . . . . . . . . . . . . . . . . .
Profit from operations . . . . . . . . . . . . . .
Net income attributable to shareholdersof Kyocera Corporation . . . . . . . . . . .
Earnings per share:
Net income attributable to shareholdersof Kyocera Corporation:
Basic . . . . . . . . . . . . . . . . . . . . . . .
Diluted . . . . . . . . . . . . . . . . . . . . . .
Weighted average number of shares
outstanding:
Basic . . . . . . . . . . . . . . . . . . . . . . .
Diluted . . . . . . . . . . . . . . . . . . . . . .
Cash dividends declared per share:
Per share of common stock . . . . . . . . . .
Per share of common stock* . . . . . . . . .
At March 31:
Total assets . . . . . . . . . . . . . . . . . . . . . .
Long-term debt . . . . . . . . . . . . . . . . . . .
Common stock . . . . . . . . . . . . . . . . . . . .
Kyocera Corporation shareholders’equity . . . . . . . . . . . . . . . . . . . . . . . . .
Total equity . . . . . . . . . . . . . . . . . . . . . .
Depreciation . . . . . . . . . . . . . . . . . . . . . . . . .
Capital expenditures . . . . . . . . . . . . . . . . . .

¥1,128,586
43,419¥1,073,805
63,860¥1,266,924
155,924¥1,190,870
97,675¥1,280,054
76,926

29,50640,095

122,448

79,357

66,473¥157.27157.23¥

187,618
187,661
¥
$

120
1.26

218.47218.47¥

183,525
183,525
¥
$

120
1.32

667.23667.23¥

183,517
183,517
¥
$

130
1.58

¥1,946,566
24,538
115,703432.58432.58¥183,451
183,451
¥
$

120
1.51

¥1,994,103
21,197
115,703362.36362.36

183,442
183,442
¥
$

120
1.33

¥1,773,802
28,538
115,703¥1,848,717
29,067
115,703

1,323,663
1,383,088¥ 83,753¥ 63,055

1,345,235
1,420,263
1,469,505
1,646,157
1,407,262
1,483,359
1,534,241
1,714,942¥ 60,602 ¥ 59,794 ¥ 62,374 ¥ 63,119¥ 37,869 ¥ 70,680 ¥ 66,408 ¥ 56,688* Translated into the U.S. dollars based on the exchange rates at each payment date in Japan.
6¥2,282,853
20,855
115,703

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:For the years ended March 31,

High

Low

Average

Period-end

2009 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
2010 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
2011 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
2012 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
2013 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

110.48100.71
94.68
85.26
96.16

87.80
86.12
78.74
75.72
77.41

100.62
92.93
85.71
79.00
82.96

99.15
93.40
82.76
82.41
94.16

86.64
91.28
93.64
96.16
99.61
103.52

81.86
86.92
91.38
93.32
92.96
97.28

83.79
89.06
93.00
94.77
97.76
100.92

86.64
91.28
92.36
94.16
97.52
100.83For most recent six months

December 2012 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
January 2013 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
February 2013 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
March 2013 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
April 2013 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
May 2013 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

The noon buying rate for Japanese yen on June 21, 2013 was $1.00 = 97.48
B. 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.
Risks Related to Kyocera’s Business(1) The continuing economic slowdown in the Japanese and global economy may significantly reduce demand
for Kyocera’s products
Kyocera conducts business not only in Japan but also around the world and provides products for a variety ofmarkets such as digital consumer equipment, industrial machinery and the environmental and energy-related
markets. In the event that stagnation in global economies has an adverse effect on production activities in our
principal market and capital investment and consumption fall significantly, the business environment facing
Kyocera may worsen, and the performance and financial condition of Kyocera may be adversely affected.
(2) A substantial portion of Kyocera’s business activity is conducted outside Japan, exposing Kyocera to therisks of international operations
A substantial amount of Kyocera’s investment has been targeted towards expanding manufacturing and sales
channels located outside Japan, such as in the United States, Europe and Asia, which includes the developing andemerging markets in China. Kyocera faces a variety of potential risks in international activities. Kyocera may
encounter unexpected legal or regulatory changes due to unfavorable political or economic factors such as
control on trade, restriction on investment, restriction on repatriation and transfer pricing issue. Kyocera may also7

have difficulties in human resources and managing operations at its international locations. As the developing
and emerging markets of Asia, which includes China, becomes considerably more important, Kyocera may
become even more susceptible to these risks.
(3) Since a significant percentage of Kyocera’s revenues has been derived from foreign sales in recent years,
various export risks may disproportionately affect its revenues
Kyocera’s sales to customers located outside Japan accounted for approximately 55% of its total revenues infiscal 2013. Kyocera believes that overseas sales will continue to account for a significant percentage of its
revenues. Therefore, the following export risks may disproportionately affect Kyocera’s revenues:•

a strong yen may make Kyocera’s products less attractive to foreign purchasers;•

political and economic instability or significant economic downturns may inhibit exports of Kyocera’s
products;•

tariffs and other barriers may make Kyocera’s products less cost competitive; and•the laws of certain foreign countries may not adequately protect Kyocera’s trade secrets and intellectual
property.

(4) Currency exchange rate fluctuations could adversely affect Kyocera’s financial results
Kyocera conducts business in countries outside Japan, which exposes it to fluctuations in foreign currency
exchange rates. Kyocera may enter into mainly short-term forward contract transaction to hedge this risk.
Nevertheless, fluctuations in foreign currency exchange rates could have an adverse effect on its business.
Fluctuations in foreign currency exchange rates may affect Kyocera’s consolidated results of operations,financial condition, cash flows and the value of its foreign assets, which in turn may adversely affect reported
earnings and the comparability of period-to-period results of operations. Changes in currency exchange rates may
affect the relative prices at which Kyocera 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 its operations.
(5) Kyocera sells a diverse variety of products, and in each of its businesses Kyocera is subject to intensecompetitive pressures, including in terms of price, technological change, product development, quality andspeed of delivery, and these pressures are likely to increase in the near term
Kyocera sells a wide variety of products and, therefore, faces a broad range of competitors from large
international companies to relatively small, rapidly growing and highly specialized companies. Kyocera’scompetitive landscape is subject to continuous change, and new and significant competitors may emerge,
including competitors based in emerging markets such as China that may have competitive advantages in termsof cost structure or other factors. Kyocera has a variety of businesses in different industries while many of its
competitors specialize in one or more of these business areas. As a result, Kyocera may not fund or invest incertain of its businesses to the same degree as its competitors, or these competitors may have greater financial,technical, and marketing resources available to them than the portion of its business against which they compete.
While some of the factors that drive competition vary by product area, price and speed of delivery
are primary factors that impact in all areas of Kyocera’s business. Price pressure has been intense, and thus
Kyocera predicts that its selling prices will continue to be lower than in fiscal 2013 depending partly on the
demand and competition situation. In production businesses in which Kyocera develops, produces and distributes
specialized parts for its customers’ products, its competitive position depends significantly on being involved
early in the process of creating a new product that fits its customers’ needs for each business. To maintain thesecompetitive advantages, it is critical to maintain close ties with customers so that Kyocera can ensure that it isable to meet required specifications and be the first supplier to create and deliver the product. Kyocera’s grossmargins may be reduced if the business environment changes in a way that Kyocera cannot maintain theseimportant relationships with customers or its market share or if it is forced in the future to further reduce prices in
response to the actions of its competitors.
8(6) Manufacturing delays or defects resulting from outsourcing or internal manufacturing processes canadversely affect Kyocera’s production yields and operating results
Kyocera ordinarily outsources the fabrication of certain components and sub-assemblies of its products, often tosole source suppliers or a limited number of suppliers. Several suppliers have manufacturing processes which arevery complex and require a long lead-time. Kyocera may be affected by occasional delays in obtaining
components and sub-assemblies. Kyocera’s production of these products will also be materially and adversely
affected if Kyocera is unable to obtain high quality, reliable and timely supply of these components and subassemblies. In addition, any reduction in the precision of these components will cause delays and interruptions inKyocera’s production cycle.
Within Kyocera’s manufacturing facilities, minute impurities, difficulties in the production process or otherfactors can cause a substantial percentage of its products to be rejected or be non-functional. These factors canresult in lower than expected production yields, which delay product shipments and may materially and adversely
affect Kyocera’s operating results. Because the majority of Kyocera’s costs of manufacture are relatively fixed,
production yield and capacity utilization rate are critical to Kyocera’s consolidated results of operations, financial
condition and cash flows.
(7) Shortages and rising costs of electricity may adversely affect Kyocera’s production and sales activities
As almost all nuclear power plant operation in Japan currently has ceased and remains at rest due to the damageand equipment failure of the nuclear power plant caused by the Great East Japan Earthquake in March
2011, Japan may have shortages and rising costs of electricity. Kyocera secures electric power supplies for
emergency through equipment and centers, however Kyocera’s production activity may become diminished if
massive blackouts occur in the areas in which Kyocera has facilities and electricity shortages continue. Shortagesof electricity in the areas in which Kyocera’s suppliers and customers have main operations may also interrupt
Kyocera’s production and sales activities. In addition, significant rising costs of electricity may adversely affectKyocera’s results of operations, financial condition and cash flows.
(8) Future initiatives and in-process research and development may not produce the desired results
Kyocera intends to expand its product lines to satisfy customer demand in its 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 from these initiatives. There can be no assurance thatthe products derived from Kyocera’s in-process research and development activities will achieve desired results
and market acceptance.
(9) Companies or assets acquired by Kyocera may require more costs than expected for integration, and may
not produce returns or benefits, or bring in anticipated business opportunities
In the course of developing its business, from time to time Kyocera considers opportunities to acquire, andundertakes the acquisition of companies or assets through mergers and acquisitions. There can be no assurance
that Kyocera will be able to integrate the operations, products and personnel of the acquired companies with its
own in an efficient manner. Nor can there be any assurance that Kyocera will be able to achieve operational andfinancial returns or benefits, or bring in new business opportunities, which it expects from the acquisition. An
acquired company may not be able to manufacture products or offer services in the amounts or at the efficiency
levels that Kyocera plans, and the demand for such products or services may not be at the levels that Kyocera
anticipates. Failure to succeed in acquisitions could have a material adverse effect on Kyocera’s business.
(10) Industry demand for skilled employees, particularly engineering and technical personnel, exceeds thenumber of personnel available and we may not be able to attract and retain key personnel
Kyocera’s future success depends, in part, on its ability to attract and retain certain key personnel, including
engineering, operational and management personnel. Kyocera anticipates that it will need to hire additional
9skilled personnel in all areas of its business. The competition for attracting and retaining these employees isintense. Because of recent intense competition for these skilled employees, Kyocera may be unable to retain its
existing personnel or attract additional qualified employees in the future.
Risks Related to Legal Restrictions and Litigations(11) Insufficient protection of Kyocera’s trade secrets and patents could have a significant adverse impact on
its competitive position
Kyocera’s success and competitive position depend on protecting its trade secrets and other intellectual property.
Kyocera’s strategy is to rely both on trade secrets and patents to protect its manufacturing and sales processes
and products, but reliance on trade secrets is only an effective business practice insofar as trade secrets remain
undisclosed and a proprietary product or process is not reverse engineered or independently developed. Kyocera
takes certain measures to protect its trade secrets, including executing nondisclosure agreements with certain of
its employees, joint venture partners, customers and suppliers. If parties breach these agreements or the measures
Kyocera takes are not properly implemented, Kyocera may not have an adequate remedy. Disclosure of its trade
secrets or reverse engineering of its proprietary products, processes or devices could materially affect Kyocera’s
business, consolidated results of operations, financial condition and cash flows.
Kyocera is actively pursuing patents on some of its inventions, but these patents may not be issued. Even if thesepatents are issued, they may be challenged, invalidated or circumvented. In addition, the laws of certain othercountries may not protect Kyocera’s intellectual property to the same extent as Japanese laws.
(12) Kyocera may require licenses to continue to manufacture and sell certain of its products, the expense ofwhich may adversely affect its results of operations
From time to time Kyocera has received, and may receive in the future, notice of claims of infringement of otherparties’ proprietary rights and licensing offers to commercialize third party’s patent rights. Accordingly, Kyocera
cannot assure that:•

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

future assertions against Kyocera will not result in an injunction against the sale of infringing or
allegedly infringing products or otherwise significantly impair its business and results of operations; or•Kyocera will not be required to obtain licenses, the expense of which may adversely affect its results ofoperations.

(13) Changes in our environmental liability and compliance obligations may adversely impact our operations
Kyocera is subject to various environmental laws and regulations in Japan and the other countries, which are
related to greenhouse gas mitigation, air emissions, wastewater discharges, the handling, disposal andremediation of hazardous substances, wastes and certain chemicals used or generated in our manufacturing
process, employee health and safety, labeling or other notifications with respect to the content or other aspects ofour processes, products or packaging, restrictions on the use of certain materials in or on design aspects of our
products or product packaging, and responsibility for disposal of products or product packaging. As well as ourcurrent operations, these laws and regulations can be applied to our past operations and may be applicable to thepast operations of businesses acquired from other companies even if such operations occurred before ouracquisitions. In addition, these laws and regulations which are applied to Kyocera can be more stringent or thescope of the laws and regulations can be broadened in the future due to factors including global climate change.
With respect to greenhouse gas mitigation in particular, international emissions trading regime may be createdbased on the result of the intergovernmental dialogue on global climate change. Kyocera establishes reserves for
specifically identified potential environmental liabilities when such liabilities are probable and can be reasonably
10estimated. In case we fail to comply with such laws and regulations, we could be required by the relevant
governmental organizations to pay penalty costs or remediation compensation. Furthermore, we may makevoluntary payments to compensate for environmental problems if we deem such compensation to be necessary.
The cost obligations noted above may adversely affect Kyocera’s results of operations, financial condition andcash flows.
(14) Kyocera is subject to various other laws and regulations
Kyocera may unintentionally come into conflict with laws and regulations and face legal proceedings, including
litigation and regulatory actions, although Kyocera believes that it is substantially in compliance with applicablelaws and regulations in the countries and areas in which Kyocera operates. If laws and regulations are
unexpectedly changed or introduced, Kyocera’s business operations may be limited and continuance may
become difficult. If Kyocera faces enormous legal costs related to litigation and regulatory actions, Kyocera’s
business operations may become significantly limited and Kyocera’s results of operations, financial conditionand cash flows may be negatively affected.
Risks Related to Disasters or Unpredictable Events(15) Kyocera’s markets or supply chains may be adversely affected by terrorism, outbreaks of disease, wars orsimilar events
Kyocera, as a global company, has been expanding its business worldwide. At the same time, we may be exposed
to risks of our getting involved in terrorism, outbreaks of disease, war and other similar events. In the case thatthose events occur, Kyocera’s operating activities would be suspended. Furthermore, there would be delay,
disorder or suspension in Kyocera’s R&D, manufacturing, sales and services. If such delay or disruption occurs
and continues for a long period of time, Kyocera’s business, consolidated results of operations, financial
condition and cash flows may be adversely affected.
(16) Kyocera’s headquarters and major facilities as well as its suppliers and customers may suffer thedevastating effects of earthquakes and other disasters
Kyocera’s headquarters and major facilities including plants, sales offices and R&D centers are located not onlyin Japan but also all over the world. It might be inevitable that Kyocera would suffer from natural disasters suchas earthquakes, typhoons, tsunamis, floods or other disasters, as well as manmade disasters such as a majorindustrial accident affecting one of our facilities. For instance, if a strong earthquake affected Kyocera’s
employees, R&D or manufacturing facilities, Kyocera’s operating activities would be suspended andmanufacturing and shipment would be delayed. Kyocera may also incur a great amount of expenses, such as
repair expenses for the damaged machines or facilities. In addition, if the social and economic infrastructure
suffers from adverse damages, traffic disturbance and electric power outages could occur and they may affectKyocera’s supply chains or manufacturing operations. Furthermore, Kyocera may be unable to obtain raw
materials if our suppliers sustain damage and Kyocera may also face difficulties shipping its products if its
customers sustain damage. Those damages set forth above, as well as any resulting general economic
slowdown and lower consumption levels, may have a material adverse effect on Kyocera’s consolidated resultsof operations, financial condition and cash flows.
Risks Related to Financial and Accounting(17) Kyocera may be exposed to credit risk on trade receivables due to its customers’ worsening financial
condition
Kyocera maintains allowances for doubtful accounts related to trade receivables for estimated losses resulting
from customers’ inability to make timely payments. However, trade receivables in the ordinary operating activity
are not covered by collateral or credit insurance. Therefore, if customers with whom Kyocera has substantial
11accounts receivable face difficulty in making payments due to economic downturn and if Kyocera is forced towrite off those receivables, Kyocera’s consolidated results of operations, financial condition and cash flows may
be affected.
(18) Kyocera may have to incur impairment losses on its investments in debt and equity securities
Kyocera holds investments in equity securities of companies not affiliated with us, which we generally hold on along-term position for business relationship purposes. A substantial portion of these investments consists ofshares of common stock of public companies in Japan, such as financial institutions and other companies
including KDDI Corporation, a Japanese telecommunication service provider. Kyocera Corporation’s equity
interest in KDDI Corporation was 12.76% as of March 31, 2013. If there are certain declines in the fair value,i.e., the market price, of the shares of these companies, and it determines that such declines are other-thantemporary, Kyocera will need to record an impairment loss. For some of the equity securities Kyocera owns,
including the shares of KDDI Corporation, Kyocera intends to keep its ownership at the current level in light of
the importance of its business relationships with the issuers of these equity securities. For other equity securities
in its portfolio, although, with periodical check, Kyocera may dispose of some securities which lack merit for
Kyocera, market conditions may not permit us to do so at the time, speed or price we may wish.
(19) Kyocera may have to incur impairment losses on long-lived assets, goodwill and intangible assets
Kyocera has many long-lived assets, goodwill and intangible assets. Long-lived assets and intangible assets withdefinite useful lives are tested for impairment whenever events or changes in circumstances indicate that its
carrying amount may not be recoverable. Goodwill and intangible assets with indefinite useful lives, rather thanbeing amortized, are tested for impairment at least annually, and also following any events and changes incircumstances that might lead to impairment.
In case the above assets are considered to be impaired, a loss on impairment is recognized based on the amountby which the carrying value exceeds the fair value of these assets. Such losses on impairment may materiallyaffect Kyocera’s consolidated results of operations and financial condition.
(20) Deferred tax assets may not be realized or additional liabilities for unrecognized tax benefits may berequired.
Kyocera records valuation allowances against deferred tax assets based on the estimated future taxable income
and feasible tax planning strategies to adjust their carrying amounts when we believe it is more likely than notthat the assets will not be realized. If future taxable income is lower than expected due to future market
conditions or poor operating results, significant adjustments to deferred tax assets may be required.
Kyocera records liabilities for unrecognized tax benefits based on the premise of being subject to income tax
examination by tax authorities, when it is more likely than not that tax benefits associated with tax positions will
not be sustained. Actual results, such as settlements with tax authorities, may differ from Kyocera’s recognition.
(21) Changes in accounting standards may adversely impact our results of operations and financial condition.
Adoptions of new accounting standards, or changes in accounting standards may have an effect on Kyocera’s
consolidated results of operations and financial condition. In addition, if Kyocera modifies its accounting
software or information systems to introduce changes in accounting standards, certain investments or expenses
may be required.

12

Other Risks(22) As a holder of ADSs, you will have fewer rights than a shareholder has and you will have to act throughthe depositary to exercise those rights
The rights of shareholders under Japanese law to take various 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 of record. Because the depositary, through its
custodian agents, is the record holder of the shares underlying the ADSs, only the depositary can exercise thoserights in connection with the deposited 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 us. However,in your capacity as an ADS holder, you will not be able to bring a derivative action, examine our accounting
books and records or exercise appraisal rights through the depositary.
(23) Rights of shareholders under Japanese law may be more limited than under the law of other jurisdictions
Our Articles of Incorporation, Regulations of the Board of Directors, Regulations of the Audit & Supervisory
Board and the Companies Act of Japan 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 bedifferent from those that would apply if we were a U.S. company. Shareholders’ rights under Japanese law may
not be as extensive as shareholders’ rights under the laws of the United States. You may have more difficulty inasserting your 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.
(24) Because of daily price range limitations under Japanese stock exchange rules, you may not be able to sell
your shares of our Common Stock at a particular price on any particular trading day, or at all
Stock prices on Japanese stock exchanges are determined on a real-time basis by the equilibrium between bids
and offers. These exchanges are order-driven markets without specialists or market makers to guide priceformation. To prevent excessive volatility, these exchanges set daily upward and downward price fluctuation
limits for each stock, based on the previous day’s closing price. Although transactions may continue at the
upward or downward limit price if the limit price is reached on a particular trading day, no transactions may takeplace outside these limits. Consequently, an investor wishing to sell at a price above or below the relevant daily
limit may not be able to sell his or her shares at such price on a particular trading day, or at all.
(25) Our shareholders of record on a record date may not receive the dividend they anticipate
The customary dividend payout practice of publicly listed companies in Japan may significantly differ from thepractice widely followed in foreign markets. Our dividend payout practice is no exception. The declaration andpayment of annual dividends requires the approval of shareholders of our common stock at the annual general
meeting of shareholders held in June of each year. Our board of directors decides and submits a proposal for anannual dividend declaration a few weeks before the annual general meeting. If the shareholders’ approval isgiven, the annual dividend payment is made to shareholders of record as of the record date for such payment,
which is March 31, whether or not the shareholders are still holding shares after such record date. The declarationand payment of interim dividends is decided by our board of directors and does not require the approval ofshareholders. The interim dividend payment is made to shareholders of record as of the record date for suchpayment, which is September 30, whether or not the shareholders are still holding shares after such record date.
Shareholders of record as of the applicable record date may sell shares in the market after the record date with theanticipation of receiving a certain dividend payment. However, the date of declaration of interim dividends is
decided by our board, and the declaration of annual dividends is approved by our shareholders only in June,
based upon a proposal submitted by our board. As such, we may have announced a dividend forecast before theapplicable record date; but, in making a decision on the dividend declaration, neither our shareholders nor our
13board of directors are legally bound by such forecast. Therefore, our shareholders of record on the record dates
for interim or annual dividends may not receive the dividend they anticipate.
(26) Foreign exchange fluctuations may affect the dollar value of our ADSs and dividends payable to holdersof our ADSs
Market prices for our ADSs may fall if the value of the yen declines against the U.S. dollar. In addition, theU.S. dollar amount of cash dividends and other cash payments made to holders of our ADSs would be reduced if
the value of the yen declines against the U.S. dollar.
Item 4.

Information on Kyocera Corporation and its Consolidated Subsidiaries

A. History and Development of Kyocera Corporation and its Consolidated Subsidiaries
Kyocera Corporation is a joint stock corporation incorporated under the laws of Japan in 1959 with the name
Kyoto Ceramic Kabushiki Kaisha. Its name 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 1960s, we
expanded our business and technology horizontally into the design and production of fine ceramic parts, ceramic
integrated circuit (IC) packages and electronic components. In the 1970s, we began to produce applied ceramic
products, including cutting tools, ceramic parts for medical and dental uses, jewelry and solar energy products.
In the 1980s, we diversified into new strategic fields. In 1982, we merged with Cybernet Electronics Corporation,a telecommunications equipment manufacturer in which we had made an equity investment three years earlier.
We also played a leading role in the establishment of DDI Corporation (currently KDDI Corporation), which has
become one of Japan’s leading providers of telecommunications services. In 1989, we gained a presence in theelectronic connector market through our acquisition of Elco International Corporation (currently Kyocera
Connector Products Corporation).
In the 1990s, we strengthened our position as a globally integrated electronic components manufacturer throughour acquisition of AVX Corporation, a maker of capacitors and other passive electronic components, in January
1990. In the middle of the 1990s, Kyocera developed two main business categories, the “Components Business,”in which Kyocera provides parts and devices such as fine ceramics parts, semiconductor parts, applied ceramic
products and electronic components and devices to mainly electronic equipment manufacturers in informationand communications fields, and the “Equipment Business,” in which Kyocera manufactures and sells
telecommunications equipment and information equipment, such as mobile phone handsets, PHS-related
products, printers and multifunctional products to distributors or directly to customers.
Since 2000, we have further enhanced our position as a market leader in telecommunications and informationequipment. In February 2000, we acquired the code division multiple access (CDMA) mobile phone handset
business from Qualcomm Inc. and established our U.S. subsidiary, Kyocera Wireless Corp., which was merged
into Kyocera Communications, Inc. in April 2010. In April 2000, we invested in Kyocera Mita Corporation(currently Kyocera Document Solutions Inc.), a manufacturer of copier machines and other document solutions
equipment, and made it a wholly-owned subsidiary. In April 2002, we transferred Kyocera Corporation’s printerbusiness to Kyocera Document Solutions Inc. to further enhance our information equipment business by pursuinggroup synergies.
With the aim of becoming a more global enterprise and enhancing our profitability, we have been expanding our
production in China located in Shanghai and Dongguan since the middle of the 1990s. Kyocera also established asales company, Kyocera (Tianjin) Sales & Trading Corporation (currently Kyocera (China) Sales and Trading
14

Corporation), in March 2003 to cultivate the Chinese market through enhancing our marketing ability for both
our products manufactured in China as well as our products imported into China. In addition, we established asubsidiary, Kyocera (Tianjin) Solar Energy Co., Ltd., to assemble solar modules, production of which
commenced in November 2003, and to respond to market needs swiftly.
In August 2003, we made Kinseki, Limited (currently Kyocera Crystal Device Corporation), a major producer ofartificial crystal related products, a wholly-owned subsidiary through a share exchange to strengthen ourElectronic Device Group. In April 2004, Kyocera integrated the marketing division of Kyocera Crystal Device
Corporation into the marketing division of the electronic components of Kyocera Corporation and the
manufacturing division of crystal related components of Kyocera Corporation was transferred to Kyocera Crystal
Device Corporation through corporate splits.
To meet with strong demand for solar energy products in Europe, Kyocera established Kyocera Solar Europe
S.R.O. for the assembling of solar modules in the Czech Republic in October 2004.
In April 2008, Kyocera acquired the mobile phone related business of SANYO Electric Co., Ltd. (currently
Panasonic Corporation) to strengthen and improve the profitability of the Telecommunications Equipment
Group.
For further enhancement of the Information Equipment Group, Kyocera Document Solutions Inc. made TA
Triumph-Adler AG (currently TA Triumph-Adler GmbH, TA), a leading specialist in the information technology
business and a distributor of printers and multifunctional peripherals in Germany, a subsidiary through avoluntary public takeover offer in January 2009. In October 2010, Kyocera Document Solutions Inc. acquired allof the remaining shares of TA. As a result, TA has become a wholly-owned subsidiary of Kyocera Document
Solutions Inc. As well as broadening sales channels through the acquisition of TA, we established a subsidiary,
Kyocera Document Technology Vietnam Company Limited, to produce information equipment for expanding
our production capacity in July 2011.
In July 2011, Kyocera acquired Unimerco Group A/S (currently Kyocera Unimerco A/S), a Danish-basedindustrial cutting tool manufacturing and sales company to expand cutting tool business.
In August 2011, Kyocera established Kyocera Vietnam Management Company Limited (currently Kyocera
Vietnam Company Limited).
In February 2012, in order to expand its Liquid Crystal Displays (LCDs) business, Kyocera acquired Optrex
Corporation (currently Kyocera Display Corporation), a specialized manufacturer of LCDs and related products.
For a discussion of recent and current capital expenditures, please see Item 5. “Operating and Financial Review
and Prospects” of this annual report on Form 20-F. We have had no recent significant divestitures nor any
significant divestitures currently being made.
B. Business Overview
Overview
Kyocera is engaged in numerous high-tech fields, from fine ceramic components to electronic devices,
equipment, services and networks. Our manufacturing and distribution operations are conducted worldwide. Asof March 31, 2013, we had 187 subsidiaries and 4 affiliates outside Japan and 31 subsidiaries and 6 affiliates inJapan. Our customers include individuals, corporations, governments and governmental agencies. For
information on our sales by category of activity and information on our sales by geographic area and productsegment, please see Item 5.A. “Operating Results” of this annual report on Form 20-F.

15

Operations
Kyocera categorizes its operations into seven reporting segments: (1) Fine Ceramic Parts Group,(2) Semiconductor Parts Group, (3) Applied Ceramic Products Group, (4) Electronic Device Group,(5) Telecommunications Equipment Group, (6) Information Equipment Group, and (7) Others.
Our principal products and services offered in each reporting segment are shown below.
(1) Fine Ceramic Parts Group
Components for Semiconductor Processing Equipment and Flat Panel Display (FPD) Manufacturing Equipment,
Information & Telecommunication Components,
General Industrial Machinery Components,
Sapphire Substrates, andAutomotive Components(2) Semiconductor Parts Group
Ceramic Packages for Crystal and SAW Devices, CMOS/CCD Image Sensor Ceramic Packages,
LSI Ceramic Packages, Wireless Communication Device Packages,
Optical Communication Device Packages and Components, andOrganic Multilayer Packages(3) Applied Ceramic Products Group
Residential and Commercial Use Solar Power Generating Systems, Solar Cells and Modules,
Cutting Tools, Micro Drills,
Medical and Dental Implants, andJewelry and Applied Ceramic Related Products(4) Electronic Device Group
Ceramic Capacitors, Tantalum Capacitors,
SAW Devices, RF Modules, EMI Filters,
Clock Oscillators, Crystal Units, Ceramic Resonators, Optical Low Pass Filters,
Connectors,
Thermal Printheads, Inkjet Printheads,
Amorphous Silicon Photoreceptor Drums,
LCDs, and Touch Panels(5) Telecommunications Equipment Group
Mobile Phones, andPHS-related Products such as PHS Handsets and PHS Base Stations(6) Information Equipment Group
Monochrome and Color Printers and Multifunctional Products,
Wide Format Systems,
Document Solutions,Application Software, andSupplies16

(7) Others
Information Systems & Telecommunication Services, Engineering Business, Management Consulting Business,
Epoxy Molding Compounds for Semiconductor Encapsulation, Electrical Insulators,
Flexible Printed Circuit Sheet Materials, Synthetic Resin Molded Parts,
Realty Development Business, and
LED Lighting Systems(1) Fine Ceramic Parts Group
Products in this reporting segment are widely used in the industrial machinery, information andcommunications equipment, computing, automotive and various other industrial sectors. These products are
made from a variety of ceramic materials, such as alumina, silicon carbide and silicon nitride as well as zirconia,
utilizing their characteristics of heat resistance, corrosion resistance, wear resistance and electrical insulation.
Products Kyocera develops, manufactures and sells in this reporting segment include substrates, which are thinceramic bases used by manufacturers for hybrid IC foundations. Kyocera also develops, manufactures and sells
substrates for thermal printheads, thin-film ceramic/alumina tape substrates for chip resistors, substrates for HDD
thin-film magnetic heads, sapphire substrates for Light Emitting Diodes (LEDs) used for back-lighting for
devices such as mobile phones and TVs, components for semiconductor processing equipment, components
for FPD manufacturing equipment, components for the automobiles, mechanical seals for pumps, friction discs
and thread guides for yarn texturing machines in the textile industry, rings for fishing rods, and nozzles and partsfor papermaking machinery.
(2) Semiconductor Parts Group
Kyocera develops, manufactures and sells both inorganic (ceramic) and organic packages and substrates in thisreporting segment.
Ceramic packages have the superior characteristics of hermeticity, heat resistance and heat dissipation. In
addition, they can be smaller and thinner and have good high frequency properties as well as facilitate theembedding of functions of passive components. Kyocera supplies various ceramic packages and components
capitalized on material’s characteristics. Major products in this reporting segment are ceramic packages forcrystal and SAW devices, CMOS/CCD sensors, LSI such as ball grid array ceramic packages and opticalcommunication, and ceramic parts for fiber-optic connectors. Ceramic packages for crystal and SAW devices areused for clock oscillators, crystal units and SAW filters, which are mostly inserted into mobile phone handsets.
Ceramic packages for CMOS/CCD sensors are mainly used for image sensor equipped in mobile phone handsetswith cameras and digital cameras. Ball grid array packages are used in MPUs and other logic ICs, mainly
for high-end servers.
In the organic package business, Kyocera develops, manufactures and sells organic flip-chip packages for highend application specific integrated circuits (ASICs), flip-chip chip-scale packages (FCCSPs) and module
substrates used in mobile phone handsets.
(3) Applied Ceramic Products Group
This reporting segment consists of four product lines: 1) Solar Energy Products, 2) Cutting Tools, 3) Medical and
Dental Implants, 4) Jewelry and Applied Ceramic Related Products.
1) Solar Energy Products
Kyocera develops, manufactures and sells solar cells and modules as well as solar power generating systems. We
concentrate the manufacturing of the solar cells in Japan, and assemble modules in Japan, China, Czech
Republic, and Mexico.
172) Cutting Tools
Kyocera develops, manufactures and sells cutting tools, which are parts used in metal processing in industrial
manufacturing that are made from composite materials based on ceramics and metal. These products are usedmainly in the automotive industry. In addition, with the aim of strengthening this business, Kyocera madeUnimerco Group A/S (currently Kyocera Unimerco A/S), which is a Danish-based industrial cutting tool
manufacturing and sales company, a wholly-owned subsidiary in July 2011. Through this acquisition, Kyocera
has added custom-made solid-type cutting tools for automobile engine processing as well as aviation and windpower generation industries to its line-up.
3) Medical and Dental Implants
Kyocera produces medical and dental implants products, which include prosthetic joints and dental prosthetics
that use ceramic materials and titanium alloys. In addition to these products, Kyocera supplies a wide range of
medical materials such as cardiovascular type medical equipment and advanced X-ray computer tomography
diagnosis equipment.
4) Jewelry and Applied Ceramic Related Products
Kyocera develops, manufactures and sells recrystallized jewelry comprised mainly of synthetic emeralds,
alexandrines and rubies. These stones are manufactured using a single crystal growth technology developed byus, and are chemically and physically equivalent to natural stones. Kyocera also develops, produces and sells
applied ceramic related products such as kitchen accessories utilizing ceramic characteristics of wear resistanceand corrosion resistance against acidity and alkalinity.
(4) Electronic Device Group
Kyocera develops, manufactures and sells high quality and cost competitive electronic components and devices
for the information and communication market. This field creates demand for high functionality, miniaturization,high frequency and low energy consumption. We develop, manufacture and sell high-value-added products suchas miniature ceramic capacitors with high capacitance, tantalum capacitors, RF modules, miniature crystal related
products like clock oscillators and connectors mainly for digital consumer equipment such as mobile phonehandsets and PCs.
For our electronic components and devices business, Kyocera is working to expand sales by strengthening costcompetitiveness through overseas production and by collaborating with consolidated subsidiaries. We areutilizing production sites in China and Southeast Asia to further reduce costs for such products as ceramic
capacitors and crystal related products. U.S. based AVX Corporation, our consolidated subsidiary, develops,
manufactures and sells ceramic capacitors, tantalum capacitors and other passive components mainly used for
information and communication equipment, industrial machinery and automobiles. We are strengthening ties
between our ceramic capacitor business and AVX Corporation in terms of development and production fronts
and are expanding sales of Kyocera Group’s electronic devices overseas by leveraging AVX Corporation’s
global manufacturing and sales network. In the crystal related products business, Kyocera Crystal Device
Corporation develops and manufactures these products while Kyocera Corporation and AVX Corporation
handles the sales.
We deliver thin-film products such as thermal printheads, amorphous silicon photoreceptor drums, andLCDs, mainly for information equipment and industrial equipment. In addition, Kyocera expanded our LCDs
business in the automotive market through making Optrex Corporation (currently Kyocera Display Corporation),a specialized manufacturer of LCDs and related products, a consolidated subsidiary in February 2012.

18

(5) Telecommunications Equipment Group
This reporting segment includes the mobile phone business such as smartphones and PHS handsets and basestations. Mobile phones are distributed mainly for KDDI Corporation and SoftBank Mobile Corp. in Japan, as
well as for U.S. telecommunication service providers such as Sprint Nextel Corporation in the overseas market.
We also develop, manufacture and sell base stations and handsets for WILLCOM, Inc., which provides PHS
services in Japan.
(6) Information Equipment Group
Kyocera Document Solutions Inc. conducts this reporting segment. The major products in this reporting segment
comprise page printers and multifunctional products. Our equipment is marketed under the “ECOSYS” concept,
a focus on the characteristic of long life cycle and lower running cost, which use amorphous silicon
photoreceptor drums developed by Kyocera Corporation and positive-charged single-layer photoconductor
drums developed by Kyocera Document Solutions Inc.
We develop equipment and software in Japan, the United States and the Philippines, and manufacture equipment
mainly in China and Vietnam. In terms of supplies such as toner, we develop them in Japan and manufacture
them in each production facility in Japan and overseas. We currently manage sales offices in 31 countries andconduct business in more than 140 countries worldwide.
(7) Others
This reporting segment includes revenues from information and communications service business. This segment
also develops, manufactures and sells electrical insulators and synthetic resin molded parts. In addition, thissegment includes revenues from environment and energy related products such as LED lighting systems.
Kyocera Communication Systems Co., Ltd. provides various corporate information and communications services
such as system integration service, content distribution service for smart devices and mobile phones through data
centers, and cloud computing service. This company also operates an engineering business from system designand construction to maintenance for such as wireless base stations. It also conducts a management consulting
business based on implementation and operation of the “Amoeba Management System,” which is Kyocera’s
unique management method.
Kyocera Chemical Corporation develops new products by pursuing synergies with fine chemical technologies
and our components technologies such as those employed by the Electronic Device Group.
In addition, we are working to expand sales of LED lighting systems and related products for stores, an area ofgrowing demand in line with increasing awareness of the importance of environmental preservation and energy
saving.
Sales and Distribution
Kyocera products are marketed worldwide by our sales personnel, as well as by sales companies within ourgroup, and by independent distributors. We have regional sales and design application personnel in strategic
locations to provide technical and sales support for customers and distributors. We believe that this combinationof distribution channels leads to a high level of market penetration and efficient coverage of services for ourcustomers.
Most of sales in the Fine Ceramic Parts Group, the Semiconductor Parts Group and the Electronic Device Groupare made directly to component and equipment manufacturers in Japan and overseas.

19

In the solar energy business in the Applied Ceramic Products Group, solar modules and solar power generating
systems are sold primarily to global users via sales subsidiaries, distributors and our franchise chains. In addition,
power storage systems and energy management systems are sold to users in Japan through Kyocera’s franchise
stores and home builders. Cutting tools are sold to users such as automobile parts manufactures throughwholesale dealers and distributors. Jewelry and applied ceramic products such as ceramic knives are sold throughdirect retail shops and general retailers. In the medical and dental implant business, joint prostheses, artificial
bones and dental implants are sold to dental clinics and hospitals through distributors.
In the Telecommunications Equipment Group, we primarily sell products directly to telecommunications carriersin the Japanese and overseas markets. Our key sales destinations are KDDI Corporation, SoftBank Mobile Corp.,
WILLCOM, Inc. in Japan and Sprint Nextel Corporation in the United States.
The information Equipment Group provides document solutions and application software and sells Kyocera
brand printers and multifunctional products globally through a sales network of distributors and wholesale
dealers that spans over 140 countries. Hardware such as printers and multifunctional products is also soldthrough OEM (Original Equipment Manufacturing) suppliers.
In the Others reporting segment, Kyocera Communication Systems Group provides Information andCommunication Technologies (ICT) business and management consulting business to general companies, public
institutions and healthcare corporations as well as engineering business to telecommunications carriers, wirelessequipment vendors and solar power generation business operators. Chemical materials from Kyocera Chemical
Corporation are sold directly to secondary manufacturers who incorporate them into their own products.
Domestic sales are made in the yen, while overseas sales are made in a variety of currencies, but predominantlyin the U.S. dollar and the Euro.
Sources and Availability of Raw Materials and Supplies
We purchase a variety of raw materials and other materials for our businesses.
The principal raw materials include alumina, zirconia, silicon nitride, silicon particles, nickel powder and epoxy
resins. These raw materials are used mainly in the manufacturing of products for the Components Business. They
are also the main materials supplied for use in key components such as chip sets and LCDs in the Equipment
Business.
Our basic policy is to procure raw materials and other materials from several companies, though we may use asingle supplier if (1) the final customer selects the material supplier; or (2) the number of suppliers who candeliver high-quality raw materials or other materials to ensure the high quality of final products is limited.
The purchase price of these raw materials and other materials fluctuates depending on the supply-demandsituation, as well as the rising cost of certain raw materials and fuel, among others. We work hard to reduce theeffect of these fluctuations and to absorb rising costs by making continuous internal improvements, including
cost reductions. We have also executed long-term agreements with suppliers for certain raw materials
to ensure that we have stable supply to meet plans to increase production, and a fair purchase price.
In fiscal 2013, we procured a sufficient level of raw materials and other materials to carry out our productionplans.

20

Patents and Licenses
Our success and competitive position depend on a number of significant patents, licenses and trade secrets
relating to our manufacturing and sales processes and products. All of Kyocera’s intellectual properties are
considered to be important. However, Kyocera believes that neither its expiration nor termination of any specificintellectual properties would have significant impact on Kyocera’s entire operation. The following table sets
forth information, as of March 31, 2013, with respect to our significant patents and license agreements.
(a) License permitted to produce products
Counterparty

Qualcomm Incorporated

Country

United States

Contents

License under patents
regarding mobile phone

PeriodFrom August 31, 1996 topatent expiration(b) License—cross agreements
Counterparty

Canon Inc.

CountryJapan

Contents

License under patents
regarding electric photo
printer

PeriodFrom April 1, 2012 topatent expiration

Competitive Position(1) Fine Ceramic Parts Group
Since our founding, Kyocera has worked continuously to develop fine ceramic materials and products to cultivate
new markets. At present, we provide fine ceramic products to a wide range of industries, notably the informationand communication market, the industrial machinery market and the automotive market.
Although competitors in this reporting segment are mainly Japanese manufacturers and differ in each market,
Kyocera has differentiated ourselves to become a global market leader through a competitive advantage inmaterials technology accumulated since our founding, and in outstanding production technology and capability,
which enables us to meet customer requirements, particularly in terms of product dimension, size and volume.
We have also established an internal integrated system from fundamental research to next-generation productdevelopment through our R&D efforts, and this differentiates us from competitors.
(2) Semiconductor Parts GroupIn this reporting segment, our goal is to further strengthen our competitive position in both ceramic and organic
package businesses in the global market. To achieve this, we strive to provide high-value-added products and todevelop new applications such as in the digital consumer equipment market, optical and wirelesscommunications markets, and in the automotive and medical industries, etc.
In the ceramic package business, Kyocera has already become a global market leader. We aim to further increasecustomer satisfaction by utilizing our expertise in development and manufacturing technologies.
In the organic package business, Kyocera SLC Technologies Corporation (KST) produces flip-chip packages forservers, routers and game consoles as well as smaller and thinner packages for mobile phone handsets. In the
flip-chip package market, fine design and high reliability are required, and we aim to become a leading company
on a global technology front. In this market, we have several competitors which are Japanese and Asian
manufactures. In pursuit of excellence in engineering and production technologies for finer pitch, smaller andthinner packages, we aim to expand our market share.

21

(3) Applied Ceramic Products GroupThe solar energy industry has a high number of competitors worldwide. In addition, many kinds of solar products
using various raw materials and production methods have been introduced to the market, and competition on
price and technological fronts is intensifying every year. Despite the highly competitive environment, Kyocera
has established a competitive advantage based on more than 35 years of experience in the development of solar
power generation products. Our products realize high conversion efficiency and long-term product reliability
based on accumulated development and production technologies, and this is one of Kyocera’s strengths.
We manufacture multicrystalline silicon solar cells and modules in-house, from silicon ingots to modules,
enabling us to reduce costs and enhance productivity in every manufacturing process. Through these efforts,
Kyocera has generated top-class results in installing solar power generating systems for public and commercial
use in Japan. In addition to selling solar modules, Kyocera manages the design of solar power generation systems
through their construction and maintenance services with subsidiaries. Besides this, Kyocera is working to
expand sales of systems such as the Home Energy Management System (HEMS), which combines asolar generating system with a power storage system.
Kyocera is one of the largest suppliers of cutting tools in Japan. Our cutting tools are employed primarily in
automotive related markets. Although we have many competitors, we provide a diverse array of cutting tools formachine tools based on advanced ceramic materials technology. We are increasing sales in the European market
and expanding business in new markets such as the aviation and wind-power generation markets throughKyocera Unimerco A/S, which joined the Kyocera Group in July 2011.
(4) Electronic Device Group
Kyocera develops, manufactures and sells a wide variety of capacitors, crystal related products, connectors andthin-film products. Although competitors in this reporting segment are Japanese, Asian and U.S. manufacturesand differ in each product, one of our competitive advantages is that we can supply a wide variety ofcomponents.
AVX Corporation and Kyocera Crystal Device Corporation, our subsidiaries, are global suppliers in the tantalum
capacitor market and the market for small-size crystal related products, respectively. In the tantalum capacitor
business, we newly added the tantalum business of Nichicon Corporation to the Kyocera Group in February 2013
and worked to further strengthen our market position and enhance our product line-up.
In the LCD business, we are focusing on the development of small- and medium-sized products and are seeking
to expand business mainly for industrial and automotive applications while also growing the touch panel
business. In addition, we have become one of the largest suppliers of thermal printheads that are equipped invarious printers, such as barcode printers.
(5) Telecommunications Equipment GroupIn the mobile phone business, our competitors are U.S., Asian and Japanese manufacturers both in Japan andoverseas. Our production volume ranks in the top class among Japanese manufacturers, even though our global
market share is not large. Kyocera strives to differentiate itself in this business by releasing distinctive handsetsthat make use of our unique component technology.
In terms of PHS related products, our main competitors are Japanese manufacturers, and we are a market leader
in the PHS handset and base station businesses.
(6) Information Equipment Group
Our competitors are mainly U.S. and Japanese manufactures in the printer and multifunctional productbusinesses. Kyocera’s printers and multifunctional products employ our uniquely developed long-life22photoreceptors (Amorphous Silicon Drum and Positive-charged Single-layer Photoconductor Drum) that boast
exceptional resistance to wear. Through this, our document equipment, which is based on the “ECOSYS”
concept aimed at realizing longer life, lower running costs and reduced waste of supplies during usage, hasreceived high praise from customers worldwide as well as independent evaluation organizations, even though
there are many competitors in this market.
In addition, we provide high-value-added solutions that meet individual customer needs through our uniquesolutions platform, “HyPAS” (Hybrid Platform for Advanced Solutions), which is based on standard technology
for the internet. “HyPAS” enables users to embed various applications in document equipment and connect witha cloud computing environment or mobile equipment. We are also expanding our MDS (Managed Document
Services) business to provide the optimal document environment for each customer.
Moreover, we are promoting further enhancement of our sales network by securing external management
resources. We also started manufacturing at a new plant in Vietnam in October 2012 in order to expand businessin emerging markets and strengthen product competitiveness by reducing costs.
Government Regulation
There are various governmental regulations specifically applicable to industries in which Kyocera operates,
including regulations relating to business and investment approvals, export regulations, tariffs, intellectual
properties, consumer and business taxation, exchange controls, and material procurement in public works.
Kyocera does not believe that such governmental regulations currently have significant effects on its business.
Environmental Regulation
Kyocera is also subject to various regulations concerning the environment of the countries where it operates.
These regulations cover air emissions, wastewater discharges, the handling, disposal and remediation of
hazardous substances, wastes and certain chemicals used or generated in Kyocera’s manufacturing process,employee health and safety, labeling or other notifications with respect to the content or other aspects of ourprocesses, products or packaging, restrictions on the use of certain materials in or on design aspects of its
products or product packaging, and responsibility for disposal of products or product packaging. They also
include several regulations for chemical substance in products, such as the European Union Directive on the
Restriction on the Use of Certain Hazardous Substances in Electrical and Electronic Equipment (RoHS
Directive), the European Union Directive on Waste Electrical and Electronic Equipment (WEEE Directive), theEuropean Union’s Registration, Evaluation, Authorization and Restriction of Chemicals (REACH), and similar
regulations required in other countries and areas including China. Based on our periodic reviews of the operating
policies and practices at all of our facilities, Kyocera believes that it is not involved in any pending or threatened
proceedings that would require curtailment of its business, and its operations are currently in substantial
compliance, in all material respects, with all applicable environmental laws and regulations. Accordingly, thecost of continuing compliance will not be considered to have a material effect on our financial condition or
results of operations.
In addition to the above environmental regulations, AVX Corporation, a U.S. based subsidiary, has been
identified by the United States Environmental Protection Agency (EPA), state governmental agencies or otherprivate parties as a potentially responsible party (PRP) under the Comprehensive Environmental Response,
Compensation and Liability Act (CERCLA) or equivalent state or local laws for clean-up and response costs
associated with certain sites at which remediation is required with respect to prior contamination. Because
CERCLA has generally been construed to authorize joint and several liability, the EPA could seek to recover all
clean-up costs from any one of the PRPs at a site despite the involvement of other PRPs. At certain sites,
financially responsible PRPs other than AVX Corporation also are, or have been, involved in site investigationand clean-up activities. AVX Corporation believes that liability resulting from these sites will be apportioned
between AVX Corporation and other PRPs.
23

To resolve its liability at the sites at which AVX Corporation has been named a PRP, AVX Corporation hasentered into various administrative orders and consent decrees with federal and state regulatory agencies
governing the timing and nature of investigation and remediation. As is customary, the orders and decrees
regarding sites where the PRPs are not themselves implementing the chosen remedy contain provisions allowing
the EPA to reopen the agreement and seek additional amounts from settling PRPs in the event that certain
contingencies occur, such as the discovery of significant new information about site conditions.
As to the proposed financial settlement among AVX Corporation, the EPA and Commonwealth of Massachusetts
regarding the New Bedford Harbor Superfund Site, and the effects on our financial condition or results ofoperations with respect to this matter, please refer to “The proposed financial settlement among AVX
Corporation, the U.S. Environmental Protection Agency and Commonwealth of Massachusetts regarding the
New Bedford Harbor Superfund Site” in Item 5.A. “Operating Results” of this annual report on Form 20-F on
page 31.
Other Regulation
Kyocera’s subsidiary conducted transactions with Iran-related organizations in fiscal 2013, which Kyocera isrequired to disclose under Section 13(r) of the Securities Exchange Act of 1934, as amended. TA Triumph-Adler
Norddeutschland GmbH (TANG), a wholly-owned subsidiary of TA Triumph-Adler GmbH, which is a whollyowned German-based subsidiary of Kyocera Document Solutions Inc., has a lease and service maintenancecontract for multifunctional peripheral machines and printers with a branch of Bank Saderat Iran in Hamburg,
Germany, of which one of the major shareholders is the Government of Iran. This contract began from October2007 and will end in September 2013, and currently TANG does not intend to renew this contract. Total sales
and interest revenue under this contract were approximately ¥172 thousand and ¥55 thousand, respectively. The
total net profits were substantially less than those amounts. TANG also has a lease and service maintenancecontract for multifunctional peripheral machines with Intra Chem Trading GmbH in Hamburg, Germany, apetrochemical company which is a German-based subsidiary of a petrochemical company in Iran. This contract
began from August 2008 and will end in July 2013, and currently TANG does not intend to renew this contract.
Total sales and interest revenue under this contract were approximately ¥49 thousand and ¥18 thousand,respectively. The total net profits were substantially less than those amounts. Kyocera believes these transactions
made by TANG were conducted in compliance with the applicable laws in Germany.

24

C. Organizational Structure
We had 228 subsidiaries and affiliates as of March 31, 2013. Our management structure is based on a businesssegment structure. Therefore, the management of each segment is conducted uniformly regardless of whether ouroperations are conducted by the parent company or by one of our subsidiaries.
The following table sets forth information, as of March 31, 2013, with respect to our significant subsidiaries.

Name

Country ofIncorporation

Percentage
held by
KyoceraMain Business(1) Fine Ceramic Parts Group
Kyocera Industrial Ceramics Corporation . . . . . . .

United States

100.00% Manufacture and sale of fineceramic-related products andthin film devices

Kyocera SLC Technologies Corporation . . . . . . . .

Japan

100.00% Development, manufacture andsale of organic multilayer
packages and substrates

Shanghai Kyocera Electronics Co., Ltd. . . . . . . . . .

China

100.00% Manufacture and sale of fineceramic-related products andelectronic devices

Kyocera America, Inc. . . . . . . . . . . . . . . . . . . . . . .

United States

100.00% Development, manufacture andsale of fine ceramic-related
products

Kyocera Solar Corporation . . . . . . . . . . . . . . . . . . .

Japan

100.00% Sale of solar energy products

Kyocera (Tianjin) Solar Energy Co., Ltd. . . . . . . .

China

90.00% Manufacture of solar energy
products

Kyocera Solar, Inc. . . . . . . . . . . . . . . . . . . . . . . . . .

United States

100.00% Manufacture and sale of solar
energy products

Kyocera Solar Europe S.R.O. . . . . . . . . . . . . . . . . .

Czech

100.00% Manufacture of solar energy
products

Kyocera Precision Tools Korea Co., Ltd. . . . . . . . .

Korea

90.00% Manufacture and sale of cutting
tools

Kyocera Tycom Corporation . . . . . . . . . . . . . . . . .

United States

100.00% Manufacture and sale of cutting
tools

Kyocera Unimerco A/S . . . . . . . . . . . . . . . . . . . . . .

Denmark

100.00% Development, manufacture andsale of cutting tools

Kyocera Medical Corporation . . . . . . . . . . . . . . . .

Japan

77.00% Development, manufacture andsale of medical material(2) Semiconductor Parts Group(3) Applied Ceramic Products Group

25

Name

Country ofIncorporation

Percentage
held by
KyoceraMain Business(4) Electronic Device Group
Kyocera Connector Products Corporation . . . . . . .

Japan

100.00% Development, manufacture andsale of electronic devices

Kyocera Crystal Device Corporation . . . . . . . . . . .

Japan

100.00% Development and manufactureof electronic devices

Kyocera Crystal Device (Thailand) Co., Ltd. . . . . .

Thailand

100.00% Manufacture of electronic
devices

Kyocera Display Corporation . . . . . . . . . . . . . . . . .

Japan

100.00% Development and sale ofelectronic devices

Kyocera Display (Zhangjiagang) Co., Ltd. . . . . . .

China

100.00% Manufacture of electronic
devices

Dongguan Shilong Kyocera Co., Ltd. . . . . . . . . . .

China

90.00% Manufacture of cutting tools
and thin-film devices

AVX Corporation . . . . . . . . . . . . . . . . . . . . . . . . . .

United States

72.23% Development, manufacture andsale of electronic devices

Kyocera Telecom Equipment (Malaysia) Sdn.
Bhd. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Malaysia

100.00% Manufacture of
telecommunications equipment

Kyocera Communications, Inc. . . . . . . . . . . . . . . .

United States

100.00% Sale of telecommunications
equipment

Kyocera Document Solutions Inc. . . . . . . . . . . . . .

Japan

100.00% Development and manufactureof information equipment

Kyocera Document Solutions Japan Inc. . . . . . . . .

Japan

100.00% Sale of information equipment
mainly in Japan

Kyocera Document Technology (Dongguan)Co., Ltd. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

China

92.76% Manufacture of informationequipment

Kyocera Document Solutions America, Inc. . . . . .

United States

100.00% Sale of information equipment
mainly in North America

Kyocera Document Solutions Europe B.V. . . . . . .

Netherlands

100.00% Sale of information equipment
mainly in Europe

Kyocera Document Solutions DeutschlandGmbH . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Germany

100.00% Sale of information equipment
mainly in Europe

TA Triumph-Adler GmbH . . . . . . . . . . . . . . . . . . .

Germany

100.00% Sale of information equipment
mainly in Europe(5) Telecommunications Equipment Group(6)Information Equipment Group

26

Name

Country ofIncorporation

Percentage
held by
KyoceraMain Business(7) Others
Kyocera Communication Systems Co., Ltd. . . . . .

Japan

76.30% Information systems andtelecommunication services

Kyocera Chemical Corporation . . . . . . . . . . . . . . .

Japan

100.00% Development, manufacture andsale of electrical insulationmaterials

Kyocera Realty Development Co., Ltd. . . . . . . . . .

Japan

100.00% Real estate services

Kyocera (China) Sales & Trading Corporation . . .

China

90.00% Sale of fine ceramic-related
products, cutting tools mainly inChina

Kyocera Korea Co., Ltd. . . . . . . . . . . . . . . . . . . . . .

Korea

100.00% Sale of fine ceramic-related
products mainly in Korea

Kyocera Asia Pacific Pte. Ltd. . . . . . . . . . . . . . . . .

Singapore

100.00% Sale of fine ceramic-related
products, solar energy products
and electronic devices mainly in
Asia

Kyocera International, Inc. . . . . . . . . . . . . . . . . . . .

United States

100.00% Holding company andheadquarters of the subsidiaries
in North America

Kyocera Fineceramics GmbH . . . . . . . . . . . . . . . .

Germany

100.00% Sale of fine ceramic-related
products, solar energy products
and thin-film devices mainly inEurope(8) Regional Holding or Sales Companies

In addition to the above consolidated subsidiaries, Kyocera had 181 other consolidated subsidiaries as ofMarch 31, 2013. Kyocera also had interests in one subsidiary accounted for by the equity method and
10 affiliates accounted for by the equity method as of March 31, 2013.
On April 1, 2013, Kyocera Crystal Device Corporation absorbed Kyocera Crystal Device Yamagata Corporation
and Kyocera Crystal Device Miyama Corporation, which were its wholly owned subsidiaries.
On April 1, 2013, Kyocera Display Corporation absorbed Kyocera Display Hiroshima Corporation which was its
wholly owned subsidiary, and succeeded to the liquid crystal display (LCD) related business, which was split off
from Kyocera Corporation.
AVX Corporation, in our Electronic Device Group, is one of our most significant subsidiaries. Most of theelectronic devices we produce for overseas sales are distributed through AVX Corporation by utilizing AVX
Corporation’s wide range of marketing channels. We market passive components produced by AVX Corporationin the Japanese market. We also utilize AVX Corporation’s manufacturing process for ceramic capacitors to
improve productivity and to enhance our competitiveness. In addition, AVX Corporation introduced ourmaterials technologies into its ceramic capacitor production. We have been seeking better ways to cooperate inexpanding our electronic device businesses. Currently, three of our directors are members of AVX Corporation’sboard of directors and AVX Corporation’s chief executive officer is one of our directors. Within the Electronic
Device Group, we have a close relationship with AVX Corporation in marketing, manufacturing, and research
27and development, and we are seeking and pursuing synergies to be a leading passive component manufacturer.
AVX Corporation posted net loss of $64,312 thousand in fiscal 2013 and its performance has a significant impact
on Kyocera’s results of operations and financial condition. See Item 5.A. “Operating Results” of this annual
report on Form 20-F.
D. Property, Plants and Equipment
As of March 31, 2013, we had property, plants and equipment with a net book value of ¥268,824 million. During
the five years ended March 31, 2013, we invested a total of ¥294,700 million for additions to property, plants andequipment. Our property, plants and equipment are subject to some material encumbrances or environmental
issues. See Item 5.A. “Operating Results” of this annual report on Form 20-F.
The following table sets forth information with respect to our principal manufacturing facilities as of March 31,
2013.
Name of Plant

Location

StatusLease
Principal Products
Floor Space
Expires Manufactured(in thousandsof square feet)Japan
Hokkaido Kitami Plant . . . . . . . . . Kitami, Hokkaido

Owned

295

Telecommunications
equipment,
Semiconductor
parts, Fine ceramicparts

Yamagata Higashine Plant . . . . . . . Higashine, Yamagata Owned

379

Electronic
components

Nagano Okaya Plant . . . . . . . . . . . Okaya, Nagano

Owned

387

Fine ceramicparts, Thin-film
components, Cutting
tools

Kawaguchi Plant . . . . . . . . . . . . . . Kawaguchi, Saitama

Owned

389

Electrical insulationmaterials

Tamaki Plant . . . . . . . . . . . . . . . . . Watarai, Mie

Owned

292

Informationequipment

Shiga Gamo Plant . . . . . . . . . . . . . Higashi-Ohmi, Shiga Owned

690

Fine ceramic parts,
Semiconductor parts

Shiga Yokaichi Plant . . . . . . . . . . . Higashi-Ohmi, Shiga Owned

1,486

Fine ceramicparts, Thin-film
components, Solarcells, Cutting tools

Shiga Yasu Plant . . . . . . . . . . . . . . Yasu, Shiga

Owned

1,810

Solar cells, Thinfilm components

Kyoto Ayabe Plant . . . . . . . . . . . . . Ayabe, Kyoto

Owned

288

Organic multilayer
packages, Organic
multilayer printed
circuit boards

Hirakata Plant . . . . . . . . . . . . . . . . Hirakata, Osaka

Owned

604

Informationequipment

28

Name of Plant

Location

StatusKagoshima Sendai Plant . . . . . . . . Satsuma-Sendai,
Kagoshima

Lease
Principal Products
Floor Space
Expires Manufactured(in thousandsof square feet)

Owned

1,992

Fine ceramic parts,
Semiconductor
parts, Cutting tools

Kagoshima Kokubu Plant . . . . . . . Kirishima, Kagoshima Owned

2,466

Fine ceramic parts,
Semiconductor
parts, Electronic
components

Kagoshima Hayato Plant . . . . . . . . Kirishima, Kagoshima Owned

278

Thin-film
components

United States
Balboa Plant . . . . . . . . . . . . . . . . . . San Diego,
California

Owned

300

Semiconductor parts

Myrtle Beach Plant . . . . . . . . . . . . Myrtle Beach, South
Carolina

Owned

308

Electronic
components

Fountain Inn Plant . . . . . . . . . . . . . Fountain Inn, South
Carolina
El Salvador

Owned

300

Electronic
components

San Salvador Plant . . . . . . . . . . . . . San Salvador

Owned

420

Electronic
components

Leased322

Lanskroun Plant . . . . . . . . . . . . . . . Lanskroun

Owned

500

Electronic
components

Uherske Hradiste Plant . . . . . . . . . Uherske Hradiste

Owned

470

Electronic
components

Kadan Plant . . . . . . . . . . . . . . . . . . Kadan

Owned

295

Solar modules

Tianjin Plant . . . . . . . . . . . . . . . . . Tianjin

Owned

520

Electronic
components

Tianjin Plant . . . . . . . . . . . . . . . . . Tianjin

Owned

355

Electronic
components

Tianjin Plant . . . . . . . . . . . . . . . . . Tianjin

Owned

308

Solar modules

Shanghai Pudong Plant . . . . . . . . . Shanghai

Owned

1,132

Semiconductor
parts, Electronic
components

Zhangjiagang Plant . . . . . . . . . . . . Zhangjiagang,
Jiangsu

Owned

365

Thin-film
components

Shilong Plant . . . . . . . . . . . . . . . . . Dongguan,
Guangdong

Owned

2,331

Informationequipment

Shilong Plant . . . . . . . . . . . . . . . . . Dongguan,
Guangdong

Owned

696

FranceSaint-Apollinaire Plant . . . . . . . . . Saint-Apollinaire

2016Electronic
components

Czech Republic

China

29

Cutting tools, Thinfilm components

Name of Plant

Location

StatusLease
Principal Products
Floor Space
Expires Manufactured(in thousandsof square feet)

ThailandThailand Plant . . . . . . . . . . . . . . . . Thailand

Owned

264

Electronic
components

Malaysia Plant . . . . . . . . . . . . . . . . Malaysia

Owned

315

Telecommunications
equipment

Malaysia Plant . . . . . . . . . . . . . . . . Malaysia

Leased300

Malaysia

2014Electronic
components

Item 4A. Unresolved Staff Comments
We are a large accelerated filer as defined in Rule 12b-2 under the Securities Exchange Act of 1934. There are no
written comments which have been provided by the staff of the Securities and Exchange Commission regarding
our periodic reports under that Act not less than 180 days before the end of the fiscal year ended March 31, 2013
and which remain unresolved as of the date of the filing of this annual report on Form 20-F with the Commission.
Item 5.

Operating and Financial Review and Prospects

A. Operating Results
You should read the discussion of our financial condition and results of operations together with ourconsolidated financial statements and information included in this annual report on Form 20-F. This discussion
and analysis contains forward-looking statements that involve risks, uncertainties and assumptions. Our actual
results may differ materially from those anticipated in these forward-looking statements as a result of certain
factors, including, but not limited to, those set forth under Item 3.D. “Risk Factor” and elsewhere in this annual
report on Form 20-F.
Overview
Kyocera develops, produces and distributes various kinds of products primarily for the information andcommunications market and environment and energy market worldwide. Kyocera Corporation was established in
1959 as a manufacturer of ceramic parts for electronic equipment and has been expanding its business mainly
through mergers and acquisitions, as well as applying its fine ceramic technologies to the areas of semiconductor
parts, electronic devices, telecommunication, metal processing, medical and dental implants and solar energy
fields. Kyocera develops, produces and distributes equipment such as printers and multifunctional peripherals aswell as mobile phone handsets. Kyocera earns revenue and income and generates cash through sales of theseproducts.
Kyocera’s operations are categorized into seven reporting segments: (1) Fine Ceramic Parts Group,(2) Semiconductor Parts Group, (3) Applied Ceramic Products Group, (4) Electronic Device Group,(5) Telecommunications Equipment Group, (6) Information Equipment Group, and (7) Others. Kyocera groups
the Fine Ceramic Parts Group, the Semiconductor Parts Group, the Applied Ceramic Products Group and theElectronic Device Group into one main business referred to as the “Components Business” and groups the
Telecommunications Equipment Group and the Information Equipment Group into another main businessreferred to as the “Equipment Business.”
In fiscal 2013, despite increases in public investment and personal consumption, the Japanese economy
weakened due primarily to a decrease in exports reflecting a slowdown from the second quarter (July 1 to
September 30, 2012) in economies overseas, particularly in Europe and Asia, and to stagnant growth in capital
investment in the corporate sector. With respect to the overseas economic environment, the U.S. economy
30expanded moderately on the back of growth in personal consumption and recovery in housing investment. On theother hand, the European economy remained in a recessionary phase due to the lingering impact of the financial
crisis. The slowdown in the Chinese economy intensified due mainly to weakening exports.
In the digital consumer equipment market, which is the principal market for Kyocera, shipment volume was slow
overall for conventional mobile phone handsets, PCs and flat-screen TVs despite significant growth forsmartphones and tablet PCs compared with fiscal 2012. In contrast, the solar energy market in Japan expanded
substantially due primarily to growth in demand in the residential sector and a sharp increase in demand in the
public and industrial sectors, which includes mega-solar power projects, as a result of the introduction of thefeed-in tariff for renewable energy in July 2012.
Average exchange rates for fiscal 2013 were ¥83 to the U. S. dollar, marking depreciation of ¥4 (approximately
5%) from ¥79 for fiscal 2012, and ¥107 to the Euro, marking appreciation of ¥2 (approximately 2%) from ¥109
for fiscal 2012. Mainly as a result of the effect of the yen’s depreciation against the U.S. dollar, net sales andincome before income taxes for fiscal 2013 were pushed up by approximately ¥21 billion and ¥2.5 billion,
respectively, compared with fiscal 2012.
Consolidated net sales for fiscal 2013 increased by ¥89,184 million, or 7.5%, to ¥1,280,054 million, comparedwith ¥1,190,870 million for fiscal 2012, due primarily to sales growth in the Applied Ceramic Products Groupand the Semiconductor Parts Group and the full-year contribution from Kyocera Display Corporation, whichbecame a consolidated subsidiary in February 2012. Profit from operations decreased by ¥20,749 million, or
21.2%, to ¥76,926 million, compared with ¥97,675 million for fiscal 2012 due to the recording of a charge of¥21,300 million for environmental remediation in New Bedford Harbor, Massachusetts in the United States by
AVX Corporation, a U.S. subsidiary. Income before income taxes decreased by ¥13,530 million, or 11.8%, to¥101,363 million, compared with ¥114,893 million for fiscal 2012. Net income attributable to shareholders ofKyocera Corporation for fiscal 2013 decreased by ¥12,884 million, or 16.2%, to ¥66,473 million, compared with
¥79,357 million for fiscal 2012.
The proposed financial settlement among AVX Corporation, the U.S. Environmental Protection Agency
and Commonwealth of Massachusetts regarding the New Bedford Harbor Superfund Site
AVX Corporation, a U.S.-based subsidiary, has been identified by the United States Environmental Protection
Agency (EPA), state governmental agencies or other private parties as a potentially responsible party (PRP)
under the Comprehensive Environmental Response, Compensation and Liability Act (CERCLA) or equivalentstate or local laws for clean-up and response costs associated with certain sites at which remediation is requiredwith respect to prior contamination. Because CERCLA has generally been construed to authorize joint andseveral liability, the EPA could seek to recover all clean-up costs from any one of the PRPs at a site despite theinvolvement of other PRPs. At certain sites, financially responsible PRPs other than AVX Corporation also are,or have been, involved in site investigation and clean-up activities. AVX Corporation believes that liability
resulting from these sites will be apportioned between AVX Corporation and other PRPs.
To resolve its liability at the sites at which AVX Corporation has been named a PRP, AVX Corporation hasentered into various administrative orders and consent decrees with federal and state regulatory agencies
governing the timing and nature of investigation and remediation. As is customary, the orders and decrees
regarding sites where the PRPs are not themselves implementing the chosen remedy contain provisions allowing
the EPA to reopen the agreement and seek additional amounts from settling PRPs in the event that certain
contingencies occur, such as the discovery of significant new information about site conditions.
In 1991, in connection with a consent decree, AVX Corporation paid ¥8,878 million ($66 million), plus interest,
toward the environmental conditions at, and remediation of, New Bedford Harbor in the Commonwealth of
Massachusetts (the harbor) in settlement with the United States and the Commonwealth of Massachusetts,
subject to reopener provisions, including a reopener if certain remediation costs for the site exceed¥12,267 million ($130.5 million).
31

On April 18, 2012, the EPA issued to AVX Corporation a Unilateral Administrative Order (UAO) directing AVX
Corporation to perform the Remedial Design, the Remedial Action and Operation and Maintenance as set forth in
the UAO, for the harbor clean-up, pursuant to the reopener provision. The original effective date set forth in the
UAO was June 18, 2012 (and subsequently extended to September 3, 2013), pursuant to which AVX Corporation
had to inform the EPA if it intends to comply with the UAO.
On October 10, 2012, the EPA, the United States, and the Commonwealth of Massachusetts and AVX
Corporation announced that they had reached a financial settlement with respect to the EPA’s ongoing clean-upof the harbor. That agreement is contained in a Supplemental Consent Decree that modifies certain provisions of
the 1992 Consent Decree, including elimination of the governments’ right to invoke the clean-up reopener
provisions in the future. In accordance with the settlement, AVX Corporation will pay ¥34,428 million ($366.25
million), plus interest computed from August 1, 2012, in three installments over a two-year period for use by the
EPA and the Commonwealth to complete the clean-up of the harbor, and the EPA will withdraw the UAO. The
settlement requires approval by the United States District Court before becoming final. The timing of any suchapproval is uncertain.
AVX Corporation has recorded a liability for the full amount of the proposed settlement, resulting in charges of¥7,900 million ($100 million) and ¥21,300 million ($266.25 million) in the years ended March 31, 2012 and2013, respectively. Kyocera included these charges in selling, general and administrative expenses in the
consolidated statements of income for the years ended March 31, 2012 and 2013, respectively.
Results of Operations
Fiscal 2013 compared with Fiscal 2012
The following table shows a summary of Kyocera’s results of operations for fiscal 2012 and fiscal 2013:
Years ended March 31,
2012
2013
Amount%Amount%(Yen in millions)

Increase(Decrease)
Amount%Net sales . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . ¥1,190,870
Cost of sales . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
870,143

100.0
73.1

¥1,280,054
952,350

100.0
74.4

¥ 89,184
82,2077.5
9.4

Gross profit . . . . . . . . . . . . . . . . . . . . . . . . . .
Selling, general and administrative expenses . . . .

320,727
223,05226.9
18.7

327,704
250,778

25.6
19.6

6,977
27,726

2.2
12.4

Profit from operations . . . . . . . . . . . . . . . . . .
Interest and dividend income . . . . . . . . . . . . . . . . .
Interest expense . . . . . . . . . . . . . . . . . . . . . . . . . . .
Foreign currency transaction gains, net . . . . . . . . .
Gains on sales of securities, net . . . . . . . . . . . . . . .
Other, net . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

97,675
13,966(2,042)
4,533
337
424

8.2
1.2
(0.2)
0.4
0.0
0.0

76,926
14,666(1,890)
5,136
4,542
1,983

6.0
1.1
(0.2)
0.4
0.4
0.2

(20,749) (21.2)
700
5.0
152
—
603
13.3
4,205
—
1,559 367.7

17,218

1.4

24,437

1.9

Income before income taxes . . . . . . . . . . . . .
Income taxes . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

114,893
30,1359.6
2.5

101,363
34,0127.9
2.6(13,530) (11.8)
3,877
12.9

Net income . . . . . . . . . . . . . . . . . . . . . . . . . . .
Net income attributable to noncontrollinginterests . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

84,758

7.1

67,351

5.3(17,407) (20.5)(5,401)

(0.4)

(878)

(0.1)

79,357

6.7

66,473

5.2

Net income attributable to shareholders ofKyocera Corporation . . . . . . . . . . . . . . . . . . . . .

¥

32

¥

7,219

4,523

41.9

—

¥(12,884) (16.2)

Net Sales
Net sales in fiscal 2013 increased by ¥89,184 million, or 7.5%, to ¥1,280,054 million, compared with ¥1,190,870
million in fiscal 2012.
In fiscal 2013, net sales increased compared with fiscal 2012 due primarily to sales growth in the Applied
Ceramic Products Group and the Semiconductor Parts Group and the full-year contribution from Kyocera
Display Corporation, which became a consolidated subsidiary in February 2012. Mainly as a result of the effectof the yen’s depreciation against the U.S. dollar, net sales after translation into the yen in fiscal 2013 were pushed
up by approximately ¥21,000 million, compared with fiscal 2012.
Net sales in the Components Business in fiscal 2013 increased by ¥82,805 million, or 12.9%, to ¥725,102 million,
compared with ¥642,297 million in fiscal 2012. Net sales in the Equipment Business in fiscal 2013 increased by¥5,722 million, or 1.4%, to ¥427,848 million, compared with ¥422,126 million in fiscal 2012.
For details regarding net sales, please refer to page 36, “Business Overview by Reporting Segment.”
Net Sales by Geographic Segment
The following table shows a breakdown of Kyocera’s total consolidated net sales in fiscal 2012 and fiscal 2013,
distinguishing between domestic and overseas sales and, with respect to overseas sales, showing the geographicalareas in which such sales were made:Years ended March 31,
2012
2013
Amount%Amount%(Yen in millions)

Increase(Decrease)
Amount%Japan . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Asia . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
United States of America . . . . . . . . . . . . . . . . . . . . .
Europe . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Others . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

¥ 559,344
205,469
166,706
204,887
54,464

47.0
17.2
14.0
17.2
4.6

¥ 574,202
235,520
215,032
198,868
56,432

44.9
18.4
16.8
15.5
4.4

¥14,858
2.7
30,051 14.6
48,326 29.0
(6,019) (2.9)
1,968
3.6

Net sales . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

¥1,190,870

100.0¥1,280,054

100.0¥89,184

7.5

Sales in Japan increased compared with fiscal 2012 due mainly to sales growth in the solar energy business,despite a decrease in sales in the Telecommunications Equipment Group affected by a decline in sales volume ofmobile phone handsets.
Sales in Asia increased compared with fiscal 2012 due primarily to an increase in sales in component for digitalconsumer equipment and in the solar energy business.
Sales in the United States of America increased compared with fiscal 2012 due to the full-year contribution from
Kyocera Display Corporation, which became a consolidated subsidiary in February 2012, and increased sales in
the Telecommunications Equipment Group resulting from increased sales of mobile phone handsets.
Sales in Europe decreased compared with fiscal 2012 affected by a decline in demand in the solar energy
business and the yen’s appreciation against the Euro.
Sales in Others increased compared with fiscal 2012 due mainly to an increase in sales in the Information
Equipment Group.

33

Cost of Sales and Gross Profit
In fiscal 2013, cost of sales increased by ¥82,207 million, or 9.4%, to ¥952,350 million from ¥870,143 million in
fiscal 2012. This is due mainly to the full-year impact from the production activity of Kyocera Display Corporation,
which became a consolidated subsidiary in February 2012, as well as the expansion of production volume in thesolar energy business.
Raw material costs of ¥384,509 million accounted for 40.4% of total cost of sales in fiscal 2013, which increased by¥51,338 million, or 15.4%, from ¥333,171 million in fiscal 2012. Labor costs of ¥179,040 million accounted for
18.8% of total cost of sales in fiscal 2013, which increased by ¥8,045 million, or 4.7%, from ¥170,995 million in fiscal
2012. Depreciation expense of ¥54,214 million accounted for 5.7% of total cost of sales in fiscal 2013, which increasedby ¥1,976 million, or 3.8%, from ¥52,238 million in fiscal 2012.
As a result, gross profit in fiscal 2013 increased by ¥6,977 million, or 2.2%, to ¥327,704 million from
¥320,727 million in fiscal 2012. The gross profit ratio to net sales decreased by 1.3 percentage points from 26.9%
to 25.6%.
Selling, General & Administrative Expenses and Profit from Operations
In fiscal 2013, selling, general and administrative expenses increased by ¥27,726 million, or 12.4%, to ¥250,778
million from ¥223,052 million in fiscal 2012. This is due to an increase by ¥13,400 million of the environmental
remediation charge at AVX Corporation as well as the full-year impact from the sales activity of Kyocera
Display Corporation, which became a consolidated subsidiary in February 2012. The ratio of selling, general andadministrative expenses to net sales was 19.6% in fiscal 2013, an increase of 0.9 percentage points as comparedwith 18.7% in fiscal 2012.
Labor costs of ¥126,691 million accounted for 50.5% of total selling, general and administrative expenses infiscal 2013, which increased by ¥11,433 million, or 9.9%, from ¥115,258 million in fiscal 2012. Sales promotion
and advertising costs of ¥38,246 million accounted for 15.3% in fiscal 2013, which increased by ¥3,474 million,or 10.0%, from ¥34,772 million in fiscal 2012. Depreciation expense of ¥13,886 million accounted for 5.5% in
fiscal 2013, which increased by ¥96 million, or 0.7%, from ¥13,790 million in fiscal 2012.
As a result, profit from operations in fiscal 2013 decreased by ¥20,749 million, or 21.2%, to ¥76,926 million,
compared with ¥97,675 million in fiscal 2012. The operating margin decreased by 2.2 percentage points to 6.0%
in fiscal 2013, compared with 8.2% in fiscal 2012.
Interest and Dividend Income
Interest and dividend income in fiscal 2013 increased by ¥700 million, or 5.0 %, to ¥14,666 million, comparedwith ¥13,966 million in fiscal 2012. This was due mainly to an increase in dividend income from KDDI
Corporation.
Interest Expense
Interest expense in fiscal 2013 decreased by ¥152 million, or 7.4%, to ¥1,890 million, compared with
¥2,042 million in fiscal 2012. This was due mainly to a decrease in short-term and long-term debts at TA
Triumph-Adler GmbH, a German subsidiary of Kyocera Document Solutions Inc.
Foreign Currency Translation
During fiscal 2013, the average exchange rate for the yen depreciated by ¥4, or 5.1%, against the U.S. dollar
and appreciated by ¥2, or 1.8%, against the Euro, as compared with fiscal 2012. At March 31, 2013, theyen depreciated by ¥12, or 14.6%, against the U.S. dollar, and by ¥11, or 10.0%, against the Euro, as comparedwith March 31, 2012. Kyocera recorded foreign currency transaction gains of ¥5,136 million in fiscal 2013.
34

Kyocera typically enters into forward exchange contracts to minimize currency exchange risks on foreign
currency denominated receivables and payables. Kyocera confines its use of forward exchange contracts forhedging its foreign exchange exposures, and does not utilize forward exchange contracts for trading purposes.
Gains and Losses from Investments
Losses on equity method investments in fiscal 2013 resulted in ¥155 million, an increase of ¥119 million, or
330.6%, compared with ¥36 million in fiscal 2012.
Gains on sales of securities in fiscal 2013 increased by ¥4,205 million to ¥4,542 million, compared with
¥337 million in fiscal 2012.
Losses on impairment of securities in fiscal 2013 decreased by ¥531 million, or 42.1%, to ¥729 million,
compared with ¥1,260 million in fiscal 2012.
Income before Income Taxes
Income before income taxes in fiscal 2013 decreased by ¥13,530 million, or 11.8%, to ¥101,363 million
compared with ¥114,893 million in fiscal 2012. Margin of income before income taxes against net sales
decreased by 1.7 percentage points to 7.9% compared with 9.6% in fiscal 2012.
Profit from operations decreased due to the recording of the charge of ¥21,300 million for an environmental
remediation at AVX Corporation. Income before income taxes decreased due to the decrease of profit fromoperations, despite of an increase in other income, such as gains on sales of securities, dividend income andforeign currency transaction gains. Income before income taxes after translation into the yen for fiscal 2013 waspushed up by approximately ¥2,500 million due to the impact of the yen’s depreciation against the U.S. dollar
compared with fiscal 2012.
Operating profit in the Components Business in fiscal 2013 decreased by ¥10,968 million, or 17.4%, to¥51,903 million, compared with ¥62,871 million in fiscal 2012. Operating profit in the Equipment Business infiscal 2013 decreased by ¥7,830 million, or 25.3%, to ¥23,090 million, compared with ¥30,920 million in fiscal
2012.
For a detail of income before taxes, please refer to page 36, “Business Overview by Reporting Segment.”
Income Taxes
Current and deferred income taxes in fiscal 2013 increased by ¥3,877 million, or 12.9%, to ¥34,012 million
compared with ¥30,135 million in fiscal 2012.
The effective tax rate of 33.6% in fiscal 2013 was 7.4 percentage points higher than the effective rate of 26.2% in
fiscal 2012. The increases were due mainly to the enactment of new Japanese tax rates in fiscal 2012, which
decreased the statutory tax rates for temporary difference expected to be realized in the subsequent periods. The
enactment resulted in the reduction of income tax in fiscal 2012 due to the amounts of reversal related to deferred
tax liabilities exceeded the amounts of reversal related to deferred tax assets. The effective tax rate in fiscal
2013 is lower than the Japanese statutory tax rate of 38.0% by 4.4 percentage points, due mainly to a decrease
related to the difference in statutory tax rates of foreign subsidiaries.
Net Income Attributable to Noncontrolling Interests
Net income attributable to noncontrolling interests in fiscal 2013 amounted to ¥878 million. Net income
attributable to noncontrolling interests in fiscal 2013 decreased by ¥4,523 million, or 83.7%, compared35

with ¥5,401 million in fiscal 2012. This mainly reflected that AVX Corporation, which accounted forapproximately 30% of noncontrolling ownership interests, posted net loss due mainly to the recording of anenvironmental remediation charge.
Business Overview by Reporting Segment
The following table shows a breakdown of Kyocera’s total consolidated net sales in fiscal 2012 and fiscal 2013by the seven reporting segments:
Years ended March 31,
2012
2013
Amount%Amount%(Yen in millions)Fine Ceramic Parts Group . . . . . . . . . . . . . . . . . . . . .
Semiconductor Parts Group . . . . . . . . . . . . . . . . . . .
Applied Ceramic Products Group . . . . . . . . . . . . . . .
Electronic Device Group . . . . . . . . . . . . . . . . . . . . . .
Total Components Business . . . . . . . . . . . . . . .
Telecommunications Equipment Group . . . . . . . . . .
Information Equipment Group . . . . . . . . . . . . . . . . .
Total Equipment Business . . . . . . . . . . . . . . . . .
Others . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Adjustments and eliminations . . . . . . . . . . . . . . . . . .
Net sales . . . . . . . . . . . . . . . . . . . . . . . . . .

Increase(Decrease)
Amount%¥80,372
6.7 ¥ 74,852
5.9 ¥ (5,520) (6.9)
153,42012.9
167,241
13.1
13,821
9.0
179,784
15.1
211,43916.5
31,655 17.6
228,72119.2
271,570
21.2
42,849 18.7
642,29753.9
725,10256.7
82,805 12.9
178,669
15.0
177,31413.8(1,355) (0.8)
243,457
20.4
250,534
19.6
7,077
2.9
422,12635.4
427,848
33.4
5,722
1.4
151,98712.8
159,902
12.5
7,915
5.2
(25,540) (2.1)(32,798) (2.6) (7,258) —¥1,190,870 100.0 ¥1,280,054 100.0 ¥89,184
7.5

The following table shows a breakdown of Kyocera’s total consolidated income before income taxes, andoperating profit for fiscal 2012 and fiscal 2013 by the seven reporting segments:
Years ended March 31,
2012
2013
Amount%*Amount%*(Yen in millions)

Increase(Decrease)
Amount%Fine Ceramic Parts Group . . . . . . . . . . . . . . . . . . . . . . . . ¥ 12,622 15.7 ¥ 7,614 10.2 ¥ (5,008) (39.7)
Semiconductor Parts Group . . . . . . . . . . . . . . . . . . . . . . .
27,754 18.1
30,379 18.2
2,625
9.5
Applied Ceramic Products Group . . . . . . . . . . . . . . . . . .
6,459
3.6
17,924
8.5
11,465 177.5
Electronic Device Group . . . . . . . . . . . . . . . . . . . . . . . . .
16,036
7.0(4,014) —(20,050) —Total Components Business . . . . . . . . . . . . . . . . . . .
62,8719.8
51,903
7.2(10,968) (17.4)
Telecommunications Equipment Group . . . . . . . . . . . . .
1,469
0.8
1,340
0.8
(129) (8.8)
Information Equipment Group . . . . . . . . . . . . . . . . . . . . .
29,451 12.1
21,7508.7(7,701) (26.1)
Total Equipment Business . . . . . . . . . . . . . . . . . . . .
30,9207.3
23,090
5.4(7,830) (25.3)
Others . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
8,054
5.3
10,5426.6
2,488 30.9
Operating profit . . . . . . . . . . . . . . . . . . . . . . . .
101,845
8.6
85,535
6.7(16,310) (16.0)
Corporate gains and equity in losses of affiliates andunconsolidated subsidiaries . . . . . . . . . . . . . . . . . . . . .
13,840 —17,248 —3,408 24.6
Adjustments and eliminations . . . . . . . . . . . . . . . . . . . . .
(792) —
(1,420) —(628) —
Income before income taxes . . . . . . . . . . . . . . . . . . . . . . ¥114,893
9.6 ¥101,363
7.9 ¥(13,530) (11.8)* % to net sales of each corresponding segment36

(1) Fine Ceramic Parts Group
Sales in this reporting segment for fiscal 2013 decreased by ¥5,520 million, or 6.9%, to ¥74,852 million,
compared with ¥80,372 million in fiscal 2012. The decrease in sales was due to stagnation in component demandin the industrial machinery market, including for semiconductor fabrication equipment, and in the digitalconsumer equipment market, despite sales being pushed up by approximately ¥500 million compared with fiscal
2012 due to the yen’s depreciation.
Operating profit in this reporting segment for fiscal 2013 decreased by ¥5,008 million, or 39.7%, to ¥7,614 million,
compared with ¥12,622 million in fiscal 2012. The main reasons for this decrease were a decline in capacity
utilization ratio in line with the decline in sales as well as product price erosion.
(2) Semiconductor Parts Group
Sales in this reporting segment for fiscal 2013 increased by ¥13,821 million, or 9.0%, to ¥167,241 million,
compared with ¥153,420 million in fiscal 2012. The increase in sales was due to growth in demand for ceramic
packages mainly for smartphones and the effects of the yen’s depreciation, which pushed up sales byapproximately ¥4,500 million compared with fiscal 2012.
Operating profit in this reporting segment for fiscal 2013 increased by ¥2,625 million, or 9.5%, to ¥30,379 million,
compared with ¥27,754 million in fiscal 2012. The main reasons for this were an increase of approximately¥2,000 million due to sales growth and the effects of the yen’s depreciation, which also pushed up profit byapproximately ¥2,000 million, despite an increase of approximately ¥1,000 million in depreciation due to anincrease in capital expenditures.
(3) Applied Ceramic Products Group
Sales in this reporting segment for fiscal 2013 increased by ¥31,655 million, or 17.6%, to ¥211,439 million,
compared with ¥179,784 million in fiscal 2012. This increase was due to growth in the solar energy business aswell as the yen’s depreciation, which pushed up sales by approximately ¥2,500 million compared with fiscal
2012.
Sales in the solar energy business increased significantly due to increased shipment volume of around 50% on a
global basis compared with fiscal 2012 on the back of considerable growth in demand in the Japanese market,
despite a decline of around 20% in product prices compared with fiscal 2012, affected by intensifying
competition.
Operating profit in this reporting segment for fiscal 2013 increased by ¥11,465 million, or 177.5%, to ¥17,924 million,
compared with ¥6,459 million in fiscal 2012. Despite an increase of approximately ¥1,000 million as the combined
total for depreciation and R&D expenses compared with fiscal 2012, the surge in operating profit was due to the effects
of higher sales, which pushed up profit by approximately ¥6,500 million, an increase of approximately ¥4,500 million
as a result of a decrease in write-down of inventories, and promoting cost reductions by approximately ¥1,000 million,
as well as an increase of approximately ¥500 million as a result of the yen’s depreciation.
(4) Electronic Device Group
Sales in this reporting segment for fiscal 2013 increased by ¥42,849 million, or 18.7%, to ¥271,570 million,
compared with ¥228,721 million in fiscal 2012. The increase in sales was due to the full-year contribution from
Kyocera Display Corporation, which became a consolidated subsidiary in February 2012, despite a decrease insales of components for the digital consumer equipment and industrial machinery markets due primarily tostagnant demand and price declines. In addition, sales were pushed up by approximately ¥9,500 million
compared with fiscal 2012 due to the yen’s depreciation.
37

Operating loss of ¥4,014 million was recorded in this reporting segment for fiscal 2013, marking a decrease of¥20,050 million compared with operating profit of ¥16,036 million in fiscal 2012. This decline was due to anincrease by ¥13,400 million of the environmental remediation charge at AVX Corporation coupled with theimpact of a decrease in sales of major components in this reporting segment, despite profit being pushed up by
approximately ¥2,000 million due to the yen’s depreciation.
(5) Telecommunications Equipment Group
Sales in this reporting segment for fiscal 2013 decreased by ¥1,355 million, or 0.8%, to ¥177,314 million,
compared with ¥178,669 million in fiscal 2012. The decrease in sales was due to a decline in sales volume ofmobile phone handsets in Japan resulting from deceleration of growth and intensifying competition, despite
growth in sales overseas on a local currency basis and the yen’s depreciation, which pushed up sales byapproximately ¥4,000 million compared with fiscal 2012.
Operating profit in this reporting segment for fiscal 2013 decreased slightly by ¥129 million, or 8.8%, to¥1,340 million, compared with ¥1,469 million in fiscal 2012. The year-on-year decline in operating profit wasdue to an increase of approximately ¥5,000 million in write-down of inventories, despite an increase of
approximately ¥2,500 million due primarily to improved profitability in the overseas business, an increase of
approximately ¥1,500 million due to lower depreciation and amortization costs, and the yen’s depreciation,
which pushed up profit by approximately ¥1,000 million.
(6) Information Equipment Group
Sales in this reporting segment for fiscal 2013 increased by ¥7,077 million, or 2.9%, to ¥250,534 million,
compared with ¥243,457 million in fiscal 2012. This increase was due mainly to an increase of approximately
20% in sales in developing countries mainly Asia and Russia compared with fiscal 2012 on the back of efforts toactively introduce new products and cultivate new markets amid a tough business environment characterized bysluggish growth in the global market and fierce price competition.
Operating profit in this reporting segment for fiscal 2013 decreased by ¥7,701 million, or 26.1%, to ¥21,750 million,
compared with ¥29,451 million in fiscal 2012. Although profit was pushed up by approximately ¥3,000 million due tothe effects of higher sales, the main reasons for the decrease were an increase of approximately ¥7,000 million inselling, general and administrative expenses, primarily consisting of sales promotion costs, and the impact of the yen’s
appreciation against Euro, which pushed down profit by approximately ¥3,000 million.
(7) Others
Sales in this reporting segment for fiscal 2013 increased by ¥7,915 million, or 5.2%, to ¥159,902 million,
compared with ¥151,987 million in fiscal 2012. The increase in sales was due to growth in sales ofapproximately ¥10,000 million at Kyocera Communication Systems Co., Ltd., led by the engineering business.
Operating profit in this reporting segment for fiscal 2013 increased by ¥2,488 million, or 30.9%, to¥10,542 million, compared with ¥8,054 million in fiscal 2012. This was due to an increase of approximately¥1,500 million as a result of higher sales coupled with a decrease of approximately ¥1,500 million in R&D
expenses for new businesses.
(8) Corporate gains and equity in losses of affiliates and unconsolidated subsidiaries
Corporate income and losses mainly constitute gains or losses related to financial assets, and income related to
management supporting service provided by Kyocera’s head office to each reporting segment. The income
increased by ¥3,408 million, or 24.6%, to ¥17,248 million, due mainly to an increase in gains on sales of
securities, compared with ¥13,840 million in fiscal 2012.
38

Results of Operations
Fiscal 2012 compared with Fiscal 2011
The following table shows a summary of Kyocera’s results of operations for fiscal 2011 and fiscal 2012:
Years ended March 31,
2011
2012
Amount%Amount%(Yen in millions)

Increase(Decrease)
Amount%Net sales . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Cost of sales . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

¥1,266,924
888,869

100.0
70.2

¥1,190,870
870,143

100.0
73.1

¥(76,054)(18,726)

Gross profit . . . . . . . . . . . . . . . . . . . . . . . . . . .
Selling, general and administrative expenses . . . . .

378,055
222,13129.8
17.5

320,727
223,052

26.9
18.7(57,328) (15.2)
921
0.4

Profit from operations . . . . . . . . . . . . . . . . . . .
Interest and dividend income . . . . . . . . . . . . . . . . .
Interest expense . . . . . . . . . . . . . . . . . . . . . . . . . . .
Foreign currency transaction gains, net . . . . . . . . .
Equity in losses of affiliates and unconsolidated
subsidiaries . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Other, net . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

155,924
12,963(2,259)
3,824

12.3
1.0
(0.2)
0.3

97,675
13,966(2,042)
4,533

8.2
1.2
(0.2)
0.4

(58,249) (37.4)
1,003
7.7
217
—
709 18.5

(160)
2,040

(0.0)
0.2

(36)
797

(0.0)
0.0

124
—
(1,243) (60.9)

16,408

1.3

17,218

1.4

Income before income taxes . . . . . . . . . . . . . .
Income taxes . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

172,332
42,21413.6
3.3

114,893
30,1359.6
2.5(57,439) (33.3)(12,079) (28.6)

Net income . . . . . . . . . . . . . . . . . . . . . . . . . . .
Net income attributable to noncontrollinginterests . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

130,118

10.3

84,7587.1(45,360) (34.9)(7,670)(0.6)(5,401)(0.4)¥ 122,448

9.7

79,357

6.7

Net income attributable to shareholders ofKyocera Corporation . . . . . . . . . . . . . . . . . . . . .

¥

810

2,269

(6.0)
(2.1)

4.9

—

¥(43,091) (35.2)

Net Sales
Net sales in fiscal 2012 decreased by ¥76,054 million, or 6.0%, to ¥1,190,870 million, compared with ¥1,266,924
million in fiscal 2011.
In fiscal 2012, net sales decreased compared with fiscal 2011 due primarily to a decline in component demandfor digital consumer equipment and a decrease in sales in the Telecommunications Equipment Group in addition
to the impact of the yen’s appreciation. Due to the impact of the yen appreciation against the U.S. dollar and theEuro, net sales after translation into the yen in fiscal 2012 were down by approximately ¥40,000 million,
compared with fiscal 2011.
Net sales in the Components Business in fiscal 2012 decreased by ¥48,942 million, or 7.1%, to ¥642,297 million,
compared with ¥691,239 million in fiscal 2011. Net sales in the Equipment Business in fiscal 2012 decreased by¥42,958 million, or 9.2%, to ¥422,126 million, compared with ¥465,084 million in fiscal 2011.
For details regarding net sales, please refer to page 43, “Business Overview by Reporting Segment.”

39

Net Sales by Geographic Segment
The following table shows a breakdown of Kyocera’s total consolidated net sales in fiscal 2011 and fiscal 2012,
distinguishing between domestic and overseas sales and, with respect to overseas sales, showing the geographicalareas in which such sales were made:Years ended March 31,
2011
2012
Amount%Amount%(Yen in millions)

Increase(Decrease)
Amount%Japan . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Asia . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Europe . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
United States of America . . . . . . . . . . . . . . . . . . . .
Others . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

¥ 559,883
215,913210,131
220,706
60,291

44.2
17.0
16.6
17.4
4.8

¥ 559,344
205,469
204,887
166,706
54,464

47.0
17.2
17.2
14.0
4.6

¥

(539) (0.1)(10,444) (4.8)(5,244) (2.5)(54,000) (24.5)(5,827) (9.7)

Net sales . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

¥1,266,924

100.0¥1,190,870

100.0¥(76,054)(6.0)

Sales in Japan were flat compared with fiscal 2011. Despite an increase in sales at Kyocera Communication
Systems Co., Ltd., sales in Japan in the solar energy business decreased resulting from decreased product prices,
as well as sluggish demand for components used in digital consumer equipment.
Sales in Asia decreased compared with fiscal 2011. Sales in the Electronic Device Group and the Semiconductor
Parts Group decreased due to a decrease in demand for components used in digital consumer equipment, as wellas the yen’s appreciation.
Sales in Europe decreased compared with fiscal 2011 due to a decrease in sales in the Applied Ceramic ProductsGroup resulting primarily from slowed market growth in Europe and a steep decline in product prices in solar
energy business.
Sales in the U.S. decreased compared with fiscal 2011 due to a decline in sales volume of mobile phone handsets
in the Telecommunications Equipment Group and to the yen’s appreciation against the U.S. dollar.
Sales for Others decreased compared with fiscal 2011 due mainly to decreased sales in the Semiconductor Parts
Group and the Electronic Device Group resulting from sluggish demand for components.
Cost of Sales and Gross Profit
In fiscal 2012, cost of sales decreased by ¥18,726 million, or 2.1%, to ¥870,143 million from ¥888,869 million in
fiscal 2011. This is due to decreases in raw material costs and production supplies costs resulting from a decreasein production volume.
Raw material costs of ¥333,171 million accounted for 38.3% of total cost of sales in fiscal 2012, which decreasedby ¥8,271 million, or 2.4%, from ¥341,442 million in fiscal 2011. Labor costs of ¥170,995 million accounted for
19.7% of total cost of sales in fiscal 2012, which decreased by ¥312 million, or 0.2%, from ¥171,307 million in
fiscal 2011. Depreciation expense of ¥52,238 million accounted for 6.0% of total cost of sales in fiscal 2012,
which increased by ¥2,034 million, or 4.1%, from ¥50,204 million in fiscal 2011 due to increased capital
expenditures in fiscal 2011.
As a result, gross profit in fiscal 2012 decreased by ¥57,328 million, or 15.2%, to ¥320,727 million from¥378,055 million in fiscal 2011. The gross profit ratio to net sales decreased by 2.9 percentage points from 29.8%
to 26.9%.
40

Selling, General & Administrative Expenses and Profit from Operations
Selling, general and administrative expenses of ¥223,052 million in fiscal 2012 remained roughly constantcompared with ¥222,131 million in fiscal 2011. This is due to the recording of ¥7,900 million of anenvironmental charge at AVX Corporation, a consolidated subsidiary of Kyocera Corporation, which was offset
by decreases in labor costs and other expenses. The ratio of selling, general and administrative expenses to net
sales was 18.7% in fiscal 2012, an increase of 1.2 percentage points as compared with 17.5% in fiscal 2011.
Labor costs of ¥115,258 million accounted for 51.7% of total selling, general and administrative expenses infiscal 2012, which decreased by ¥1,501 million, or 1.3%, from ¥116,759 million in fiscal 2011. Sales promotion
and advertising costs of ¥34,772 million accounted for 15.6% in fiscal 2012, which increased by ¥242 million, or
0.7%, from ¥34,530 million in fiscal 2011. Depreciation expense of ¥13,790 million accounted for 6.2% in fiscal
2012, which increased by ¥116 million, or 0.8%, from ¥13,674 million in fiscal 2011.
Profit from operations in fiscal 2012 decreased by ¥58,249 million, or 37.4%, to ¥97,675 million, compared with
¥155,924 million in fiscal 2011. The operating margin decreased by 4.1 percentage points to 8.2% in fiscal 2012,
compared with 12.3% in fiscal 2011.
Interest and Dividend Income
Interest and dividend income in fiscal 2012 increased by ¥1,003 million, or 7.7 %, to ¥13,966 million, comparedwith ¥12,963 million in fiscal 2011. This was due mainly to an increase in dividend income from KDDI
Corporation.
Interest Expense
Interest expense in fiscal 2012 decreased by ¥217 million, or 9.6%, to ¥2,042 million, compared with
¥2,259 million in fiscal 2011. This was due mainly to a decrease in long-term debt at TA Triumph-Adler GmbH.
Foreign Currency Translation
During fiscal 2012, the average exchange rate for the yen appreciated by ¥7, or 8.1%, against the U.S. dollar, andby ¥4, or 3.5%, against the Euro, as compared with fiscal 2011. At March 31, 2012, the yen appreciated by ¥1, or
1.2%, against the U.S. dollar, and by ¥8, or 6.8%, against the Euro, as compared with March 31, 2011. Kyocera
recorded foreign currency transaction gains of ¥4,533 million in fiscal 2012.
Kyocera typically enters into forward exchange contracts to minimize currency exchange risks on foreign
currency denominated receivables and payables. Kyocera confines its use of derivative financial instruments forhedging its foreign exchange exposures, and does not utilize derivative transactions for trading purposes.
Gains and Losses from Investments
Losses on equity method investments in fiscal 2012 resulted in ¥36 million, a decrease of ¥124 million, or
77.5%, compared with ¥160 million in fiscal 2011.
Gains on sales of securities in fiscal 2012 increased by ¥285 million, or 548.1%, to ¥337 million, compared with¥52 million in fiscal 2011.
Losses on impairment of securities in fiscal 2012 increased by ¥919 million, or 269.5%, to ¥1,260 million,
compared with ¥341 million in fiscal 2011.

41

Income before Income Taxes
Income before income taxes in fiscal 2012 decreased by ¥57,439 million, or 33.3%, to ¥114,893 million
compared with ¥172,332 million in fiscal 2011. Margin of income before income taxes against net sales
decreased by 4.0 percentage points to 9.6% compared with 13.6% in fiscal 2011.
A decline in income before income taxes was less than a decline in profit from operations due to increases in
dividend income and foreign currency transaction gains, despite an increase in losses on impairment of
securities. Affected by the yen appreciation against the U.S. dollar and the Euro, income before income taxes
after translation into the yen for fiscal 2012 was down by approximately ¥10,000 million compared with fiscal
2011.
Operating profit in the Components Business in fiscal 2012 decreased by ¥57,124 million, or 47.6%, to¥62,871 million, compared with ¥119,995 million in fiscal 2011. Operating profit in the Equipment Business infiscal 2012 increased by ¥2,954 million, or 10.6%, to ¥30,920 million, compared with ¥27,966 million in fiscal
2011.
For a detail of income before taxes, please refer to page 43, “Business Overview by Reporting Segment.”
Income Taxes
Current and deferred income taxes in fiscal 2012 decreased by ¥12,079 million, or 28.6%, to ¥30,135 million
compared with ¥42,214 million in fiscal 2011.
The effective tax rate of 26.2% in fiscal 2012 was 1.7 percentage points higher than the effective rate of 24.5% in
fiscal 2011. Despite a reversal of deferred tax liabilities due to a revision of Japanese tax laws in fiscal 2012, theeffective tax rate increased due to decreased reversals of valuation allowance against deferred tax assets
compared to fiscal 2011. The effective tax rate in fiscal 2012 was lower than the Japanese statutory tax rate of
41.0% by 14.8 percentage points. This was mainly due to a decrease related to reversal of deferred tax liabilities
regarding the revision of Japanese tax laws by 7.2 percentage points and a decrease related to the difference instatutory tax rates of foreign subsidiaries by 6.4 percentage points.
Net Income Attributable to Noncontrolling Interests
Net income attributable to noncontrolling interests in fiscal 2012 amounted to ¥5,401 million and noncontrollinginterests related to AVX Corporation, which accounted for approximately 30% of noncontrolling ownershipinterests, amounted to ¥3,494 million. Net income attributable to noncontrolling interests in fiscal 2012
decreased by ¥2,269 million, or 29.6%, compared with ¥7,670 million in fiscal 2011. This was due mainly to adecrease in net income at AVX Corporation.

42

Business Overview by Reporting Segment
The following table shows a breakdown of Kyocera’s total consolidated net sales in fiscal 2011 and fiscal 2012by the seven reporting segments:
Years ended March 31,
2011
2012
Amount%Amount%(Yen in millions)Fine Ceramic Parts Group . . . . . . . . . . . . . . . . . . .
Semiconductor Parts Group . . . . . . . . . . . . . . . . . .
Applied Ceramic Products Group . . . . . . . . . . . . . .
Electronic Device Group . . . . . . . . . . . . . . . . . . . .
Total Components Business . . . . . . . . . . . . . .
Telecommunications Equipment Group . . . . . . . . .
Information Equipment Group . . . . . . . . . . . . . . . .
Total Equipment Business . . . . . . . . . . . . . . .
Others . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Adjustments and eliminations . . . . . . . . . . . . . . . .
Net sales . . . . . . . . . . . . . . . . . . . . . . . . .

Increase(Decrease)
Amount
%¥76,2696.0 ¥ 80,372
6.7 ¥ 4,103
5.4
174,687
13.8
153,420
12.9(21,267) (12.2)
197,642
15.6
179,784
15.1(17,858) (9.0)
242,64119.2
228,72119.2(13,920) (5.7)
691,23954.6
642,29753.9(48,942) (7.1)
225,16817.8
178,669
15.0(46,499) (20.7)
239,91618.9
243,457
20.4
3,541
1.5
465,08436.7
422,12635.4(42,958) (9.2)
139,383
11.0
151,987
12.8
12,6049.0(28,782) (2.3)(25,540) (2.1)
3,242—¥1,266,924 100.0 ¥1,190,870 100.0 ¥(76,054) (6.0)

The following table shows a breakdown of Kyocera’s total consolidated income before income taxes, andoperating profit for fiscal 2011 and fiscal 2012 by the seven reporting segments:

Fine Ceramic Parts Group . . . . . . . . . . . . . . . . . . . . . . . .
Semiconductor Parts Group . . . . . . . . . . . . . . . . . . . . . . .
Applied Ceramic Products Group . . . . . . . . . . . . . . . . . . .
Electronic Device Group . . . . . . . . . . . . . . . . . . . . . . . . .
Total Components Business . . . . . . . . . . . . . . . . . . .
Telecommunications Equipment Group . . . . . . . . . . . . . .
Information Equipment Group . . . . . . . . . . . . . . . . . . . . .
Total Equipment Business . . . . . . . . . . . . . . . . . . . .
Others . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Operating profit . . . . . . . . . . . . . . . . . . . . . . . .
Corporate . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Equity in earning of affiliates and unconsolidated
subsidiaries . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Adjustments and eliminations . . . . . . . . . . . . . . . . . . . . .
Income before income taxes . . . . . . . . . . . . . . . . . . .

Years ended March 31,
2011
2012
Amount%*Amount%*(Yen in millions)

Increase(Decrease)
Amount%¥ 11,969
37,331
29,04941,646
119,995
2,121
25,84527,966
9,651
157,612
16,882

¥

15.7
21.4
14.7
17.2
17.4
0.9
10.8
6.0
6.9
12.4
—

(160) —
(2,002) —¥172,332 13.6

¥ 12,622
27,754
6,459
16,03662,871
1,469
29,45130,9208,054
101,845
13,876

15.7
18.1
3.6
7.0
9.8
0.8
12.1
7.3
5.3
8.6
—

(36) —(792) —
¥114,893
9.6

653
5.5
(9,577) (25.7)(22,590) (77.8)(25,610) (61.5)(57,124) (47.6)(652) (30.7)
3,606 14.0
2,954 10.6
(1,597) (16.5)(55,767) (35.4)(3,006) (17.8)

124
—
1,210
—
¥(57,439) (33.3)* % to net sales of each corresponding segment(1) Fine Ceramic Parts Group
Sales in this reporting segment for fiscal 2012 increased by ¥4,103 million, or 5.4%, to ¥80,372 million,
compared with ¥76,269 million in fiscal 2011. The increase in sales was due mainly to higher sales of automotive
parts in Europe and growing component demand in the LED related markets.

43

Operating profit in this reporting segment for fiscal 2012 increased by ¥653 million, or 5.5%, to ¥12,622 million,
compared with ¥11,969 million in fiscal 2011. Despite an increase of approximately ¥2,200 million in depreciation
and R&D expenses, higher sales and cost reduction measures pushed operating profit up by around ¥3,500 million.
Sales and operating profit were adversely affected by approximately ¥2,000 million and ¥500 million,
respectively, compared with fiscal 2011, due to the yen’s appreciation.
(2) Semiconductor Parts Group
Sales in this reporting segment for fiscal 2012 decreased by ¥21,267 million, or 12.2%, to ¥153,420 million,
compared with ¥174,687 million in fiscal 2011. Sales for fiscal 2012 were down due to sluggish demand forcomponents used in digital consumer equipment coupled with prolonged component inventory adjustments byequipment makers, primarily as a result of stagnant production activity for such items as digital cameras causedby severe flooding in Thailand. In addition, major product prices declined by approximately 10% compared withthe end of fiscal 2011 in line with the miniaturization of components.
Operating profit in this reporting segment for fiscal 2012 decreased by ¥9,577 million, or 25.7%, to¥27,754 million, compared with ¥37,331 million in fiscal 2011. This included a decrease of approximately¥4,500 million due to lower sales, and of approximately ¥1,000 million due to an increase in depreciation.
Sales and operating profit were adversely affected by approximately ¥5,000 million and ¥2,500 million,
respectively, compared with fiscal 2011, due to the yen’s appreciation.
(3) Applied Ceramic Products Group
Sales in this reporting segment for fiscal 2012 decreased by ¥17,858 million, or 9.0%, to ¥179,784 million,
compared with ¥197,642 million in fiscal 2011.
Sales in the cutting tool business increased due to growth in sales mainly for the automotive market aswell as the contribution from Kyocera Unimerco A/S, which became a consolidated subsidiary in July 2011.
Overall segment sales were down, however, due to a decline in sales for the solar energy business, the corebusiness in this reporting segment.
Total shipment volume in the solar energy business slightly decreased compared with fiscal 2011 due to a decline
in shipments for the European market in particular despite growth in demand in Japan. Nevertheless, sales in thesolar energy business decreased as product prices dropped by approximately 30% compared with fiscal 2011 due
to intensifying competition.
Operating profit in this reporting segment for fiscal 2012 decreased by ¥22,590 million, or 77.8%, to¥6,459 million, compared with ¥29,049 million in fiscal 2011. Gross profit decreased by approximately¥20,000 million compared with fiscal 2011 due mainly to lower sales and unit price declines in the solar energy
business and the recognition of impairment loss on inventories.
Sales and operating profit were adversely affected by approximately ¥4,000 million and ¥500 million,
respectively, compared with fiscal 2011, due to the yen’s appreciation.
(4) Electronic Device Group
Sales in this reporting segment for fiscal 2012 decreased by ¥13,920 million, or 5.7%, to ¥228,721 million,
compared with ¥242,641 million in fiscal 2011. A decline in demand of components for digital consumer
equipment such as mobile phone handsets and PCs and the yen’s appreciation caused a negative impact of44

approximately ¥27,000 million on sales, despite the new sales contribution from Optrex Corporation (currently
Kyocera Display Corporation), which was made a consolidated subsidiary in February 2012. As a result, sales inthis segment decreased compared with fiscal 2011.
Operating profit in this reporting segment for fiscal 2012 decreased by ¥25,610 million, or 61.5%, to¥16,036 million, compared with ¥41,646 million in fiscal 2011. This included a decrease of approximately¥14,000 million due to lower sales and a lower capacity utilization rate. In addition, AVX Corporation
recorded an environmental remediation charge of ¥7,900 million in fiscal 2012.
Sales and operating profit were adversely affected by approximately ¥13,000 million and ¥3,000 million,
respectively, compared with fiscal 2011, due to the yen’s appreciation.
(5) Telecommunications Equipment Group
Sales in this reporting segment for fiscal 2012 decreased by ¥46,499 million, or 20.7%, to ¥178,669 million,
compared with ¥225,168 million in fiscal 2011. The decrease in sales was due mainly to an approximately 30%
decline in sales volume of mobile phone handsets affected by inventory adjustments at key customers overseas.
Operating profit decreased by ¥652 million, or 30.7%, to ¥1,469 million, compared with ¥2,121 million in fiscal 2011.
A decline in sales caused a negative impact of ¥4,500 million on operating profit. However, operating profit in thisreporting segment decreased by only ¥652 million due to our various cost reduction efforts amounting to¥5,500 million including a reduction in R&D expenses through selecting and centralizing R&D themes.
Sales and operating profit were adversely affected by approximately ¥6,000 million and ¥1,500 million,
respectively, compared with fiscal 2011, due to the yen’s appreciation.
(6) Information Equipment Group
Sales in this reporting segment for fiscal 2012 increased by ¥3,541 million, or 1.5%, to ¥243,457 million,
compared with ¥239,916 million in fiscal 2011. Despite sales were adversely affected by approximately¥10,000 million compared with fiscal 2011 due to the yen’s appreciation, an increase in sales of color-capable
multifunctional peripherals led to an overall increase in segment sales.
Operating profit in this reporting segment for fiscal 2012 increased by ¥3,606 million, or 14.0%, to¥29,451 million, compared with ¥25,845 million in fiscal 2011. Operating profit was adversely affected byapproximately ¥2,000 million compared with fiscal 2011 due to the yen’s appreciation as well as increasing inadvertising cost for promotion by approximately ¥1,000 million. However, an increase in sales and decreases in
R&D expenses and depreciation pushed operating profit up by approximately ¥7,000 million. As a result,
total operating profit increased compared with fiscal 2011.
Sales and operating profit were adversely affected by approximately ¥10,000 million and ¥2,000 million,
respectively, compared with fiscal 2011, due to the yen’s appreciation.
(7) Others
Sales in this reporting segment for fiscal 2012 increased by ¥12,604 million, or 9.0%, to ¥151,987 million,
compared with ¥139,383 million in fiscal 2011. Sales contribution of new products such as LED lighting systems
produced a positive impact of approximately ¥10,000 million.
However, operating profit in this reporting segment for fiscal 2012 decreased by ¥1,597 million, or 16.5%, to¥8,054 million, compared with ¥9,651 million in fiscal 2011. This decrease in operating profit was due mainly to anincrease of approximately ¥1,000 million in R&D expenses particularly for the development of new businesses.
Sales and operating profit were adversely affected by approximately ¥500 million and ¥100 million, respectively,
compared with fiscal 2011, due to the yen’s appreciation.
45

(8) Corporate
Corporate income and losses mainly constitute gains or losses related to financial assets, and income related to
management supporting service provided by Kyocera’s head office to each reporting segment. Corporate income
decreased by ¥3,006 million, or 17.8%, to ¥13,876 million, compared with ¥16,882 million in fiscal 2011. Thiswas mainly due to an increase in losses on impairment of securities.
Critical Accounting Policies and Estimates
Kyocera’s consolidated financial statements are prepared in conformity with accounting principles generally
accepted in the United States of America. The preparation of these consolidated financial statements requires theuse of estimates, judgments, and assumptions that affect the reported amounts of assets and liabilities at the dateof consolidated financial statements and the reported amounts of revenues and expenses during the periods
presented. Actual results may differ from these estimates, judgments and assumptions.
An accounting estimate in Kyocera’s consolidated financial statements is a critical accounting estimate if it
requires Kyocera to make assumptions about matters that are highly uncertain at the time the accounting estimate
is made and if either different estimates that Kyocera reasonably could have used in the current period or changes
in the accounting estimate that are reasonably likely to occur 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.
Allowances for Doubtful Accounts
Kyocera maintains allowances for doubtful accounts related to trade notes receivables, trade accounts receivables
and finance receivables for estimated losses resulting from customers’ inability to make timely payments,
including interest on finance receivables. Kyocera’s estimates are based on various factors, including the lengthof past due payments, historical experience and current business environments. In circumstances where it isaware of a specific customer’s inability to meet its financial obligations, a specific allowance against theseamounts is provided considering the fair value of assets pledged by the customer as collateral.
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 certain holding periods to be slow-moving or
obsolete. Kyocera also records inventory write-downs based on its projections of future demand, market
conditions and related management-led initiatives even though the age of corresponding inventory is shorter thancertain holding periods.
In fiscal 2012, Kyocera recognized inventory write-downs of ¥11,486 million mainly in the Applied Ceramic ProductsGroup and the Telecommunications Equipment Group, and in fiscal 2013, recognized inventory write-downs of¥11,507 million mainly in the Telecommunications Equipment Group. Kyocera recorded these write-downs to adjust
the carrying amount to market value due to decreases in sales price arising from short lives of products or rapidly
worsening market conditions. If the market conditions or demand for the products are less favorable than Kyocera’s
projections, additional write-downs may be required.
The amounts of these inventory write-downs by reporting segments appear in Note 18 to the Consolidated
Financial Statements included in this annual report on Form 20-F.
Impairment of Securities and Investments
Kyocera records impairment charges for debt and equity securities when it believes that the decline in fair value
is other-than-temporary. Kyocera regularly reviews each security and investment for impairment based on the46

extent to which the fair value is less than cost, the duration of the decline, the anticipated recoverability of fairvalue in the future and the financial conditions of the issuer. Poor operating results of the issuers of thesesecurities or adverse changes in the market may cause impairment losses in future periods. The impairment
losses are recorded as Corporate losses.
Kyocera recognized losses on impairment of debt and equity securities of ¥1,260 million and ¥729 million in
fiscal 2012 and 2013, respectively.
Kyocera is currently a major shareholder of KDDI Corporation. The price fluctuation of the shares of KDDI
Corporation may affect Kyocera’s financial conditions. The unrealized gain on the shares of KDDI Corporation
held by Kyocera at March 31, 2013 had increased by ¥136,297 million, or 235.3%, to ¥194,216 million
compared with that of ¥57,919 million at March 31, 2012, due to a fluctuation of the market price of the shares ofKDDI Corporation. For detailed information on the gross unrealized gain or loss, see Note 3 to the Consolidated
Financial Statements in this annual report on Form 20-F.
Impairment of Long-Lived Assets
Kyocera reviews its long-lived assets and intangible assets with definite useful lives for impairment whenever
events or changes in circumstances indicate that its carrying amount may not be recoverable. Long-lived assets
and intangible assets with definite useful lives are considered to be impaired when the expected undiscounted
cash flows from the asset group is less than its carrying value. A loss on impairment is recognized based on theamount by which the carrying value exceeds the fair value of the long-lived assets and intangible assets withdefinite useful lives.
Goodwill and Other Intangible Assets
Goodwill and intangible assets with indefinite useful lives, rather than being amortized, are tested for impairment
at least annually, and also following any events and changes in circumstances that might lead to impairment.
Intangible assets with definite useful lives are amortized straight line over their respective estimated useful lives
to their estimated residual values, and reviewed for impairment whenever events or changes in circumstancesindicate that their carrying amount may not be recoverable. Kyocera concluded that there was no goodwill
impairment at any reporting unit as of January 1, 2013.
The goodwill of ¥9,996 million which Kyocera acquired in fiscal 2013 was due mainly to the acquisitionof the Tantalum Components Division of Nichicon Corporation by AVX Corporation included in Electronic
Device Group and due mainly to the acquisition of the common stocks of MOTEX Inc. by Kyocera
Communication Systems Co., Ltd. included in Others.
For detailed information of these acquisitions, see Note 2 and 9 to the Consolidated Financial Statements in thisannual report on Form 20-F.
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 of deferred tax assets principallydepends 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 todeferred tax assets may be required. At March 31, 2013, deferred tax assets amounted to ¥107,271 million, which
Kyocera considers will reasonably be realized in the future. This estimate is reasonable when compared with theamounts of income from continuing operations before income taxes and income taxes in fiscal 2013.

47

Benefit Plans
The over funded or under funded status of defined benefit postretirement plans, which depends on projected
benefit obligations and plan assets, are recognized as an asset or liability in our consolidated balance sheets
and changes in that funded status are recognized through comprehensive income in the year in which the changes
occur. Projected benefit obligations are determined on an actuarial basis and are significantly affected by theassumptions used in their calculation, such as the discount rates, the rate of increase in compensation levels andother assumptions. The expected long-term rate of return on plan assets is also used as an assumption.
Kyocera determines the discount rate by referencing the yield on high quality fixed income securities such as
Japanese Government Bonds. The rate of increase in compensation levels is determined based mainly on resultsof operations and inflation. The expected return on plan assets is determined based on the rate of historicalearnings and Kyocera’s expectation of future performance of the funds in which plan assets are invested.
Kyocera annually reviews the assumptions underlying its actuarial calculations, making adjustments based on
current market conditions, if necessary.
If Kyocera is required to decrease its assumptions of the discount rate and the expected long-term rate of returnon plan assets because of a stagnation of Japanese and global economies, projected benefit obligations and net
periodic pension costs will increased.
Sensitivity Analysis of Benefit Plans
The following table illustrates the effect of assumed changes in discount rates and the expected rate of return onplan assets, while holding assuming all other assumptions consistent, for the benefit plan at Kyocera Corporationand its major domestic subsidiaries which accounts for a significant portion of Kyocera’s projected benefit
obligations and net periodic pension costs.
Effect on projected benefit obligations
as of March 31, 2013
(Yen in millions)

Discount rates:
0.25% decrease . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
0.25% increase . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

¥ 5,184(4,992)
Effect on income before income taxes
for the year ending March 31, 2014
(Yen in millions)

Discount rates:
0.25% decrease . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
0.25% increase . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Expected rate of return on plan assets:
0.25% decrease . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
0.25% increase . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

¥

(60)
67
(359)
359

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 these contingencies. Kyocera
records liabilities for these contingencies when the likelihood of an adverse outcome is probable and the amount
can be reasonably estimated. In making these estimates, Kyocera considers the progress of the lawsuits, thesituations of other companies that are subject to similar lawsuits and other relevant factors. The amounts ofliabilities accrued are based on estimates and may be significantly affected by further developments or the
resolution of these contingencies in the future.
48

As to a liability recorded at AVX Corporation for environmental remediation in New Bedford Harbor,
Massachusetts in the U.S., please refer to “The proposed financial settlement among AVX Corporation, the U.S.
Environmental Protection Agency and Commonwealth of Massachusetts regarding the New Bedford Harbor
Superfund Site” in Item 5.A. “Operating Results” of this annual report on Form 20-F on page 31.
Revenue Recognition
Kyocera generates revenue principally through the sale of industrial components and telecommunications andinformation equipment. Kyocera’s operations consist of the following seven reporting segments: 1) Fine Ceramic
Parts Group, 2) Semiconductor Parts Group, 3) Applied Ceramic Products Group, 4) Electronic Device Group,5) Telecommunications Equipment Group, 6) Information Equipment Group and 7) Others.
Kyocera recognizes revenue when persuasive evidence of an arrangement exists, delivery has occurred and title
and risk of loss have been transferred to the customer or services have been rendered, the sales price is fixed ordeterminable and collectability is reasonably assured in accordance with Accounting Standards Codification(ASC) 605, “Revenue Recognition.” Sales to customers in each of the above segments are based on the specificterms and conditions contained in basic contracts with customers and firm customer orders which detail the price,
quantity and timing of the transfer of ownership (such as risk of loss and title) of the products.
For most customer orders, the transfer of ownership and revenue recognition occurs at the time of shipment of
the products to the customer. For the remainder of customer orders, the transfer of ownership and revenue
recognition occurs at the time of receipt of the products by the customer, with the exception of sales of solar
power generating systems in the Applied Ceramic Products Group and information equipment in the Information
Equipment Group for which sales are made to end users together with installation services. The transfer ofownership and revenue recognition in these cases occur at the completion of installation and customer
acceptance, as Kyocera have no further obligations under the contracts and all revenue recognition criteria under
ASC 605 are met. When Kyocera provides a combination of products and services, the arrangement is evaluatedunder ASC 605-25, “Multiple-Element Arrangements.”
In addition, in the Information Equipment Group, Kyocera may enter into sales contracts and lease agreements
ranging from one to seven years directly with end users. Sales contracts and lease agreements may include
installation services and have customer acceptance clauses. For sales and sales-type lease agreements, revenue isrecognized at the completion of installation and customer acceptance which usually occurs on the same business
day as delivery. For sales-type leases, unearned income (which represents interest) is amortized over the leaseterm using the effective interest method in accordance with ASC 840, “Leases.”
For all sales in the above segments, product returns are only accepted if the products are determined to be
defective. There are no price protections, stock rotation or returns provisions, except for certain programs in theElectronic Device Group as noted below.
Sales Incentives
In the Electronic Device Group, sales to independent electronic component distributors may be subject to various
sale programs for which a provision for incentive programs is recorded as a reduction of revenue at the time ofsale, as further described below in accordance with ASC 605-50, “Customer Payments and Incentives” andASC 605-15, “Products.”(a) Distributor Stock Rotation Program
Stock rotation is a program whereby distributors are allowed to return for credit, qualified inventory, semiannually, equal to a certain percentage of the previous six months net sales. In accordance with ASC 605-15, anestimated sales allowance for stock rotation is recorded at the time of sale based on a percentage of distributor
49

sales using historical trends, current pricing and volume information, other market specific information and input
from sales, marketing and other key management personnel. These procedures require the exercise of significant
judgments. Kyocera believes that these procedures enable Kyocera to make reliable estimates of future returns
under the stock rotation program. Kyocera’s actual results have historically approximated its estimates. When the
products are returned and verified, the distributor is given credit against their accounts receivables.
(b) Distributor Ship-from-Stock and Debit Program
Ship-from-Stock and Debit (ship and debit) is a program designed to assist distributors in meeting competitive
prices in the marketplace on sales to their end customers. Ship and debit programs require a request from the
distributor for a pricing adjustment of a specific part for a sale to the distributor’s end customers from the
distributor’s stock. Ship and debit authorizations may cover current and future distributor activity for a specificpart for a sale to their customers. In accordance with ASC 605, at the time Kyocera records the sales to
distributors, an allowance for the estimated future distributor activities related to such sales is provided since it isprobable that such sales to distributors will result in ship and debit activities. In accordance with ASC 605-15,
Kyocera records an estimated sales allowance based on sales during the period, credits issued to distributors,
distributor inventory levels, historical trends, market conditions, pricing trends noted in direct sales activity withoriginal equipment manufacturers and other customers, and input from sales, marketing and other key
management personnel. These procedures require the exercise of significant judgments. Kyocera believes thatthese procedures enable Kyocera to make reliable estimates of future credits under the ship and debit program.
Kyocera’s actual results have historically approximated its estimates.
Sales Rebates
In the case of sales to distributors in the Applied Ceramic Products Group and Information Equipment Group,
Kyocera provides cash rebates when predetermined sales targets are achieved during a certain period. Provisions
for sales rebates are recorded as a reduction of revenue at the time of revenue recognition based on the best
estimate of forecasted sales to each distributor in accordance with ASC 605-50.
Sales Returns
Kyocera records an estimated sales returns allowance at the time of sales based on historical return experience.
Products Warranty
For after-service costs to be paid during warranty periods, Kyocera accrues a product warranty liability for
claims under warranties relating to the products that have been sold. Kyocera records an estimated productwarranty liability based on its historical repair experience with consideration given to the expected level of future
warranty costs.
In the Information Equipment Group, Kyocera provides a standard one year manufacturer’s warranty on its
products. For sales directly to end users, Kyocera offers extended warranty plans that may be purchased and thatare renewable in one year incremental periods at the end of the warranty term. Service revenues are recognizedover the term of the related service maintenance contracts in accordance with ASC 605-20, “Services.”
Uncertainty in Income Taxes
Kyocera records liabilities for unrecognized tax benefits based on the premise of being subject to income tax
examination by tax authorities, when it is more likely than not that tax benefits associated with tax positions will
not be sustained. Actual results such as settlements with taxing authorities may differ from the recognition
accounted for under ASC 740, “Income Taxes.”
50

At March 31, 2013, gross unrecognized tax benefits amounted to ¥4,064 million. Kyocera does not anticipate thefinal resolution of procedures to have a material impact on the consolidated statements of income in the future.
Recently Adopted Accounting Standards
On April 1, 2012, Kyocera adopted the Financial Accounting Standard Board (FASB)‘s Accounting Standards Update(ASU) No. 2011-05, “Presentation of Comprehensive Income” and ASU No. 2011-12, “Deferral of the Effective Datefor Amendments to the Presentation of Reclassifications of Items Out of Accumulated Other Comprehensive Incomein Accounting Standards Update No. 2011-05.” ASU No. 2011-05 requires entities to present net income and othercomprehensive income in either a single continuous statement or in two separate, but consecutive, statements of net
income and other comprehensive income. It eliminates the current option to present the components of othercomprehensive income as part of the statement of equity. ASU No. 2011-05 also requires reclassification adjustments
and the effect of those adjustments on net income and other comprehensive income to be disclosed on the face offinancial statements, however, the effective date of this requirement is deferred indefinitely by ASU No. 2011-12. As
these accounting standards are a provision for presentation, the adoption of these accounting standards did not have an
impact on Kyocera’s consolidated results of operations, financial condition and cash flows.
On April 1, 2012, Kyocera adopted the FASB’s ASU No. 2011-08, “Testing Goodwill for Impairment.” Thisaccounting standard permits an entity to first assess qualitative factors to determine whether it is more likely than
not that the fair value of a reporting unit is less than its carrying amount as a basis for determining whether it isnecessary to perform the two-step goodwill impairment test. An entity is not required to calculate the fair valueof a reporting unit unless the entity determines that it is more likely than not that its fair value is less than its
carrying amount. As this accounting standard does not actually change how the impairment would be calculated,
the adoption of this accounting standard did not have an impact on Kyocera’s consolidated results of operations,financial condition and cash flows.
Recently Issued Accounting Standards
In July 2012, the FASB issued ASU No. 2012-02, “Testing Indefinite-Lived Intangible Assets for Impairment.”
This accounting standard permits an entity to first assess qualitative factors to determine whether it is more likely
than not that the indefinite-lived intangible asset is impaired as a basis for determining whether it is necessary to
perform the impairment test. An entity is not required to calculate the fair value of the indefinite-lived intangible
asset unless the entity determines that it is more likely than not that the indefinite-lived intangible asset isimpaired. This accounting standard will be effective for annual and interim impairment tests performed for fiscal
years beginning after September 15, 2012. As this accounting standard does not actually change how the
impairment would be calculated, the adoption of this accounting standard will not have an impact on Kyocera’s
consolidated results of operations, financial condition and cash flows.
In January 2013, the FASB issued ASU No. 2013-01, “Clarifying the Scope of Disclosures about Offsetting Assets andLiabilities.” This accounting standard clarifies that the scope of ASU No. 2011-11 applies to derivatives accounted forin accordance with ASC 815, Derivatives and Hedging, including bifurcated embedded derivatives, repurchaseagreements and reverse repurchase agreements, and securities borrowing and securities lending transactions that areeither offset in accordance with ASC 210-20-45 or ASC 815-10-45 or subject to an enforceable master netting
arrangement or similar agreement. This accounting standard will be effective for annual reporting periods beginning on
or after January 1, 2013, and interim periods within those annual periods. As this accounting standard is a provision fordisclosure, the adoption of this accounting standard will not have an impact on Kyocera’s consolidated results ofoperations, financial condition and cash flows.
In February 2013, the FASB issued ASU No. 2013-02, “Reporting of Amounts Reclassified Out of Accumulated
Other Comprehensive Income.” This accounting standard requires an entity to provide information about the amounts
reclassified out of accumulated other comprehensive income by component. In addition, this accounting standard
requires an entity to present, either on the face of the statement where net income is presented or in the notes,
51significant amounts reclassified out of accumulated other comprehensive income by the respective line items of net
income but only if the amount reclassified is required under U.S. GAAP to be reclassified to net income in its entirety
in the same reporting period. For other amounts that are not required under U.S. GAAP to be reclassified in their
entirety to net income, this accounting standard required an entity to cross-reference to other disclosures required under
U.S. GAAP that provide additional detail about those amounts. This accounting standard will be effective
prospectively for annual reporting periods beginning after December 15, 2012, and interim periods within those annual
periods. As this accounting standard is a provision for disclosure, the adoption of this accounting standard will not havean impact on Kyocera’s consolidated results of operations, financial condition and cash flows.
In February 2013, the FASB issued ASU No. 2013-04, “Obligations Resulting from Joint and Several Liability
Arrangements for Which the Total Amount of the Obligation Is Fixed at the Reporting Date.” This accounting
standard requires an entity to measure obligations resulting from joint and several liability arrangements forwhich the total amount of the obligation within the scope of this guidance is fixed at the reporting date, as thesum of the following: (a) The amount the reporting entity agreed to pay on the basis of its arrangement among its
co-obligors (b) Any additional amount the reporting entity expects to pay on behalf of its co-obligors. The
accounting standard also requires an entity to disclose the nature and amount of the obligation as well as otherinformation about those obligations. This accounting standard will be effective for fiscal years, and interim
periods within those years, beginning after December 15, 2013. The adoption of this accounting standard is notexpected to have a material impact on Kyocera’s consolidated results of operations, financial condition and cash
flows.
In March 2013, the FASB issued ASU No. 2013-05, “Parent’s Accounting for the Cumulative Translation
Adjustment upon Derecognition of Certain Subsidiaries or Groups of Assets within a Foreign Entity or of an
Investment in a Foreign Entity.” This accounting standard resolves the diversity in practice about whether
ASC 810-10, Consolidation—Overall, or ASC 830-30, Foreign Currency Matters—Translation of Financial
Statements, applies to the release of the cumulative translation adjustment into net income when a parent either
sells a part or all of its investment in a foreign entity or no longer holds a controlling financial interest in a
subsidiary or group of assets that is a nonprofit activity or a business within a foreign entity. In addition, thisaccounting standard resolves the diversity in practice for the treatment of business combinations achieved instages involving a foreign entity. This accounting standard will be effective prospectively for fiscal years, andinterim reporting periods within those years, beginning after December 15, 2013. The impact of this accounting
standard on Kyocera’s consolidated results of operations, financial condition and cash flows will depend on thenature and significance of transactions after the adoption date.

B. Liquidity and Capital Resources
Capital Resources
Kyocera’s net cash provided by operating activities in fiscal 2013 was ¥109,489 million, and cash and cash
equivalents at March 31, 2013 were ¥305,454 million. In addition, Kyocera also held significant amount ofhighly-liquid financial assets. Based on those facts, Kyocera does not expect to face any liquidity issue in theforeseeable future. In the short term, Kyocera expects cash demands for working capital and funds for capital
expenditures required for the expansion of operations, contribution to pension plans and payments of dividends
to shareholders. Kyocera’s primary source of short-term liquidity is cash generated by operations. Certain
subsidiaries also generate capital in the form of loans from financial institutions. At March 31, 2013, Kyocera’s
short-term borrowings and long-term debt including current portion totaled ¥33,807 million. The ratio to total
assets of 1.5% continues to reflect a low level of dependence. Most borrowings were denominated in the Euro,the Japanese yen and the U.S. dollar, but certain borrowings were denominated in other foreign currencies.
Details of these borrowings are described in “Tabular Disclosure of Contractual Obligations,” which also
includes the information regarding obligations for the acquisition or construction of property, plant andequipment.
52

Capital expenditures in fiscal 2013 decreased by ¥9,720 million, or 14.6%, to ¥56,688 million compared with
¥66,408 million in fiscal 2012. In fiscal 2013, although Kyocera constructed new plants in Vietnam, it reduced its
capital expenditures in the Components Business due mainly to the weak condition of the digital consumer
equipment market. As a result, in fiscal 2013, capital expenditures decreased compared with fiscal 2012. R&D
expenses in fiscal 2013 increased by ¥1,960 million, or 4.3%, to ¥47,519 million compared with ¥45,559 million
in fiscal 2012. Almost all capital and R&D expenditures were funded by using cash at hand.
During fiscal 2014, Kyocera expects total capital expenditures to be approximately ¥75,000 million and total
R&D expenses to be approximately ¥52,000 million. Kyocera expects that total capital expenditures will increase
due mainly to the construction of new plants in Semiconductor Parts Group and Information Equipment Group inorder to expand their production capacity. Kyocera also expects that R&D expenses will increase compared withfiscal 2013. Kyocera will promote R&D of new products in order to expand the business. Nearly all capital and
R&D expenditures will be funded by using cash on hand. Kyocera intends to maintain proportion of capital and
R&D expenditures to sales in fiscal 2014 almost as same level as in fiscal 2013. Kyocera believes that Kyocera
needs to invest its resources continuously in the development of new business areas and enhancement oftechnology in order to create new products, commercialize advanced technologies and thereby secure future
earnings streams.
Kyocera contributed ¥12,748 million to its benefit pension plans in fiscal 2013 and Kyocera expects to contribute¥15,442 million to its benefit pension plans in fiscal 2014. At March 31, 2013, Kyocera’s funded status of its
benefit pension plans ensured the sources of funds sufficient to cover the pension benefits paid to participants
and beneficiaries, and large amounts of additional contributions are not considered to be necessary. Kyocera
expects contributions to pension plan assets will be made by using cash at hand.
In fiscal 2013, Kyocera Corporation paid cash dividends totaling ¥22,013 million, at ¥120 per share. Kyocera
Corporation received approval at the general meeting of shareholders held on June 26, 2013 for the payment ofyear-end dividends totaling ¥11,006 million, or ¥60 per share, on June 27, 2013 to all shareholders of record on
March 31, 2013.
As described in Note 2 to the Consolidated Financial Statements, Kyocera acquired several businesses. In fiscal
2013, these acquisition costs, net of cash acquired were ¥18,533 million, and all acquisitions were funded byusing cash at hand.
At March 31, 2013, Kyocera’s working capital totaled ¥941,753 million, an increase of ¥98,198 million, or
11.6%, compared with ¥843,555 million at March 31, 2012. Our working capital requirements, capital
expenditures, debt repayments and other obligations were funded by using cash at hand.
Undistributed earnings of foreign subsidiaries which are intended to be reinvested indefinitely amounted to¥268,554 million yen as of March 31, 2013. Accordingly, cash and cash equivalents and investments in securities
amounts held by Kyocera’s foreign subsidiaries, totaling ¥205,857 million yen as of March 31, 2013, are
not intended to be used as dividend distributions to Kyocera for use in Japan at present. Kyocera currently
believes it does not need the cash and investments held by its foreign subsidiaries to be repatriated back to Japan
at least in fiscal 2014 as it has adequate liquidity within Japan to support its Japanese operations.
Kyocera believes cash at hand will be sufficient to fund all cash requirements outlined above at least during fiscal
2014. Consequently, Kyocera does not currently intend to use any other external financing sources that might
affect its credit agency ratings. If cash generated by operations are insufficient for funding purposes, Kyocera
retains other financing options, including external sources, such as short-term borrowings or long-term debts, aswell as financing directly in the capital markets through issuances of debt or equity securities. As evidenced byequity to assets ratio of 72.1% at March 31, 2013, Kyocera maintains a strong financial position, which leads
Kyocera to believe that any capital requirements could be secured from external sources at a relatively low cost.
Kyocera also maintains good business relationships with several major financial institutions.
53Any future significant deterioration in market demand for Kyocera’s products, or a slump in product prices tolevels substantially below those projected by Kyocera, could adversely affect Kyocera’s operating results andfinancial condition, possibly resulting in reduced liquidity.
Cash flows
Fiscal 2013 compared with Fiscal 2012
The following table shows a summary of Kyocera’s cash flows for fiscal 2012 and fiscal 2013:
Years ended March 31,
2012
2013
AmountAmount(Yen in millions)

Cash flows from operating activities . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Cash flows from investing activities . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Cash flows from financing activities . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Effect of exchange rate changes on cash and cash equivalents . . . . . . . . . . . . . . . . . . . . . .
Net increase (decrease) in cash and cash equivalents . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Cash and cash equivalents at beginning of year . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Cash and cash equivalents at end of year . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

¥109,065 ¥109,489(56,051) (66,142)(50,769) (31,431)(2,428)20,250(183)
32,166
273,471
273,288273,288
305,454

Net cash provided by operating activities for fiscal 2013 was ¥109,489 million, which was almost flat comparedto ¥109,065 million for fiscal 2012. This was mainly because a decrease in net income and cash flow adjustment
related to notes and accounts payable were offset by cash flow adjustments related to inventories and othernon-current liabilities.
Net cash used in investing activities for fiscal 2013 increased by ¥10,091 million, or 18.0%, to ¥66,142 million from
¥56,051 million for fiscal 2012. This was mainly because an increase in acquisition and a decrease in withdrawal oftime deposits and certificate of deposits exceeded decreases in acquisitions of business and in payments forpurchases of held-to-maturity securities.
Net cash used in financing activities for fiscal 2013 decreased by ¥19,338 million, or 38.1%, to ¥31,431 million
from ¥50,769 million for fiscal 2012. This was due mainly to decreases in payments of short-term borrowings andlong-term debts as well as a decrease in dividend paid.
An increase in the effect of exchange rate changes on cash and cash equivalents of ¥20,250 million was due mainly
to the yen’s depreciation against the Euro and the U.S. dollar between March 31, 2012 and March 31, 2013.
Cash and cash equivalents at March 31, 2013 totaled ¥305,454 million, an increase of ¥32,166 million, or 11.8%,
from those of ¥273,288 million at March 31, 2012. Most of Kyocera’s cash and cash equivalents were denominatedin the yen but certain cash and cash equivalents, mainly in overseas subsidiaries, were denominated in foreign
currencies, such as the U.S. dollar.

54

Fiscal 2012 compared with Fiscal 2011
The following table shows a summary of Kyocera’s cash flows for fiscal 2011 and fiscal 2012:
Years ended March 31,
2011
2012
AmountAmount(Yen in millions)

Cash flows from operating activities . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Cash flows from investing activities . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Cash flows from financing activities . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Effect of exchange rate changes on cash and cash equivalents . . . . . . . . . . . . . . . . . . . . . .
Net decrease in cash and cash equivalents . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Cash and cash equivalents at beginning of year . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Cash and cash equivalents at end of year . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

¥ 119,687 ¥109,065(121,364) (56,051)(26,820) (50,769)(11,158)(2,428)(39,655)(183)
313,126
273,471
273,471
273,288

Net cash provided by operating activities in fiscal 2012 decreased by ¥10,622 million, or 8.9%, to ¥109,065 million
from ¥119,687 million in fiscal 2011. This was due mainly to a decrease in net income and a decrease in notes andaccounts payable in fiscal 2012. Those were partly offset by decreases in cash outflows related to changes inreceivables and inventories.
Net cash used in investing activities for fiscal 2012 decreased by ¥65,313 million, or 53.8%, to ¥56,051 million
from ¥121,364 million for fiscal 2011. This was due mainly to increases in proceeds from sales and maturities ofavailable-for-sales and held-to-maturity securities and a decrease in acquisition of time deposits and certificate ofdeposits which exceeded an increase in acquisitions of businesses.
Net cash used in financing activities for fiscal 2012 increased by ¥23,949 million, or 89.3%, to ¥50,769 million
from ¥26,820 million for fiscal 2011. This was due mainly to increases in payments of short-term borrowings
and long-term debts.
A decrease in the effect of exchange rate changes on cash and cash equivalents of ¥2,428 million was due mainly
to the yen’s appreciation against the Euro and the U.S. dollar between March 31, 2011 and March 31, 2012.
Cash and cash equivalents at March 31, 2012 totaled ¥273,288 million, a decrease of ¥183 million, or 0.1%, fromthose of ¥273,471 million at March 31, 2011. Most of Kyocera’s cash and cash equivalents were denominated in
the yen but certain cash and cash equivalents, mainly in overseas subsidiaries, were denominated in foreign
currencies, such as the U.S. dollar.
Assets, Liabilities and Equity
Kyocera’s total assets at March 31, 2013 increased by ¥288,750 million, or 14.5% to ¥2,282,853 million,
compared with ¥1,994,103 million at March 31, 2012.
Cash and cash equivalents increased by ¥32,166 million, or 11.8%, to ¥305,454 million, due mainly to the sales
and redemption of securities and increases from net cash gained by operating activities.
Other short-term investments in debt securities increased by ¥21,078 million, or 13.3%, to ¥179,843 million, due
mainly to acquisitions of time deposits at Kyocera Corporation.
Trade receivables-accounts increased by ¥43,349 million, or 19.2%, to ¥268,927 million, due mainly to increases
in sales driven.
Inventories increased by ¥26,114 million, or 9.7%, to ¥296,450 million, due mainly to increases in orders.
55Investments in debt and equity securities increased by ¥133,711 million or, 35.9%, to ¥506,490 million, due
mainly to increases in market values of the shares of KDDI Corporation and other equity securities at March 31,
2013 compared with March 31, 2012.
Total property, plant and equipment at cost, net of accumulated depreciation, increased by ¥8,287 million, or
3.2%, to ¥268,824 million. Capital expenditure in fiscal 2013 was ¥56,688 million, and depreciation was ¥63,119
million.
Goodwill increased by ¥14,386 million, or 16.2%, to ¥103,425 million, due mainly to the acquisition of
the Tantalum Components Division of Nichicon Corporation by AVX Corporation and the acquisition of thecommon stocks of MOTEX Inc. by Kyocera Communication Systems Co., Ltd.
Other assets increased by ¥10,093 million, or 17.3%, to ¥68,487 million, due mainly to increases of deferredtaxes assets for the recording of a liability for an environmental remediation charge at AVX Corporation.
Kyocera’s total liabilities at March 31, 2013 increased by ¥108,049 million, or 23.5%, to ¥567,911 million,
compared with ¥459,862 million at March 31, 2012.
Deferred taxes liabilities increased by ¥56,050 million or, 62.2%, to ¥146,229 million, due mainly to increases inmarket values of the shares of KDDI Corporation and other equity securities at March 31, 2013 compared with
March 31, 2012.
Other non-current liabilities increased by ¥22,878 million, or 152.6%, to ¥37,875 million, due mainly to therecording of a liability for an environmental remediation charge at AVX Corporation.
Total equity at March 31, 2013 increased by ¥180,701 million, or 11.8%, to ¥1,714,942 million, compared with
¥1,534,241 million at March 31, 2012.
Retained earnings at March 31, 2013 increased by ¥44,460 million, or 3.4%, due to a net income for fiscal 2013of ¥66,473 million offset by cash dividend payments of ¥22,013 million.
Accumulated other comprehensive income increased by ¥131,777 million, to ¥50,138 million. Net unrealized
gains on securities increased by ¥94,513 million, or 232.0%, due mainly to increases in market values of theshares of KDDI Corporation and other equity securities at March 31, 2013 compared with March 31, 2012.
Foreign currency translation adjustments increased by ¥48,387 million to a loss of ¥(61,627) million, due mainly
to the effect of the yen’s depreciation.
Pension adjustments decreased by ¥11,125 million to a loss of ¥(23,415) million. Despite the improvement in
performance of benefit plan assets affected by stability of financial markets, unamortized actuarial losses
increased due mainly to an increase in projected benefit obligations resulting from a decrease in discount rates
applied to actuarial calculation.
Kyocera Corporation shareholders’ equity ratio at March 31, 2013 was 72.1%, decreased by 1.6 percentage
points compared with 73.7% at March 31, 2012.
Noncontrolling interests in subsidiaries, principally AVX Corporation, increased by ¥4,049 million, or 6.3%, to¥68,785 million, compared with ¥64,736 million at March 31, 2012.

56

C. Research and Development, Patents and Licenses, etc.
Kyocera seeks to create new technologies, products and markets by integrating group-wide management
resources and thereby generate businesses that will become core to the group in the future. In particular, we arefocusing on R&D in the information and communications market and the environment and energy market thathave high-growth potential.
An outline of R&D activities in each reporting segment follows.
(1) Fine Ceramic Parts GroupIn this reporting segment, we are working to develop new products in a wide range of markets by leveraging fineceramic materials technology, processing technology and design technology that we have accumulated since ourearliest days. In the industrial machinery market, we are strengthening the development of parts for next-generation
semiconductor fabrication equipment, which includes increasing the size of silicon wafers, parts for theenvironment and energy market and LED-related products, which are attracting attention for use in lighting.
In the automotive market, efforts are being undertaken for camera modules for rearview detection and forpreventing collision, an area where demand is forecast to increase due to new legislation concerning safety
regulations in the United States. At the same time, we are concentrating development on ceramic parts for diesel
engines that contribute to a reduction of carbon dioxide and exhaust gas.
In the digital consumer equipment market, we are pushing ahead with development primarily of a Smart Sonic
Receiver for mobile phones that makes maximum use of the exceptional piezoelectric properties of ceramics.
(2) Semiconductor Parts GroupIn the digital consumer equipment market, needs are continuing to grow for products such as smartphones thatare more multifunctional as well as smaller and thinner. In line with this, electronic components used in such
equipment are getting smaller while semiconductors are becoming more refined. In the information andcommunications network market, there is demand for the creation of fast, large-capacity infrastructure. In orderto respond to these market trends, Kyocera is working to develop new high-value-added products that leverage
our own unique material, design and layering technologies. Specifically, we are working on the development ofhigh-strength, high-rigidity ultra-small and thin ceramic packages that employ micro wiring as well as ceramic
packages for optical communications that are capable of higher frequency.
We are also strengthening the development of fine-pitch, thin, highly precise flip-chip organic packages andmodule substrates.
(3) Applied Ceramic Products GroupIn the solar energy business, we are working to further improve the conversion efficiency of multicrystalline
silicon solar cells and the output of modules. We are also pushing forward with the development of single crystal
silicon solar cells and thin-film solar cells with the aim of expanding our range of products that meet various
applications and needs. In addition, we are focusing on the development of energy management systems, which
control energy efficiently, amid a projection of further proliferation going forward.
In the cutting tool business, we are working on the development of high quality and high precision products that
contribute to increased productivity for users.
(4) Electronic Device Group
Kyocera is developing various components and devices, including small, thin ceramic capacitors and modules,
crystal related products, and fine-pitch, low-profile connectors for use in mobile equipment such as smartphones
57and tablet PCs, which are getting more multifunctional and smaller. In addition, we are pushing ahead with thedevelopment of high-voltage ceramic capacitors and connectors suitable for high-speed data transfer for theindustrial equipment market.
In LCD related products, we are developing TFT color LCDs with high luminance, high contrast and wideviewing angles for the industrial equipment market and automotive market as well as slim touch panels for
consumer equipment and industrial equipment. Additionally, we are developing high-speed, high-definition
inkjet printheads mainly for the commercial printing market.
(5) Telecommunications Equipment Group
Kyocera is focusing on the development of smartphones based on the Android operating system that are capableof high-speed wireless communications such as Long Term Evolution (LTE). We are also strengthening thedevelopment of high-value-added terminals that realize differentiation in user interface for equipment byleveraging our unique component technology in addition to slim design, waterproofing and dust prevention
technologies that we have amassed in-house. We are also concentrating on the development of new products forvarious domains such as car electronics, industrial equipment, medical equipment and digital home electronics
where networking continues apace.
(6) Information Equipment Group
Kyocera is working to further innovate printers based on the “ECOSYS” concept and multifunctional products
based on the “TASKalfa” brand, which realize longer life and minimal waste of consumables. This involves
focusing on development to further extend the life of the amorphous silicon drum, the nucleus of image forming,and of the positively-charged single-layer photoconductor (PSLP) drum as well as a processing system thatmaintains high image quality over a long period. From the perspective of energy conservation, we arestrengthening the development of energy-saving toner, which is effective in reducing power consumption, thepower supply and the ASICs as well as software that controls the power supply and ASICs.
In addition, we are accelerating new product development in the solution services field. This includes developing
various applications capable of connecting with the external environment such as mobile equipment and cloudsystems as well as creating a system for the global development of MDS that optimize and provide continuous
support to users’ document environments. In emerging markets, where high growth is forecast, we are working to
expand our line-up of ultra-low-priced products fitted with only the basic necessary functions.
(7) Others
Kyocera Communication Systems Co., Ltd. is working on development in a wide range of areas from coresystems to software that drive the future of the IT market, including the creation of cloud computing systems,
meeting needs for rapidly expanding mobile communications and for sending and receiving high-capacitancedata, and strengthening information security systems.
Kyocera Chemical Corporation is working on technology related themes concerned with environmental
preservation and to this end is developing sealing materials for semiconductors and casting resin based on
halogen-free epoxy materials, which feature environmental properties. In addition, we are developing various
application products such as thermo-setting epoxy resin sheets primarily for the purpose of protecting andaffixing electronic components mounted on equipment.
Efforts are also being made to strengthen the development of advanced ceramic cell stacks for residential-use
Solid Oxide Fuel Cells (SOFCs) in order to further improve energy efficiency.

58

R&D expenses by reporting segment are as follows.
Years ended March 31,
2011
2012
2013
AmountAmountAmount(Yen in millions)

Increase(Decrease)%

Fine Ceramic Parts Group . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . ¥ 2,363
Semiconductor Parts Group . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
3,026
Applied Ceramic Products Group . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
5,794
Electronic Device Group . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
5,742¥ 2,943
2,551
5,010
5,852

¥ 2,878
2,353
5,778
8,058

(2.2)
(7.8)
15.3
37.7

Total Components Business . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Telecommunications Equipment Group . . . . . . . . . . . . . . . . . . . . . . . .
Information Equipment Group . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

16,9258,310
18,36916,356
4,431
17,81319,067
4,445
18,373

16.6
0.3
3.1

Total Equipment Business . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Others . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

26,6795,870

22,244
6,959

22,8185,634

2.6(19.0)

R&D expenses . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . ¥49,474¥45,559¥47,519

4.3% to net sales . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

3.9%

3.8%

3.7%

We have a variety of patents in Japan and other countries, and we hold licenses for the use of patents from others.
Details are set forth in “Patents and Licenses” included in Item 4.B “Business Overview” in this annual report on
Form 20-F.
D. Trend Information
In the digital consumer equipment market in fiscal 2013, although demand for smartphones and tablet PCs
increased significantly compared with fiscal 2012, production activities for digital consumer equipment slumped
on the whole due to the impact of stagnation in the Japanese and overseas economies coupled with weak demandfor other digital consumer equipment. As a result, component demand for digital consumer equipment increased
only moderately relative to fiscal 2012.
In fiscal 2014, we expect the global economy to be on a recovery track and production activities to expand
gradually in the digital consumer equipment market primarily on the back of aggressive new productintroductions by equipment manufacturers.
In the environment and energy market, the global solar energy market expanded steadily in fiscal 2013, led by
growth in the U.S. and Japanese markets. In particular, it is estimated that the solar energy market in Japan has
almost doubled in size due in part to the introduction of a feed-in tariff for renewable energy for commercial use
in July 2012.
In fiscal 2014, although demand in the global solar energy market is forecast to remain roughly unchanged
compared with fiscal 2013 due mainly to contraction in the European market, demand for solar power generation
systems is projected to continue increasing in Japan owing to continuation of the feed-in tariff system. In
addition, demand is expected to rise for energy management systems that not only create energy but also store
the created energy and control energy consumption particularly in the Japanese market.
E. Off-Balance Sheet Arrangements
Refer to Note 14 in the Consolidated Financial Statements included in this annual report on Form 20-F.
As a part of our ongoing business, we have no unconsolidated special purpose financing or partnership entities
that are likely to create material contingent obligations.
59

F. Tabular Disclosure of Contractual Obligations
The following table provides information about Kyocera’s contractual obligations and other commercial
commitments that will affect Kyocera’s liquidity for the next several years, as of March 31, 2013. Kyocera
anticipates that the funds required to fulfill these debt obligations and commitments will be cash at hand.
Less than
1 yearContractual obligations

2-3 years¥——
14,734
1,063
55,2995,818

4-5 years Thereafter(Yen in millions)

¥

—
—
4,901
209
58,005
2,507

¥

—
—
1,220
23
71,884
1,778

Total

Short-term borrowings . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Interest payments for short-term borrowings* . . . . . . . . . .
Long-term debt (including due within one year) . . . . . . . .
Interest payments for long-term debt* . . . . . . . . . . . . . . . .
Supply agreement material used in operation . . . . . . . . . .
Operating leases . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Obligations for the acquisition or construction ofproperty, plant and equipment . . . . . . . . . . . . . . . . . . . .

¥ 3,135
45
9,817
1,141
30,304
5,486

¥

3,135
45
30,672
2,436
215,492
15,589

9,009

224

—

—

9,233

Total contractual obligations . . . . . . . . . . . . . . . . . . . . . . .

¥58,937¥77,138¥65,622¥74,905¥276,602* For Kyocera’s variable interest rate of borrowings and debt, Kyocera utilized the rates in effect as ofMarch 31, 2013 when estimating schedule of interest payments.
In addition to contractual obligations shown in the above tables, Kyocera forecasts to contribute ¥15,442 million to its
defined benefit pension plans in fiscal 2014. Kyocera recorded liabilities of ¥4,064 million for gross unrecognized tax
benefits in accordance with FASB’s ASC 740, “Income Taxes” at March 31, 2013, which are not included in the abovetable because we are unable to make reasonable estimates of the period of settlements. For detailed information, seeNote 16 to the Consolidated Financial Statements in this annual report on Form 20-F.
Item 6.

Directors, Senior Management and Employees

A. Directors and Senior Management
Kyocera believes that its current management system enables faster decision-making across the board throughthe use of a top management system comprising the chairman, the vice chairman and the president. With thissetup, the chairman takes on the position as the head of the board of directors, providing guidance to thepresident, while the president has total responsibility for daily business execution. It is also believed that moreaccurate management decisions can be made with this management system, as the chairman, the vice chairman
and the president can provide diverse perspectives on critical issues.

60

The following table shows Kyocera’s Directors and Audit & Supervisory Board Members as of June 26, 2013.
Name

Date of Birth

Tetsuo Kuba . . . . . . . . . . . . . .

February 2, 1954

Tatsumi Maeda . . . . . . . . . . . .

January 1, 1953

Goro Yamaguchi . . . . . . . . . .

January 21, 1956

Katsumi Komaguchi . . . . . . .
Yasuyuki Yamamoto . . . . . . .
Ken Ishii . . . . . . . . . . . . . . . . .
Yoshihito Ohta . . . . . . . . . . . .
Shoichi Aoki . . . . . . . . . . . . .
Hiroshi Fure . . . . . . . . . . . . . .
Yoji Date . . . . . . . . . . . . . . . .
John S. Gilbertson . . . . . . . . .
John S. Rigby . . . . . . . . . . . . .
Tadashi Onodera . . . . . . . . . .
Yoshihiro Kano . . . . . . . . . . .

March 5, 1951
April 2, 1951
October 6, 1953
June 26, 1954
September 19, 1959
February 24, 1960
September 20, 1956
December 4, 1943
May 13, 1955
February 3, 1948
April 5, 1953

Kouji Mae . . . . . . . . . . . . . . .

January 19, 1949

Osamu Nishieda . . . . . . . . . . .

January 10, 1943

Yoshinori Yasuda . . . . . . . . . .

November 24, 1946

Nichimu Inada . . . . . . . . . . . .

November 24, 1940

Yasunari Koyano . . . . . . . . . .

December 6, 1942

*1
*2
*3
*4

Position

Since

Term

Representative Director andChairman
Representative Director andVice Chairman
Representative Director andPresident
Senior Managing Director
Senior Managing Director
Director
Director
Director
Director
Director
Director
Director
Outside Director
Full-time Audit & Supervisory
Board Member
Full-time Audit & Supervisory
Board Member
Audit & Supervisory Board
MemberAudit & Supervisory Board
MemberAudit & Supervisory Board
MemberAudit & Supervisory Board
Member2008(Chairman 2013)
2008

*1

2009
(President 2013)
2009
2009
2012
2010
2009
2013
2013
1995
2012
2013
2011

*1
*1
*1
*1
*1
*1
*1
*1
*1
*1
*1
*2

2013

*3

1993

*4

2012

*4

2012

*4

2013

*3

*1

The term of office of a Director is two years after his election at the close of the ordinary general meeting ofshareholders held on June 26, 2013.
The term of office of an Audit & Supervisory Board Member is four years after his election at the close of
the ordinary general meeting of shareholders held on June 28, 2011.
The term of office of an Audit & Supervisory Board Member is four years after his election at the close of
the ordinary general meeting of shareholders held on June 26, 2013.
The term of office of an Audit & Supervisory Board Member is four years after his election at the close of
the ordinary general meeting of shareholders held on June 27, 2012.

Tetsuo Kuba has served as a Representative Director and Chairman of Kyocera Corporation since 2013. He
became an Executive Officer in 2003, a Managing Executive Officer in 2005, a Senior Managing Executive
Officer in 2007, a Director in 2008 and a Representative Director and President in 2009. He joined Kyocera
Corporation in 1982 and has served as the Chairman of the Board of Directors of Shanghai Kyocera Electronics
Co., Ltd., Chairman of the Board of Directors of Dongguan Shilong Kyocera Co., Ltd., Chairman of the Board of
Directors of Kyocera Management Consulting Service (Shanghai) Co., Ltd., Authorized Representative andChairman of Kyocera Vietnam Co., Ltd., Representative Director and Chairman of Kyoto Purple Sanga Co., Ltd.,
Representative Director and Chairman of Kyocera SLC Technologies Corporation, Representative Director
and Chairman of Kyocera Crystal Device Corporation, Representative Director and Chairman of Kyocera
Display Corporation, Representative Director and Chairman of Kyocera Document Solutions, Representative
Director and Chairman of Kyocera Chemical Corporation, Representative Director and Chairman of Kyocera
Optec Co., Ltd. and Representative Director and Chairman of Kyocera Realty Development.
61

Tatsumi Maeda has served as a Representative Director and Vice Chairman of Kyocera Corporation since 2013.
He became a Director in 2001 and retired in 2003. He became a Managing Executive officer in 2003, a Senior
Managing Executive Officer in 2007 and rejoined as a Director in 2008. He became a Representative
Director and Vice President in 2009. He joined Kyocera Corporation in 1975 and has served as a Charge ofEngineering and Technology.
Goro Yamaguchi has served as a Representative Director and President of Kyocera Corporation since 2013. He
became an Executive Officer in 2003, a Senior Executive Officer in 2005 and a Managing Executive Officer in2009. He joined Kyocera Corporation in 1978 and has served as the Representative Director and Chairman andPresident in Kyocera Korea Co., Ltd. and Chairman of the Board of Directors of Kyocera (China) Sales &Trading Corporation.
Katsumi Komaguchi has served as a Senior Managing Director of Kyocera Corporation since 2013. He became
an Executive Officer in 2008, a Managing Executive Officer and a Director in 2009. He joined Kyocera
Corporation in 1986 and has served as a Senior Managing Executive Officer, and the Representative Director andPresident of Kyocera Document Solutions Inc.
Yasuyuki Yamamoto has served as a Senior Managing Director of Kyocera Corporation since 2013. He became
an Executive Officer in 2003, a Senior Executive Officer in 2008, a Managing Executive Officer and a Director
in 2009. He joined Kyocera Corporation in 1976 and has served as a Senior Managing Executive Officer and theGeneral Manager of Corporate Communication Equipment Group.
Ken Ishii has served as a Director of Kyocera Corporation since 2012. He became an Executive Officer in 2009
and a Senior Executive Officer in 2011. He joined Kyocera Corporation in 1977 and has served as a Managing
Executive Officer, the General Manager of Corporate Cutting Tool Group, and the Representative Director andChairman and President in Kyocera Precision Tools Korea Co., Ltd.
Yoshihito Ohta has served as a Director of Kyocera Corporation since 2010. He became an Executive Officer in2003 and a Senior Executive Officer in 2007. He joined Kyocera Corporation in 1978 and has served as aManaging Executive Officer and the General Manager of Corporate General Affairs Group.
Shoichi Aoki has served as a Director of Kyocera Corporation since 2009. He became an Executive Officer in2005. He joined Kyocera Corporation in 1983 and has served as a Managing Executive Officer and the General
Manager of Corporate Financial and Accounting Group.
Hiroshi Fure has served as a Director of Kyocera Corporation since 2013. He became an Executive Officer in
2011. He joined Kyocera Corporation in 1984 and has served as a Managing Executive Officer and the General
Manager of Corporate Automotive Components Group.
Yoji Date has served as a Director of Kyocera Corporation since 2013. He became an Executive Officer in 2012.
He joined Kyocera Corporation in 1979 and has served as a Managing Executive Officer, and a Representative
Director and President of Kyocera Connector Products Corporation.
John S. Gilbertson has served as a Director of Kyocera Corporation since 1995. He became a Director in 1995
and a Managing Director in 1999. He joined AVX Corporation in 1981 and has served as Director, Chairman andChief Executive Officer of AVX Corporation.
John S. Rigby has served as a Director of Kyocera Corporation since 2012. He became an Executive Officer in2005. He joined Kyocera International, Inc. in 1981 and has served as Director and President of Kyocera
International, Inc.
Tadashi Onodera has served as an Outside Director of Kyocera Corporation since 2013. He joined DDI
Corporation (currently KDDI Corporation) in 1989 and has served as the Chairman of the Board andRepresentative Director of KDDI Corporation.
62

Yoshihiro Kano has served as a Full-time Audit & Supervisory Board Member of Kyocera Corporation since2011. He became an Executive Officer in 2005 and a Managing Executive Officer and a Director in 2009. He
joined Kyocera International, Inc. in 1980 and transferred to Kyocera Corporation in 1991.
Kouji Mae has served as a Full-time Audit & Supervisory Board Member of Kyocera Corporation since 2013. He
became a Director in 2001 and retired in 2003. He became a Senior Executive Officer in 2003 and retiredin 2004. He became an Executive Officer in 2009 and retired in 2013. He joined Kyocera Corporation in 1972.
Osamu Nishieda has served as an Audit & Supervisory Board Member of Kyocera Corporation since 1993. He
has served as an In-House Council of Kyocera Corporation.
Yoshinori Yasuda has served as an Audit & Supervisory Board Member of Kyocera Corporation since 2012. He
has served as Visiting Professor at Reitaku University, Member of the Royal Swedish Academy of Sciences,
Senior Fellow at The Tokyo Foundation, Professor Emiritus at International Research Center for JapaneseStudies, Professor at Graduate School of Environmental Studies, Tohoku University and Professor Emeritus at
Graduate University for Advanced Studies.
Nichimu Inada has served as an Audit & Supervisory Board Member of Kyocera Corporation since 2012. He hasserved as Representative Director and President of Family Co., Ltd., Executive Director of The Japan Federationof Medical Devices Associations and Chairman of The Japan Home-Health Apparatus Industrial Association.
Yasunari Koyano has served as an Audit & Supervisory Board Member of Kyocera Corporation since 2013. He
has served as Representative Lawyer of Koyano LPC.
Kyocera adopts an “executive officer system,” which aims to establish corporate governance appropriate for a
global corporation together with a decision making system responsive to the business environment and to train
the next generation of senior executives.
The following table shows Kyocera’s Executive Officers as of June 26, 2013.
Name

Position

Goro Yamaguchi . . . . . . Executive Officer and President
Katsumi Komaguchi . . . Senior Managing Executive Officer(Representative Director and President of Kyocera Document Solutions Inc.)
Yasuyuki Yamamoto . . Senior Managing Executive Officer(General Manager of Corporate Communication Equipment Group)
Ken Ishii . . . . . . . . . . . . Managing Executive Officer(General Manager of Corporate Cutting Tool Group)
Yoshihito Ohta . . . . . . . Managing Executive Officer(General Manager of Corporate General Affairs Group)
Shoichi Aoki . . . . . . . . . Managing Executive Officer(General Manager of Corporate Financial and Accounting Group)
Hiroshi Fure . . . . . . . . . Managing Executive Officer(General Manager of Corporate Automotive Components Group)
Yoji Date . . . . . . . . . . . . Managing Executive Officer(Representative Director and President of Kyocera Connector Products Corporation)
Nobuo Kitamura . . . . . . Senior Executive Officer(General Manager of Corporate Solar Energy Group)
Yoshiharu Nakamura . . Senior Executive Officer(President of Dongguan Shilong Kyocera Co., Ltd.)
Junichi Jinno . . . . . . . . . Senior Executive Officer(General Manager of Corporate Legal and Intellectual Property Group)
63

Name

Position

Tadashi Otsuji . . . . . . . .

Executive Officer(General Manager of Corporate Semiconductor Components Group)
Setsuo Sasaki . . . . . . . . Executive Officer(Representative Director and President of Kyocera Communication Systems Co.,Ltd.)
Kazuyuki Nada . . . . . . . Executive Officer(Representative Director and President of Kyocera SLC Technologies Corporation)
Shigeaki Kinori . . . . . . . Executive Officer(Representative Director and President of Kyocera Crystal Device Corporation)
Masaaki Itoh . . . . . . . . . Executive Officer(Deputy General Manager of Corporate General Affairs Group)
Masaki Iida . . . . . . . . . . Executive Officer(General Manager of Corporate Purchasing Group)
Yuji Goto . . . . . . . . . . . Executive Officer(President of Kyocera (China) Sales & Trading Corporation)
Hitoshi Takao . . . . . . . . Executive Officer(General Manager of Corporate Printing Device Group)
Yoichi Yamashita . . . . . Executive Officer(General Manager of Corporate Production Technology & Development Division,
Corporate R&D Group)
Kazumasa Umemura . . . Executive Officer(Deputy General Manager of Office of the Chief Executives, Corporate General
Affairs Group)
Shigeru Koyama . . . . . . Executive Officer(Representative Director and President of Kyocera Fineceramics GmbH)
Koichi Kano . . . . . . . . . Executive Officer(General Manager of Corporate Development Group)
Naoki Kawai . . . . . . . . . Executive Officer(General Manager of Corporate Fine Ceramics Group)
Toshiki Kawaguchi . . . . Executive Officer(Deputy General Manager of Corporate Communication Equipment Group)
Masaharu Goto . . . . . . . Executive Officer(Representative Director and President of Kyocera Solar Corporation)
Hideo Yoshida . . . . . . . Executive Officer(Deputy General Manager of Corporate Semiconductor Components Group)
Toshihide Koyano . . . . . Executive Officer(Deputy General Manager of Corporate Solar Energy Group)
Yasumichi Okuda . . . . . Executive Officer(Deputy General Manager of Corporate Fine Ceramics Group)
Masahiro Inagaki . . . . . Executive Officer(General Manager of Corporate R&D Group)
Hironao Kudo . . . . . . . . Executive Officer(General Manager of Corporate Electronic Components Group)
Takashi Sato . . . . . . . . . Executive Officer(General Manager of Corporate Human Resources Group)
Robert E. Whisler . . . . . Executive Officer(Director and President of Kyocera America, Inc.)64

B. Compensation
The aggregate amount of compensation provided by Kyocera Corporation and its certain subsidiaries in fiscal
2013 to all Directors, Audit & Supervisory Board Members and Executive Officers of Kyocera Corporation was¥1,729 million. The compensation is mainly comprised of basic remuneration, bonus, stock option, incentive
compensation plan and retirement allowance.
In Japan, regulations require public companies to provide disclosure on an individual basis for each Director or
Audit & Supervisory Board Member who receives aggregate compensation exceeding ¥100 million from therelevant company and its subsidiaries. In accordance with this requirement, we provide disclosure ofcompensation on an individual basis as follows.

Name

Tetsuo Kuba

John S. Gilbertson

Amounts of compensation by types
Incentive
Basic
Stock
plan
remuneration Bonus option compensation Others Total(Yen in millions)

Position

Representative Director andChairman of the Board of
Kyocera Corporation

60

42

Director of AVX
Corporation

1—

Director of Kyocera
Corporation

10

Director, Chairman of theBoard and Chief Executive
Officer of AVX
Corporation

70

—

—

—

2

—

—

5

—

—

—

5

18

33

10

¥105

¥151

Notes:
1. AVX Corporation is Kyocera’s consolidated subsidiary in the United States and the determination ofcompensation is made by AVX’s Compensation Committee pursuant to the U.S. regulations and based on its
consideration for general and customary levels of compensation in the United States.
2. The compensation provided originally in the U.S. dollars at AVX Corporation was translated into the yen at a
rate of ¥83 per $1.00, which was the average rate during fiscal 2013.
3. The above position shows the current position of each Director as of the filing date of this annual report on
Form 20-F.

65

In addition to the above, Japanese regulations require public companies to disclose details of compensation paid
to Directors and Audit & Supervisory Board Members by the parent company and also to disclose the policy
applied in determining such compensation. In accordance with this requirement, we provide disclosure regarding
compensation for Directors and Audit & Supervisory Board Members as follows.
The total amount of compensation paid to Directors and Audit & Supervisory Board Members, the amounts ofcompensation by types, and the number of Directors and Audit & Supervisory Board Members were as follows.
Totalamount ofcompensation

Amounts ofcompensation by types
Basicremuneration Bonus(Yen in millions)

Number of
Directors andAudit &
Supervisory
Board Members

Director . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

¥325

¥199

¥126

14

Full-time Audit & Supervisory Board Member . . . . . . . . . . .

55

55

—

3

Outside Audit & Supervisory Board Member . . . . . . . . . . . .

18

18

—

5

Total . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

¥398

¥272

¥126

22

Note: Amount of remuneration to Directors does not include salaries for services as employees or Executive
Officers for Directors who serve as such.
Policy to determine the amount of compensation
Kyocera Corporation’s compensation paid to Directors consists of “Basic remuneration” and “Bonuses to
Directors.”
1) Basic remuneration
Basic remuneration constitutes of remuneration to be paid in compensation for the exercise of responsibility byeach Director, and the amount of basic remuneration is determined in accordance with each Director’s materialityof their role.
The individual amount paid to each Director is determined taking into consideration the level of payment atsimilar public manufacturing companies and the aggregate amount to be paid to all Directors shall be no morethan ¥400 million annually.
2) Bonuses to Directors
The aggregate amount payable to all Directors shall not exceed 0.2% of net income attributable to shareholdersof Kyocera Corporation for the relevant fiscal year, provided that such amount shall in no case exceed¥300 million annually, and such aggregate amount shall be distributed among the Directors in accordance with
their respective levels of contribution to the performance of Kyocera.
Kyocera Corporation’s compensation paid to Audit & Supervisory Board Members consists of “Basic
remuneration” only, which is not linked to the performance of Kyocera, in order to maintain the impartiality ofaudit. The aggregate amount payable to all Audit & Supervisory Board Members shall be no more than¥100 million annually.
C. Board Practices
For information regarding the terms of office of Directors and Audit & Supervisory Board Members, see
Item 6.A. “Directors and Senior Management” of this annual report on Form 20-F.
In accordance with the requirements of the Companies Act of Japan (the Companies Act), our Articles ofIncorporation provide for not more than six Audit & Supervisory Board Members. Audit & Supervisory Board
66

Members are elected at a general meeting of shareholders, and their normal term of office is four years. However,
Audit & Supervisory Board Members may serve any number of consecutive terms. At least half of the Audit& Supervisory Board Members must be persons who have not been Directors or employees of Kyocera Corporation orits subsidiaries (Outside Audit & Supervisory Board Members). Audit & Supervisory Board Members form the
Audit & Supervisory Board. Audit & Supervisory Board Members are under a statutory duty to oversee theadministration of our affairs by the Directors, to examine our financial statements and business reports to be submitted
by the Board of 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 their opinions, but they are
not entitled to vote. Audit & Supervisory Board Members also have a statutory duty to provide their report on the audit
report prepared by our independent certified public accountants to the Audit & Supervisory Board, which must submit
its audit report to the Board of Directors. The Audit & Supervisory Board will also determine matters relating to theduties of the Audit & Supervisory Board Members, such as audit policy and methods of investigation of our affairs.
Under the Companies Act, the Directors and Audit & Supervisory Board Members are liable for any damages sufferedby us as a result of their violation of laws or regulations or any failure to perform their duties. Under our Articles ofIncorporation, any such liabilities incurred by the Outside Directors and the Outside Audit & Supervisory Board
Members may, except in the case of willful misconduct or gross negligence or in certain other cases, be limited by aliability limitation agreement entered into between us and each Outside Director or each Outside Audit & Supervisory
Board Member, as the case may be, up to an amount to be calculated in accordance with the relevant provisions of theCompanies Act with reference to annual remuneration, retirement allowance and profits received upon exercise ortransfer of stock options, if any.
Kyocera Corporation 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.
There is no arrangement or understanding between any Director or Audit & Supervisory Board Member and anyother person pursuant to which he was elected as a Director or an Audit & Supervisory Board Member. There isno family relationship between any Director or Audit & Supervisory Board Member and any other Director or
Audit & Supervisory Board Member.
D. Employees
The numbers of Kyocera’s employees by reporting segments at March 31, 2013 are as follows:
Fine Ceramic Parts Group . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
2,951
Semiconductor Parts Group . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
8,843
Applied Ceramic Products Group . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
8,067
Electronic Device Group . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 24,176
Telecommunications Equipment Group . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
4,013
Information Equipment Group . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 15,983
Others . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
6,008
Corporate . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
1,604
Total . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

71,645

Kyocera Corporation had 14,786 employees, and their average age and average service years were 40.0 and 16.4
respectively.

67

The numbers of Kyocera Corporation’s employees by reporting segments at March 31, 2013 are as follows:
Fine Ceramic Parts Group . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Semiconductor Parts Group . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Applied Ceramic Products Group . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Electronic Device Group . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Telecommunications Equipment Group . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Information Equipment Group . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Others . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Corporate . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

2,673
3,578
2,336
2,224
2,387
—
933
655

Total . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

14,786

Most regular employees of Kyocera Corporation, other than management, are members of the Kyocera Union.
Over 90% of Kyocera Corporation’s regular employees are members of this union. The Kyocera Union is only
open to Kyocera Corporation employees, not to our Japanese or overseas subsidiaries. The employees at some ofour subsidiaries in Japan are unionized. Employees at our Japanese subsidiaries are not otherwise unionized.
Employees at some of our foreign subsidiaries are unionized. Our relationship with our employee union groups isgenerally good. However, no assurance can be given that, in response to changing economic conditions and ouractions, labor unrest or strikes will not occur.

68

E. Share Ownership
Kyocera’s Directors, Audit & Supervisory Board Members and Executive Officers as of June 26, 2013
owned 396,619 shares of Kyocera Corporation in total (380,819 shares of common stock of Kyocera Corporationand 15,800 ADRs of Kyocera Corporation), or 0.2% of the outstanding shares of Kyocera Corporation atMarch 31, 2013. The numbers of shares owned by each Director, Audit & Supervisory Member and Executive
Officer are shown in the following table.
Name

Tetsuo Kuba . . . . . . . . . . . . . . . . . . . . . . . . . .
Tatsumi Maeda . . . . . . . . . . . . . . . . . . . . . . . .
Goro Yamaguchi . . . . . . . . . . . . . . . . . . . . . .
Katsumi Komaguchi . . . . . . . . . . . . . . . . . . . .
Yasuyuki Yamamoto . . . . . . . . . . . . . . . . . . .
Ken Ishii . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Yoshihito Ohta . . . . . . . . . . . . . . . . . . . . . . . .
Shoichi Aoki . . . . . . . . . . . . . . . . . . . . . . . . . .
Hiroshi Fure . . . . . . . . . . . . . . . . . . . . . . . . . .
Yoji Date . . . . . . . . . . . . . . . . . . . . . . . . . . . .
John S. Gilbertson . . . . . . . . . . . . . . . . . . . . .
John S. Rigby . . . . . . . . . . . . . . . . . . . . . . . . .
Tadashi Onodera . . . . . . . . . . . . . . . . . . . . . . .
Yoshihiro Kano . . . . . . . . . . . . . . . . . . . . . . .
Kouji Mae . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Osamu Nishieda . . . . . . . . . . . . . . . . . . . . . . .
Yoshinori Yasuda . . . . . . . . . . . . . . . . . . . . . .
Nichimu Inada . . . . . . . . . . . . . . . . . . . . . . . .
Yasunari Koyano . . . . . . . . . . . . . . . . . . . . . .
Nobuo Kitamura . . . . . . . . . . . . . . . . . . . . . . .
Yoshiharu Nakamura . . . . . . . . . . . . . . . . . . .
Junichi Jinno . . . . . . . . . . . . . . . . . . . . . . . . . .
Tadashi Otsuji . . . . . . . . . . . . . . . . . . . . . . . . .
Setsuo Sasaki . . . . . . . . . . . . . . . . . . . . . . . . .
Kazuyuki Nada . . . . . . . . . . . . . . . . . . . . . . . .
Shigeaki Kinori . . . . . . . . . . . . . . . . . . . . . . . .
Masaaki Itoh . . . . . . . . . . . . . . . . . . . . . . . . . .
Masaki Iida . . . . . . . . . . . . . . . . . . . . . . . . . . .
Yuji Goto . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Hitoshi Takao . . . . . . . . . . . . . . . . . . . . . . . . .
Yoichi Yamashita . . . . . . . . . . . . . . . . . . . . . .
Kazumasa Umemura . . . . . . . . . . . . . . . . . . .
Shigeru Koyama . . . . . . . . . . . . . . . . . . . . . . .
Koichi Kano . . . . . . . . . . . . . . . . . . . . . . . . . .
Naoki Kawai . . . . . . . . . . . . . . . . . . . . . . . . . .
Toshiki Kawaguchi . . . . . . . . . . . . . . . . . . . . .
Masaharu Goto . . . . . . . . . . . . . . . . . . . . . . . .
Hideo Yoshida . . . . . . . . . . . . . . . . . . . . . . . .
Toshihide Koyano . . . . . . . . . . . . . . . . . . . . .
Yasumichi Okuda . . . . . . . . . . . . . . . . . . . . . .
Masahiro Inagaki . . . . . . . . . . . . . . . . . . . . . .
Hironao Kudo . . . . . . . . . . . . . . . . . . . . . . . . .
Takashi Sato . . . . . . . . . . . . . . . . . . . . . . . . . .
Robert E. Whisler . . . . . . . . . . . . . . . . . . . . . .

Title

Number of Shares

Representative Director and Chairman
Representative Director and Vice Chairman
Representative Director and President
Senior Managing Director
Senior Managing Director
Director
Director
Director
Director
Director
Director
Director
Outside Director
Full-time Audit & Supervisory Board Member
Full-time Audit & Supervisory Board Member
Audit & Supervisory Board Member
Audit & Supervisory Board Member
Audit & Supervisory Board Member
Audit & Supervisory Board Member
Senior Executive Officer
Senior Executive Officer
Senior Executive Officer
Executive Officer
Executive Officer
Executive Officer
Executive Officer
Executive Officer
Executive Officer
Executive Officer
Executive Officer
Executive Officer
Executive Officer
Executive Officer
Executive Officer
Executive Officer
Executive Officer
Executive Officer
Executive Officer
Executive Officer
Executive Officer
Executive Officer
Executive Officer
Executive Officer
Executive Officer

8,096
3,709
8,158
4,244
4,411
2,136
3,928
2,548
624
2,669
13,436 (ADR)
725 (ADR)
—
2,218
5,200
306,181
89
839
—
520
2,122
383
627
2,870
1,651
1,957
1,457
1,370
2,198
1,898
528
682
1,265
1,322
1,371
375
773
726
179
697
33
109
656
1,639 (ADR)69

Item 7.

Major Shareholders and Related Party Transactions

A. Major Shareholders
As far as is known to us, Kyocera is not, directly or indirectly, owned or controlled by any other corporation orby the Japanese or any foreign government, and there is no arrangement which may at a subsequent date result ina change in control of Kyocera.
The following table shows the ten largest shareholders of record of Kyocera Corporation at March 31, 2013.
Name

The Master Trust Bank of Japan, Ltd.
(Trust Account) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Japan Trustee Services Bank, Ltd.
(Trust Account) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Kyocera Corporation . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
The Bank of Kyoto, Ltd. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Kazuo Inamori . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
State Street Bank and Trust Company(Standing proxy: The Hongkong and Shanghai Banking Corporation Limited) . . . . .
Inamori Foundation . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
SSBT OD05 Omnibus Account-Treaty Clients(Standing proxy: The Hongkong and Shanghai Banking Corporation Limited) . . . . .
KI Enterprise Co., Ltd. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
BNY GCM CLIENT ACCOUNT JPRD AC ISG (FE-AC)(Standing proxy: The Bank of Tokyo-Mitsubishi UFJ, Ltd.) . . . . . . . . . . . . . . . . . . . .
Total . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Shares owned(in thousands)

Ownership(%)

13,903

7.27

11,863
7,869
7,218
5,606

6.20
4.11
3.77
2.93

5,399
4,680

2.82
2.45

3,574
3,550

1.87
1.86

3,216

1.68

66,87934.96

None of the above shareholders has voting rights that are different from those of other shareholders.
Under the Financial Instruments 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.
In accordance with the Financial Instruments and Exchange Law of Japan mentioned above, on March 6,
2013, Sumitomo Mitsui Trust Bank, Limited and its related partners sent a copy of such a report to us, setting
forth information regarding shareholders as of February 28, 2013 as shown in the following table. Despite thisreport, they are not included in the above list of major shareholders because we are not able to confirm thenumber of shares beneficially owned by them from our shareholders records as of March 31, 2013.
Name

Shares owner(in thousands)

Ownership(%)

Sumitomo Mitsui Trust Bank, Limited . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Sumitomo Mitsui Trust Asset Management Co., Ltd. . . . . . . . . . . . . . . . . . . . . . . . . . . .
Nikko Asset Management Co., Ltd. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

5,131
406
3,976

2.68
0.21
2.08

Total . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

9,513

4.97

According to Citibank N.A., depositary for Kyocera’s ADSs, as of March 31, 2013, 2,084,105 shares of Kyocera’scommon stock were held in the form of ADSs and there were 690 ADS holders of record in the United States.
70According to Kyocera’s register of shareholders, as of March 31, 2013, there were 59,734 holders of Kyocera’scommon stock of record worldwide. As of March 31, 2013, there were 150 record holders of Kyocera’s common
stock with addresses in the United States, holding 24,317,826 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
Significant Customer
In fiscal 2013, Kyocera’s sales to KDDI Corporation amounted to ¥92,901 million, or 7.3% of consolidated net sales.
KDDI Corporation provides telecommunication services, and Kyocera sells mainly telecommunication equipment toKDDI Corporation. Kyocera Corporation made an equity investment in KDDI Corporation when it was founded, andcurrently a director of Kyocera Corporation is a director of KDDI Corporation. At March 31, 2013, Kyocera
Corporation’s equity interest in KDDI Corporation was 12.76%. Kyocera serves KDDI Corporation as an independent
vendor in terms of price determination, remittance condition and product distribution. All of the agreements andongoing contractual commitments between Kyocera and KDDI Corporation have been made on an arm’s-length basis.
Kyocera expects that KDDI Corporation will remain a significant customer in the future.
C. Interests of Experts and Counsel
Not applicable.
Item 8.

Financial Information

A. Consolidated Statements and Other Financial Information
Financial Statements
The information required by this item is set forth beginning on page F-2 of this annual report on Form 20-F.
Dividend Policy(1) Payment term of dividends
Kyocera normally pays cash dividends twice per year as an interim and a year-end dividend. Year-end dividends
must be approved by shareholders at the ordinary general shareholders’ meeting. In addition to a year-end dividend,
Kyocera may pay an interim dividend by resolution of its board of directors and without shareholders approval.
(2) Basic profit distribution policy
Kyocera believes that the best way to increase corporate value and meet shareholders’ expectations is to improve future
consolidated performance on an ongoing basis. Kyocera therefore has adopted a principal guideline that dividend
amounts within a range based on net income attributable to shareholders of Kyocera Corporation on a consolidated
basis, and has set its consolidated dividend policy to maintain a consolidated dividend ratio at a level of approximately
20% to 25% of consolidated net income attributable to shareholders of Kyocera Corporation. In addition, Kyocera
determines dividend amounts based on an overall assessment, taking into account various factors including the amountof capital expenditures necessary for medium to long-term corporate growth. Kyocera also has adopted policies toensure a sound financial basis, and, for such purpose, it sets aside other general reserves in preparation for the creationof new businesses, cultivation of new markets, development of new technologies and acquisition of outside
management resources necessary to achieve sustainable corporate growth.
Based on performance during the year ended March 31, 2013 and pursuant to these policies, Kyocera distributed
a year-end dividend for the year ended March 31, 2013 of 60 yen per share. When aggregated with the interim
dividend in the amount of 60 yen per share, which was resulted by a board of directors meeting held on
October 31, 2012, the total annual dividend was 120 yen per share.
71

(3) Amendment of basic profit distribution policy
In order to further enhance the return of profit to shareholders and expand its shareholder base, Kyocera will
amend its policy to aim for a consolidated dividend ratio of 30% or more commencing in the year ending
March 31, 2014, replacing the current dividend ratio of approximately 20% to 25%. Other basic policies are notamended.
Kyocera will decide dividend amounts for the year ending March 31, 2014 pursuant to this amended basic profit
distribution policy and it currently forecasts a total annual dividend in the amount of 160 yen per share, based on
its financial forecast for the year ending March 31, 2014.
B. Significant Changes
Except as disclosed in this annual report on Form 20-F, there have been no significant changes since March 31,
2013.
Item 9.

The Offer and Listing

A. Offer and Listing Details
Price Range of Shares
The principal non-United States market on which the shares of Common Stock of Kyocera Corporation are
traded is the Tokyo Stock Exchange, the largest stock exchange in Japan. The American Depositary Shares ofKyocera Corporation, each representing one share of Common Stock of Kyocera Corporation, are traded on the
New York Stock Exchange. Citibank, N.A. acts as the Depositary in respect of the American Depositary Shares.
Common Stock of Kyocera Corporation is also listed on the Osaka Securities Exchange in Japan.

Years ended March 31,

Tokyo Stock Exchange
Price per Share ofCommon Stock
High
Low

New York Stock Exchange
Price per American
Depositary Share*
High
Low

2009 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
2010 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
2011 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
2012 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
2013 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

¥10,940
9,210
9,740
9,040
9,130

¥4,330
6,320
6,440
6,060
6,000

$100.7899.99
108.99111.0098.54$45.41
64.91
79.08
78.15
77.39

High

Low

High

Low

¥ 7,920
8,480
8,460
9,130
10,12011,760¥7,410
7,730
7,870
7,900
8,350
9,590

$ 94.00
93.67
89.80
95.99
101.56114.16$88.55
87.73
86.03
85.21
89.54
97.75

Most Recent 6 months

December 2012 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
January 2013 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
February 2013 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
March 2013 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
April 2013 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
May 2013 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

* The prices of American Depositary Shares are based upon reports by the New York Stock Exchange, with all
fractional figures rounded up to the nearest two decimal points.
On June 21, 2013, the closing price of our shares of Common Stock on the Tokyo Stock Exchange was¥9,930 per share.

72

The following table shows the information about high and low sales prices for each quarterly period in fiscal
2012 and 2013 in respect of the shares of Common Stock of Kyocera Corporation on the Tokyo Stock Exchange,
and the American Depositary Shares on the New York Stock Exchange.
For Voting Securities by Fiscal Quarter
2012
1st

2nd

3rd

4th

Common Stock:Market price per share (A) . . . . . . . . . . . . . . . . . . . . . . . . . —High—Low
Cash dividends paid per share . . . . . . . . . . . . . . . . . . . . . . .

¥ 9,040 ¥ 8,590 ¥7,210 ¥7,780
8,020
6,280
6,090
6,060
70
—
60
—

American Depositary Share:
Market price per share (B) . . . . . . . . . . . . . . . . . . . . . . . . . —High—Low
Cash dividends paid per share (C) . . . . . . . . . . . . . . . . . . . .

$111.00 $108.25 $96.10 $92.90
97.01
83.00
78.15
78.71
0.85
—
0.76
—
2013
1st

2nd

3rd

4th

Common Stock:Market price per share (A) . . . . . . . . . . . . . . . . . . . . . . . . . —High—Low
Cash dividends paid per share . . . . . . . . . . . . . . . . . . . . . . .

¥ 8,030 ¥ 6,980 ¥7,920 ¥9,130
6,190
6,000
6,400
7,730
60
60

American Depositary Share:
Market price per share (B) . . . . . . . . . . . . . . . . . . . . . . . . . —High—Low
Cash dividends paid per share (C) . . . . . . . . . . . . . . . . . . . .

$ 98.54 $ 87.98 $94.00 $95.99
79.48
77.39
82.00
85.21
0.76
—
0.74
—

(A) Price on the Tokyo Stock Exchange(B) Price on the New York Stock Exchange(C) Translated into the U.S. dollars based on the exchange rates at each payment date
B. Plan of Distribution
Not applicable.
C. Markets
See Item 9.A. of this annual report on 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.
73

Item 10.

Additional Information

A. Share Capital
Not applicable.
B. Memorandum and Articles of Association
GeneralSet out below is certain information regarding the organization and shares of Kyocera Corporation, including
brief summaries of certain provisions of the Articles of Incorporation, the Share Handling Regulations and theRegulations of the Board of Directors of Kyocera Corporation and of the Companies Act relating to joint stock
corporations (kabushiki kaisha) and certain related legislation, all as currently in effect.
Organization
Kyocera Corporation is a joint stock corporation (kabushiki kaisha) incorporated in Japan under the Companies
Act. It is registered in the Commercial Register maintained by the Kyoto Local Registry Office of the Ministry ofJustice.
Objects and Purposes
The objects of Kyocera Corporation 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 of products 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;(7) Manufacture and sale of and research on component parts of automobiles;(8) Manufacture and sale of and research on precious metals, precious stones and semiprecious stones andvarious 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) Construction and sale of power plants, and power generation business and management and operation
thereof;(14) Manufacture and sale of and research on optical machinery and instruments and precision machinery andinstruments and parts hereof;(15) Manufacture and sale of and research on machinery and equipment for business use and machinery andequipment for industrial use and parts thereof;(16) Manufacture and sale of and research on photosensitive materials for photographic use;74

(17) Design, control and contract of construction relating to public works, building, electric equipment andpiping construction;(18) Sale, purchase, lease, maintenance and brokerage of real estate;(19) Lease, maintenance and management of facilities relating to sports, recreation, medical care, hotels andrestaurants, and the travel agency business;(20) Road freight handling and warehousing;(21) Business relating to non-life insurance agency and life insurance canvassing, and general leasing, factoring
and finance business;(22) Sale and purchase of various kinds of plants and technology related thereto;(23) Design and sale of software relating to computers;(24) Disposition through sale and the like and acquisition through purchase and the like of patents and otherindustrial property rights and know-how appertaining to the preceding items and acting as intermediary insuch transactions;(25) Businesses relating to import and export of any of the foregoing items; and(26) All commercial activities relating or incidental to any of the foregoing.
Directors
Under the Companies Act, the Board of Directors has the ultimate responsibility for the management of Kyocera
Corporation and each Representative Director, who is elected from among the members of the Board of
Directors, has the statutory authority to represent Kyocera Corporation in all respects. Under both the Companies
Act and the Regulations of the Board of Directors of Kyocera Corporation, the Directors must refrain fromengaging in any business competing with Kyocera Corporation unless approved by the Board of Directors andany Director who has a material interest in the subject matter of a resolution to be taken by the Board of
Directors cannot vote in such resolution. The Companies Act and the Articles of Incorporation of Kyocera
Corporation provide that remuneration of Directors and Audit & Supervisory Board Members shall be
determined at a general meeting of shareholders.
Except as stated below, neither the Companies Act nor Kyocera Corporation’s Articles of Incorporation makeany special provision as to a Director’s or Audit & Supervisory Board Member’s power to vote in connection
with their compensation; or the borrowing powers exercisable by a Representative Director (or a Director who isgiven power by a Representative Director to exercise such powers), their retirement age or requirement to holdany shares of capital stock of Kyocera Corporation.
The Companies Act specifically requires a resolution of the Board of Directors for a joint stock corporation,
among other things, to acquire or dispose of material assets; to borrow substantial amounts of money; to employ
or discharge from employment important employees, such as executive officers; to establish, change or abolish amaterial corporate organization such as a branch office; or to issue bonds. A resolution of the Board of Directors
is also specifically required for the establishment of a control system to ensure adequacy of Kyocera
Corporation’s affairs, such as a control system to ensure the exercise of Directors’ duty to comply with laws andregulations and the Articles of Incorporation of Kyocera Corporation. The Regulations of the Board of Directorsof Kyocera Corporation require a resolution of the Board of Directors for Kyocera Corporation, among otherthings, to issue bonds or bonds with stock acquisition rights; to borrow, lend or contribute a significant amount ofmoney; to give a guarantee of a significant amount of debt; or to waive the right to receive a significant amountof money. The Regulations of the Board of Directors of Kyocera Corporation defines a “significant amount” asfive billion yen or more with respect to borrowing and one hundred million yen or more with respect to othermatters. The Regulations of the Board of Directors of Kyocera Corporation also require a resolution of the Boardof Directors to approve any transaction between a Director and Kyocera Corporation; or allocate remuneration
and bonuses of Directors as previously determined or approved by the general meeting of shareholders.
75Capital Stock
GeneralOn January 5, 2009, a central clearing system for shares of Japanese listed companies was established pursuant to
the Law Concerning Book-Entry Transfer of Corporate Bonds, Shares, etc. (including regulations promulgatedthereunder, the Book-Entry Law), and the shares of all Japanese companies listed on any Japanese stock
exchange, including Kyocera Corporation’s shares, became subject to this system.
On the same day, all existing share certificates for such shares became null and void. At present, Japan Securities
Depository Center, Inc. (JASDEC) is the only institution that is designated by the relevant authorities as aclearing house which is permitted to engage in the clearing operations of shares of Japanese listed companies
under the Book-Entry Law. Under the clearing system, in order for any person to hold, sell or otherwise disposeof shares of Japanese listed companies, it must have an account at an account management institution unless such
person has an account at JASDEC. “Account management institutions” are financial instruments traders(i.e., securities companies), banks, trust companies and certain other financial institutions which meet therequirements prescribed by the Book-Entry Law, and only those financial institutions that meet further stringent
requirements of the Book-Entry Law can open accounts directly at JASDEC.
Under the Book-Entry Law, any transfer of shares is effected through book entry, and title to the shares passes tothe transferee at the time when the transferred number of the shares is recorded at the transferee’s account at an
account managing institution. The holder of an account at an account management institution is presumed to be
the legal owner of the shares held in such account.
Under the Companies Act and the Book-Entry Law, in order to assert shareholders’ rights against Kyocera
Corporation, a shareholder must have its name and address registered in the register of shareholders of Kyocera
Corporation, except in limited circumstances.
Non-resident shareholders are required to appoint a standing proxy in Japan or provide a mailing address inJapan. Each such shareholder must give notice of such standing proxy or mailing address to the relevant accountmanagement institution. Such notice will be forwarded to us through JASDEC. Japanese securities companies
and commercial banks customarily act as standing proxies and provide related services for standard fees. Notices
from us to non-resident shareholders are delivered to such standing proxies or mailing addresses.
The registered holder of deposited shares underlying the ADSs is the depositary for the ADSs. Accordingly,
holders of ADSs will not be able to directly assert shareholders’ rights.
Authorized capital
Article 6 of the Articles of Incorporation of Kyocera Corporation provides that the total number of sharesauthorized for issuance by Kyocera Corporation is 600,000,000 shares.
Distributions of Surplus
GeneralUnder the Companies Act, distributions of cash or other assets by joint stock corporations to their shareholders,so-called “dividends,” are referred to as “distributions of Surplus” (“Surplus” is defined in “—Restriction on
distributions of Surplus”). Kyocera Corporation may make distributions of Surplus to its shareholders any
number of times per fiscal year, subject to certain limitations described in “—Restriction on distributions ofSurplus”. Distributions of Surplus are required in principle to be authorized by a resolution of a general meetingof shareholders, but may also be made pursuant to a resolution of the Board of Directors if all the requirements
described in (a) through (c) are met:(a) Kyocera Corporation’s Articles of Incorporation provide that the Board of Directors has the authority
to decide to make distributions of Surplus;
76

(b) the normal term of office of Kyocera Corporation’s Directors is not longer than one year; and(c) Kyocera Corporation’s non-consolidated annual financial statements and certain documents for thelatest fiscal year present fairly its assets and profit or loss, as required by ordinances of the Ministry ofJustice.
In the case of Kyocera Corporation, at present, the requirements in (a) and (b) above are not met. Nevertheless,
Kyocera Corporation may make distributions of Surplus in cash as an interim dividend (an “interim dividend”) to
its shareholders by resolutions of the Board of Directors once per fiscal year under Kyocera Corporation’s
Articles of Incorporation and the Companies Act.
Under Kyocera Corporation’s Articles of Incorporation, a year-end dividend may be distributed to shareholdersof record as of March 31 of each year pursuant to a resolution of a general meeting of shareholders, and aninterim dividend may be distributed to shareholders of record as of September 30 of each year pursuant to a
resolution of the Board of Directors. In addition, under the Companies Act, Kyocera Corporation may makefurther distributions of Surplus by resolution of general meetings of shareholders. Kyocera Corporation is not
obliged to pay any dividends unclaimed for a period of three years after the date on which they first became
payable.
Distributions of Surplus, other than interim dividends, may be made in cash or in kind in proportion to thenumber of shares held by each shareholder. A resolution of a general meeting of shareholders or the Board of
Directors authorizing a distribution of Surplus must specify the kind and aggregate book value of the assets to be
distributed, the manner of allocation of such assets to shareholders, and the effective date of the distribution. If a
distribution of Surplus is to be made in kind, Kyocera Corporation may, pursuant to a resolution of a general
meeting of shareholders or (as the case may be) the Board of Directors, grant a right to its shareholders to require
Kyocera Corporation to make such distribution in cash instead of in kind. If no such right is granted toshareholders, the relevant distribution of Surplus must be approved by a special resolution of a general meetingof shareholders (see “Voting rights” with respect to a “special resolution”).
In Japan the “ex-dividend” date and the record date for dividends precede the date of determination of theamount of the dividend to be paid. The market price of shares generally goes ex-dividend on the second business
day prior to the record date.
Restriction on distributions of Surplus
When Kyocera Corporation makes a distribution of Surplus, it must, until the sum of its additional paid-in capitaland legal reserve reaches one-quarter of its stated capital, set aside in its additional paid-in capital and/or legal
reserve an amount equal to one-tenth of the amount of Surplus so distributed.
The amount of Surplus at any given time must be calculated in accordance with the following formula:
A + B + C + D - (E + F + G)
In the above formula:“A” = the total amount of other capital surplus and other retained earnings, each such amount being thatappearing on Kyocera Corporation’s non-consolidated balance sheet as of the end of the last fiscal
year“B” = (if Kyocera Corporation has disposed of its treasury stock after the end of the last fiscal year) theamount of the consideration for such treasury stock received by Kyocera Corporation less the bookvalue thereof“C” = (if Kyocera Corporation has reduced its stated capital after the end of the last fiscal year) the amountof such reduction less the portion thereof that has been transferred to additional paid-in capital or
legal reserve (if any)77

“D” = (if Kyocera Corporation has reduced its additional paid-in capital or legal reserve after the end of thelast fiscal year) the amount of such reduction less the portion thereof that has been transferred tostated capital (if any)“E” = (if Kyocera Corporation has cancelled its treasury stock after the end of the last fiscal year) the bookvalue of such treasury stock“F” = (if Kyocera Corporation has distributed Surplus to its shareholders after the end of the last fiscal
year) the total book value of the Surplus so distributed“G” = certain other amounts set forth in ordinances of the Ministry of Justice, including (if Kyocera
Corporation has reduced Surplus and increased its stated capital, additional paid-in capital or legal
reserve after the end of the last fiscal year) the amount of such reduction and (if Kyocera
Corporation has distributed Surplus to its shareholders after the end of the last fiscal year) theamount set aside in its additional paid-in capital or legal reserve (if any) as required by ordinances ofthe Ministry of Justice
The aggregate book value of Surplus distributed by Kyocera Corporation may not exceed a prescribed
distributable amount (the “Distributable Amount”), as calculated on the effective date of such distribution. The
Distributable Amount at any given time shall be equal to the amount of Surplus less the aggregate of (a) the bookvalue of its treasury stock, (b) the amount of consideration for any of its treasury stock disposed of by it after theend of the last fiscal year and (c) certain other amounts set forth in ordinances of the Ministry of Justice,including (if the sum of one-half of goodwill and the deferred assets exceeds the total of stated capital, additional
paid-in capital and legal reserve, each such amount being that appearing on Kyocera Corporation’s nonconsolidated balance sheet as of the end of the last fiscal year) all or certain part of such exceeding amount ascalculated in accordance with the ordinances of the Ministry of Justice.
If Kyocera Corporation has become at its option a company with respect to which consolidated balance sheets
should also be taken into consideration in the calculation of the Distributable Amount (renketsu haito kisei tekiyo
kaisha), it will be required to further deduct from the amount of Surplus the excess amount, if any, of (x) the total
amount of shareholders’ equity appearing on its non-consolidated balance sheet as of the end of the last fiscal
year and certain other amounts set forth by an ordinance of the Ministry of Justice over (y) the total amount ofshareholders’ equity and certain other amounts set forth by an ordinance of the Ministry of Justice appearing on
its consolidated balance sheet as of the end of the last fiscal year.
If Kyocera Corporation has prepared interim financial statements as described below, and if such interim
financial statements have been approved by the Board of Directors or (if so required by the Companies Act) by ageneral meeting of shareholders, then the Distributable Amount must be adjusted to take into account the amountof profit or loss, and the amount of consideration for any of its treasury stock disposed of by it, during the period
in respect of which such interim financial statements have been prepared. Kyocera Corporation may prepare nonconsolidated interim financial statements consisting of a balance sheet as of any date subsequent to the end of thelast fiscal year and an income statement for the period from the first day of the current fiscal year to the date ofsuch balance sheet. Interim financial statements so prepared by Kyocera Corporation must be audited by
its Audit & Supervisory Board Members and independent certified public accountants, as required by ordinancesof the Ministry of Justice.
General Meeting of Shareholders
Pursuant to the Articles of Incorporation of Kyocera Corporation, an ordinary general meeting of shareholders ofKyocera Corporation shall be convened within three months after the last day of each fiscal year. In addition,
Kyocera Corporation 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 eachshareholder having voting rights (or, in the case of a non-resident shareholder, to the standing proxy or mailing78

address thereof in Japan) at least two weeks prior to the date set for the meeting. Under the Companies Act, such
notice may be given to shareholders by electronic means, subject to the consent of the relevant shareholders.
Any shareholder or group of shareholders holding at least 300 voting rights or one percent of the total number ofvoting rights for six months or more may propose a matter to be considered at a general meeting of shareholders
by submitting a request to a Representative Director at least eight weeks prior to the date set for such meeting. If
Kyocera Corporation’s Articles of Incorporation so provide, any of the minimum percentages, time periods andnumber of voting rights necessary for exercising the minority shareholder rights described above may bedecreased or shortened.
Voting rights
A holder of shares constituting one or more whole units (see “Unit share system” below) is entitled to one votefor each whole unit of shares. However, in general, neither Kyocera Corporation nor any corporate shareholder or
certain other entity one-quarter or more of the total voting rights of which are directly or indirectly held byKyocera Corporation, has voting rights in respect of the shares held by Kyocera Corporation or such entity.
Except as otherwise provided by law or by the Articles of Incorporation of Kyocera Corporation, a resolution canbe adopted at a general meeting of shareholders by a majority of the total number of voting rights represented at
the meeting. Under the Companies Act and Kyocera Corporation’s Articles of Incorporation, however, thequorum for the election of Directors and Audit & Supervisory Board Members is one-third of the total number ofvoting rights. Kyocera Corporation’s shareholders are not entitled to cumulative voting in the election of
Directors. Shareholders may exercise their voting rights through proxies, provided that the proxies are also
shareholders holding voting rights. Kyocera Corporation’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 byelectronic means if the Board of Directors approves such method of exercising voting rights.
The Companies Act provides that certain important matters shall be approved by a “special resolution” of ageneral meeting of shareholders. Under Kyocera Corporation’s Articles of Incorporation, the quorum for a
special resolution is one-third of the total number of voting rights and the approval of at least two-thirds of thevoting rights represented at the meeting is required for adopting a special resolution. Such important matters
include:(i)purchase of shares by Kyocera Corporation from a specific shareholder other than a Kyocera
Corporation subsidiary;(ii)

consolidation of shares;(iii)

issuance or transfer of new shares or existing shares held by Kyocera Corporation as treasury stock topersons other than the shareholders at a “specially favorable” price;(iv)

issuance of stock acquisition rights (including those incorporated in bonds with stock acquisitionrights) to persons other than the shareholders under “specially favorable” conditions;(v)removal of Kyocera Corporation’s Audit & Supervisory Board Members;(vi)exemption from a portion of liability of Kyocera Corporation’s Directors, Audit & Supervisory Board
Members or independent auditors;(vii) reduction of stated capital (subject to certain exceptions);(viii) distribution of Surplus in kind with respect to which shareholders are not granted the right to require
Kyocera Corporation to make distribution in cash instead of in kind;(ix)

any amendment to Kyocera Corporation’s Articles of Incorporation (except for such amendments that
may be made without approval by shareholders under the Companies Act);
79

(x)

transfer of the whole or a substantial part of Kyocera Corporation’s business;(xi)

taking over of the whole of the business of another company requiring shareholders’ approval;(xii) dissolution, merger or consolidation requiring shareholders’ approval;(xiii) corporate split requiring shareholders’ approval; and(xiv) establishment of a parent and wholly-owned subsidiary relationship by way of a share transfer(kabushiki-iten) or share exchange (kabushiki-kokan) requiring shareholders’ approval.
Under the Companies Act, Kyocera Corporation’s shareholders will possess various rights, such as the right toreview and make copies of its Articles of Incorporation and the register of shareholders, to require theconvocation of a general meeting of shareholders, to propose a matter to be considered at a general meeting ofshareholders, and to bring derivative actions, depending upon the number of shares held by them and the durationof their shareholding.
Subscription rights
Holders of Kyocera Corporation’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” pricementioned under “Voting rights” above. The Board of Directors may, however, determine that shareholders of aparticular 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 not less 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 date on whichsuch rights expire.
Liquidation rights
In the event of a liquidation of Kyocera Corporation, the assets remaining after payment of all debts, liquidation
expenses and taxes will be distributed among the holders of our shares of common stock in proportion to therespective numbers of shares held by each holder.
Transfer agent
Kyocera Corporation’s transfer agent is Mitsubishi UFJ Trust and Banking Corporation. Mitsubishi UFJ Trustand Banking Corporation maintains Kyocera Corporation’s register of shareholders and registers the names andaddresses of Kyocera Corporation’s shareholders and other relevant information in Kyocera Corporation’s
register of shareholders upon notice thereof from JASDEC, as described in “Record date”.
Record date
March 31 is the record date for the determination of shareholders entitled to receive Kyocera Corporation’s yearend dividends and to vote at the ordinary general meeting of shareholders with respect to the fiscal year ending
on such March 31. September 30 is the record date for interim dividends. In addition, Kyocera Corporation may
set a record date for determining the shareholders and/or beneficial shareholders entitled to other rights and forother purposes by giving at least two weeks’ prior public notice.
Under the Book-Entry Law, Kyocera Corporation is required to give notice of each record date to JASDEC atleast two weeks prior to such record date. JASDEC is required to promptly give Kyocera Corporation notice ofthe names and addresses of Kyocera Corporation’s shareholders, the numbers of shares held by them and otherrelevant information as of such record date. Kyocera Corporation, upon receipt of each such notice, will update
through the transfer agent its register of shareholders to reflect the information such notice contains.
80Acquisition by Kyocera Corporation of its capital stock
Kyocera Corporation may acquire shares (i) by soliciting all its shareholders to offer to sell shares held by them(in this case, certain terms of such acquisition, such as the total number of shares to be purchased and the total
amount of consideration, shall be set by an ordinary resolution of a general meeting of shareholders in advance,
and acquisition shall be effected pursuant to a resolution of the Board of Directors), (ii) from a specificshareholder other than any of Kyocera Corporation’s subsidiaries (pursuant to a special resolution of a general
meeting of shareholders), (iii) from any of Kyocera Corporation’s subsidiaries (pursuant to a resolution of theBoard of Directors), or (iv) by way of purchase on any Japanese stock exchange on which the shares are listed orby way of tender offer (in either case pursuant to an ordinary resolution of a general meeting of shareholders or a
resolution of the Board of Directors). In the case of (ii) above, any other shareholder may make a request to
Kyocera Corporation’s Representative Director that such other shareholder be included as a seller in the proposed
purchase, provided that no such right will be available if the purchase price or any other consideration to bereceived by the relevant specific shareholder will not exceed the higher of (x) the last trading price of the shareson the relevant stock exchange on the day immediately preceding the date on which the resolution mentioned in(ii) above was adopted (or, if there is no trading in the shares on the stock exchange or if the stock exchange is
not open on such day, the price at which the shares are first traded on such stock exchange thereafter) and (y) if
the shares are subject to a tender offer on the day immediately preceding the date on which the resolution
mentioned in (ii) above was adopted, the price of the shares under the agreement with respect to such tender offer
on such day.
The total amount of the purchase price of shares may not exceed the Distributable Amount, as described in“Distributions of Surplus—Restriction on distributions of Surplus.”
The Companies Act permits Kyocera Corporation to hold shares acquired by it as treasury stock. Treasury stock
may be held by Kyocera Corporation for any time period and may be cancelled by resolution of its Board of
Directors. Kyocera Corporation 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 other requirements similar to those applicable to theissuance of new shares. Kyocera Corporation may also utilize its treasury stock for the purpose of transfer to any
person upon exercise of stock acquisition rights or for the purpose of acquiring another company by way ofmerger, share exchange 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 stock acquisition rights or the relevant
merger, share exchange or corporate split must be approved, as the case may be, by the Board of Directors or
shareholders at Kyocera Corporation’s shareholders’ meeting.
“Unit” share system
Under Kyocera Corporation’s Articles of Incorporation, 100 shares constitute one “unit.” The Board of Directors ispermitted to reduce the number of shares constituting a unit or to abolish the unit share system in its entirety byamending Kyocera Corporation’s Articles of Incorporation without approval by shareholders. The number of sharesconstituting one unit may not exceed the lesser of 1,000 and one-two hundredth of the total number of issued shares.
Under the clearing system, shares constituting less than one unit are transferable. However, because sharesconstituting less than one unit do not comprise a trading unit, except in limited circumstances, such shares may
not be sold on the Japanese stock exchanges under the rules of the Japanese stock exchanges.
Under the unit share system, a shareholder has one vote for each unit of shares held by it. Shares constituting lessthan one unit will carry no voting rights and be excluded for the purposes of calculating the quorum for voting
purposes. Moreover, holders of shares constituting less than one unit will have no other shareholder rights if
Kyocera Corporation’s Articles of Incorporation so provide, except that such holders may not be deprived ofcertain rights specified in the Companies Act or an ordinance of the Ministry of Justice, including the right toreceive distribution of Surplus.
81A holder of shares constituting less than one unit may require Kyocera Corporation to purchase such shares attheir market value through the relevant account management institutions and JASDEC. The Articles ofIncorporation and the Share Handling Regulations of Kyocera Corporation provide that a holder of sharesconstituting less than one unit has the right to require Kyocera Corporation to sell to such holder sharesconstituting less than one unit which, when added to shares constituting less than one unit currently owned bysuch holder, shall constitute a full one unit. Under the clearing system, such request must be made through therelevant account management institutions and JASDEC. The request of such purchase or sale may not be
withdrawn without Kyocera Corporation’s consent.
A holder who owns ADRs evidencing less than 100 ADSs will indirectly own less than a whole unit. Although,as discussed above, under the unit share system holders of less than one unit have the right to require Kyocera
Corporation 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 one
unit and, therefore, are unable, as a practical matter, to exercise the right to require Kyocera Corporation topurchase such underlying shares. As a result, access to the Japanese markets by holders of ADRs through thewithdrawal mechanism will not be available for dispositions of shares in lots of less than one unit. The unit sharesystem does not affect the transferability of ADSs, which may be transferred in lots of any size.
Miscellaneous
The Financial Instruments and Exchange Law of Japan and related regulations require any person who has
become, beneficially and solely or jointly, a holder of more than five percent of the total issued voting shares ofKyocera Corporation 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, shares to be issued or transferred to these persons upon the exercise of stock acquisition rights
are included in determining both the size of the holding and Kyocera Corporation’s total issued voting sharecapital, with certain exceptions.
A similar report must also be filed in respect of any subsequent change of one percent or more in any suchholding, with certain exceptions. (For this purpose, any shares of Kyocera Corporation issuable to such person
upon conversion of convertible securities or exercise of stock acquisition rights, of which none are currently
outstanding, would be taken into account in determining both the number of shares held by such holder andKyocera Corporation’s total issued share capital.) Copies of such report must also be furnished to Kyocera
Corporation and to all Japanese stock exchanges on which the shares of Kyocera Corporation are listed.
Except for the general limitation under Japanese anti-trust and anti-monopoly regulations against holding ofshares of capital stock of a Japanese corporation which leads or may lead to a restraint of trade or monopoly, andexcept for general limitations under the Companies Act or Kyocera Corporation’s Articles of Incorporation on
the rights of shareholders applicable regardless of residence or nationality, there is no limitation under Japaneselaws and regulations applicable to Kyocera Corporation 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 Kyocera
Corporation.
There is no provision in Kyocera Corporation’s Articles of Incorporation that would have an effect of delaying,deferring or preventing a change in control of Kyocera Corporation and that would operate only with respect tomerger, acquisition or corporate restructuring involving Kyocera Corporation.
Daily Price Fluctuation Limits under Japanese Stock Exchange Rules
Share prices on Japanese stock exchanges are determined on a real-time basis by the equilibrium between bids
and offers. These exchanges set daily price limits, which limit the maximum range of fluctuation within a single
trading day. Daily price limits are set according to the previous day’s closing price or special quote. Although82transactions may continue at the upward or downward limit price if the limit price is reached on a particular
trading day, no transactions may take place outside these limits. Consequently, an investor wishing to sell at a
price above or below the relevant daily limit may not be able to sell his or her shares at such price on a particular
trading day, or at all.
The closing price of our shares of Common Stock on the Tokyo Stock Exchange on the latest available date is set
forth at Price Range of Shares in Item 9. The following table shows the daily price limit for a stock on the Tokyo
Stock Exchange with a closing price of between ¥7,000 and ¥10,000 per share, as well as the daily price limit if
our per share price were to rise to between ¥10,000 and ¥15,000, or fall to between ¥5,000 and ¥7,000. Other
daily price limits would apply if our per share price moved to other ranges.
Selected Daily Price Limits
Maximum Daily
Price Movement

Previous Day’s Closing Price or Special Quote

Over
Over
Over

¥5,000¥7,000¥10,000

Less thanLess thanLess than¥7,000 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
¥10,000 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
¥15,000 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

¥1,000¥1,500¥3,000For a history of the trading price of our shares of Common Stock on the Tokyo Stock Exchange, see Item 9.A.
“Offering and Listing Details” of this annual report on Form 20-F.
C. Material Contracts
On October 10, 2012, AVX Corporation reached a proposed financial settlement with the U.S. Environmental
Protection Agency and Commonwealth of Massachusetts regarding the New Bedford Harbor Superfund Site.
For this summary of the proposed financial settlement, please refer to “The proposed financial settlement among AVX
Corporation, the U.S. Environmental Protection Agency and Commonwealth of Massachusetts regarding the New
Bedford Harbor Superfund Site” in Item 5.A. “Operating Results” of this annual report on Form 20-F on page 31.
The proposed financial settlement, which is Exhibit 4.1 “Supplemental Consent Decree with Defendant AVX
Corporation containing agreement among AVX Corporation, the United States Environmental Protection Agency
and the Commonwealth of Massachusetts, dated October 10, 2012” to this annual report on Form 20-F, isincorporated herein by reference.
D. Exchange Controls
There is no foreign exchange control in Japan that may materially affect the import or export of capital, including
the availability of cash and cash equivalents for use by Kyocera Corporation, or the remittance of dividends orother payments to nonresident holders of Kyocera Corporation’s shares or of ADRs evidencing ADSs.
E. Taxation
Japanese Taxation
The following is a discussion summarizing material Japanese tax consequences to an owner of shares or ADSs
who is a non-resident of Japan or a non-Japanese corporation without a permanent establishment in Japan towhich the relevant income is attributable. The statements regarding Japanese tax laws set forth below are basedon the laws in force and as interpreted by the Japanese taxation authorities as at the date hereof. This summary is
not exhaustive of all possible tax considerations which may apply to a particular investor. Potential investors
should satisfy themselves as to:•the overall tax consequences of the ownership and disposition of shares or ADSs, including specificallythe tax consequences under Japanese law,83•the laws of the jurisdiction of which they are a resident, and•any tax treaty between Japan and their country of residence, by consulting 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 Japaneseincome 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 (the “Treaty”),
establishes the maximum rate of Japanese withholding tax which may be imposed on dividends paid toa United States resident or corporation (within the meaning of the Treaty) not having a “permanentestablishment” in Japan. A “permanent establishment” in Japan is generally a fixed place of businessfor industrial or commercial activity in Japan. Under the Treaty, the maximum withholding rate formost qualified portfolio shareholders is limited to 10% of the gross amount of the dividends and 5% of
the gross amount of the dividends if the beneficial owner is a qualified company that owns, directly or
indirectly, on the date on which entitlement to the dividend is determined, at least 10% (but not morethan 50%, to be amended to less than 50% when the Protocol Amending 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 Tax on Income signed on January 24, 2013 becomes effective (effective date
to be determined)) of the voting stock of the issuing company. The Treaty provides that no Japanese
tax will be imposed on dividends paid to a qualified pension fund that is a United States resident, if
such dividends are not derived from the carrying on of a business, directly or indirectly, by suchpension fund.

For purposes of the Treaty and Japanese tax law, U.S. holders of ADRs will be treated as the owners of theshares underlying the ADSs evidenced by the ADRs.
Japan has income tax treaties, conventions or agreements, which generally provide that the rate of withholding tax may
not exceed 15% for portfolio investors, with, among others, Belgium, Canada, Denmark, Finland, Germany, Ireland,
Italy, Luxembourg, New Zealand, Norway, Singapore, Spain and Sweden. Japan’s income tax treaties with Australia,
France, the Netherlands, Switzerland and the United Kingdom have been amended to generally reduce the maximum
withholding tax rate to 10%. In the absence of any applicable tax treaty, convention or agreement reducing the
maximum rate of withholding tax or allowing exemption from Japanese withholding tax, the rate of Japanese
withholding tax applicable to dividends paid by Kyocera Corporation to non-residents or non-Japanese corporations is20%. However, with respect to dividends paid by Kyocera Corporation to any corporate or individual shareholders
who are non-residents of Japan or non-Japanese corporations, except for any individual shareholder who holds 3% ormore of the outstanding total of the shares issued by Kyocera Corporation, the said 20% withholding tax rate is
reduced to (i) 7% for dividends due and payable on or before December 31, 2013 and (ii) 15% for dividends due andpayable on or after January 1, 2014. A special reconstruction surtax (2.1% multiplied by the original applicable taxrate) is added to the withholding tax rates from and including January 1, 2013 to and including December 31, 2037.
Under Japanese tax law, whichever is the lower of the maximum rate provided in the relevant tax treaty, convention or
agreement and the Japanese statutory rate will be applicable. 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 Japan or
non-Japanese corporation not having a permanent establishment in Japan are in general not subject to Japanese income
or corporation taxes.
Kyocera Corporation has paid or will pay any stamp, registration or similar tax imposed by Japan in connection
with the issue of the shares, except that Kyocera Corporation will not pay any tax payable in connection with thetransfer 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.
84

United States Taxation
The following discusses the material United States federal income tax consequences of the ownership of sharesor ADSs. It only applies to U.S. holders (as defined below) of shares or ADSs who hold their shares or ADSs as
capital assets for tax purposes. This section does not address special classes of holders, some of whom may besubject to special rules including:•a dealer in securities,•a trader in securities that elects to use a mark-to-market method of accounting for securities holdings,•

a tax-exempt organization,•certain insurance companies,•

a person liable for alternative minimum tax,•

a person that actually or constructively owns 10% or more of our voting stock,•a person that holds shares or ADSs as part of a straddle or a hedging or conversion transaction,•a person that purchases or sells shares or ADSs as part of a wash sale for tax purposes, or•a person whose functional currency is not the U.S. dollar.

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 and administrative and judicial interpretations,as currently in effect, as well as on the Treaty. These laws are subject to change, possibly on a retroactive basis.
In addition, this discussion is based in part upon the representations of the depositary and the assumption thateach obligation in the deposit agreement relating to the ADRs and any related agreement will be performed inaccordance with its terms.
If a partnership holds the shares or ADSs, the United States federal income tax treatment of a partner will
generally depend on the status of the partner and the tax treatment of the partnership. A partner in a partnership
holding the shares or ADSs should consult its tax advisor with regard to the United States federal income tax
treatment of an investment in the shares or ADSs.
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, or•a trust if a United States court can exercise primary supervision over the trust’s administration and one
or more United States persons are authorized to control all substantial decisions of the trust.

This discussion addresses only United States federal income taxation. An investor should consult its own tax
advisor regarding the United States federal, state and local and other tax consequences of owning and disposingof shares or ADSs in its particular circumstances.
In general, and taking into account the earlier assumptions, for United States federal income tax purposes, if theinvestor holds ADRs evidencing ADSs, the investor will be treated as the owner of the shares represented bythose ADSs. Exchanges of shares for ADRs, and ADRs for shares, generally will not be subject to United Statesfederal income tax.

85

Taxation of Dividends
Subject to the PFIC rules discussed below, under the United States federal income tax laws, if the investor is a
U.S. holder, the gross amount of any dividend paid by Kyocera Corporation out of its current or accumulated
earnings and profits, as determined for United States federal income tax purposes, is subject to United Statesfederal income taxation. If the investor is a non-corporate U.S. holder, dividends that constitute qualified
dividend income will be taxable at the preferential rates applicable to long-term capital gains provided that theshares or ADSs are held for more than 60 days during the 121-day period beginning 60 days before the exdividend date and meet other holding period requirements. Dividends paid with respect to shares or ADSs
generally will be qualified dividend income. The investor must include any Japanese tax withheld from thedividend payment in this gross amount even though it does not in fact receive it.
The dividend is taxable to the investor when the investor, in the case of shares, or the depositary, in the case of
ADSs, receives the dividend, actually or constructively. The dividend will not be eligible for the dividendsreceived deduction generally allowed to United States corporations in respect of dividends received from other
United States corporations.
The amount of the dividend distribution that the investor must include in its income as a U.S. holder will be theU.S. dollar value of the Japanese yen payments made, determined at the spot Japanese yen/U.S. dollar rate on thedate the dividend distribution is includible in the investor’s income, regardless of whether the payment is in fact
converted into the U.S. dollars. Generally, any gain or loss resulting from currency exchange fluctuations during
the period from the date the investor includes the dividend payment in income to the date it converts the payment
into the U.S. dollars will be treated as ordinary income or loss and will not be eligible for the special tax rateapplicable to qualified dividend income. The gain or loss generally will be income or loss from sources within
the United States for foreign tax credit limitation purposes.
Distributions in excess of current and accumulated earnings and profits, as determined for United States federal
income tax purposes, will be treated as a non-taxable return of capital to the extent of the investor’s basis in theshares 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 willbe creditable against the investor’s United States federal income tax liability. Special rules apply in determining
the foreign tax credit limitation with respect to dividends that are subject to the preferential tax rates. To theextent a refund of the tax withheld is available to the investor under Japanese law or under the Treaty, the amountof tax withheld that is refundable will not be eligible for credit against the investor’s United States federal
income tax liability.
Dividends will, depending on the investor’s circumstances, generally be either “passive” or “general” income forpurposes 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 Kyocera Corporation generally will not be subject to United States federal
income tax.
Taxation of Capital Gains
Subject to the PFIC rules discussed below, if the investor is a U.S. holder and the investor sells or otherwise
disposes of its 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 its
tax basis, determined in U.S. dollars, in its shares or ADSs. Capital gain of a non-corporate U.S. holder isgenerally taxed at preferential rates where the holder has a holding period greater than one year. Additionally,
gain or loss will generally be income or loss from sources within the United States for foreign tax credit
limitation purposes.
86

PFIC Rules
Kyocera Corporation believes that its shares and ADSs should not be treated as stock of a PFIC for United Statesfederal income tax purposes, but this conclusion is a factual determination that is made annually and thus may besubject to change.
In general, if the investor is a U.S. holder, Kyocera Corporation will be a PFIC with respect to the investor if for
any taxable year in which the investor held our ADSs or shares:•

at least 75% of our gross income for the taxable year is passive income or•at least 50% of the value, determined on the basis of a quarterly average, of our assets is attributable toassets 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 from assets that produce passive income.
If a foreign corporation owns at least 25% by value of the stock of another corporation, the foreign corporation istreated for purposes of the PFIC tests as owning its proportionate share of the assets of the other corporation, andas receiving directly its proportionate share of the other corporation’s income.
If Kyocera Corporation is treated as a PFIC, and the investor is a U.S. holder that did not make a mark-to-market
election, as described below, the investor will be subject to special rules with respect to:•

any gain the investor realizes on the sale or other disposition of your shares or ADSs and•any excess distribution that we make 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 theinvestor 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’s holding period for the sharesor ADSs,•

the amount allocated to the taxable year in which the investor realized the gain or excess 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 ineffect for that year, and•the interest charge generally applicable to underpayments of tax will be imposed in respect of the tax
attributable to each such year.

Special rules apply for calculating the amount of the foreign tax credit with respect to excess distributions by a PFIC.
If the investor owns shares or ADSs in a PFIC that are treated as marketable stock, the investor may make amark-to-market election. Kyocera Corporation’s shares and ADSs will be treated as marketable stock for acalendar year if they are regularly traded (within the meaning of applicable Treasury regulations) on a qualified
exchange (which includes the New York Stock Exchange) during such calendar year. If the investor makes thiselection, 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 its shares or ADSs at the endof the taxable year over its adjusted basis in its shares or ADSs. These amounts of ordinary income will not be
eligible for the favorable tax rates applicable to qualified dividend income or long-term capital gains. The
investor will also be allowed to take an ordinary loss in respect of the excess, if any, of the adjusted basis of its
shares or ADSs over their fair market value at the end of the taxable year (but only to the extent of the net
amount of previously included income as a result of the mark-to-market election). The investor’s basis in theshares or ADSs will be adjusted to reflect any such income or loss amounts.
87In addition, notwithstanding any election the investor makes with regard to the shares or ADSs, dividends that it
receives from Kyocera Corporation will not constitute qualified dividend income to the investor if Kyocera
Corporation is a PFIC either in the taxable year of the distribution or the preceding taxable year. Moreover, theinvestor’s shares or ADSs will be treated as stock in a PFIC if Kyocera Corporation was a PFIC which was not aqualified electing fund with respect to the investor at any time during its holding period in its shares or ADSs,
even if Kyocera Corporation is not currently a PFIC. For purposes of this rule, if the investor makes a mark-tomarket election with respect to its shares or ADSs, the investor will be treated as having a new holding period in
its shares or ADSs beginning on the first day of the first taxable year beginning after the last taxable year forwhich the mark-to-market election applies. Dividends that the investor receives that do not constitute qualified
dividend income are not eligible for taxation at the preferential rates applicable to qualified dividend income.
Instead, the investor must include the gross amount of any such dividend paid by Kyocera Corporation out of ouraccumulated earnings and profits (as determined for United States federal income tax purposes) in its grossincome, and it will be subject to tax at rates applicable to ordinary income.
If the investor owns shares or ADSs during any year that Kyocera Corporation is a PFIC with respect to theinvestor, it may be required to 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, as amended, and, in
accordance therewith, we will file annual reports on Form 20-F within four months of our fiscal year-end andother reports and information on Form 6-K with the Securities and Exchange Commission. These reports andother information can be inspected at the public reference room at the Securities and Exchange Commission at
100 F Street, N.E., 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
the operation of the Securities and Exchange public reference room by calling the Securities and Exchange
Commission in the United States at 1-800-SEC-0330. The Securities and Exchange Commission also maintains a
web site at www.sec.gov that contains reports, proxy statements and other information regarding registrants thatfile electronically with the Securities and Exchange Commission. As a foreign private issuer, we are exempt fromthe rules under the Securities Exchange Act of 1934, as amended, prescribing the furnishing and content of proxystatements to shareholders.
I. Subsidiary Information
Not applicable.
Item 11.

Quantitative and Qualitative Disclosures about Market Risk

Kyocera is exposed to market risk, including changes in foreign currency exchange rates, interest rates and equity
prices. In order to hedge against these risks, Kyocera uses derivative financial instruments. Kyocera does nothold or issue derivative financial instruments for trading purposes. Kyocera regularly assesses these market risks
based on policies and procedures established to protect against the adverse effects of these risks and otherpotential exposures, primarily by reference to the market value of financial instruments. Although Kyocera may
be exposed to losses in the event of non-performance by counterparties, Kyocera believes that its counterpartiesare creditworthy and does not expect such losses, if any, to be significant.
88

In the normal course of business, Kyocera also faces other risks such as country risk, credit risk, or legal risk, butthey are not represented in the following tables.
Foreign Currency Exchange Risk
Kyocera enters into foreign currency forward contracts to hedge certain existing assets and liabilities
denominated in foreign currencies, principally the U.S. dollar and the Euro. All such contracts in effect at
March 31, 2013 will generally mature within four months. The following tables provide information about
Kyocera’s major foreign currency forward contracts existing at March 31, 2013, which include hedge accounting
setting forth the contract amounts, fair value, weighted average exchange rates. The contract amounts are
generally used to calculate the contractual payments to be exchanged under the contracts.
Forward exchange contracts to sell foreign currencies(Pay/Receive) (Except average contractual rates)
US$/YenEURO/Yen
EURO/US$(Yen in millions)Contract amounts . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Fair value . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Weighted average contractual rates . . . . . . . . . . . . . . . . . . . . . . . . .

¥74,450(3,682)0.011

Forward exchange contracts to purchase foreign currencies(Receive/Pay) (Except average contractual rates)
Yen/US$
US$/YenEURO/Yen(Yen in millions)Contract amounts . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Fair value . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Weighted average contractual rates . . . . . . . . . . . . . . . . . . . . . . . . .

¥ 6,290(126)
92.503¥62,724(4,014)0.009¥2,80568
0.759¥ 5,920(66)
0.011¥2,252(20)
0.008Interest Rate Risk
Kyocera enters into interest rate swaps to reduce market risk exposure to changes in interest rates. The tables
below provide information about Kyocera’s financial instruments that are sensitive to changes in interest rates.
Expected maturity dateduring the year ending March 31,
2015
2016
2017
2018
Thereafter(Yen in millions)Long-term debt(including due within one year)

Averagepay rate

Loans from banks andothers . . . . . . . . . . . . . . . .

4.46% ¥9,817

Notional
Averageprincipal
receiveamounts
rate(Variable to Fixed)

Averagepay rate

2014

¥119

3.55%

¥59

0.50%

2014

9,167

5,567

3,370

1,531

1,220

Interest rate swaps
Expected maturity dateduring the year ending March 31,
2015
2016
2017
2018
Thereafter(Yen in millions)

60

—

—

—

—

Total

Fair value¥30,672¥30,691

Total

Fair value

¥119

¥(22)

Equity Price Risk
Kyocera has marketable equity and debt securities that are classified as available-for-sale and are carried in the
consolidated balance sheets at fair value. Changes in fair value are recognized as other comprehensive income,net of taxes, as a separate component of shareholders’ equity. Gross unrealized gains on marketable equity
securities, which were ¥219,400 million, included ¥194,216 million derived from unrealized gain of KDDI
Corporation held by Kyocera. Detailed information appears in Note 3 to the Consolidated Financial Statements
included in this annual report on Form 20-F. Kyocera evaluates whether declines in fair value of debt and equity
89

securities are other-than-temporary. Other-than-temporary declines in fair value are recorded as a realized loss
with a new cost basis. This evaluation is based mainly on the duration and the extent to which the fair value isless than cost and the anticipated recoverability of fair value in the future. Other-than-temporary loss on debt andequity securities with readily determinable fair values for the years ended March 31, 2012 and 2013 amounted
to ¥1,258 million and ¥728 million, respectively. At March 31, 2013, Kyocera held the following available-forsale marketable equity and debt securities.
March 31, 2013
Cost
Fair Value(Yen in millions)Due within 1 year . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Due after 1 year to 5 years . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Due after 5 years . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Equity securities . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Item 12.

Description of Securities Other than Equity Securities

A. Debt Securities
Not applicable.
B. Warrants and Rights
Not applicable.
C. Other Securities
Not applicable.

90

¥

—
3,070
4,479
273,719

¥

—
3,080
4,521
493,119¥281,268¥500,720

D. American Depositary Shares
Fee Schedule
Kyocera’s ADR program is administered by Citibank, N. A., as depositary.
The holder of an ADR has to pay the following fees and charges related to services in connection with theownership of the ADR to the depositary bank.
Service

Rate

By Whom Paid

(1) Issuance of ADSs upon depositof Stock (excluding issuances
contemplated by paragraphs(3)(b) and (5) below).

Up to $5.00 per 100 ADSs (orfraction thereof) issued.

Party for whom deposits are madeor party receiving ADSs.

(2) Delivery of Deposited
Securities, property and cash
against surrender of ADSs.

Up to $5.00 per 100 ADSs (orfraction thereof) surrendered.

Party surrendering ADSs or
making withdrawal.

(3) Distribution of (a) cash dividendor (b) ADSs pursuant to Stock
Splits (as defined in the Deposit
Agreement)

No fee.

Not applicable.

(4) Distribution of cash proceeds(i.e. upon sale of rights andother entitlements).

Up to $2.00 per 100 ADSs held.

Party to whom distribution ismade.

(5) Distribution of ADSs pursuant
to exercise of rights.

Up to $5.00 per 100 ADSs issued.

Party to whom distribution is
made.

Charges
Holders and Beneficial Owners shall be responsible for the following charges:(i)taxes (including applicable interest and penalties) and other governmental charges;(ii) such registration fees as may from time to time be in effect for the registration of shares of Stock or other
Deposited Securities on the share register and applicable to transfers of shares of Stock or other Deposited
Securities to or from the name of the Custodian, the Depositary or any nominees upon the making ofdeposits and withdrawals, respectively;(iii) such cable, telex and facsimile transmission and delivery expenses as are expressly provided in the Deposit
Agreement to be at the expense of the person depositing shares of Stock or Holders and Beneficial Ownersof ADSs;(iv) the expenses and charges incurred by the Depositary in the conversion of foreign currency;(v) such fees and expenses as are incurred by the Depositary in connection with compliance with exchange
control regulations and other regulatory requirements applicable to shares of Stock, Deposited Securities,
ADSs and ADRs; and(vi) the fees and expenses incurred by the Depositary in connection with the delivery of Deposited Securities
Reimbursement fees and payments
There are no fees or other direct and indirect payments received from the Depositary to Kyocera Corporation.
91

PART II
Item 13.

Defaults, Dividend Arrearages and Delinquencies

None.
Item 14.

Material Modification to the Rights of Security Holders and Use of Proceeds

None.
Item 15.

Controls and Procedures

Evaluation of Disclosure Controls and Procedures
Kyocera’s management, with the participation of its principal executive and principal financial officers, evaluated theeffectiveness of Kyocera’s disclosure controls and procedures (as defined in Rules 13a-15(e) under the U.S. Securities
Exchange Act of 1934, as amended) as of March 31, 2013. Based on that evaluation, Kyocera’s principal executive
and principal financial officers concluded that the disclosure controls and procedures were effective as of that date.
Management’s Report on Internal Control over Financial Reporting
Kyocera’s management is responsible for establishing and maintaining adequate internal control over financial
reporting (as defined in Rules 13a-15(f) under the U.S. Securities Exchange Act of 1934, as amended). Becauseof its inherent limitations, internal control over financial reporting may not prevent or detect misstatements. Also,
projections of any evaluation of effectiveness to future periods are subject to the risk that controls may become
inadequate because of changes in conditions, or that the degree of compliance with the policies or procedures
may deteriorate.
Kyocera’s management, with the participation of its principal executive and principal financial officers,
evaluated the effectiveness of Kyocera’s internal control over financial reporting using the criteria set forth inInternal Control—Integrated Framework (1992) issued by the Committee of Sponsoring Organizations of theTreadway Commission (COSO). Based on this evaluation, Kyocera’s management concluded that Kyocera’sinternal control over financial reporting was effective as of March 31, 2013. Kyocera’s independent registeredpublic accounting firm, PricewaterhouseCoopers Kyoto, which changed its English name from Kyoto Audit
Corporation effective March 1, 2013, has audited the effectiveness of Kyocera’s internal control over financial
reporting as of March 31, 2013, as stated in their report which appears on page F-1 of this annual report on
Form 20-F.
Evaluation of Changes in Internal Control over Financial Reporting
Kyocera’s management, with the participation of its principal executive and principal financial officers, also
carried out an evaluation of changes in our internal control over financial reporting during the year ended
March 31, 2013. Based on that evaluation, there was no change in Kyocera’s internal control over financial
reporting that occurred during the year ended March 31, 2013 that materially affected, or is reasonably likely tomaterially affect, Kyocera’s internal control over financial reporting.
Item 16.

[Reserved]

Item 16A. Audit Committee Financial Expert
The Audit & Supervisory Board of Kyocera has determined that Kyocera does not have an “audit committee
financial expert” as defined in Item 16A of Form 20-F serving on the Audit & Supervisory Board. Kyocera
believes that the combined knowledge, skills and experience of the Audit & Supervisory Board enables them, as92

a group, to act effectively in the fulfillment of their tasks and responsibilities, including those under the
Sarbanes-Oxley Act of 2002. In addition, the Audit & Supervisory Board Members have the power and authority
to engage outside experts, including those who have the attributes described in Item 16A(b) of Form 20-F, asthey deem appropriate to provide them with advice on matters related to their tasks and responsibilities.
Item 16B. Code of Ethics
Kyocera has adopted a code of ethics that applies to Chief Executive Officer, Chief Financial Officer and themembers of Kyocera Disclosure Committee. Kyocera’s code of ethics, which is Exhibit 11.1 to this annual reporton Form 20-F, is incorporated herein by reference.
Item 16C. Principal Accountant Fees and Services
Principal Independent Registered Public Accounting Firm Fees
PricewaterhouseCoopers Kyoto, which changed its English name from Kyoto Audit Corporation
effective March 1, 2013, served as our independent registered public accounting firm for fiscal 2012 and fiscal
2013 and audited our Consolidated Financial Statements included in this annual report on Form 20-F.
The following table presents the aggregate fees for professional services and other services renderedby PricewaterhouseCoopers Kyoto, and other member firms of PricewaterhouseCoopers to Kyocera in fiscal
2012 and fiscal 2013.
Years ended March 31,
2012
2013
(Yen in millions)Audit Fees(1) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Audit-related Fees(2) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Tax Fees(3) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
All Other Fees(4) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

¥1,3169205
9¥1,4573
271
3

Total . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

¥1,539¥1,734(1) Amounts represent fees for the annual audit of Kyocera for fiscal 2012 and fiscal 2013, reviews ofKyocera’s financial statements for interim periods, other regulatory filings in fiscal 2012 and fiscal 2013
and the statutory audit of internal control over financial reporting for fiscal 2012 and fiscal 2013.
(2) Amounts in fiscal 2012 primarily represent fees for translation support to statutory financial reporting andfor an advisory service in connection with its adoption of International Financial Reporting Standards.
(3) Amounts represent fees for tax services which are mainly international tax compliance performed by the tax
department of the independent registered public accounting firm other than financial audit in fiscal 2012 andfiscal 2013.
(4) Amounts in fiscal 2012 for all other fees primarily included fees for advisory assurance service of the
preparation of Kyocera’s sustainability report.
Policies and Procedures of the Audit & Supervisory Board
In accordance with the regulations of the Securities and Exchange Commission issued pursuant to Sections 202 and208 of the Sarbanes-Oxley Act of 2002, our Audit & Supervisory Board has adopted a pre-approval policy
regarding non-audit work performed by PricewaterhouseCoopers Kyoto, a member firm of PricewaterhouseCoopers
and by other member firms of the PricewaterhouseCoopers network for Kyocera and its subsidiaries, other thansuch work performed for AVX Corporation, which is itself an SEC-reporting entity and follows the pre-approval
policy that its audit committee has adopted. Under Kyocera’s pre-approval policy, there are two types of preapproval procedures, “General Pre-Approval” and “Specific Pre-Approval.”
93Under the pre-approval procedure for “General Pre-Approval,” each of Kyocera Group companies (other than
AVX Corporation) must make a proposal to Kyocera’s Audit & Supervisory Board for the types of services andestimated fee levels of each category of services to be generally pre-approved. Such proposal must be madeannually. If such proposal is accepted, Kyocera’s Audit & Supervisory Board includes these services in a
“General Pre-Approved List.” In addition, our Audit & Supervisory Board is notified of each such service
actually rendered.
Under the pre-approval procedure for “Specific Pre-Approval,” if any proposed services are not on the General
Pre-Approved List, each of Kyocera group companies (other than AVX Corporation) must submit an application
to Kyocera’s Audit & Supervisory Board for such services. After reviewing the details and estimated fee levels
for each engagement, Kyocera’s Audit & Supervisory Board may make a specific pre-approval decision on these
services. Also, if any approved services in the General Pre-Approved List exceed the fee levels prescribed on theList, each of Kyocera group companies (other than AVX Corporation) must submit an application to Kyocera’s
Audit & Supervisory Board for new fee levels for such services. Kyocera’s Audit & Supervisory Board may
make a pre-approval decision after reviewing the details of the services and the estimated fee levels for eachengagement.
All of the services provided by PricewaterhouseCoopers Kyoto, a member firm of PricewaterhouseCoopers, orby other member firms of PricewaterhouseCoopers network since Rule 2-01(c)(7) of Regulation S-X became
effective were approved by Kyocera’s Audit & Supervisory Board pursuant to the pre-approval policy describedabove, and none of such services were approved pursuant to the procedures described in Rule 2-01(c)(7)(i)(C) of
Regulation S-X, which waives the general requirement for pre-approval in certain circumstances.
Item 16D. Exemptions from the Listing Standards for Audit Committees
With respect to the requirements of Rule 10A-3 under the Securities Exchange Act of 1934 relating to listedcompany audit committees, which apply to us through Section 303A.06 of the New York Stock Exchange’s
Listed Company Manual, we rely on an exemption provided by paragraph (c)(3) of that Rule available to foreign
private issuers with audit & supervisory board meeting certain requirements. For a New York Stock Exchangelisted Japanese company with an audit & supervisory board, the requirements for relying on paragraph (c)(3) ofRule 10A-3 are as follows:(a) The audit & supervisory board must be established, and its members must be selected, pursuant toJapanese law expressly requiring such a board for Japanese companies that elect to have a corporate
governance system with audit & supervisory board members.
(b) Japanese law must and does require the audit & supervisory board to be separate from the board of
directors.
(c) None of the audit & supervisory board members is elected by management, and none of the listedcompany’s executive officers is a member of the audit & supervisory board.
(d) Japanese law must and does set forth standards for the independence of all audit & supervisory board
members from the listed company or its management. Also, under Japanese law, at least half of acompany’s audit & supervisory board members must be “outside” audit & supervisory board members,
to whom additional independence requirements apply.
(e) The audit & supervisory board, in accordance with Japanese law or the listed company’s governing
documents, must be responsible, to the extent permitted by Japanese law, for the appointment, retention
and oversight of the work of any registered public accounting firm engaged (including, to the extent
permitted by Japanese law, the resolution of disagreements between management and the auditor
regarding financial reporting) for the purpose of preparing or issuing an audit report or performing
other audit, review or attest services for the listed company, including its principal accountant which
audits its Consolidated Financial Statements included in its annual reports on Form 20-F.
94

(f)

To the extent permitted by Japanese law:•

the audit & supervisory board must establish procedures for (i) the receipt, retention and treatmentof complaints received by us regarding accounting, internal accounting controls, or auditing
matters, and (ii) the confidential, anonymous submission by our employees of concerns regarding
questionable accounting or auditing matters;•

the audit & supervisory board must have the authority to engage independent counsel and otheradvisers, as it determines necessary to carry out its duties; and•the listed company must provide for appropriate funding, as determined by its audit & supervisoryboard, for payment of (i) compensation to any registered public accounting firm engaged for the
purpose of preparing or issuing an audit report or performing other audit, review or attest services
for us, (ii) compensation to any advisers employed by the audit & supervisory board, and(iii) ordinary administrative expenses of the audit & supervisory board that are necessary or
appropriate in carrying out its duties.

In our assessment, our Audit & Supervisory Board, which meets the requirements for reliance on the exemption
in paragraph (c)(3) of Rule 10A-3 described above, is not materially less effective than an audit committee
meeting all the requirements of paragraph (b) of Rule 10A-3 (without relying on any exemption provided by thatRule) at acting independently of management and performing the functions of an audit committee ascontemplated therein.
Item 16E. Purchases of Equity Securities by the Issuer and Affiliated Purchasers
The following table sets forth certain information with respect to purchases of our own shares by us and ouraffiliated purchasers.

(b) Average
Price Paid
per Share(or Unit)(c) Total Number of
Shares (or Units)
Purchased as Partof Publicly Announced
Plans or Programs(d) Maximum Number(or Approximate Dollar Value)of Shares (or Units)that May Yet Be
Purchased Under thePlans or Programs

81
298
296
675
348

7,250.00
7,304.16
6,565.87
6,508.41
6,335.45

—
—
—
—
—

—
—
—
—
—

192
493
176
272
415
569
357

6,732.50
6,875.92
7,436.70
7,618.60
7,971.22
8,189.31
8,335.93

—
—
—
—
—
—
—

—
—
—
—
—
—
—

4,172

7,265.72——(a) Total
Number of
Shares(or Units)
Purchased

April 1 to April 30, 2012 . . . . . . . . . .
May 1 to May 31, 2012 . . . . . . . . . . . .
June 1 to June 30, 2012 . . . . . . . . . . . .
July 1 to July 31, 2012 . . . . . . . . . . . .
August 1 to August 31, 2012 . . . . . . .
September 1 to September 30,
2012 . . . . . . . . . . . . . . . . . . . . . . . . .
October 1 to October 31, 2012 . . . . . .
November 1 to November 30, 2012 . .
December 1 to December 31, 2012 . .
January 1 to January 31, 2013 . . . . . .
February 1 to February 28, 2013 . . . .
March 1 to March 31, 2013 . . . . . . . .
Total . . . . . . . . . . . . . . . . . . . . . .

PeriodNote: Under the Companies Act, a holder of shares constituting less than one full unit may request Kyocera
to purchase such shares at their market value. (See Memorandum and Articles of Association—Capitalstock—“Unit share system,” in “Item 10. Additional Information.”) All purchases described in the abovetable were made pursuant to such requests by shareholders.

95

Item 16F. Change in Registrant’s Certifying Accountant
Not applicable.
Item 16G.

Corporate Governance

Companies listed on the New York Stock Exchange (NYSE) must comply with certain standards regarding
corporate governance under Section 303A of the NYSE Listed Company Manual. However, listed companies
that are foreign private issuers, such as Kyocera Corporation, are permitted to follow home country practice inlieu of certain provisions of Section 303A.
The following table shows the significant differences between the corporate governance practices followed by
U.S. listed companies under Section 303A of the NYSE Listed Company Manual and those followed by Kyocera
Corporation.
Corporate Governance Practices
Followed by NYSE-listed U.S. Companies

Corporate Governance Practices
Followed by Kyocera Corporation

1. An NYSE-listed U.S. company must have a majorityof directors meeting the independence requirements
under Section 303A of the NYSE Listed Company
Manual.

For large Japanese companies, including Kyocera
Corporation, which employ a corporate governancesystem based on an audit & supervisory board (the“audit & supervisory board system”), the Companies
Act of Japan (the Companies Act) has no independence
requirement with respect to directors. The task ofoverseeing management and independent auditors is
assigned to the audit & supervisory board members,
who are separate from Kyocera Corporation’s
management. All audit & supervisory board members
must meet certain independence requirements under theCompanies Act.
For large Japanese companies with an audit &supervisory board, including Kyocera Corporation, atleast half of the members of such board must be“outside” audit & supervisory board members. Such“outside” audit & supervisory board members mustmeet additional independence requirements under theCompanies Act. An “outside” audit & supervisoryboard member means an audit & supervisory board
member who has not served as a director, manager orother employee of Kyocera Corporation or any of its
subsidiaries previously.
As of June 26, 2013, Kyocera Corporation had six
audit & supervisory board members, of whom threewere “outside” audit & supervisory board members.
In addition to the independence requirements under theCompanies Act described above, the rules of theJapanese stock exchanges require that at least one of
Kyocera Corporation’s outside directors or outside
audit & supervisory board members must meet certain
additional independence criteria.
96Corporate Governance Practices
Followed by NYSE-listed U.S. Companies

Corporate Governance Practices
Followed by Kyocera Corporation

2. An NYSE-listed U.S. company must have an audit
committee composed entirely of independent directors,
and the audit committee must have at least threemembers.

Kyocera Corporation employs the audit & supervisoryboard system as described above. Under this system, theaudit & supervisory board is a legally separate andindependent body from the board of directors. The mainfunction of the audit & supervisory board is similar tothat of independent directors, including those who aremembers of the audit committee of a U.S. company: tomonitor the performance of the directors, and review
and express opinions on the method of auditing by
Kyocera Corporation’s independent auditors and onsuch independent auditors’ audit reports, for theprotection of Kyocera Corporation’s shareholders.
Kyocera Corporation and other large Japanesecompanies which employ the audit & supervisoryboard system are required to have at least three audit& supervisory board members. As of June 26, 2013,
Kyocera Corporation had six audit & supervisoryboard members. Each audit & supervisory board
member serves a four-year term of office. In contrast,
the term of office of each director of Kyocera
Corporation is two years.
With respect to the requirements of Rule 10A-3 under
the U.S. Securities Exchange Act of 1934 relating tolisted company audit committees, Kyocera Corporation
relies on an exemption under that rule which is available
to foreign private issuers with audit & supervisory board
meeting certain requirements.

3. An NYSE-listed U.S. company must have anominating/corporate governance committee composed
entirely of independent directors.

Kyocera Corporation’s directors are elected at a general
meeting of shareholders. Its board of directors does nothave the power to fill vacancies thereon. Kyocera
Corporation’s audit & supervisory board members arealso elected at a general meeting of shareholders.
A proposal by Kyocera Corporation’s board of directors
to elect an audit & supervisory board member must be
approved by a resolution of its audit & supervisoryboard. The audit & supervisory board is empowered toadopt a resolution requesting that Kyocera
Corporation’s directors submit a proposal for election of
an audit & supervisory board member to a general
meeting of shareholders. The audit & supervisory board
members have the right to state their opinions
concerning election of an audit & supervisory board
member at the general meeting of shareholders.

97Corporate Governance Practices
Followed by NYSE-listed U.S. Companies

Corporate Governance Practices
Followed by Kyocera Corporation

4. An NYSE-listed U.S. company must have acompensation committee composed entirely of
independent directors and must impose procedural anddisclosure requirements with respect to the use ofcompensation consultants, independent legal counsel
and other advisors.

The total amount of compensation for Kyocera
Corporation directors and the total amount ofcompensation for Kyocera Corporation audit &supervisory board members are proposed to, andvoted upon by, a general meeting of shareholders.
Once the proposal for each of such total amount ofcompensation is approved at the general meeting ofshareholders, each of the board of directors and audit& supervisory board allocates the respective total
amount among its respective members.
There are no procedural or disclosure requirementswith respect to the use of compensation consultants,
independent legal counsel or other advisors.

5. An NYSE-listed U.S. company must
generally obtain shareholder approval with respect toany equity compensation plan.

Item 16H.

Japanese companies, including Kyocera Corporation,
often issue “stock acquisition rights” (granting theholder thereof the right to acquire from the issuer
shares of its common stock at a prescribed price) forthe purpose of granting stock options to their officers,etc. Typically, when stock acquisition rights are used
for such purpose, they are issued under terms andconditions which are especially favorable to therecipients thereof, and because of that, such issuanceis subject to approval at a general meeting ofshareholders under the Companies Act. Kyocera
Corporation obtains approval at a general meeting ofshareholders with respect to its issuance of stockacquisition rights for stock option purposes.

Mine Safety Disclosure

Not applicable.

98PART III
Item 17.

Financial Statements

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

Financial Statements

The information required by this item is set forth beginning on page F-1 of this annual report on Form 20-F.
Description

(1)

Page

Report of Independent Registered Public Accounting Firm related to the Consolidated
Financial Statements listed below . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

F-1

(2)

Consolidated Balance Sheets at March 31, 2012 and 2013 . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

F-2 & F-3

(3)

Consolidated Statements of Income for the years ended March 31, 2011, 2012 and 2013 . . . . .

F-4

(4)

Consolidated Statements of Comprehensive Income for the years ended March 31, 2011, 2012
and 2013 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

F-5

(5)

Consolidated Statements of Equity for the years ended March 31, 2011, 2012 and 2013 . . . . .

F-6 & F-7

(6)

Consolidated Statements of Cash Flows for the years ended March 31, 2011, 2012 and2013 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

F-8

Notes to the Consolidated Financial Statements . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

F-9 to F-64

(7)

Item 19.

Exhibits

Exhibit Number

Description

1.1

Articles of Incorporation (English translation)

1.2

Share Handling Regulations of the Registrant (incorporated by reference to the Registrant’s
annual report on Form 20-F filed on June 29, 2011)

1.3

Regulations of the Board of Directors of the Registrant (incorporated by reference to theRegistrant’s annual report on Form 20-F filed on June 29, 2011)

1.4

Regulations of the Audit & Supervisory Board of the Registrant (English translation)

2.1

Amended and Restated Deposit Agreement, dated as of June 29, 1998 among Kyocera
Corporation, Citibank N.A. as Depositary and all owners and holders from time to time ofAmerican Depositary Receipts, as amended by Amendment No.1 thereto, dated as of January 5,
1999 (incorporated by reference to the Registrant’s annual report on Form 20-F filed on
September 24, 2001), as further amended by Amendment No.2 thereto, dated as of December 21,
2007, including the form of American Depositary Receipt (incorporated by reference to Posteffective Amendment No.2 to the Registrant’s Registration Statement on Form F-6 filed on
December 4, 2007 (File No. 333-07222))

4.1

Supplemental Consent Decree with Defendant AVX Corporation containing agreement among
AVX Corporation, the United States Environmental Protection Agency and the Commonwealthof Massachusetts, dated October 10, 2012

8.1

List of Significant Subsidiaries (See “Organizational Structure” in Item 4.C. of the Registrant’s
annual report on Form 20-F)

99

Exhibit Number

Description

11.1

Code of Ethics (incorporated by reference to the Registrant’s annual report on Form 20-F filedon July 5, 2007)

12.1

Certification of the principal executive officer of the Registrant required by Rule 13a-14(a)12.2

Certification of the principal financial officer of the Registrant required by Rule 13a-14(a)13.1

Certification of the principal executive officer of the Registrant required by Rule 13a-14(b) andSection 1350 of Chapter 63 of Title 18 of the United States Code

13.2

Certification of the principal financial officer of the Registrant required by Rule 13a-14(b) andSection 1350 of Chapter 63 of Title 18 of the United States Code

15.1

Consent of PricewaterhouseCoopers Kyoto with respect to its report on the audit of the financial
statements included in the Registrant’s annual report on Form 20-F

101

Instance Document

101

Schema Document101

Calculation Linkbase Document

101

Labels Linkbase Document

101

Presentation Linkbase Document

101

Definition Linkbase Document

Kyocera has not included as exhibits certain instruments with respect to its long-term debt, the amount of debt
authorized under each of which does not exceed 10% of its total assets, and it agrees to furnish a copy of any
such instrument to the Securities and Exchange Commission upon request.

100

Report of Independent Registered Public Accounting Firm
To the Board of Directors and Stockholders ofKyocera Corporation
In our opinion, the accompanying consolidated balance sheets and the related consolidated statements of income,comprehensive income, equity and cash flows present fairly, in all material respects, the financial position of
Kyocera Corporation and its subsidiaries (the “Company”) at March 31, 2013 and March 31, 2012, and theresults of their operations and their cash flows for each of the three years in the period ended March 31, 2013 inconformity with accounting principles generally accepted in the United States of America. Also in our opinion,
the Company maintained, in all material respects, effective internal control over financial reporting as ofMarch 31, 2013, based on criteria established in Internal Control—Integrated Framework (1992) issued by theCommittee of Sponsoring Organizations of the Treadway Commission (COSO). The Company’s management is
responsible for these financial statements, for maintaining effective internal control over financial reporting andfor its assessment of the effectiveness of internal control over financial reporting, included in Management’s
Report on Internal Control over Financial Reporting appearing under Item 15. Our responsibility is to express
opinions on these financial statements and on the Company’s internal control over financial reporting based on
our integrated audits. We conducted our audits in accordance with the standards of the Public Company
Accounting Oversight Board (United States). Those standards require that we plan and perform the audits toobtain reasonable assurance about whether the financial statements are free of material misstatement and whether
effective internal control over financial reporting was maintained in all material respects. Our audits of thefinancial statements included examining, on a test basis, evidence supporting the amounts and disclosures in thefinancial statements, assessing the accounting principles used and significant estimates made by management,
and evaluating the overall financial statement presentation. Our audit of internal control over financial reporting
included obtaining an understanding of internal control over financial reporting, assessing the risk that a material
weakness exists, and testing and evaluating the design and operating effectiveness of internal control based on
the assessed risk. Our audits also included performing such other procedures as we considered necessary in thecircumstances. We believe that our audits provide a reasonable basis for our opinions.
A company’s internal control over financial reporting is a process designed to provide reasonable assurance
regarding the reliability of financial reporting and the preparation of financial statements for external purposes inaccordance with generally accepted accounting principles. A company’s internal control over financial reporting
includes those policies and procedures that (i) pertain to the maintenance of records that, in reasonable detail,accurately and fairly reflect the transactions and dispositions of the assets of the company; (ii) provide reasonableassurance that transactions are recorded as necessary to permit preparation of financial statements in accordancewith generally accepted accounting principles, and that receipts and expenditures of the company are being madeonly in accordance with authorizations of management and directors of the company; and (iii) provide reasonableassurance regarding prevention or timely detection of unauthorized acquisition, use, or disposition of thecompany’s assets that could have a material effect on the financial statements.
Because of its inherent limitations, internal control over financial reporting may not prevent or detect
misstatements. Also, projections of any evaluation of effectiveness to future periods are subject to the risk that
controls may become inadequate because of changes in conditions, or that the degree of compliance with thepolicies or procedures may deteriorate.
/s/ PricewaterhouseCoopers Kyoto
Kyoto, Japan
June 27, 2013

F-1

Consolidated Balance Sheets
Kyocera Corporation and Consolidated Subsidiaries
March 31, 2012 and 2013ASSETS

2012
2013(Yen in millions andshares in thousands)

Current assets:
Cash and cash equivalents . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . ¥ 273,288 ¥ 305,454
Short-term investments in debt and equity securities (Notes 3 and 4) . . . . . . . . . .
47,17543,893
Other short-term investments (Note 3) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
158,765
179,843
Trade receivables
Notes (Note 7) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
19,34927,061
Accounts (Notes 7 and 10) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
225,578
268,927
Less allowances for doubtful accounts and sales returns (Note 6) . . . . . . . . .
(4,583)(4,705)Inventories (Note 5) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Advance payments . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Deferred income taxes (Note 16) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Other current assets (Notes 4, 6, 8, 10 and 13) . . . . . . . . . . . . . . . . . . . . . . . . . . . .

240,344
270,336
68,68545,04940,961

291,283
296,450
65,812
47,34938,299Total current assets . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

1,144,603

1,268,383

Investments and advances:
Long-term investments in debt and equity securities (Notes 3 and 4) . . . . . . . . . .
Other long-term investments (Notes 3, 4, 6 and 7) . . . . . . . . . . . . . . . . . . . . . . . . .

372,779
19,098506,490
12,661

Total investments and advances . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

391,877

519,151

Property, plant and equipment (Notes 4 and 10):Land . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Buildings . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Machinery and equipment . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Construction in progress . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Less accumulated depreciation . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

60,600301,911719,146
17,035(838,155)

61,808323,014788,692
13,546(918,236)

Total property, plant and equipment . . . . . . . . . . . . . . . . . . . . . . . . . . . .

260,537

268,824

Goodwill (Notes 2 and 9) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Intangible assets (Notes 2, 9 and 10) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Other assets (Notes 6, 8, 10 and 16) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

89,03949,65358,394103,425
54,583
68,487

Total assets . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

¥1,994,103¥2,282,853

The accompanying notes are an integral part of these statements.

F-2

Consolidated Balance Sheets—(Continued)
Kyocera Corporation and Consolidated Subsidiaries
March 31, 2012 and 2013
LIABILITIES AND EQUITY

2012
2013
(Yen in millions andshares in thousands)

Current liabilities:
Short-term borrowings (Note 10) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . ¥4,062 ¥
3,135
Current portion of long-term debt (Notes 4 and 10) . . . . . . . . . . . . . . . . . . . . . . . .
10,6109,817
Trade notes and accounts payable . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
102,699
111,249
Other notes and accounts payable . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
60,99352,018
Accrued payroll and bonus . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
49,88052,420Accrued income taxes . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
13,49622,214
Other accrued liabilities (Note 14) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
29,94039,135
Other current liabilities (Notes 4, 13 and 16) . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
29,36836,642
Total current liabilities . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

301,048

326,630

Non-current liabilities:
Long-term debt (Notes 4 and 10) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Accrued pension and severance liabilities (Note 11) . . . . . . . . . . . . . . . . . . . . . . .
Deferred income taxes (Note 16) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Other non-current liabilities (Note 16) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

21,19732,441
90,17914,997

20,85536,322
146,229
37,875

Total non-current liabilities . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

158,814241,281

Total liabilities . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

459,862

567,911

Kyocera Corporation shareholders’ equity (Note 15):
Common stock:
Authorized 600,000 shares
Issued 191,309 shares . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Additional paid-in capital . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Retained earnings . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Accumulated other comprehensive income . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Common stock in treasury, at cost:
7,865 shares at March 31, 2012 and
7,869 shares at March 31, 2013 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

115,703
162,617
1,324,052(81,639)

115,703
163,062
1,368,512
50,138(51,228)(51,258)

Total Kyocera Corporation shareholders’ equity . . . . . . . . . . . . . . . . . .
Noncontrolling interests . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

1,469,505
64,736

1,646,157
68,785

Total equity . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

1,534,241

1,714,942

Total liabilities and equity . . . . . . . . . . . . . . . . . . . . . . . . . . . .

¥1,994,103¥2,282,853

Commitments and contingencies (Note 14)

The accompanying notes are an integral part of these statements.

F-3

Consolidated Statements of Income
Kyocera Corporation and Consolidated Subsidiaries
For the three years ended March 31, 2013
2011
2012
2013
(Yen in millions and shares in thousands,
except per share amounts)

Net sales (Notes 7 and 13) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Cost of sales (Note 13) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

¥1,266,924
888,869¥1,190,870
870,143¥1,280,054
952,350

Gross profit . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Selling, general and administrative expenses (Notes 2, 4, 14 and 17) . . .

378,055
222,131

320,727
223,052

327,704
250,778

Profit from operations . . . . . . . . . . . . . . . . . . . . . . . . . . . .

155,924

97,67576,926

Other income (expenses):
Interest and dividend income . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Interest expense (Note 13) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Foreign currency transaction gains, net (Note 13) . . . . . . . . . . . . . .
Gains on sales of securities, net (Note 3) . . . . . . . . . . . . . . . . . . . . .
Other, net (Note 4) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

12,963(2,259)
3,824
52
1,828

13,966(2,042)
4,533
337
424

14,666(1,890)
5,136
4,542
1,983

16,40817,21824,437

Income before income taxes . . . . . . . . . . . . . . . . . . . . . . .

172,332

114,893

101,363

Income taxes (Note 16):
Current . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Deferred . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

35,744
6,470

34,199(4,064)39,655(5,643)42,21430,13534,012

Net income . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Net income attributable to noncontrolling interests . . . . . . . . . . . . . . . . .

130,118(7,670)84,758(5,401)

67,351(878)

Net income attributable to shareholders of Kyocera
Corporation . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

¥ 122,448¥

79,357¥

66,473¥¥432.58432.58¥362.36362.36

Earnings per share (Note 19):
Net income attributable to shareholders of Kyocera Corporation:
Basic . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Diluted . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Cash dividends declared per share:
Per share of common stock . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Average number of shares of common stock outstanding:
Basic . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Diluted . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
The accompanying notes are an integral part of these statements.

F-4

667.23667.23130.00120.00120.00183,517
183,517

183,451
183,451

183,442
183,442

Consolidated Statements of Comprehensive Income
Kyocera Corporation and Consolidated Subsidiaries
For the three years ended March 31, 20132011

Net income . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

2012(Yen in millions)2013¥130,118¥84,758¥ 67,351

Other comprehensive income (loss)—net of taxes
Net unrealized gains on securities (Notes 3 and 15) . . . . . . . . . . . . . . . . . .
Net unrealized gains (losses) on derivative financial instruments(Notes 13 and 15) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Pension adjustments (Notes 11 and 15) . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Foreign currency translation adjustments (Note 15) . . . . . . . . . . . . . . . . . .

8,863

8,520

94,57763(4,619)(33,923)(58)(8,941)(6,429)8(11,677)
55,468

Total other comprehensive income (loss) . . . . . . . . . . . . . . . . . . . . . . . . . .

(29,616)(6,908)138,376

Comprehensive income . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Comprehensive income (loss) attributable to noncontrolling interests . . . .

100,502(2,626)77,850(4,320)205,727(7,202)Comprehensive income attributable to shareholders of Kyocera
Corporation . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

¥ 97,876¥73,530¥198,525

F-5

Consolidated Statements of Equity
Kyocera Corporation and Consolidated Subsidiaries
For the three years ended March 31, 2013

(Number of shares outstanding)

Additional
Common Paid-in
Stock
CapitalRetained
Earnings

Accumulated
Kyocera
Other
Corporation
Comprehensive Treasury Shareholders’ Noncontrolling
Stock
Interests
IncomeEquityEquity(Note 15)
(Note 15)
(Yen in millions and shares in thousands)

Balance, March 31, 2010 (183,521) . . . . . ¥115,703 ¥163,044 ¥1,168,122
Comprehensive income:Net income . . . . . . . . . . . . . . . . . . . .
122,448
Change in net unrealized gains on
securities—net of taxes(Note 3) . . . . . . . . . . . . . . . . . . . . .
Change in net unrealized gains onderivative financial instruments—
net of taxes (Note 13) . . . . . . . . . .
Change in pension adjustments—net
of taxes (Note 11) . . . . . . . . . . . . .
Change in foreign currencytranslation adjustments—net oftaxes . . . . . . . . . . . . . . . . . . . . . . .

¥(51,010)¥(50,624) ¥1,345,235¥62,027¥1,407,262

122,448

7,670

130,118

8,767

8,767

96

8,863

52

52

11

63

(4,530)(4,530)(89)(4,619)(28,861)(28,861)(5,062)(33,923)

97,876

2,626

100,502

Total comprehensive income . . . . . .
Cash dividends paid to Kyocera
Corporation’s shareholders . . . . . .
Cash dividends paid tononcontrolling interests . . . . . . . . .
Purchase of treasury stock (8) . . . . . .
Reissuance of treasury stock (0) . . . .
Stock option plan of subsidiaries . . .
Other . . . . . . . . . . . . . . . . . . . . . . . . .
Balance, March 31, 2011 (183,513) . . . . . 115,703
Comprehensive income:Net income . . . . . . . . . . . . . . . . . . . .
Change in net unrealized gains on
securities—net of taxes(Note 3) . . . . . . . . . . . . . . . . . . . . .
Change in net unrealized losses onderivative financial instruments—
net of taxes (Note 13) . . . . . . . . . .
Change in pension adjustments—net
of taxes (Note 11) . . . . . . . . . . . . .
Change in foreign currencytranslation adjustments—net oftaxes . . . . . . . . . . . . . . . . . . . . . . .

(22,022)(22,022)

(51)

(69)
2
151
(910)

(1,875)60
258(1,875)
(69)
2
211
(652)

(75,633)(50,691) 1,420,263

63,096

1,483,359

79,3575,401

84,758

8,502

8,502

18

8,520

(41)

(41)

(17)

(58)

(8,750)(8,750)(191)(8,941)

(69)
2

0
151
(859)
162,336 1,268,548
79,357(5,538)

Total comprehensive income . . . . . .
Cash dividends paid to Kyocera
Corporation’s shareholders . . . . . .
Cash dividends paid tononcontrolling interests . . . . . . . . .
Purchase of treasury stock (69) . . . . .
Reissuance of treasury stock (0) . . . .
Stock option plan of subsidiaries . . .
Other . . . . . . . . . . . . . . . . . . . . . . . . .

(22,022)(23,853)(5,538)(891)(6,429)73,5304,320

77,850(23,853)(23,853)(2,124)

(540)
3

0
103
178

(179)

F-6

(540)
3
103
(1)

41
(597)

(2,124)
(540)
3
144
(598)

Consolidated Statements of Equity—(Continued)
Kyocera Corporation and Consolidated Subsidiaries
For the three years ended March 31, 2013

(Number of shares outstanding)

Additional
Common Paid-in
Stock
CapitalRetained
Earnings

Accumulated
Kyocera
Other
Corporation
Comprehensive Treasury Shareholders’ Noncontrolling
Stock
Interests
IncomeEquityEquity(Note 15)
(Note 15)
(Yen in millions and shares in thousands)

Balance, March 31, 2012 (183,444) . . . . . 115,703
Comprehensive income:Net income . . . . . . . . . . . . . . . . . . . .
Change in net unrealized gains on
securities—net of taxes(Note 3) . . . . . . . . . . . . . . . . . . . . .
Change in net unrealized gains onderivative financial instruments—
net of taxes (Note 13) . . . . . . . . . .
Change in pension adjustments—net
of taxes (Note 11) . . . . . . . . . . . . .
Change in foreign currencytranslation adjustments—net oftaxes . . . . . . . . . . . . . . . . . . . . . . .

162,617 1,324,052(81,639)(51,228) 1,469,505

64,736

1,534,241

66,473878

67,351

94,513

94,51364

94,5772

2

6

8(11,111)(11,111)(566)(11,677)

48,6486,820

55,468

198,5257,202

205,727

66,47348,648

Total comprehensive income . . . . . .
Cash dividends paid to Kyocera
Corporation’s shareholders . . . . . .
Cash dividends paid tononcontrolling interests . . . . . . . . .
Purchase of treasury stock (4) . . . . . .
Reissuance of treasury stock (0) . . . .
Stock option plan of subsidiaries . . .
Other . . . . . . . . . . . . . . . . . . . . . . . . .

(22,013)(22,013)(22,013)

(275)

(30)
0
80
90

(2,229)32(956)(2,229)
(30)
0
112
(866)

¥ 50,138¥(51,258) ¥1,646,157¥68,785¥1,714,942

(30)
0

0
80
365

Balance, March 31, 2013 (183,440) . . . . . ¥115,703 ¥163,062 ¥1,368,512

The accompanying notes are an integral part of these statements.

F-7

Consolidated Statements of Cash Flows
Kyocera Corporation and Consolidated Subsidiaries
For the three years ended March 31, 2013
2011

2012
(Yen in millions)¥ 130,118¥ 84,758¥ 67,351

71,544
2,039
5,291
6,470
(52)
506

73,120370
11,486(4,064)
(337)
(759)

73,597238
11,507(5,643)(4,542)(2,003)(38,043)(69,368)(20,008)(616)
29,422
2,039
3,033(2,871)183(3,803)(39,762)
3,507(1,094)(10,092)(6,680)4,411(5,287)
3,291(14,876)(13,910)
2,872
2,035
(35,557)
8,151
9,242
14,739(3,712)

Net cash provided by operating activities . . . . . . . . . . . . . . . . . . . . .

119,687

109,065

109,489

Cash flows from investing activities:
Payments for purchases of available-for-sale securities . . . . . . . . . . . . . . . . . . . . . .
Payments for purchases of held-to-maturity securities . . . . . . . . . . . . . . . . . . . . . . .
Payments for purchases of other securities . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Proceeds from sales and maturities of available-for-sale securities . . . . . . . . . . . . .
Proceeds from maturities of held-to-maturity securities . . . . . . . . . . . . . . . . . . . . . .
Acquisitions of businesses, net of cash acquired (Notes 2 and 20) . . . . . . . . . . . . . .
Investment in affiliates . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Payments for purchases of property, plant and equipment . . . . . . . . . . . . . . . . . . . .
Payments for purchases of intangible assets . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Acquisition of time deposits and certificate of deposits . . . . . . . . . . . . . . . . . . . . . .
Withdrawal of time deposits and certificate of deposits . . . . . . . . . . . . . . . . . . . . . .
Other, net . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

(11,837)(67,174)(5,173)
9,568
42,534(1,581)—(65,844)(6,568)(303,482)
287,376817(18,970)(74,369)(149)
29,34674,083(35,454)(793)(67,765)(6,744)(258,032)
299,5313,265(30,052)(49,583)(19)
37,593
71,167(18,533)(2,150)(58,416)(6,553)(289,694)
276,436
3,662

Net cash used in investing activities . . . . . . . . . . . . . . . . . . . . . . . . .

(121,364)(56,051)(66,142)

Cash flows from financing activities:
Increase (decrease) in short-term debt, net (Note 2) . . . . . . . . . . . . . . . . . . . . . . . . .
Proceeds from issuance of long-term debt . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Payments of long-term debt (Note 2) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Dividends paid . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Purchase of treasury stock . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Other, net . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

4,044
10,708(15,707)(23,654)(69)(2,142)(13,615)
10,141(19,166)(25,874)(540)(1,715)(1,465)
9,055(12,733)(24,336)(30)(1,922)

Net cash used in financing activities . . . . . . . . . . . . . . . . . . . . . . . . .

(26,820)(50,769)(31,431)

Effect of exchange rate changes on cash and cash equivalents . . . . . . . . . . . . . . . . . . . . .

(11,158)(2,428)20,250Net increase (decrease) in cash and cash equivalents . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Cash and cash equivalents at beginning of year . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

(39,655)
313,126(183)
273,471

32,166273,288

Cash and cash equivalents at end of year . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

¥ 273,471¥ 273,288¥ 305,454

Cash flows from operating activities:
Net income . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Adjustments to reconcile net income to net cash provided by operating activities:
Depreciation and amortization . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Provision for doubtful accounts and loss on bad debts . . . . . . . . . . . . . . . . . . .
Write-down of inventories . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Deferred income taxes (Note 16) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Gains on sales of securities, net . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Foreign currency adjustments . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Change in assets and liabilities:
Increase in receivables . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Increase in inventories . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
(Increase) decrease in advance payment . . . . . . . . . . . . . . . . . . . . . . . . . .
(Increase) decrease in other current assets . . . . . . . . . . . . . . . . . . . . . . . .
Increase (decrease) in notes and accounts payable . . . . . . . . . . . . . . . . . .
Increase (decrease) in accrued income taxes . . . . . . . . . . . . . . . . . . . . . . .
Increase in other current liabilities . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Increase (decrease) in other non-current liabilities . . . . . . . . . . . . . . . . . .
Other, net . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

The accompanying notes are an integral part of these statements.

F-8

2013

Notes to the Consolidated Financial Statements
Kyocera Corporation and Consolidated Subsidiaries
1. ACCOUNTING POLICIESFinancial Statements Presentation:
The accompanying consolidated financial statements of Kyocera Corporation and its subsidiaries have been
prepared in conformity with accounting principles generally accepted in the United States of America.
Basis of Consolidation and Accounting for Investments in Affiliated Companies:
The consolidated financial statements include the accounts of Kyocera Corporation, its subsidiaries in which
Kyocera has a controlling financial interest and a variable interest entity for which Kyocera is the primary
beneficiary under the Financial Accounting Standard Board (FASB)’s Accounting Standards Codification (ASC)810, “Consolidation.” All significant inter-company transactions and accounts are eliminated. Investments in
20% to 50% owned companies and an investment in a variable interest entity, for which Kyocera is not the
primary beneficiary but has a significant influence to, are accounted for by the equity method, whereby Kyocera
includes in net income its equity in the earnings or losses from these companies.
These variable interest entities do not have material impacts on Kyocera’s consolidated results of operations,financial condition and cash flows.
Revenue Recognition:
Kyocera generates revenue principally through the sale of industrial components and telecommunications andinformation equipment. Kyocera’s operations consist of the following seven reporting segments: 1) Fine Ceramic
Parts Group, 2) Semiconductor Parts Group, 3) Applied Ceramic Products Group, 4) Electronic Device Group, 5)
Telecommunications Equipment Group, 6) Information Equipment Group and 7) Others.
Kyocera recognizes revenue when persuasive evidence of an arrangement exists, delivery has occurred and title
and risk of loss have been transferred to the customer or services have been rendered, the sales price is fixed ordeterminable and collectability is reasonably assured in accordance with ASC 605, “Revenue Recognition.” Sales
to customers in each of the above segments are based on the specific terms and conditions contained in basic
contracts with customers and firm customer orders which detail the price, quantity and timing of the transfer ofownership (such as risk of loss and title) of the products.
For most customer orders, the transfer of ownership and revenue recognition occurs at the time of shipment of
the products to the customer. For the remainder of customer orders, the transfer of ownership and revenue
recognition occurs at the time of receipt of the products by the customer, with the exception of sales of solar
power generating systems in the Applied Ceramic Products Group and information equipment in the Information
Equipment Group for which sales are made to end users together with installation services. The transfer ofownership and revenue recognition in these cases occur at the completion of installation and customer
acceptance, as Kyocera have no further obligations under the contracts and all revenue recognition criteria under
ASC 605 are met. When Kyocera provides a combination of products and services, the arrangement is evaluatedunder ASC 605-25, “Multiple-Element Arrangements.”
In addition, in the Information Equipment Group, Kyocera may enter into sales contracts and lease agreements
ranging from one to seven years directly with end users. Sales contracts and lease agreements may include
installation services and have customer acceptance clauses. For sales and sales-type lease agreements, revenue isrecognized at the completion of installation and customer acceptance which usually occurs on the same business
day as delivery. For sales-type leases, unearned income (which represents interest) is amortized over the leaseterm using the effective interest method in accordance with ASC 840, “Leases.”
F-9

Notes to the Consolidated Financial Statements—(Continued)
Kyocera Corporation and Consolidated Subsidiaries
For all sales in the above segments, product returns are only accepted if the products are determined to be
defective. There are no price protections, stock rotation or returns provisions, except for certain programs in theElectronic Device Group as noted below.
Sales Incentives
In the Electronic Device Group, sales to independent electronic component distributors may be subject to various
sale programs for which a provision for incentive programs is recorded as a reduction of revenue at the time ofsale, as further described below in accordance with ASC 605-50, “Customer Payments and Incentives” andASC 605-15, “Products.”(a) Distributor Stock Rotation Program
Stock rotation is a program whereby distributors are allowed to return for credit qualified inventory, semiannually, equal to a certain percentage of the previous six months net sales. In accordance with ASC 605-15, anestimated sales allowance for stock rotation is recorded at the time of sale based on a percentage of distributor
sales using historical trends, current pricing and volume information, other market specific information and input
from sales, marketing and other key management personnel. These procedures require the exercise of significant
judgments. Kyocera believes that these procedures enable Kyocera to make reliable estimates of future returns
under the stock rotation program. Kyocera’s actual results have historically approximated its estimates. When the
products are returned and verified, the distributor is given credit against their accounts receivables.
(b) Distributor Ship-from-Stock and Debit Program
Ship-from-Stock and Debit (ship and debit) is a program designed to assist distributors in meeting competitive
prices in the marketplace on sales to their end customers. Ship and debit programs require a request from the
distributor for a pricing adjustment of a specific part for a sale to the distributor’s end customers from the
distributor’s stock. Ship and debit authorizations may cover current and future distributor activity for a specificpart for a sale to their customers. In accordance with ASC 605, at the time Kyocera records the sales to
distributors, an allowance for the estimated future distributor activities related to such sales is provided since it isprobable that such sales to distributors will result in ship and debit activities. In accordance with ASC 605-15,
Kyocera records an estimated sales allowance based on sales during the period, credits issued to distributors,
distributor inventory levels, historical trends, market conditions, pricing trends noted in direct sales activity withoriginal equipment manufacturers and other customers, and input from sales, marketing and other key
management personnel. These procedures require the exercise of significant judgments. Kyocera believes thatthese procedures enable Kyocera to make reliable estimates of future credits under the ship and debit program.
Kyocera’s actual results have historically approximated its estimates.
Sales Rebates
In the case of sales to distributors in the Applied Ceramic Products Group and Information Equipment Group,
Kyocera provides cash rebates when predetermined sales targets are achieved during a certain period. Provisions
for sales rebates are recorded as a reduction of revenue at the time of revenue recognition based on the best
estimate of forecasted sales to each distributor in accordance with ASC 605-50.
Sales Returns
Kyocera records an estimated sales returns allowance at the time of sales based on historical return experience.
F-10

Notes to the Consolidated Financial Statements—(Continued)
Kyocera Corporation and Consolidated Subsidiaries
Products Warranty
For after-service costs to be paid during warranty periods, Kyocera accrues a product warranty liability for
claims under warranties relating to the products that have been sold. Kyocera records an estimated productwarranty liability based on its historical repair experience with consideration given to the expected level of future
warranty costs.
In the Information Equipment Group, Kyocera provides a standard one year manufacturer’s warranty on its
products. For sales directly to end users, Kyocera offers extended warranty plans that may be purchased and thatare renewable in one year incremental periods at the end of the warranty term. Service revenues are recognizedover the term of the related service maintenance contracts in accordance with ASC 605-20, “Services.”
Cash and Cash Equivalents:
Kyocera considers cash, bank deposits and all highly liquid investments purchased with an original maturity of
three months or less to be cash and cash equivalents accounted for under ASC 305, “Cash and Cash
Equivalents.”
Translation of Foreign Currencies:
Assets and liabilities of consolidated foreign subsidiaries and affiliates accounted for by the equity method aretranslated into Japanese yen at the exchange rates in effect on the respective balance sheet dates. Operating
accounts are translated at the average exchange rates for the respective periods accounted for under ASC 830,
“Foreign Currency Matters.” Translation adjustments result from the process of translating foreign currency
denominated financial statements into Japanese yen. These translation adjustments, which are not included in thedetermination of net income, are included in other comprehensive income.
Assets and liabilities denominated in foreign currencies are translated at the exchange rates in effect on therespective balance sheet dates, and resulting transaction gains or losses are included in the determination of net
income.
Allowances for Doubtful Accounts:
Kyocera maintains allowances for doubtful accounts related to trade notes receivables, trade accounts receivables
and finance receivables for estimated losses resulting from customers’ inability to make timely payments,
including interest on finance receivables. Kyocera’s estimates are based on various factors, including the lengthof past due payments, historical experience and current business environments. In circumstances where it isaware of a specific customer’s inability to meet its financial obligations, a specific allowance against theseamounts is provided, considering the fair value of assets pledged by the customer as collateral. In addition, when
Kyocera determines it is unable to collect receivables, Kyocera directly writes-off these receivables to expenses
in the period incurred.
Inventories:
Inventories are accounted for under ASC 330, “Inventory.” Inventories are stated at the lower of cost or market.
For finished goods and work in process, cost is mainly determined by the average method. For raw materials andsupplies, cost is mainly determined by the first-in, first-out method. Kyocera recognizes estimated write-down of
inventories for excess, slow-moving and obsolete inventories.

F-11

Notes to the Consolidated Financial Statements—(Continued)
Kyocera Corporation and Consolidated Subsidiaries
Securities:
Debt and equity securities are accounted for under ASC 320, “Investments—Debt and Equity Securities.”
Securities classified as available-for-sale securities are recorded at fair value, with unrealized gains and losses
excluded from income and reported in other comprehensive income, net of taxes. Securities classified as held-tomaturity securities are recorded at amortized cost. Non-marketable equity securities are accounted for by the cost
method in accordance with ASC 325, “Investments—Other.”
Kyocera evaluates whether the declines in fair value of securities are other-than-temporary. Other-thantemporary declines in fair value are recorded as a realized loss with a new cost basis. This evaluation is based
mainly on the duration and the extent to which the fair value is less than cost, and the anticipated recoverability
in fair value.
Kyocera also reviews its investments accounted for by the equity method for impairment quarterly in accordancewith ASC 323, “Investments—Equity Method and Joint Ventures.” Factors considered in assessing whether anindication of other-than-temporary impairment exists include the achievement of business plan objectives andmilestones including cash flow projections and the results of planned financing activities, the financial conditionand prospects of each investee company, the fair value of the ownership interest relative to the carrying amountof the investment, the period of time during which the fair value of the ownership interest has been below thecarrying amount of the investment and other relevant factors. Impairment to be recognized is measured based on
the amount by which the carrying amount of the investment exceeds the fair value of the investment. Fair value isdetermined through the use of various methodologies such as discounted cash flows and comparable valuationsof similar companies.
Property, Plant and Equipment and Depreciation:
Property, plant and equipment are accounted for under ASC 360, “Property, Plant, and Equipment.” Kyocera
provides for depreciation of buildings, machinery and equipment over their estimated useful lives primarily on
the declining balance method. The principal estimated useful lives used for computing depreciation are as
follows:
Buildings
Machinery and equipment

2 to 50 years
2 to 20 years

Major renewals and betterments are capitalized as tangible assets and they are depreciated based on estimateduseful lives. The costs of minor renewals, maintenance and repairs are charged to expenses in the period
incurred. When assets are sold or otherwise disposed of, the gains or losses thereon, computed on the basis of thedifference between depreciated costs and proceeds, are credited or charged to income in the year of disposal, andcosts and accumulated depreciation are removed from accounts.
Goodwill and Other Intangible Assets:
Goodwill and other intangible assets are accounted for under ASC 350, “Intangibles—Goodwill and Other.”
Goodwill and intangible assets with indefinite useful lives, rather than being amortized, are tested for impairment
at least annually, and also following any events and changes in circumstances that might lead to impairment.
Intangible assets with definite useful lives are amortized straight line over their respective estimated useful lives
to their estimated residual values, and reviewed for impairment which are accounted for under ASC 360,
“Property, Plant, and Equipment” whenever events or changes in circumstances indicate that their carrying
amount may not be recoverable.
F-12

Notes to the Consolidated Financial Statements—(Continued)
Kyocera Corporation and Consolidated Subsidiaries
The principal estimated useful lives for intangible assets are as follows:
SoftwarePatent rights
Customer relationships

2 to 10 years
2 to 12 years
3 to 20 years

Impairment of Long-Lived Assets:
Impairment of long-lived assets which include intangible assets with definite useful lives is accounted for under
ASC 360, “Property, Plant, and Equipment.” Kyocera reviews its long-lived assets for impairment whenever
events or changes in circumstances indicate that its carrying amount may not be recoverable.
Long-lived assets are considered to be impaired when the expected undiscounted cash flows from the asset groupis less than its carrying value. A loss on impairment is recognized based on the amount by which the carrying
value exceeds the fair value of the long-lived assets.
Derivative Financial Instruments:
Derivatives are accounted for under ASC 815, “Derivatives and Hedging.” All derivatives are recorded as either
assets or liabilities on the balance sheet and measured at fair value. Changes in the fair value of derivatives arecharged to income. However cash flow hedges may qualify for hedge accounting, if the hedging relationship is
expected to be highly effective in achieving offsetting cash flows of hedging instruments and hedged items.
Under hedge accounting, changes in the fair value of the effective portion of these cash flow hedge derivatives
are deferred in accumulated other comprehensive income and charged to income when the underlying transaction
being hedged occurs.
Kyocera designates certain foreign currency forward contracts and interest rate swaps as cash flow hedges.
However, changes in fair value of most of the foreign currency forward contracts are recorded in income without
applying hedge accounting as it is expected that such changes will be offset by corresponding gains or losses of
the underlying hedged assets and liabilities.
Kyocera formally documents all relationships between hedging instruments and hedged items, as well as its risk
management objective and strategy for undertaking various hedge transactions. This process includes linking allderivatives designated as cash flow hedge to specific assets and liabilities on the balance sheet or forecasted
transactions. Kyocera also formally assesses, both at the hedge’s inception and on an ongoing basis, whether thederivatives that are used in hedging transactions are highly effective in offsetting cash flows of hedged items.
When it is determined that a derivative is not a highly effective hedge or that it has ceased to be a highly effective
hedge, Kyocera discontinues hedge accounting prospectively. When a cash flow hedge is discontinued, the net
derivative gains or losses remain in accumulated other comprehensive income, unless it is probable that theforecasted transaction will not occur at which point the derivative gains or losses are reclassified into income
immediately.
Commitments and Contingencies:
Commitments and contingencies are accounted for under ASC 450, “Contingencies.” Liabilities for loss
contingencies are recorded when analysis indicates that it is both probable that a liability has been incurred andthe amount of loss can be reasonably estimated. When a range of loss can be estimated, we accrue the most likely
amount. In the event that no amount in the range of probable loss is considered most likely, the minimum loss in
the range is accrued. Amounts recorded are reviewed periodically and adjusted to reflect additional legal andtechnical information that becomes available. Legal costs are accrued as incurred.
F-13

Notes to the Consolidated Financial Statements—(Continued)
Kyocera Corporation and Consolidated Subsidiaries
Stock-Based Compensation:
Costs resulting from share-based payment transactions are accounted for under ASC 718, “Compensation—Stock
Compensation,” Kyocera recognizes such costs in the consolidated financial statements based on the grant datefair value over the measurement method.
Net Income Attributable to Shareholders of Kyocera Corporation:
Earnings per share is accounted for under ASC 260, “Earnings Per Share.” Basic earnings per share attributable
to shareholders of Kyocera Corporation is computed based on the average number of shares of common stock
outstanding during each period, and diluted earnings per share attributable to shareholders of Kyocera
Corporation is computed based on the diluted average number of shares of stock outstanding during each period.
Research and Development Expenses and Advertising Expenses:
Research and development expenses, are accounted for under ASC 730, “Research and Development”, arecharged to operations as incurred. Advertising expenses, are accounted for under ASC 720-35, “Other
Expenses—Advertising Costs”, are charged to operations as incurred.
Use of Estimates:
The preparation of the consolidated financial statements in conformity with accounting principles generally
accepted in the United States of America requires management to make estimates and assumptions that affect theamounts reported in the consolidated financial statements and accompanying notes. However, actual results
could differ from those estimates and assumptions.
Recently Adopted Accounting Standards:
On April 1, 2012, Kyocera adopted the FASB’s ASU No. 2011-05, “Presentation of Comprehensive Income” andASU No. 2011-12, “Deferral of the Effective Date for Amendments to the Presentation of Reclassifications ofItems Out of Accumulated Other Comprehensive Income in Accounting Standards Update No. 2011-05.”
ASU No. 2011-05 requires entities to present net income and other comprehensive income in either a single
continuous statement or in two separate, but consecutive, statements of net income and other comprehensive
income. It eliminates the current option to present the components of other comprehensive income as part of thestatement of equity. ASU No. 2011-05 also requires reclassification adjustments and the effect of thoseadjustments on net income and other comprehensive income to be disclosed on the face of financial statements,
however, the effective date of this requirement is deferred indefinitely by ASU No. 2011-12. As these accounting
standards are a provision for presentation, the adoption of these accounting standards did not have an impact on
Kyocera’s consolidated results of operations, financial condition and cash flows.
On April 1, 2012, Kyocera adopted the FASB’s ASU No. 2011-08, “Testing Goodwill for Impairment.” Thisaccounting standard permits an entity to first assess qualitative factors to determine whether it is more likely than
not that the fair value of a reporting unit is less than its carrying amount as a basis for determining whether it isnecessary to perform the two-step goodwill impairment test. An entity is not required to calculate the fair valueof a reporting unit unless the entity determines that it is more likely than not that its fair value is less than its
carrying amount. As this accounting standard does not actually change how the impairment would be calculated,
the adoption of this accounting standard did not have an impact on Kyocera’s consolidated results of operations,financial condition and cash flows.

F-14

Notes to the Consolidated Financial Statements—(Continued)
Kyocera Corporation and Consolidated Subsidiaries
Recently Issued Accounting Standards:
In July 2012, the FASB issued ASU No. 2012-02, “Testing Indefinite-Lived Intangible Assets for Impairment.”
This accounting standard permits an entity to first assess qualitative factors to determine whether it is more likely
than not that the indefinite-lived intangible asset is impaired as a basis for determining whether it is necessary to
perform the impairment test. An entity is not required to calculate the fair value of the indefinite-lived intangible
asset unless the entity determines that it is more likely than not that the indefinite-lived intangible asset isimpaired. This accounting standard will be effective for annual and interim impairment tests performed for fiscal
years beginning after September 15, 2012. As this accounting standard does not actually change how the
impairment would be calculated, the adoption of this accounting standard will not have an impact on Kyocera’s
consolidated results of operations, financial condition and cash flows.
In January 2013, the FASB issued ASU No. 2013-01, “Clarifying the Scope of Disclosures about Offsetting
Assets and Liabilities.” This accounting standard clarifies that the scope of ASU No. 2011-11 applies toderivatives accounted for in accordance with ASC 815, Derivatives and Hedging, including bifurcated embedded
derivatives, repurchase agreements and reverse repurchase agreements, and securities borrowing and securities
lending transactions that are either offset in accordance with ASC 210-20-45 or ASC 815-10-45 or subject to an
enforceable master netting arrangement or similar agreement. This accounting standard will be effective forannual reporting periods beginning on or after January 1, 2013, and interim periods within those annual periods.
As this accounting standard is a provision for disclosure, the adoption of this accounting standard will not havean impact on Kyocera’s consolidated results of operations, financial condition and cash flows.
In February 2013, the FASB issued ASU No. 2013-02, “Reporting of Amounts Reclassified Out of Accumulated
Other Comprehensive Income.” This accounting standard requires an entity to provide information about theamounts reclassified out of accumulated other comprehensive income by component. In addition, this accounting
standard requires an entity to present, either on the face of the statement where net income is presented or in thenotes, significant amounts reclassified out of accumulated other comprehensive income by the respective line
items of net income but only if the amount reclassified is required under U.S. GAAP to be reclassified to net
income in its entirety in the same reporting period. For other amounts that are not required under U.S. GAAP tobe reclassified in their entirety to net income, this accounting standard required an entity to cross-reference toother disclosures required under U.S. GAAP that provide additional detail about those amounts. This accounting
standard will be effective prospectively for annual reporting periods beginning after December 15, 2012, andinterim periods within those annual periods. As this accounting standard is a provision for disclosure, theadoption of this accounting standard will not have an impact on Kyocera’s consolidated results of operations,financial condition and cash flows.
In February 2013, the FASB issued ASU No. 2013-04, “Obligations Resulting from Joint and Several Liability
Arrangements for Which the Total Amount of the Obligation Is Fixed at the Reporting Date.” This accounting
standard requires an entity to measure obligations resulting from joint and several liability arrangements forwhich the total amount of the obligation within the scope of this guidance is fixed at the reporting date, as thesum of the following: (a) The amount the reporting entity agreed to pay on the basis of its arrangement among its
co-obligors (b) Any additional amount the reporting entity expects to pay on behalf of its co-obligors. The
accounting standard also requires an entity to disclose the nature and amount of the obligation as well as otherinformation about those obligations. This accounting standard will be effective for fiscal years, and interim
periods within those years, beginning after December 15, 2013. The adoption of this accounting standard is notexpected to have a material impact on Kyocera’s consolidated results of operations, financial condition and cash
flows.
In March 2013, the FASB issued ASU No. 2013-05, “Parent’s Accounting for the Cumulative Translation
Adjustment upon Derecognition of Certain Subsidiaries or Groups of Assets within a Foreign Entity or of an
F-15

Notes to the Consolidated Financial Statements—(Continued)
Kyocera Corporation and Consolidated Subsidiaries
Investment in a Foreign Entity.” This accounting standard resolves the diversity in practice about whether ASC
810-10, Consolidation—Overall, or ASC 830-30, Foreign Currency Matters—Translation of Financial
Statements, applies to the release of the cumulative translation adjustment into net income when a parent either
sells a part or all of its investment in a foreign entity or no longer holds a controlling financial interest in a
subsidiary or group of assets that is a nonprofit activity or a business within a foreign entity. In addition, thisaccounting standard resolves the diversity in practice for the treatment of business combinations achieved instages involving a foreign entity. This accounting standard will be effective prospectively for fiscal years, andinterim reporting periods within those years, beginning after December 15, 2013. The impact of this accounting
standard on Kyocera’s consolidated results of operations, financial condition and cash flows will depend on thenature and significance of transactions after the adoption date.
Reclassifications:Certain reclassifications and changes have been made to the consolidated balance sheet at March 31, 2012, theconsolidated statements of income and the consolidated statements of cash flows for the year ended March 31,
2012 and 2011 and footnotes to conform to the current presentation.
2. BUSINESS COMBINATIONBusiness combinations in the year ended March 31, 2013
On June 5, 2012, Kyocera Document Solutions Deutschland GmbH, a subsidiary of Kyocera Document
Solutions Inc., a Japan based subsidiary, acquired 100% of the common stock of AKI GmbH to strengthen its
document solutions business.
On August 1, 2012, Kyocera Document Solutions America, Inc., a subsidiary of Kyocera Document Solutions
Inc., acquired information equipment sales business, related assets and liabilities from Nevill Business Machines,
Inc. to expand its sales channels in the United States of America.
The results of operations of the acquired businesses were included into Kyocera’s consolidated financial
statements since the acquisition date. For reporting segment, they are reported in the Information Equipment
Group. The acquisitions did not have material impacts on Kyocera’s consolidated results of operations, financial
condition and cash flows.
On November 5, 2012, Kyocera Communication Systems Co., Ltd., a Japan based subsidiary, acquired 100% of
the common stock of MOTEX Inc., a development and sales company of information technology assets
management package software, and made it consolidated subsidiary with the aim of strengthening its security
service business in information systems & telecommunication services business.
Going forward, Kyocera Communication Systems Co., Ltd. will strive to further expand its information
systems & telecommunication services business through the pursuit of synergies with MOTEX Inc.
The results of operations of MOTEX Inc. was included into Kyocera’s consolidated financial statements since
the acquisition date. For segment reporting, it is reported in the Others.
Kyocera has used the acquisition method of accounting to record assets acquired and liabilities assumed inaccordance with ASC 805, “Business Combinations.”

F-16

Notes to the Consolidated Financial Statements—(Continued)
Kyocera Corporation and Consolidated Subsidiaries
The allocation of fair value to the acquired assets and assumed liabilities in this business combination wascompleted in the year ended March 31, 2013. The related assets and liabilities were recorded based upon theirestimated fair values at the date of acquisition with the excess being allocated to goodwill as shown in thefollowing table. Acquisition-related costs of ¥101 million were included in selling, general and administrative
expenses in the consolidated statement of income for the year ended March 31, 2013.
November 5, 2012
(Yen in millions)

Current assets . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Intangible assets . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Other non-current assets . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

¥ 5,069
4,247
1,400

Total assets . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

10,716

Current liabilities . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Non-current liabilities . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

1,907
1,607

Total liabilities . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

3,514

Total identified assets and liabilities . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

7,202

Purchase price (Cash) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

13,507

Goodwill . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

¥ 6,305

The total amount of goodwill is not expected to be deductible for tax purposes.
The pro forma results are not presented as the revenue and earnings were not material.
Intangible assets that Kyocera recorded due to this acquisition are summarized as follows:
November 5, 2012
(Yen in millions)Intangible assets subject to amortization:
Customer relationships . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Software . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Trademarks . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

¥3,452616
179

Total . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

¥4,247

The weighted average amortization periods for customer relationships, software and trademarks are ten years,
five years and ten years, respectively.
On February 6, 2013, AVX Corporation, a U.S. based subsidiary, acquired by merger all of the outstanding
capital stock of the Tantalum Components Division of Nichicon Corporation (Nichicon Tantalum) for¥8,054 million ($86 million) in cash. Nichicon Tantalum designs, develops, manufactures and markets tantalum
electronic components. Nichicon Tantalum’s products are used in a broad range of commercial applications.
Nichicon Tantalum has manufacturing facilities located in Adogawa, Japan and Tianjin, China. The acquisition
enhances AVX Corporation’s leadership position in the passive electronic component industry and provides
further opportunities for expansion in the Asian region and tantalum component manufacturing efficiencies.
The results of operations of Nichicon Tantalum was included into Kyocera’s consolidated financial statements
since the acquisition date. For segment reporting, it is reported in the Electronic Device Group.
F-17

Notes to the Consolidated Financial Statements—(Continued)
Kyocera Corporation and Consolidated Subsidiaries
Kyocera has used the acquisition method of accounting to record the transaction in accordance with ASC 805,
“Business Combinations.” In accordance with the purchase method, the purchase price is allocated to the assets
acquired and liabilities assumed based on their estimated fair values with the excess being allocated to goodwill.
Factors that contributed to the recognition of goodwill include expected synergies and the trained workforce.
As of March 31, 2013, the allocation of the purchase price was prepared based on estimates of fair values, as
shown in the following table. The purchase price allocation of assets and liabilities is preliminary and subject tochange as Kyocera awaits the completion of the fair value appraisal of certain personal and real tangible assets aswell as certain intangible assets.
February 6, 2013
(Yen in millions)

Accounts receivables . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Inventories . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Other current assets and liabilities . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

¥ 727
1,414
(200)

Working capital . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

1,941

Property, plant and equipment . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Accrued benefit liability . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

2,873
(179)

Total identified assets and liabilities . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

4,635

Purchase price (Cash) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

8,054

Goodwill . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

¥3,419The total amount of goodwill is not expected to be deductible for tax purposes.
The pro forma results are not presented as the revenue and earnings were not material.
Business combinations in the year ended March 31, 2012
On July 11, 2011, Kyocera Fineceramics GmbH, a consolidated German subsidiary of Kyocera Corporation,acquired 100% of the outstanding common stock of Unimerco Group A/S, a Denmark-based industrial cutting
tool manufacturing and sales company and made it a consolidated subsidiary with the aim of strengthening its
cutting tool business. Unimerco Group A/S has changed its name to Kyocera Unimerco A/S on July 21, 2011.
By making Kyocera Unimerco A/S a consolidated subsidiary, Kyocera has added Kyocera Unimerco A/S’s highquality, high-precision, custom-made solid-type cutting tools for automobile engine processing as well as
aviation and wind-power generation markets to its lineup while also expanding its sales network, mainly inEurope. Going forward, Kyocera will strive to further expand its cutting tool business through the pursuit ofsynergies with Kyocera Unimerco A/S.
The results of operations of the acquired business was included into Kyocera’s consolidated financial statements
since the acquisition date. For segment reporting, it is reported in the Applied Ceramic Products Group.
Kyocera has used the acquisition method of accounting to record assets acquired and liabilities assumed inaccordance with ASC 805, “Business Combinations.”
The allocation of fair value to the acquired assets and assumed liabilities in this business combination wascompleted in the year ended March 31, 2012. The related assets and liabilities were recorded based upon their
F-18

Notes to the Consolidated Financial Statements—(Continued)
Kyocera Corporation and Consolidated Subsidiaries
estimated fair values at the date of acquisition with the excess being allocated to goodwill as shown in thefollowing table. Acquisition-related costs of ¥160 million were included in selling, general and administrative
expenses in the consolidated statement of income for the year ended March 31, 2012.
July 11, 2011
(Yen in millions)

Current assets . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Intangible assets . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Other non-current assets . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

¥ 5,400
7,691
4,765

Total assets . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

17,856

Current liabilities . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Non-current liabilities . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

1,810
4,872

Total liabilities . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

6,682

Total identified assets and liabilities . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

11,174Purchase price (Cash) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

22,494

Goodwill . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

¥11,320

The total amount of goodwill is not expected to be deductible for tax purposes.
The pro forma results are not presented as the amounts were immaterial.
Intangible assets that Kyocera recorded due to this acquisition are summarized as follows:
July 11, 2011
(Yen in millions)Intangible assets subject to amortization:
Customer relationships . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Unpatented technologies . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Trademarks . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Others . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

¥3,296
2,735
1,318
342

Total . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

¥7,691

The weighted average amortization periods for customer relationships, unpatented technology and trademark are
20 years, 20 years and 10 years, respectively.
On February 1, 2012, Kyocera acquired 100% of the common stock of Optrex Corporation, a specialized
manufacturer of liquid crystal displays (LCD) and related products, with the aim of strengthening its LCD
business, and made it a consolidated subsidiary. Optrex Corporation has changed its name to Kyocera Display
Corporation on April 1, 2012.
By making Optrex Corporation a consolidated subsidiary, Kyocera will further enhance the product lines of bothits conventional industrial equipment applications and newly acquired automotive applications. Moreover,
Optrex Corporation also possesses excellent production technology for touchscreen panels, thus by effectively
combining both companies’ product technologies and operating resources including customer bases, Kyocera
also expects to further enhance and expand its touchscreen panel business. Going forward, Kyocera will strive tofurther expand its LCD and touchscreen panel business.
F-19

Notes to the Consolidated Financial Statements—(Continued)
Kyocera Corporation and Consolidated Subsidiaries
The results of operations of the acquired business was included into Kyocera’s consolidated financial statements
since the acquisition date. For segment reporting, it is reported in the Electronic Device Group.
Kyocera has used the acquisition method of accounting to record assets acquired and liabilities assumed inaccordance with ASC 805, “Business Combinations.”
The allocation of fair value to the acquired assets and assumed liabilities in this business combination wascompleted in the year ended March 31, 2012. The related assets and liabilities were recorded based upon theirestimated fair values at the date of acquisition with the excess being allocated to goodwill as shown in thefollowing table. Acquisition-related costs of ¥159 million were included in selling, general and administrative
expenses in the consolidated statement of income for the year ended March 31, 2012.
February 1, 2012
(Yen in millions)

Cash and cash equivalents . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Trade receivables . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Inventories . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Others . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

¥ 1,957
14,35812,528
1,308

Total current assets . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

30,151

Property, plant and equipment . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Intangible assets . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Others . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

6,104
4,124
397

Total non-current assets . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

10,625

Total assets . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

40,776

Short-term borrowings . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Current portion of long-term debt . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Trade notes and accounts payable . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Others . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

10,058
5,345
15,271
2,800

Total current liabilities . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

33,474Non-current liabilities . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

3,133

Total liabilities . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

36,607

Total identified assets and liabilities . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

4,169

Purchase price (Cash) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

18,312

Goodwill . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

¥14,143

The total amount of goodwill is not expected to be deductible for tax purposes.
The short-term borrowings of ¥10,058 million and the current portion of long-term debt of ¥5,345 million wereloans from several financial institutions, the repayment of which were completed in the year ended March 31,
2012.

F-20

Notes to the Consolidated Financial Statements—(Continued)
Kyocera Corporation and Consolidated Subsidiaries
Intangible assets that Kyocera recorded due to this acquisition are summarized as follows:
February 1, 2012
(Yen in millions)Intangible assets subject to amortization:
Customer relationships . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Technologies . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Others . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

¥3,233417
474

Total . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

¥4,124

The weighted average amortization periods for customer relationships and technology are 10 years, respectively.
Pro forma information
The following is the pro forma combined results of operations of Kyocera for the years ending March 31, 2011
and 2012 as if above business combination had taken place on April 1, 2010. The pro forma combined results ofoperations are presented for comparative purposes only and are not necessarily indicative of the results ofoperations that may occur in the future or that would have occurred had the acquisitions been in effect on the dateindicated.
Years ending March 31,
2011
2012
(Unaudited)(Unaudited)(Yen in millions except per shareamounts)

Pro forma net sales . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Pro forma net income attributable to shareholders of Kyocera Corporation . . . . . .
Pro forma net income attributable to shareholders of Kyocera Corporation per
share:
Basic . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Diluted . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

¥1,340,810
118,874¥1,269,455
78,829647.75647.75429.70429.70

The amounts of revenue and earnings of Optrex Corporation since the acquisition date included in the
consolidated income statement for the year ended March 31, 2012 are not presented as the amounts wereimmaterial.
On August 31, 2011, Kyocera Document Solutions India Pte. Ltd., a subsidiary of Kyocera Document Solutions
Inc., acquired information equipment sales business, related assets and liabilities from Kilburn Office
Automation Ltd. to expand its sales channels in India.
On October 1, 2011, Kyocera Document Solutions Canada, Ltd, a subsidiary of Kyocera Document Solutions
Inc., acquired 100% of the common stock of Copicom Inc. to expand its sales channels in Canada.
The results of operations of the acquired businesses were included into Kyocera’s consolidated financial
statements since the acquisition date. For reporting segment, they are reported in the Information Equipment
Group. The acquisitions did not have material impacts on Kyocera’s consolidated results of operations, financial
condition and cash flows.

F-21

Notes to the Consolidated Financial Statements—(Continued)
Kyocera Corporation and Consolidated Subsidiaries
Business combinations in the year ended March 31, 2011
On June 1, 2010, Kyocera Corporation acquired thin film transistor LCD business of Yasu facility from Sony
Mobile Display Corporation. The results of operations of the acquired business was included into Kyocera’s
consolidated financial statements since the acquisition date and for segment reporting, it is reported in theElectronic Device Group.
Kyocera Tycom Corp. has owned a 33.33% interest in Tycom Ltd., a sales company of cutting tools, andaccounted for its investment by the equity method. On August 31, 2010, Kyocera Tycom Corp. acquired all of
the remaining shares of Tycom Ltd. As a result, Tycom Ltd. has become a wholly-owned subsidiary of Kyocera
and has been consolidated by Kyocera from that date. The results of operations of the acquired business was
included into Kyocera’s consolidated financial statements since the acquisition date and for segment reporting, it
is reported in the Applied Ceramic Products Group.
On October 29, 2010, Kyocera Document Solutions Inc. acquired 100% of shares of Epson Software Engineering(Philippines), Inc. which is a software developer related to information equipment. The results of operations of
the acquired business was included into Kyocera’s consolidated financial statements since the acquisition date
and for segment reporting, it is reported in the Information Equipment Group.
These acquisitions did not have material impacts on Kyocera’s consolidated results of operations, financial
condition and cash flows.
3. INVESTMENTS IN DEBT, EQUITY SECURITIES AND OTHER INVESTMENTS
Available-for-sale securities are recorded at fair value, with unrealized gains and losses excluded from income
and reported in other comprehensive income, net of tax. Held-to-maturity securities are recorded at amortizedcost. Non-marketable equity securities are accounted by the cost method.
Gross unrealized gains on equity securities which derived from a fluctuation in the market value of the shares ofKDDI Corporation (KDDI) at March 31, 2012 and 2013 are as follows:
March 31,
2012
2013
(Yen in millions)

Gross unrealized gains on shares of KDDI . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

¥57,919¥194,216

Other-than-temporary loss on debt and equity securities for the years ended March 31, 2011, 2012 and 2013 are
as follows:
Years ended March 31,
2011
2012
2013
(Yen in millions)

Other-than-temporary loss on debt and equity securities . . . . . . . . . . . . . . . . . . . . . . . . . . .

F-22

¥341

¥1,260¥729

Notes to the Consolidated Financial Statements—(Continued)
Kyocera Corporation and Consolidated Subsidiaries(1) Debt and equity securities with readily determinable fair values
Investments in debt and equity securities at March 31, 2012 and 2013, included in short-term investments in debt
and equity securities and in long-term investments in debt and equity securities are summarized as follows:
March 31,
2012

Cost*

2013

Gross
Gross
Aggregate Unrealized Unrealized
Fair Value
Gains
LossesCost*(Yen in millions)

Available-for-sale securities:
Marketable equity
securities . . . . . . . . . . . ¥266,070 ¥333,840 ¥68,057
Investment trusts . . . . . .
3,690
3,704
145
Total equity securities . . . . . . 269,760 337,544

Gross
Gross
Aggregate Unrealized Unrealized
Fair Value
Gains
Losses¥ 287 ¥269,819 ¥488,748 ¥218,929
131
3,900
4,371
471

68,202

418

¥

0
—

273,719 493,119 219,400

0Corporate bonds . . . . . . .
Government bonds andpublic bonds . . . . . . . .

12,735

11,941

0

794

7,549

7,601

108

56

1,501

1,203

—

298

—

—

—

—

Total debt securities . . . . . . . .

14,23613,144

0

1,092

7,549

7,601

108

56

Total available-for-salesecurities . . . . . . . . . . . . . . . 283,996 350,688

68,202

1,510

281,268 500,720 219,508

56

Held-to-maturity securities:
Corporate bonds . . . . . . .
Government bonds andpublic bonds . . . . . . . .
Others . . . . . . . . . . . . . . .
Total held-to-maturity
securities . . . . . . . . . . . . . . .

54,31754,325123

115

48,65848,73698

20

13,9491,000

13,949
1,000

13
0

13
—

5
1,000

5
1,000

—
0

—
—

69,266

69,274136

128

49,66349,74198

20¥1,638 ¥330,931 ¥550,461 ¥219,606¥ 76

Total . . . . . . . . . . . . . . . . . . . . ¥353,262 ¥419,962 ¥68,338

At March 31, 2013, the contractual maturities of available-for-sale and held-to-maturity securities are
summarized as follows:
March 31, 2013
Available-for-Sale
Held-to-Maturity
Aggregate
Aggregate
Fair
Fair
Cost*
Value
Cost*
Value
(Yen in millions)Due within 1 year . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . ¥—¥—¥43,893
Due after 1 year to 5 years . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
3,070
3,080
5,770
Due after 5 years . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
4,479
4,521
—
Equity securities . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
273,719
493,119—¥281,268*¥500,720¥49,663¥43,910
5,831——¥49,741

Cost represents amortized cost for held-to-maturity securities and acquisition cost for available-for-salesecurities. The cost basis of the individual securities is written down to fair value as a new cost basis whenother-than-temporary impairment is recognized.
F-23

Notes to the Consolidated Financial Statements—(Continued)
Kyocera Corporation and Consolidated Subsidiaries
Proceeds from sales of available-for-sale securities and the related gross realized gains and losses for the years
ended March 31, 2011, 2012 and 2013 are as follows:
Years ended March 31,
2011
2012
2013
(Yen in millions)

Proceeds from sales of available-for-sale securities . . . . . . . . . . . . . . . . . . . . . . . . . ¥8,500 ¥16,705 ¥34,587
Gross realized gains . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
608
1,196
5,858
Gross realized losses . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
445
1,162
1,156
For the purpose of computing gains and losses, the cost of those securities is determined by the moving averagemethod.
Kyocera’s available-for-sale securities classified by length of unrealized loss position at March 31, 2012 and2013 are as follows:
within 1 year
Aggregate
Gross
Fair
Unrealized
Value
LossesMarch 31, 2012
over 1 year
Aggregate
Gross
Fair
Unrealized
Value
Losses(Yen in millions)

Total
Aggregate
Gross
Fair
Unrealized
Value
LossesMarketable equity securities . . . . . . . . . . . . .
Investment trusts . . . . . . . . . . . . . . . . . . . . . .
Corporate bonds . . . . . . . . . . . . . . . . . . . . . .
Government bonds and public bonds . . . . . .

¥ 2,135
2,796
8,235
376

¥287
131
32
1

¥

1
—
3,055
827

¥

0
—
762
297

¥ 2,136
2,796
11,290
1,203

¥ 287
131
794
298

Total . . . . . . . . . . . . . . . . . . . . . . . . . . .

¥13,542¥451¥3,883¥1,059¥17,425¥1,510within 1 year
Aggregate
Gross
Fair
Unrealized
Value
LossesMarketable equity securities . . . . . . . . . . . . .
Investment trusts . . . . . . . . . . . . . . . . . . . . . .
Corporate bonds . . . . . . . . . . . . . . . . . . . . . .
Government bonds and public bonds . . . . . .
Total . . . . . . . . . . . . . . . . . . . . . . . . . . .

March 31, 2013
over 1 year
Aggregate
Gross
Fair
Unrealized
Value
Losses(Yen in millions)

Total
Aggregate
Gross
Fair
Unrealized
Value
Losses

¥

1
—
5,145
—

¥

0
—
56
—

¥

2
—
—
—

¥

0
—
—
—

¥

3
—
5,145
—

¥

¥5,146¥ 56¥¥¥5,148

¥ 56

2

0

0
—
56
—

At March 31, 2013, Kyocera held available-for-sale securities in unrealized loss positions of ¥56 million.
Kyocera considered the decline in fair value of marketable equity securities were not other-than-temporary as theextent to which fair value was below the cost was minor. Kyocera considered the decline in fair value ofcorporate bonds were not other-than-temporary because the decline in fair value was not caused by credit loss
and Kyocera would receive the full cost amount.

F-24

Notes to the Consolidated Financial Statements—(Continued)
Kyocera Corporation and Consolidated Subsidiaries(2) Other investments
Kyocera holds time deposits and certificates of deposits which are due over three months to original maturity,
non-marketable equity securities, long-term loans and investments in affiliates and unconsolidated subsidiaries.
Carrying amounts of these investments at March 31, 2012 and 2013, included in other short-term investments
and in other long-term investments, are summarized as follows:
March 31,
2012
2013
(Yen in millions)Time deposits and certificates of deposits (due over 3 months) . . . . . . . . . . . . . . . . . . . . . .
Non-marketable equity securities . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Long-term loans . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Investments in affiliates and unconsolidated subsidiaries . . . . . . . . . . . . . . . . . . . . . . . . . .

¥160,796
15,39377
1,597¥179,875
9,441
43
3,145

Total . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

¥177,863¥192,504

4. FAIR VALUE
Fair value is the price that would be received from selling an asset or paid to transfer a liability in an orderlytransaction between market participants at the measurement date. The three levels of inputs that may be used tomeasure fair value are as follows:
Level 1:
Level 2:

Level 3:

Unadjusted quoted prices in active markets for identical assets and liabilities.
Observable inputs other than those included in Level 1. For example, quoted prices for
similar assets or liabilities in active markets or quoted prices for identical assets or
liabilities in inactive markets.
Unobservable inputs reflecting management’s own assumptions about the inputs used inpricing the asset or liability.

F-25

Notes to the Consolidated Financial Statements—(Continued)
Kyocera Corporation and Consolidated Subsidiaries(1) Assets and Liabilities Measured at Fair Value on a Recurring Basis
The fair value of the financial assets that were measured and recorded at fair value on a recurring basis are as
follows:
March 31,
Level 1

Current Assets:
Marketable equity securities . . . . . ¥Investment trusts . . . . . . . . . . . . . .

2012
Level 2 Level 3

25 ¥ —
2,386
—

¥—
—

Total equity securities . . . . . .

2,411

—

Corporate bonds . . . . . . . . . . . . . . .
Government bonds and publicbonds . . . . . . . . . . . . . . . . . . . . .

2,859

Total
Level 1
(Yen in millions)

Total

25 ¥
2,386

— ¥ —
—
—

¥—
—

—

2,411

—

—

—

—

—

—

2,859

—

—

—

—

168

—

—

168

—

—

—

—

Total debt securities . . . . . . . .

3,027

—

—

3,027

—

—

—

—

Foreign currency forward
contracts . . . . . . . . . . . . . . . . . . .

—

459

—

459

—

956

—

956

Total derivatives . . . . . . . . . .

—

459

—

459

—

956

—

956

Total current assets . . . . . . . . . . . .

5,438

459

—

5,897

—

956

—

956

Non-Current Assets:
Marketable equity securities . . . . .
Investment trusts . . . . . . . . . . . . . .

333,815
66

—
1,252

—
—

333,815
1,318

488,748
21

—
4,350

—
—

488,748
4,371

Total equity securities . . . . . .

333,881

1,252—

335,133

488,7694,350—

493,119

Corporate bonds . . . . . . . . . . . . . . .
Government bonds and publicbonds . . . . . . . . . . . . . . . . . . . . .

9,082

—

—

9,082

7,601

—

—

7,601

1,035

—

—

1,035

—

—

—

—

Total debt securities . . . . . . . .

10,117——

10,117

7,601

—

—

7,601

Total non-current assets . . . . .

343,998

1,252—

345,250

496,370

4,350—

500,720¥351,147 ¥496,370 ¥5,306 ¥—¥501,676¥¥

Total assets . . . . . . . . . . . . . . . . . . ¥349,436 ¥1,711 ¥—Current Liabilities:
Foreign currency forward
contracts . . . . . . . . . . . . . . . . . . . ¥Interest rate swaps . . . . . . . . . . . . .

——¥5,140 ¥—28 —Total derivatives . . . . . . . . . .

—

5,168

Total current liabilities . . . . . . . . . ¥—¥5,168 ¥—¥2013
Level 2 Level 3—¥5,140 ¥
28——

¥9,233 ¥—
22 —

5,168

—

9,255

5,168 ¥—

¥9,255 ¥—

¥

—
—

—

9,233
22
9,255

¥

9,255

The fair value of Level 1 investments is quoted price in an active market with sufficient volume and frequency oftransactions.
The fair value of Level 2 investments is other than quoted price included within Level 1 that is observable for theasset or liability, either directly or indirectly through corroboration with observable market data. Kyocera did notrecognize any transfers between Levels 1 and 2 for the years ended March 31, 2011, 2012 and 2013.
F-26

Notes to the Consolidated Financial Statements—(Continued)
Kyocera Corporation and Consolidated Subsidiaries
The fair value of Level 2 derivatives is estimated based on quotes from financial institutions. With respect to thedetail information of derivatives, please refer to the Note 13 to the Consolidated Financial Statement.
(2) Assets and Liabilities Measured at Fair Value on a Non-recurring Basis
The following table presents the financial assets and non-financial assets that were measured and recorded at fairvalue on a non-recurring basis for the year ended March 31, 2011.
Balance at
March 31, 2011

Property, plant and equipment . . . . . . . . . . . . . . . . . .
Non-marketable equity securities . . . . . . . . . . . . . . . .

¥ 42
0Level 1 Level 2 Level 3(Yen in millions)¥ 420Total gains (losses)
for the year ended
March 31, 2011¥(712)(3)

The following table presents the financial assets and non-financial assets that were measured and recorded
at fair value on a non-recurring basis for the year ended March 31, 2012.
Balance at
March 31, 2012

Property, plant and equipment . . . . . . . . . . . . . . . . . .
Non-marketable equity securities . . . . . . . . . . . . . . . .

¥116
1Level 1 Level 2 Level 3(Yen in millions)¥116
1

Total gains (losses)
for the year ended
March 31, 2012¥(241)(2)

The following table presents the financial assets and non-financial assets that were measured and recorded
at fair value on a non-recurring basis for the year ended March 31, 2013.
Balance at
March 31, 2013

Property, plant and equipment . . . . . . . . . . . . . . . . . .
Non-marketable equity securities . . . . . . . . . . . . . . . .

¥—0Level 1 Level 2 Level 3(Yen in millions)¥—0

Total gains (losses)
for the year ended
March 31, 2013¥(286)(1)

Certain property, plant and equipment with a carrying amount were written down to their fair value due to eventsor circumstances that carrying value of the assets was not recoverable, resulting in impairment charge of¥712 million, ¥241 million and ¥286 million, which were included in selling, general and administrative
expenses in the consolidated statements of income for the years ended March 31, 2011, 2012 and 2013,
respectively.
Certain non-marketable equity securities with a carrying amount were written down to their fair value due toother-than-temporary impairment, resulting in impairment charge of ¥3 million, ¥2 million and ¥1 million, whichwere included in other, net in the consolidated statements of income for the years ended March 31, 2011, 2012
and 2013, respectively.

F-27

Notes to the Consolidated Financial Statements—(Continued)
Kyocera Corporation and Consolidated Subsidiaries(3) Fair Value of Financial Instruments
The fair values of financial instruments and the methods and assumptions used to estimate the fair value are as
follows:
March 31,
2012
2013
Carrying
Carrying
AmountFair Value
AmountFair Value(Yen in millions)

Assets (a):Short-term investments in debt and equity securities . . . . . . .
Long-term investments in debt and equity securities . . . . . . .
Other long-term investments (excluding investments inaffiliates and unconsolidated subsidiaries) . . . . . . . . . . . . .

¥ 47,175
372,779¥ 47,116
372,846¥ 43,893
506,490¥ 43,910
506,551

17,501

17,526

9,516

9,516

Total . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

¥437,455¥437,488¥559,899¥559,977

Liabilities (b):Long-term debt (including due within one year) . . . . . . . . . .

¥ 31,807¥ 32,028¥ 30,672¥ 30,691

Total . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

¥ 31,807¥ 32,028¥ 30,672¥ 30,691(a) For investments with active markets, fair value is based on quoted market prices. For non-marketable equity
securities, it is not practicable to estimate the fair value because of the lack of the market price and difficultyin estimating fair value without incurring excessive cost. In addition, Kyocera did not identify any events orchanges in circumstances that may have had a significant adverse effect on these investments. The
aggregated carrying amounts of these investments included in the above table at March 31, 2012 and 2013
were ¥15,380 million and ¥9,428 million, respectively. Fair value of held-to-maturity investments in debt
securities is mainly classified as Level 1 and Level 2.
(b) Fair value is estimated by discounting cash flows, using current interest rates for instruments with similarterms and remaining maturities, and classified as Level 2.
Carrying amounts of cash and cash equivalents, other short-term investments, trade notes receivable, tradeaccounts receivable, short-term borrowings, trade notes and accounts payable, and other notes and accounts
payable approximate fair values because of the short maturity of these instruments.
5. INVENTORIESInventories at March 31, 2012 and 2013 are as follows:
March 31,
2012
2013
(Yen in millions)Finished goods . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Work in process . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Raw materials and supplies . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

F-28¥117,337
54,70098,299¥142,175
54,248100,027¥270,336¥296,450

Notes to the Consolidated Financial Statements—(Continued)
Kyocera Corporation and Consolidated Subsidiaries
6. VALUATION ALLOWANCES
Changes in valuation allowances for the years ended March 31, 2011, 2012, and 2013 are as follows:
Balanceat Beginning ofYear

Description

ChargedCharged to (Credited) to
Costs or
Other
Expenses
Accounts*(Yen in millions)

Charge-offs

Balanceat End ofYear

For the year ended March 31, 2011:
Allowance for doubtful accounts . . . . . . . . . . . . .
Allowance for sales returns . . . . . . . . . . . . . . . . .

¥4,541
2,255¥1,5075,936¥ (30)(345)¥ (804)(5,441)¥5,214
2,405

Total . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

¥6,796¥7,443¥(375)¥(6,245)¥7,619For the year ended March 31, 2012:
Allowance for doubtful accounts . . . . . . . . . . . . .
Allowance for sales returns . . . . . . . . . . . . . . . . .

¥5,214
2,405

¥ 858
4,340

¥ 42
(51)

¥(1,163)(4,552)¥4,951
2,142

Total . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

¥7,619¥5,198¥(9)¥(5,715)¥7,093For the year ended March 31, 2013:
Allowance for doubtful accounts . . . . . . . . . . . . .
Allowance for sales returns . . . . . . . . . . . . . . . . .

¥4,951
2,142

¥ 969
3,931

¥ 320
414

¥(1,695)(3,959)¥4,545
2,528

Total . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

¥7,093¥4,900¥ 734¥(5,654)¥7,073*Charged (credited) to other accounts mainly consists of foreign currency translation adjustments.

The location of valuation allowances in the consolidated balance sheets at March 31, 2012 and 2013 are as
follows:
March 31, 2012 March 31, 2013
(Yen in millions)

The location of valuation allowances that are not deducted from the related
receivables in the consolidated balance sheets:
Less allowances for doubtful accounts and sales returns . . . . . . . . . . . . . . . . .

¥4,583¥4,705The location of valuation allowances that are deducted from the related
receivables in the consolidated balance sheets:
Other current assets . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Other long-term investments . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Other assets . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

¥ 518
¥ 44
¥1,948¥ 387¥
1¥1,980Subtotal . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

¥2,510¥2,368

Total . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

¥7,093¥7,073

7. INVESTMENTS IN AND ADVANCES TO AFFILIATES
Related party transactions with the affiliates, accounted for by the equity method are as follows:
March 31,
2012
2013
(Yen in millions)

Kyocera’s investments in and advances to affiliates . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Kyocera’s trade receivables from affiliates . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
F-29¥1,184
1,048¥2,756127

Notes to the Consolidated Financial Statements—(Continued)
Kyocera Corporation and Consolidated Subsidiaries
Years ended March 31,
2011
2012
2013
(Yen in millions)

Kyocera’s equity in earnings of affiliates . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Kyocera’s sales to affiliates . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

¥ 83
314

¥(279) ¥(330)661
200

8. LEASE RECEIVABLES
Lease receivables represent capital leases which consist of sales-type leases. Most of the lease receivables arerecognized at TA Triumph-Adler GmbH (TA). These receivables typically have terms ranging from one year toseven years. The lease receivables, which are included in other current assets and other assets in theaccompanying consolidated balance sheets, are as follows:
March 31,
2012
2013
(Yen in millions)

Total minimum lease payments receivable . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Unguaranteed residual values . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Unearned income . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Executory costs . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

¥ 32,683 ¥ 34,073
1,522
1,176
(2,544)(2,325)(21)(12)

Less, allowance for doubtful receivables . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

31,640(382)

32,912(238)

Less, portion due within one year . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

31,258(11,307)

32,674(11,720)

Total . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

¥ 19,951¥ 20,954

A reconciliation of the beginning and ending amounts of allowance for doubtful accounts related to leasereceivables are as follows:
Years ended March 31,
2011
2012
2013
(Yen in millions)

Balance at beginning of year . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Charged to costs or expenses, or charge-off . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Others* . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

¥571 ¥493 ¥ 382(44) (69) (187)(34) (42)43

Balance at end of year . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

¥493

*

Others consist mainly of foreign currency translation adjustments.

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

F-30

¥382

¥ 238

Notes to the Consolidated Financial Statements—(Continued)
Kyocera Corporation and Consolidated Subsidiaries
The future minimum lease payments to be received under financing leases for future years are as follows:
Years ending March 31,(Yen in millions)2014 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
2015 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
2016 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
2017 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
2018 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
2019 and thereafter . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

¥12,717
9,004
6,375
4,196
1,485
296

Total . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

¥34,073

TA transferred the capital lease receivables to a third party in exchange for cash, however, the transfer was not
qualified as a sale for financial reporting purpose because TA has a right to repurchase the receivables.
Accordingly, Kyocera has accounted for the cash received as a secured borrowing and it has been included inlong-term debt. As a result of the transaction, the capital lease receivables in the amount of ¥28,086 million and¥27,065 million have been recorded on the balance sheets as of March 31, 2012 and 2013, respectively.
9. GOODWILL AND OTHER INTANGIBLE ASSETS
Intangible assets are summarized as follows:
March 31,2012
2013
Gross Carrying Accumulated Gross Carrying Accumulated
AmountAmortization
AmountAmortization(Yen in millions)Intangible assets subject to amortization:
Software . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Patent rights . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Customer relationships . . . . . . . . . . . . . . . . . . . .
Other . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

¥31,493
16,81831,473
16,281¥21,906
14,17012,214
6,966¥ 35,522
12,77337,314
16,698¥24,764
9,686
16,454
6,678

Total . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

¥96,065¥55,256¥102,307¥57,582

March 31,2012
2013
Gross Carrying Gross Carrying
AmountAmount(Yen in millions)Intangible assets not subject to amortization:
Trademark . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Other . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

¥8,842
2¥9,8562

Total . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

¥8,844¥9,858F-31

Notes to the Consolidated Financial Statements—(Continued)
Kyocera Corporation and Consolidated Subsidiaries
Intangible assets acquired during the year ended March 31, 2013 are as follows:Year ended March 31, 2013
(Yen in millions)Intangible assets subject to amortization:
Software . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Patent rights . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Customer relationships . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Other . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

¥ 4,949
1,811
4,014
452

Total . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

¥11,226

The weighted average amortization periods for software, patent rights and customer relationships which wereacquired during the year ended March 31, 2013 are three years, seven years and ten years, respectively.
Total amortization of intangible assets during the years ended March 31, 2011, 2012 and 2013 amounted to¥11,410 million, ¥10,387 million and ¥10,292 million, respectively.
The estimated aggregate amortization expenses for intangible assets for the next five years are as follows:
Years ending March 31,(Yen in millions)2014 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
2015 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
2016 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
2017 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
2018 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

F-32¥7,819
6,357
5,584
4,194
3,652

Notes to the Consolidated Financial Statements—(Continued)
Kyocera Corporation and Consolidated Subsidiaries
The changes in the amounts of goodwill by reporting segment in the years ended March 31, 2012 and 2013 are as
follows:
Fine
Applied
Ceramic Semiconductor Ceramic Electronic Telecommunications Information
Parts
Parts
Products Device
Equipment
Equipment
Group
Group
Group
Group
Group
Group
Others(Yen in millions)

Total

Balance at March 31,
2011
Goodwill . . . . . . . . . . . . . ¥100
Accumulated impairment
losses . . . . . . . . . . . . . . —¥1,266—(5,415)

—

—

(22)

(2,695)(8,132)

100

1,266

2,941

26,86818,456

13,1701,900

64,701¥ 8,356 ¥26,868¥18,456¥13,192 ¥ 4,595 ¥ 72,833

Goodwill acquired during
the year . . . . . . . . . . . .
Impairment of
goodwill . . . . . . . . . . . .
Translation adjustments
and reclassification toother accounts . . . . . . .

——11,32014,143—391—

25,854

—

—

—

—

—

—

—

—

—

(4)

(616)

(148)

—

(748)

—

(1,516)

Balance at March 31,
2012
Goodwill . . . . . . . . . . . . .
Accumulated impairment
losses . . . . . . . . . . . . . .

100

1,262

19,06040,86318,456

12,835

4,595

97,171——(5,415)

—

—

(22)

(2,695)(8,132)

100

1,262

13,64540,86318,456

12,813

1,900

89,039

—

—

—

3,419

—

272

6,305

9,996

—

—

—

—

—

—

—

—

—

51

1,453

1,390

—

1,496

—

4,390

100

1,313

20,51345,672

18,456

14,603

10,900111,557——(5,415)

—

—

(22)

(2,695)(8,132)¥100¥1,313¥15,098 ¥45,672¥18,456

Goodwill acquired during
the year . . . . . . . . . . . .
Impairment of
goodwill . . . . . . . . . . . .
Translation adjustments
and reclassification toother accounts . . . . . . .
Balance at March 31,
2013
Goodwill . . . . . . . . . . . . .
Accumulated impairment
losses . . . . . . . . . . . . . .

¥14,581 ¥ 8,205 ¥103,425

The goodwill of ¥9,996 million which Kyocera acquired during the year ended March 31, 2013 was mainly basedon the acquisition of the Tantalum Components Division of Nichicon Corporation by AVX Corporation, aU.S. based subsidiary of Kyocera Corporation, included in Electronic Device Group and based on the acquisitionof the common stocks of MOTEX Inc. by Kyocera Communication Systems Co., Ltd., a Japan based subsidiaryof Kyocera Corporation, included in Others.
For detailed information of these acquisitions, see Note 2 to the Consolidated Financial Statements.

F-33

Notes to the Consolidated Financial Statements—(Continued)
Kyocera Corporation and Consolidated Subsidiaries
As described in Note 1 to the Consolidated Financial Statements, we assess our goodwill for impairment annually
as of January 1, and also whenever indicators of impairment exist.
The goodwill impairment test involves a two step process. The first step (“identification of potential
impairment”) is a comparison of each reporting unit’s fair value with its carrying amount, including goodwill. If
the fair value of any reporting unit exceeds its carrying amount, the goodwill of the reporting unit is considered
not impaired. If the carrying amount of any reporting unit exceeds its fair value, the second step shall be
performed to measure the amount of impairment loss. The second step (“measurement of impairment loss”)
compares the implied fair value of a reporting unit’s goodwill with the carrying amount of the goodwill. The
implied fair value of the goodwill is determined in the same manner as the amount of goodwill recognized in abusiness combination is determined. That is, the fair value of the reporting unit is allocated to all of the assets andliabilities of the unit (including any unrecognized intangible assets), and the excess of the fair value of thereporting unit over the amount assigned to its assets and liabilities is the implied fair value of the goodwill. If thecarrying amount of a reporting unit’s goodwill exceeds the implied fair value of the goodwill, an impairment loss
is recognized in an equal amount to that excess. Kyocera concluded that there was no goodwill impairment at any
reporting unit as of January 1, 2013.
10. SHORT-TERM BORROWINGS AND LONG-TERM DEBT
Short-term borrowings at March 31, 2012 and 2013 are comprised of the following:
March 31,

Average interest rates on loans from banks and others . . . . . . . . . . . . . . . . . . . . . . . .

2012

2013

1.56%

1.43%

March 31,
2012
2013
(Yen in millions)

Secured . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Unsecured . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

¥ 132
3,930

¥ 135
3,000

¥4,062¥3,135Long-term debt at March 31, 2012 and 2013 are comprised of the following:
March 31,2013

0.20%-11.60%

0.20%-7.01%

Range of interest rates on loans from banks and others . . . . . . . . . . . . . . . . .

2012March 31,
2012

2013
(Yen in millions)

Secured . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . ¥Unsecured . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

30,036
1,771

Less, portion due within one year . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

31,807(10,610)¥F-34

21,197¥29,086
1,586
30,672(9,817)¥

20,855

Notes to the Consolidated Financial Statements—(Continued)
Kyocera Corporation and Consolidated Subsidiaries
Aggregate maturities of long-term debt at March 31, 2013 are as follows:
Years ending March 31,(Yen in millions)2015 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
2016 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
2017 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
2018 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
2019 and thereafter . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

¥ 9,167
5,567
3,370
1,531
1,220
¥20,855

Kyocera’s assets pledged as collateral of property, plant and equipment, net of accumulated depreciation andintangible assets for loans from banks at March 31, 2012 and 2013 are as follows:
March 31,
2012
2013
(Yen in millions)

Trade account receivables . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Property, plant and equipment, net of accumulated depreciation . . . . . . . . . . . . . . . . . . . . . . . . .
Intangible assets . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

¥

56
4,556
1,650

¥ —
3,869
—

As described in Note 8 to the Consolidated Financial Statement, since transferring of the capital lease receivables
did not qualify as a sale for financial reporting purpose, Kyocera has accounted for the cash received as a secured
borrowing. As a result of the transaction, capital lease receivables in the amount of ¥28,086 million and¥27,065 million as of March 31, 2012 and 2013 have been recorded on the balance sheets, respectively.
11. BENEFIT PLANS
Domestic:
Defined benefit plans
At March 31, 2013, Kyocera Corporation and its major domestic subsidiaries sponsor funded defined benefit
pension plans or unfunded retirement and severance plans for their employees. They use a “point system”
whereby benefits under the plan are calculated according to (i) accumulated “points” that are earned based on
employees’ position, extent of contribution and length of service period during employment, and (ii) conditions
at the time of retirement. In addition, employees were provided an option to select how benefit payments will bemade. Employees may elect to receive up to 50% of the accumulated points balance as an annuity payment overthe employees lifetime with the remainder of the accumulated points being distributed in instalments over a fixed
period of up to 20 years.

F-35

Notes to the Consolidated Financial Statements—(Continued)
Kyocera Corporation and Consolidated Subsidiaries
The funded status of the benefit plans at Kyocera Corporation and its major domestic subsidiaries as ofMarch 31, 2012 and 2013 are as follows:
March 31,
2012
2013
(Yen in millions)

Change in projected benefit obligations:
Projected benefit obligations at beginning of year . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Service cost . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Interest cost . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Actuarial loss . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Benefits paid . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Acquisitions of Business . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Other . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

¥145,807 ¥159,988
9,410
10,049
2,506
2,324
5,056
10,558(5,646)(6,329)
2,121
972
734
—

Projected benefit obligations at end of year . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Change in plan assets:
Fair value of plan assets at beginning of year . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Actual return on plan assets . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Employer’s contribution . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Benefits paid . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Acquisitions of Business . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Other . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

159,988

177,562

150,226
1,557
9,147(5,585)
818
693

156,856
5,612
9,651(6,215)793—

Fair value of plan assets at end of year . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

156,856

166,697

Funded status . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

¥ (3,132) ¥ (10,865)

The business acquisition in the year ended March 31, 2012 and 2013 was due to the acquisition of the common
stocks of Kyocera Display Corporation and the domestic operation of the Tantalum Components Division of
Nichicon Corporation by AVX Corporation, a U.S. based subsidiary, respectively.
Amounts recognized in the consolidated balance sheets consist of:March 31,
2012
2013
(Yen in millions)Prepaid benefit cost . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Accrued benefit liability . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

¥ 7,613 ¥372(10,745) (11,237)

Net amount recognized . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

¥ (3,132) ¥(10,865)

Amounts recognized in accumulated other comprehensive income (loss) consist of:March 31,
2012
2013
(Yen in millions)

Prior service cost . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Actuarial loss . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

¥ 32,932 ¥ 28,603(42,454) (49,357)

Accumulated other comprehensive loss . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

¥ (9,522) ¥(20,754)

F-36

Notes to the Consolidated Financial Statements—(Continued)
Kyocera Corporation and Consolidated Subsidiaries
March 31,
2012
2013
(Yen in millions)

Accumulated benefit obligation at end of year . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Pension plans with an accumulated benefit obligation in excess of plan assets at the endof year are as follows:
Projected benefit obligation . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Accumulated benefit obligation . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Fair value of plan assets . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

¥159,465¥176,982¥ 25,478
24,956
14,733¥172,778
172,198
161,541

Net periodic pension costs at Kyocera Corporation and its major domestic subsidiaries in the years ended
March 31, 2011, 2012 and 2013, include the following components:
Years ended March 31,
2011
2012
2013
(Yen in millions)

Service cost . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Interest cost . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Expected return on plan assets . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Amortization of prior service cost . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Recognized actuarial loss . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

¥ 8,662 ¥ 9,410 ¥10,049
2,637
2,506
2,324
(3,255) (3,358) (3,467)(4,329) (4,329) (4,329)
772
1,140
1,510

Net periodic pension costs . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

¥ 4,487¥ 5,369¥ 6,087

Changes in other comprehensive income (loss) at Kyocera Corporation and its major domestic subsidiaries in theyears ended March 31, 2011, 2012 and 2013 mainly consist of the following components:
Years ended March 31,
2011
2012
2013
(Yen in millions)

Prior service cost due to plan amendments . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . ¥ —
¥
(3) ¥
—
Net actuarial loss incurred during the year . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
(5,621)(6,857)(8,413)
Amortization of prior service cost . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . (4,329)(4,329)(4,329)
Recognized actuarial loss . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
772
1,140
1,510
Total . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

¥(9,178) ¥(10,049) ¥(11,232)

Prior service cost and actuarial loss expected to be amortized at Kyocera Corporation and its major domestic
subsidiaries in the year ending March 31, 2014 are as follows:Year ending March 31, 2014
(Yen in millions)

Amortization of prior service cost . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Recognized actuarial loss . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

¥(4,306)
1,886

Assumptions used to determine projected benefit obligations at Kyocera Corporation and its major domestic
subsidiaries at March 31, 2012 and 2013 are as follows:
March 31,
2012
2013

Discount rate (%) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
F-37

0.75-1.50

0.25-1.00

Notes to the Consolidated Financial Statements—(Continued)
Kyocera Corporation and Consolidated Subsidiaries
Assumptions used to determine net periodic pension costs at Kyocera Corporation and its major domestic
subsidiaries for the years ended March 31, 2011, 2012 and 2013 are as follows:
2011

Years ended March 31,
2012
2013

Discount rate (%) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1.00-2.00
Expected long-term rate of return on plan assets (%) . . . . . . . . . . . . . . . . . . . . 2.00-2.20

1.00-1.75
2.00-2.20

0.75-1.50
1.35-2.20

Rate of increase in compensation levels was not used in the calculation of projected benefit obligation and net
periodic pension costs for the years ended March 31, 2011, 2012 and 2013 under the “point system.”
Kyocera Corporation and its major domestic subsidiaries determine their expected long-term rate of return onplan assets based on the defined yields of life insurance company general account, which occupies major part ofplan assets categories, and their consideration of the current expectations for future returns and the historicalreturns of other plan assets categories in which they invest.
Plan assets
Kyocera Corporation and its major domestic subsidiaries manage and operate their plan assets with a target ofobtaining better performance more than earnings from the expected rate of return on plan assets to ensure thesources of funds sufficient to cover the pension benefits paid to participants and beneficiaries into the future.
Plan assets are classified into four major types. Approximately 60% is invested in life insurance company generalaccounts, approximately 25% is mainly invested in equity securities that are listed on securities exchanges and indebt securities such as governments bonds, approximately 10% is invested in trust funds that invest both long andshort in stocks and bonds and in real estate funds, and approximately 5% is held in cash and cash equivalents.
In terms of the plan assets management, Kyocera Corporation and its major domestic subsidiaries makeappropriate investment choices and optimal portfolios with a consideration of its performances, expected returns
and risks, and entrusts their plan assets to the fund trustees which can be expected to be the most appropriate toaccomplish Kyocera’s objective. Kyocera Corporation and its major domestic subsidiaries also make an effort tomaintain their portfolios within reasonable allocations of plan assets. Kyocera Corporation and its majordomestic subsidiaries evaluate their categories of plan assets allocations and can change their portfolios when it
is needed.
At March 31, 2013, Kyocera Corporation and its major domestic subsidiaries do not have plans to change
substantially their long-term strategy about allocations of plan assets from described above.

F-38

Notes to the Consolidated Financial Statements—(Continued)
Kyocera Corporation and Consolidated Subsidiaries
Plan assets categories at Kyocera Corporation and its major domestic subsidiaries at March 31, 2012 and 2013
are as follows:
Level 1 assets are equity securities and corporate bonds which are valued using unadjusted quoted market prices
in active markets with sufficient volume and frequency of transactions. Level 2 assets are life insurance company
general account, pooled funds and trust funds that invest both long and short in equity securities and bonds.
Investments in life insurance company general accounts are valued at conversion value. Pooled funds and trust
funds are valued at their net asset values that are provided by the fund manager or general partner of the funds.
For detailed information of the three levels of input used to measure fair value, see Note 4 to the Consolidated
Financial Statements.
March 31,2012
Quotedpricesin active
markets(Level 1)

Otherobservable Unobservable
inputsinputs(Level 2)(Level 3)

Life insurance company
general account . . . . . . . ¥ — ¥ 93,969
Equity securities:
Domestic . . . . . . . . . . 1,789—
International . . . . . . . . 7,836—
Pooled funds(1) . . . . . .
—12,638Debt securities:
Corporate bonds . . . . . 16,081—
Pooled funds(2) . . . . . .
—4,541
Other types of investments:
Equity long/short
Domestic(3) . . . . .
—783
International(4) . .
—3,680
Debt long/short(5) . . . .
—8,090
Real Estate funds(6) . . .
——Other . . . . . . . . . . . . . . . . . .
—2,146
Cash and cash
equivalents . . . . . . . . . . . 3,546—
Total . . . . . . ¥29,252 ¥125,847

2013
QuotedpricesOther
in active observable Unobservable
markets
inputsinputs
Total(Level 1) (Level 2)(Level 3)(Yen in millions)¥ —¥ 93,969 ¥¥ —¥ 92,160

—
—
—

1,789
7,836
12,638

1,312
7,740
—

—
—
14,119

—
—
—

1,312
7,740
14,119——16,081 19,066
4,541
—

—
6,290

—
—

19,066
6,290

—
—
—
—
1,757

783
3,680
8,090
—
3,903

—
—
—
—
—

—
3,973
6,847
—
2,048

—
—
—
6,015
1,419

—
3,973
6,847
6,015
3,467

—

3,546

5,708

—

—

5,708

¥156,856 ¥33,826 ¥125,437¥7,434¥166,697¥1,757— ¥ 92,160

Total(1) This category includes pooled funds that mainly invest in domestic and international equity securities thatare listed on securities exchanges.
(2) This category includes pooled funds that mainly invest in domestic government bonds and municipal bonds.
(3) This category includes trust funds that mainly invest both long and short in equity securities that are listedon domestic securities exchanges.
(4) This category includes trust funds that mainly invest both long and short in equity securities that are listed
on international securities exchanges.
(5) This category includes trust funds that mainly invest both long and short in government bonds.
(6) This category includes private open-ended real estate funds.

F-39

Notes to the Consolidated Financial Statements—(Continued)
Kyocera Corporation and Consolidated Subsidiaries
The following table presents additional information about Level 3 assets measured at fair value on recurring basis
for the years ended March 31, 2012 and 2013. Plan assets of Level 3 are invested in real estate funds and multistrategy hedge funds, which are valued at their net asset values that are provided by the fund manager or generalpartner of the funds. The net asset values are based on the fair value of the underlying assets owned by the funds,
minus its liabilities then divided by the number of units outstanding.
Years ended March 31,
2012
2013
(Yen in millions)

Balance at beginning of year . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Actual return on plan assets:
Relating to assets still held at end of year . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Relating to assets sold during the year . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Purchases, sales and settlements . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

¥1,449¥1,757

(19)
(45)
372

72
(26)
5,631

Balance at end of year . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

¥1,757¥7,434

Kyocera Corporation and its major domestic subsidiaries forecast to contribute ¥14,401million to the defined
benefit pension plans in the year ending March 31, 2014.
Estimated future benefit payments at Kyocera Corporation and its major domestic subsidiaries are as follows:
Years ending March 31,(Yen in millions)2014 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
2015 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
2016 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
2017 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
2018 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
2019 to 2023 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

¥ 6,478
6,943
7,265
7,591
8,745
53,142Foreign:(1) Pension plans
Kyocera International, Inc. and its consolidated subsidiaries (KII), consolidated U.S. subsidiaries of Kyocera
Corporation, maintain a non-contributory defined benefit pension plans in the U.S. The KII plan covers
substantially certain full-time employees in the U.S., of which benefits are based on years of service and theemployees’ average compensation. In the year ended March 31, 2013, KII made a partial settlement of its
pension plan by implementing lump sum payments to a certain portion of terminated vested participants.
AVX Corporation and its consolidated subsidiaries (AVX), consolidated U.S. subsidiaries of Kyocera
Corporation, maintain non-contributory defined benefit pension plans in the U.S. and contributory defined
benefit pension plans inside the U.S. Pension benefits provided to certain U.S. employees covered undercollective bargaining agreements are based on a flat benefit formula. Effective December 31, 1995, AVX froze
benefit accruals under its domestic non-contributory defined benefit pension plan for a significant portion of theemployees covered under collective bargaining agreements. AVX’s pension plans for certain European
employees provide for benefits based on a percentage of final pay. AVX’s funding policy is to contributeamounts sufficient to meet minimum funding requirements as set forth in employee benefit and tax laws.
TA, a German subsidiary of Kyocera Document Solutions Inc., maintains a defined benefit pension plan, which
covers certain employees in Germany. TA does not maintain an external fund for this benefit pension plan.
F-40

Notes to the Consolidated Financial Statements—(Continued)
Kyocera Corporation and Consolidated Subsidiaries
The following table sets forth the funded status of the plans at KII, AVX and TA as of March 31, 2012 and 2013:
March 31,
2012
2013
(Yen in millions)

Change in benefit obligations:Benefit obligations at beginning of year . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Service cost . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Interest cost . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Plan participants’ contributions . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Actuarial loss . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Benefits paid . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Partial settlement of pension plan . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Foreign exchange adjustment . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Other . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Benefit obligations at end of year . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

¥ 35,954 ¥ 37,845
293
348
1,764
1,667
10
7
3,026
5,024
(1,880)(1,927)—(1,220)(1,308)
4,798
(14)
(38)
¥ 37,845¥ 46,504

March 31,
2012
2013
(Yen in millions)

Change in plan assets:
Fair value of plan assets at beginning of year . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Actual return on plan assets . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Employer contribution . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Plan participants’ contributions . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Benefits paid . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Partial settlement of pension plan . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Foreign exchange adjustment . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Other expenses . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Fair value of plan assets at end of year . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Funded status . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

¥ 18,010 ¥ 18,751
787
1,887
1,082
3,097
10
7
(845)
(911)
—
(1,220)
(279)
2,636
(14)
(38)
18,751

24,209¥(19,094) ¥(22,295)

Amounts recognized in the consolidated balance sheets consist of:March 31,
2012
2013
(Yen in millions)

Accrued benefit liability . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

¥(19,094)¥(22,295)

Net amount recognized . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

¥(19,094)¥(22,295)

F-41

Notes to the Consolidated Financial Statements—(Continued)
Kyocera Corporation and Consolidated Subsidiaries
Amounts recognized in accumulated other comprehensive income (loss) consist of:March 31,
2012
2013
(Yen in millions)

Prior service cost . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Actuarial loss . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Accumulated other comprehensive loss . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

¥(69)(8,893)¥(66)(13,892)¥ (8,962)¥(13,958)

March 31,
2012
2013
(Yen in millions)

Accumulated benefit obligation at end of year . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

¥36,759¥ 44,741

Pension plans with an accumulated benefit obligation in excess of plan assets at the end of year:
March 31,
2012
2013
(Yen in millions)

Projected benefit obligation . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Accumulated benefit obligation . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Fair value of plan assets . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

¥37,845
36,75918,751¥46,504
44,741
24,209Net periodic pension costs at KII, AVX and TA in the years ended March 31, 2011, 2012 and 2013 include thefollowing components:
2011

Service cost . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Interest cost . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Expected return on plan assets . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Amortization of prior service cost . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Recognized actuarial loss . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Partial settlement of pension plan . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Net periodic pension costs . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Years ended March 31,
2012
2013
(Yen in millions)

¥

311
1,886
(1,210)
9
250
—

¥

293
1,764
(1,259)
8
204
—

¥

348
1,667
(1,225)9422
451¥ 1,246¥ 1,010¥ 1,672

Changes in other comprehensive income (loss) at KII, AVX and TA in the years ended March 31, 2011, 2012
and 2013 mainly consist of the following components:
2011

Years ended March 31,
2012
2013
(Yen in millions)

Net actuarial gain (loss) incurred during the year . . . . . . . . . . . . . . . . . . . . . .
Amortization of prior service cost . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Recognized actuarial loss . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Partial settlement of pension plan . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

¥ 788
9
250
—

¥(3,498)8
204—¥(4,362)9422
451

Total . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

¥1,047¥(3,286)¥(3,480)F-42

Notes to the Consolidated Financial Statements—(Continued)
Kyocera Corporation and Consolidated Subsidiaries
Prior service cost and actuarial loss expected to be amortized at KII, AVX and TA in the year ending March 31,
2014 are as follows:Year ending March 31, 2014
(Yen in millions)

Amortization of prior service cost . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Recognized actuarial loss . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

¥

9
945

Assumptions used to determine projected benefit obligations of the plans at KII, AVX and TA as of March 31,
2012 and 2013 are as follows:
March 31,
2012
2013

Discount rate (%) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Rate of increase in compensation levels (%) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

4.00-5.00
2.50-3.80

3.10-4.57
2.50-3.90

Assumptions used to determine net periodic pension costs at KII, AVX and TA in the years ended March 31,
2011, 2012 and 2013 are as follows:
2011

Years ended March 31,
2012
2013

Discount rate (%) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4.80-6.00
Rate of increase in compensation levels (%) . . . . . . . . . . . . . . . . . . . . . . . . . . 2.00-4.25
Expected long-term rate of return on plan assets (%) . . . . . . . . . . . . . . . . . . . . 6.50-8.50

5.15-5.75
2.50-4.00
6.40-7.75

4.00-5.00
2.50-3.80
5.52-7.75

KII and AVX determine their expected long-term rate of return on plan assets based on the consideration of thecurrent expectations for future returns and the historical returns of other plan assets categories in which they
invest.

F-43

Notes to the Consolidated Financial Statements—(Continued)
Kyocera Corporation and Consolidated Subsidiaries
Plan assets
KII’s and AVX’s plan assets categories at March 31, 2012 and 2013 are as follows:
Level 1 assets are equity securities and government bonds which are valued using unadjusted quoted market
prices in active markets with sufficient volume and frequency of transactions. Level 2 assets are government
agency bonds, corporate bonds and pooled separate accounts at AVX, which are valued at their net asset values
that are provided by the fund manager or general partner of the funds. For detailed information of the three levels
of input used to measure fair value, see Note 4 to the Consolidated Financial Statements.
March 31,2012
QuotedpricesOther
in active observable Unobservable
markets
inputsinputs(Level 1) (Level 2)(Level 3)

Equity securities:
International . . . . . . . . . . ¥5,071 ¥ —Debt securities:
Government bonds . . . . .
350—
Government agency
bonds . . . . . . . . . . . . .
—842
Corporate bonds . . . . . . .
—340
Pooled separate accounts * . . .
—11,614
Other . . . . . . . . . . . . . . . . . . . .
—477
Cash and cash equivalents . . .
57—
Total . . . . . . . . . . . . ¥5,478 ¥13,273
*

¥—

2013
QuotedpricesOther
in active observable Unobservable
markets
inputsinputs
Total(Level 1) (Level 2)(Level 3)(Yen in millions)¥ 5,071 ¥6,200 ¥

Total

—

¥—

¥ 6,200

—

350

453

—

—

453

—
—
—
—
—

842
340
11,614
477
57

—
—
—
—
68

841
573
14,499
1,575
—

—
—
—
—
—

841
573
14,499
1,575
68

¥—

¥18,751 ¥6,721 ¥17,488¥—¥24,209

This category includes pooled separate accounts held by AVX that mainly invest in equity securities anddebt securities.

KII’s long-term strategy is for target allocation of 70%-80% equity securities and 20%-30% debt securities for its
defined benefit plans. AVX’s long-term strategy is for target allocation of 40% equity and 60% fixed income for
its U.S. defined benefit plans and 60% equity and 40% fixed income for its European defined benefit plans.
KII and AVX forecast to contribute ¥1,041 million to the defined benefit pension plans in the year ending
March 31, 2014.
Estimated future benefit payments of the plans at KII, AVX and TA are as follows:
Years ending March 31,(Yen in millions)2014 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
2015 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
2016 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
2017 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
2018 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
2019 to 2023 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

F-44¥ 2,278
2,323
2,354
2,391
2,413
12,391

Notes to the Consolidated Financial Statements—(Continued)
Kyocera Corporation and Consolidated Subsidiaries(2) Savings plans
KII and AVX maintain retirement savings plans which allow eligible U.S. employees to defer part of their annualcompensation.
AVX also maintains non-qualified deferred compensation programs which permit key employees to annuallyelect to defer a portion of their compensation until retirement. Contributions to the plans are as follow:
Years ended March 31,
2011
2012
2013
(Yen in millions)Contributions to the plans . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

¥632

¥505

¥493

12. STOCK OPTION PLANS
AVX has four fixed stock option plans. Under the 1995 stock option plan, as amended, AVX could grant options
to employees for the purchase of up to an aggregate of 9,300 thousand shares of common stock. Under the
non-employee directors’ stock option plan, as amended, AVX could grant options for the purchase of up to an
aggregate of 650 thousand shares of common stock. No awards were made under these two plans after August 1,
2005. Under the 2004 stock option plan, as amended, AVX may grant options to employees for the purchase of
up to an aggregate of 10,000 thousand shares of common stock. Under the 2004 non-employee directors’ stock
option plan, as amended, AVX may grant options for the purchase of up to an aggregate of 1,000 thousand sharesof common stock. Under all stock option plans, the exercise price of each option shall not be less than the market
price of AVX’s stock on the date of grant and an option’s maximum term is 10 years. Options granted under the
1995 stock option plan and the 2004 stock option plan vest as to 25% annually and options granted under the
non-employee directors’ stock option plan and the 2004 non-employee directors’ stock option plan vest as to one
third annually. Requisite service periods related to all of the plans begin on the grant date. As of March 31, 2013,
there were 11,741 thousand shares of common stock available for future issuance under all of the plans,consisting of options available to be granted and options currently outstanding.
Activity under the stock option plans is summarized as follows:

Number of
Options(in thousands)

Weighted
Average
Exercise
Price(U.S. dollar)

Weighted
Average
Contractual
Life Remaining(years)Outstanding at March 31, 2012 . . . . . . . . . . . . . . . . . .
Granted . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Exercised . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Expired and cancelled . . . . . . . . . . . . . . . . . . . . . . . . .

4,344
538
(16)
(619)

$14.12
10.79
9.71
16.24

Outstanding at March 31, 2013 . . . . . . . . . . . . . . . . . .

4,247$13.40

5.10¥165

Exercisable at March 31, 2013 . . . . . . . . . . . . . . . . . .

2,994$13.833.79¥ 86

AggregatedIntrinsic Value(Yen in millions)

¥ 2
¥ 11

The total aggregate intrinsic value of options exercised is ¥149 million, ¥24 million and ¥2 million for the years
ended March 31, 2011, 2012 and 2013, respectively.

F-45

Notes to the Consolidated Financial Statements—(Continued)
Kyocera Corporation and Consolidated Subsidiaries
Unvested share activity under stock option plans at March 31, 2013 is summarized as follows:
Number of
Options(in thousands)

Weighted Average
Grant-Date
Fair Value(U.S. dollar)

Unvested balance at March 31, 2012 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Options granted . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Options forfeited . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Options vested . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

1,301
538
(68)
(518)

$2.99
2.09
2.79
3.00

Unvested balance at March 31, 2013 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

1,253

$2.61

The weighted average estimated fair value of options granted at grant date market prices was $3.29, $3.03 and$2.09 per option for the years ended March 31, 2011, 2012 and 2013, respectively. The total aggregate fair valueof options vested is ¥192 million, ¥146 million and ¥129 million for the years ended March 31, 2011, 2012 and2013, respectively.
AVX’s weighted average fair value is estimated at the date of grant using Black Scholes model. AVX estimatedvolatility by considering AVX’s historical stock volatility. AVX calculated the dividend yield based on historical
dividend paid. AVX has estimated forfeitures in determining the weighted average fair value calculation. The
forfeiture rate used for the year ended March 31, 2013 was 7.1%. The following are significant weighted averageassumptions used for estimating the fair value of options issued under stock option plans:
Years ended March 31,
2011
2012
2013

Expected life . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Interest rate . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Volatility . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Expected dividends . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

5 years
2.3%
27%
1.3%

6 years
1.8%
23%
1.5%

6 years
1.0%
28%
2.8%

The total unrecognized compensation costs related to unvested awards as of March 31, 2011, 2012 and 2013 are
as follows, which are expected to be recognized over the vesting period, approximately four years.

Total unrecognized compensation costs related to unvested awards . . . . . . . . . .

2011March 31,
2012
(Yen in millions)

2013

¥142

¥95

¥86

The following table presents the amounts recorded in AVX’s consolidated financial statements related to grants
and exercises of options for the years ended March 31, 2011, 2012 and 2013.
Years ended March 31,
2011
2012
2013
(Yen in millions)

Stock based compensation expense (net of tax benefit) . . . . . . . . . . . . . . . . . . . .
Tax benefit associated with stock based compensation expense . . . . . . . . . . . . .
Cash received from the exercise of options . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Excess tax benefit from stock-based payment arrangements . . . . . . . . . . . . . . . .

F-46

¥190
23
517
44

¥93
50
79
8

¥74
40
13
1

Notes to the Consolidated Financial Statements—(Continued)
Kyocera Corporation and Consolidated Subsidiaries
KII provides key employees of its certain subsidiary with a stock option plan. The issuance of options under thisplan was suspended by April 1, 2006 and all options were vested by March 31, 2010. The options were granted toa key employee, who had the right to purchase for up to an aggregate of 3,800 thousand shares of common stock.
The exercise price was not less than 85% of the fair value per share of the subsidiary at the time the option was
granted, and the grant has a maximum term of 10 years. Since the subsidiary is not listed, the fair value isdetermined based on valuation techniques using management internal assumptions.
Activity under the stock option plan is summarized as follows:

Number of
Options(in thousands)

Weighted
Average
Exercise
Price(U.S. dollar)

Weighted
Average
Contractual
Life Remaining(years)Outstanding at March 31, 2012 . . . . . . . . . . . . . . . . . .
Granted . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Exercised . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Expired and cancelled . . . . . . . . . . . . . . . . . . . . . . . . .

269
—
—
(26)

$2.20
—
—
2.85

Outstanding at March 31, 2013 . . . . . . . . . . . . . . . . . .

243

$2.13

1.68

—

Exercisable at March 31, 2013 . . . . . . . . . . . . . . . . . .

243

$2.13

1.68

—

AggregatedIntrinsic Value(Yen in millions)—

Since all options were vested by March 31, 2010, there was no stock based compensation expense for the year
ended March 31, 2013. In addition, there were no unrecognized compensation costs related to unvested awards at
March 31, 2013.
13. DERIVATIVES AND HEDGING
Kyocera’s activities are exposed to varieties of market risks, including the effects of changes in foreign currency
exchange rates, interest rates and stock prices. Approximately 55% of Kyocera’s net sales are generated fromoverseas customers, which exposes Kyocera to foreign currency exchange rates fluctuations. These financial
exposures are monitored and managed by Kyocera as an integral part of its overall risk management program.
Kyocera’s risk management program focuses on the unpredictability of financial markets and seeks to reduce thepotentially adverse effects that the volatility of these markets may have on its operating results.
Kyocera maintains a foreign currency risk management strategy that uses derivative financial instruments, suchas foreign currency forward contracts to minimize the volatility in its cash flows caused by changes in foreign
currency exchange rates. Movements in foreign currency exchange rates pose a risk to Kyocera’s operations andcompetitive position, since exchange rates changes may affect the profitability, cash flows, and business and/or
pricing strategies of non Japan-based competitors. These movements affect cross-border transactions thatinvolve, but not limited to, direct export sales made in foreign currencies and raw material purchases incurred inforeign currencies.
Kyocera maintains an interest rate risk management strategy that uses derivative financial instruments, such as
interest rate swaps to minimize significant, unanticipated cash flow fluctuations caused by interest rate volatility.
By using derivative financial instruments to hedge exposures to changes in exchange rates and interest rates,
Kyocera became exposed to credit risk. Credit risk is the failure of the counterparty to perform under the terms ofthe derivative contracts. When the fair value of a derivative contract is positive, the counterparty owes Kyocera,
F-47

Notes to the Consolidated Financial Statements—(Continued)
Kyocera Corporation and Consolidated Subsidiaries
which creates repayment risk for Kyocera. When the fair value of a derivative contract is negative, Kyocera owes
the counterparty and, therefore, it does not possess repayment risk. Kyocera minimizes the credit (or repayment)risk in derivative financial instruments by (a) entering into transactions with creditworthy counterparties,(b) limiting the amount of exposure to each counterparty, and (c) monitoring the financial condition of its
counterparties.
Kyocera does not hold or issue such derivative financial instruments for trading purposes.
Cash Flow Hedges:
Kyocera uses certain foreign currency forward contracts with terms normally lasting for less than four months
designated as cash flow hedges to protect against foreign currency exchange rate risks inherent in its forecasted
transactions related to purchase commitments and sales. Kyocera also uses interest rate swaps mainly to convert
a portion of its variable rates debt to fixed rates debt.
Other Derivatives:
Kyocera’s main direct foreign export sales and some import purchases are denominated in the customers’ andsuppliers’ local currencies, principally the U.S. dollar and the Euro. Kyocera purchases foreign currency forward
contracts to protect against the adverse effects that exchange rate fluctuations may have on foreign-currencydenominated trade receivables and payables. The gains and losses on both the derivatives and the foreigncurrency-denominated trade receivables, payables are recorded as foreign currency transaction gains, net in the
consolidated statement of income. Kyocera does not adopt hedge accounting for such derivatives.
The aggregate contractual amounts of derivative financial instruments at March 31, 2012 and 2013 are as
follows:
March 31,
2012
2013
(Yen in millions)

Derivatives designated as hedging instruments:
Foreign currency forward contracts . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Interest rate swaps . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

¥ 12,941
963¥ 12,225
120

Total . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Derivatives not designated as hedging instruments:
Foreign currency forward contracts . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

¥ 13,904¥ 12,345¥130,346¥163,526

Total derivatives . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

¥144,250¥175,871

F-48

Notes to the Consolidated Financial Statements—(Continued)
Kyocera Corporation and Consolidated Subsidiaries
The location and fair value of derivative financial instruments in the consolidated balance sheets at March 31,
2012 and 2013 are as follows:
Location

Derivative assets:
Derivatives designated as hedging instruments:
Foreign currency forward contracts . . . . . . . . . . . . . . . . . . . . . . . . . . .
Derivatives not designated as hedging instruments:
Foreign currency forward contracts . . . . . . . . . . . . . . . . . . . . . . . . . . .

March 31,
2012
2013
(Yen in millions)

Other current assets

¥ 135

¥ 105

Other current assets

¥ 324

¥ 851

Total derivative assets . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

¥ 459

¥ 956

Derivative liabilities:
Derivatives designated as hedging instruments:
Foreign currency forward contracts . . . . . . . . . . . . . . . . . . . . . . . . . . . Other current liabilities
Interest rate swaps . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Other current liabilities

¥ 256
28

¥ 192
22

Total . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

¥ 284

¥ 214

Derivatives not designated as hedging instruments:
Foreign currency forward contracts . . . . . . . . . . . . . . . . . . . . . . . . . . . Other current liabilities¥4,884¥9,041

Total derivative liabilities . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

¥5,168¥9,255The location and amount of derivative financial instruments included in the comprehensive income for the years
ended March 31, 2011, 2012 and 2013 are as follows:
Derivatives designated as cash flow hedge:
Gains (losses) recognized in net unrealized gains (losses) on derivative financial instruments
Years ended March 31,
2011
2012
2013
(Yen in millions)

Foreign currency forward contracts . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Interest rate swaps . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

¥27
25

¥(51)
10

¥ 23
(21)

Total . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

¥52

¥(41)

¥ 2

Gains (losses) recognized in income, which are reclassified from net unrealized gains (losses) on derivative
financial instruments (effective portion)
Location

Foreign currency forward contracts . . . .
Foreign currency forward contracts . . . .
Interest rate swaps . . . . . . . . . . . . . . . . . .

Net sales
Cost of sales
Interest expense

Total . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

F-49

Years ended March 31,
2011
2012
2013
(Yen in millions)¥(102)
259
20

¥12
9
13

¥ 97
(248)
24

¥ 177

¥34

¥(127)

Notes to the Consolidated Financial Statements—(Continued)
Kyocera Corporation and Consolidated Subsidiaries
Gains (losses) recognized in income (ineffective portion and amount excluded from effectiveness testing)Location

Foreign currency forward contracts . . . .

Foreign currency transaction gains, net

Years ended March 31,
2011
2012
2013
(Yen in millions)

¥9

¥(14)

¥(21)

Derivatives not designated as hedging instruments:
Gains (losses) recognized in income

Location

Years ended March 31,
2011
2012
2013
(Yen in millions)

Foreign currency forward contracts . . . . Foreign currency transaction gains, net
Currency swaps . . . . . . . . . . . . . . . . . . . . Foreign currency transaction gains, net¥(3,114) ¥(1,310) ¥(3,630)
16
(7)
—

Total . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

¥(3,098) ¥(1,317) ¥(3,630)

14. COMMITMENTS AND CONTINGENCIESAs of March 31, 2013, Kyocera had contractual obligations for the acquisition or construction of property, plantand equipment aggregating ¥9,233 million principally due within one year.
Kyocera is a lessee under long-term operating leases primarily for office space and equipment. Rental expenses
for operating leases were ¥8,310 million, ¥10,586 million and ¥11,465 million for the years ended March 31,
2011, 2012 and 2013, respectively.
The future minimum lease commitments under non-cancelable operating leases as of March 31, 2013 are as
follows:
Years ending March 31,(Yen in millions)2014 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
2015 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
2016 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
2017 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
2018 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
2019 and thereafter . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

¥ 5,486
3,591
2,227
1,422
1,085
1,778
¥15,589

Kyocera has entered into purchase agreements for a certain portion of an anticipated quantity of materials used in
its operations. Under those agreements, during the year ended March 31, 2013, Kyocera purchased¥14,973 million and is obligated to purchase ¥215,492 million in total by the end of December 2020.
Kyocera guarantees the debt of employees, an investee and an unconsolidated subsidiary. As of March 31, 2013,
the total amount of these guarantees was ¥581 million. The financial guarantees are made in the form ofcommitments and letters of awareness issued to financial institutions and generally obligate Kyocera to makepayments in the event of default by the borrowers.
F-50

Notes to the Consolidated Financial Statements—(Continued)
Kyocera Corporation and Consolidated Subsidiaries
AVX corporation (AVX), a U.S. based subsidiary, has been identified by the United States Environmental
Protection Agency (EPA), state governmental agencies or other private parties as a potentially responsible party(PRP) under the Comprehensive Environmental Response, Compensation and Liability Act (CERCLA) or
equivalent state or local laws for clean-up and response costs associated with certain sites at which remediation isrequired with respect to prior contamination. Because CERCLA has generally been construed to authorize joint
and several liability, the EPA could seek to recover all clean-up costs from any one of the PRPs at a site despite
the involvement of other PRPs. At certain sites, financially responsible PRPs other than AVX also are, or havebeen, involved in site investigation and clean-up activities. AVX believes that liability resulting from these sites
will be apportioned between AVX and other PRPs.
To resolve its liability at the sites at which AVX has been named a PRP, AVX has entered into various
administrative orders and consent decrees with federal and state regulatory agencies governing the timing andnature of investigation and remediation. As is customary, the orders and decrees regarding sites where the PRPs
are not themselves implementing the chosen remedy contain provisions allowing the EPA to reopen theagreement and seek additional amounts from settling PRPs in the event that certain contingencies occur, such as
the discovery of significant new information about site conditions.
In 1991, in connection with a consent decree, AVX paid ¥8,878 million ($66 million), plus interest, toward theenvironmental conditions at, and remediation of, New Bedford Harbor in the Commonwealth of Massachusetts(the harbor) in settlement with the United States and the Commonwealth of Massachusetts, subject to reopener
provisions, including a reopener if certain remediation costs for the site exceed ¥12,267 million ($130.5 million).
On April 18, 2012, the EPA issued to AVX a Unilateral Administrative Order (UAO) directing AVX to performthe Remedial Design, the Remedial Action and Operation and Maintenance as set forth in the UAO, for the
harbor clean-up, pursuant to the reopener provision. The original effective date set forth in the UAO was June 18,
2012 (and subsequently extended to September 3, 2013), pursuant to which AVX had to inform the EPA if it
intends to comply with the UAO.
On October 10, 2012, the EPA, the United States, and the Commonwealth of Massachusetts and AVX announced
that they had reached a financial settlement with respect to the EPA’s ongoing clean-up of the harbor. That
agreement is contained in a Supplemental Consent Decree that modifies certain provisions of the 1992 Consent
Decree, including elimination of the governments’ right to invoke the clean-up reopener provisions in the future.
In accordance with the settlement, AVX will pay ¥34,428 million ($366.25 million), plus interest computed from
August 1, 2012, in three installments over a two-year period for use by the EPA and the Commonwealth tocomplete the clean-up of the harbor, and the EPA will withdraw the UAO. The settlement requires approval by
the United States District Court before becoming final. The timing of any such approval is uncertain.
AVX has recorded a liability for the full amount of the proposed settlement, resulting in charges of¥7,900 million ($100 million) and ¥21,300 million ($266.25 million) in the years ended March 31, 2012 and2013, respectively. Kyocera included these charges in selling, general and administrative expenses in the
consolidated statements of income for the years ended March 31, 2012 and 2013, respectively.
In addition to the above matter, Kyocera is involved in various environmental matters and Kyocera currently has
certain amount of reserves related to such environmental matters. The amount recorded for identified contingent
liabilities is based on estimates. Amounts recorded are reviewed periodically and adjusted to reflect additional
legal and technical information that becomes available. The uncertainties about the status of laws, regulations,
regulatory actions, technology and information related to individual sites make it difficult to develop an estimateof the reasonably possible aggregate environmental remediation exposure; therefore these costs could differ fromour current estimates.
F-51

Notes to the Consolidated Financial Statements—(Continued)
Kyocera Corporation and Consolidated Subsidiaries
Kyocera is also subject to various lawsuits and claims which arise, in the ordinary course of business. Kyocera
consults with legal counsel and assesses the likelihood of adverse outcome of these contingencies. Kyocera
records liabilities for these contingencies when the likelihood of an adverse outcome is probable and the amount
can be reasonably estimated. Based on the information available, management believes that damages, if any,
resulting from these actions will not have a significant impact on Kyocera’s consolidated results of operations,financial condition and cash flows.
15. EQUITY
Under the Companies Act of Japan (the Companies Act), the entire amount paid in for the shares is principally
required to be capitalized as stated capital, although Kyocera Corporation may, by resolution of its Board of
Directors, capitalize an amount not exceeding one-half of the amount paid in for the shares as additional paid-in
capital.
The Companies Act requires a domestic company to appropriate as legal reserve or additional paid-in capital, anamount equal to 10% of the amount paid out for dividends until the sum of the legal reserve and additional
paid-in capital equals 25% of its stated capital. The legal reserve and additional paid-in capital, which could bedecreased due to shareholder actions, may be transferred to stated capital or used to reduce a deficit principally.
The appropriated legal reserve at March 31, 2013 included in retained earnings was ¥18,510 million.
The Companies Act does not permit any payment of dividends in connection with repurchased treasury stock.
Kyocera repurchased treasury stock mainly for the expeditious execution of capital strategies in the future, which
are restricted as to the payment of cash dividends. The amount of statutory retained earnings of Kyocera
Corporation available for the payment of dividends to shareholders at March 31, 2013 was ¥748,606 million.
The accompanying consolidated financial statements for the year ended March 31, 2013 do not include any
provision for the year-end dividend of ¥60 per share aggregating ¥11,006 million payable on June 27, 2013
which was approved by the shareholders at the shareholder’s meeting held on June 26, 2013.
Kyocera’s equity in retained earnings or deficits of affiliates and unconsolidated subsidiaries accounted for by
the equity method of accounting aggregating ¥(2,079) million at March 31, 2013 was included in retained
earnings.
Changes in accumulated other comprehensive income are as follows:

Net
Unrealized
Gains onSecurities

Balance at March 31, 2010 . . . . . . . . . . . . . . ¥ 23,468
Net change for the year . . . . . . . . . . . . .
8,767
Other . . . . . . . . . . . . . . . . . . . . . . . . . . .
—Balance at March 31, 2011 . . . . . . . . . . . . . .
32,235
Net change for the year . . . . . . . . . . . . .
8,502
Other . . . . . . . . . . . . . . . . . . . . . . . . . . .
(2)Balance at March 31, 2012 . . . . . . . . . . . . . .
40,735
Net change for the year . . . . . . . . . . . . .
94,513
Other . . . . . . . . . . . . . . . . . . . . . . . . . . .
—Balance at March 31, 2013 . . . . . . . . . . . . . . ¥135,248
F-52

Net
Unrealized
Losseson Derivative
Financial
Instruments

¥(82)
52
1
(29)
(41)
0
(70)
2
0
¥(68)

Foreign
Currency
PensionTranslation
Adjustments Adjustments(Yen in millions)¥ 1,053(4,530)(57)(3,534)(8,750)(6)(12,290)(11,111)(14)¥(23,415)¥ (75,449)(28,861)5(104,305)(5,538)(171)(110,014)
48,648(261)¥ (61,627)

Total
Accumulated
Other
Comprehensive
Income¥ (51,010)(24,572)(51)(75,633)(5,827)(179)(81,639)
132,052(275)¥ 50,138

Notes to the Consolidated Financial Statements—(Continued)
Kyocera Corporation and Consolidated Subsidiaries
Tax effects allocated to each component of other comprehensive income (loss) and adjustments, excluding
amounts attributable to noncontrolling interests, are as follows:
Before-tax
amount

For the year ended March 31, 2011:
Net unrealized gains on securities:
Amount arising during the year . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Reclassification adjustments for gains and losses realized in net income . . .

Tax (expense) Net-of-tax
or benefit
amount(Yen in millions)¥ 14,599280¥ (5,998)(114)

Net change for the year . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Net unrealized gains on derivative financial instruments:
Amount arising during the year . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Reclassification adjustments for gains and losses realized in net income . . .

14,879(6,112)

8,767

252
(197)

(13)
10

239
(187)

Net change for the year . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Pension adjustments:
Amount arising during the year . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Reclassification adjustments for gains and losses realized in net income . . .

55

(3)

52

(5,157)(3,015)

2,276
1,366

(2,881)(1,649)Net change for the year . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Foreign currency translation adjustments . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

(8,172)(28,966)

3,642
105

(4,530)(28,861)

Other comprehensive income (loss) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

¥ (22,204)¥ (2,368)¥ (24,572)

For the year ended March 31, 2012:
Net unrealized gains on securities:
Amount arising during the year . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Reclassification adjustments for gains and losses realized in net income . . .

¥ 10,419
1,365¥ (2,722)(560)¥

Net change for the year . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Net unrealized losses on derivative financial instruments:
Amount arising during the year . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Reclassification adjustments for gains and losses realized in net income . . .

11,784(3,282)

8,502

(22)
(30)

1
10

(21)
(20)

Net change for the year . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Pension adjustments:
Amount arising during the year . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Reclassification adjustments for gains and losses realized in net income . . .

(52)

11

(41)

(10,246)(2,983)

3,327
1,152

(6,919)(1,831)

Net change for the year . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Foreign currency translation adjustments . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

(13,229)(5,538)4,479—(8,750)(5,538)Other comprehensive income (loss) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

¥ (7,035)¥ 1,208¥ (5,827)

For the year ended March 31, 2013:
Net unrealized gains on securities:
Amount arising during the year . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Reclassification adjustments for gains and losses realized in net income . . .

¥151,607(3,800)¥(55,708)
2,414¥ 95,899(1,386)

Net change for the year . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Net unrealized gains on derivative financial instruments:
Amount arising during the year . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Reclassification adjustments for gains and losses realized in net income . . .

147,807(53,294)

94,513

(170)
182

24
(34)

(146)
148

Net change for the year . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Pension adjustments:
Amount arising during the year . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Reclassification adjustments for gains and losses realized in net income . . .

12

(10)

2

(13,508)(1,940)3,689
648(9,819)(1,292)

Net change for the year . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Foreign currency translation adjustments . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

(15,448)
48,648

4,337—(11,111)
48,648Other comprehensive income (loss) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

¥181,019¥(48,967)¥132,052

F-53

¥

8,601
166

7,697
805

Notes to the Consolidated Financial Statements—(Continued)
Kyocera Corporation and Consolidated Subsidiaries
16. INCOME TAXES
Income before income taxes and income taxes for the years ended March 31, 2011, 2012 and 2013 are comprisedof the following components:
Years ended March 31,
2011
2012
2013
(Yen in millions)

Income before income taxes:
Domestic . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Foreign . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

¥112,374
59,958¥ 77,813
37,080¥ 81,713
19,650Total income before income taxes . . . . . . . . . . . . . . . . . . . . . . . . . . .

¥172,332¥114,893¥101,363

Income taxes:
Current income taxes:
Domestic . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Foreign . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

¥ 21,297
14,447¥ 20,685
13,514¥ 27,906
11,749Total current income taxes . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

35,74434,19939,655

Deferred income taxes:
Domestic . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Foreign . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

11,892(5,422)(1,148)(2,916)

1,045(6,688)

Total deferred income taxes . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

6,470(4,064)(5,643)

Total income taxes . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

¥ 42,214¥ 30,135¥ 34,012

In Japan, a company is subject to a number of taxes, based on income, which in the aggregate indicate normal
statutory income tax rates of approximately 41.0%, 41.0% and 38.0% for the years ended 2011, 2012 and 2013,
respectively.
Reconciliations between the Japanese statutory income tax rate and Kyocera’s effective income tax rate for theyears ended March 31, 2011, 2012 and 2013 are as follows:
Years ended March 31,
2011
2012
2013

Japanese statutory income tax rate . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Difference in statutory tax rates of foreign subsidiaries . . . . . . . . . . . . . . . . . . . . . .
Change in valuation allowance . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Tax credit for research and development expenses . . . . . . . . . . . . . . . . . . . . . . . . .
Uncertainty in income taxes . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Tax rate change* . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Other . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

41.0%
(5.0)
(8.1)
(2.1)
(2.1)
—
0.8

41.0%
(6.4)
(1.1)
(2.1)
1.3
(7.2)
0.7

38.0%
(4.8)
2.8
(3.1)
(0.2)
—
0.9

Effective income tax rate . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

24.5%

26.2%

33.6%

*

In accordance with the Law to Amend a Part of the Income Tax Law to Implement a Tax System
Corresponding to Changes in the Economy and Social Structure (Law No. 114 of 2011) and the Special
Measures Law to Secure Necessary Financial Resources to Execute Measures for Reconstruction from theGreat East Japan Earthquake (Law No. 117 of 2011), which were enacted on December 2, 2011, thecorporate tax rate, etc. applied to annual reporting periods commencing on and after April 1, 2012 has been
F-54

Notes to the Consolidated Financial Statements—(Continued)
Kyocera Corporation and Consolidated Subsidiaries
revised in Japan. As a result of such amendments, the effective Japanese statutory corporate tax rate of 41%
previously applied for calculation of the amount of deferred tax assets and deferred tax liabilities has been
reduced to 38% with respect to temporary differences to be realized during the annual reporting period
commencing as from April 1, 2012 through the annual reporting period commencing as from April 1, 2014,
and reduced to 36% with respect to temporary differences to be realized during the annual reporting periods
commencing on and after April 1, 2015.
The components of the deferred tax assets and deferred tax liabilities at March 31, 2012 and 2013 are as follows:
March 31,
2012
2013
(Yen in millions)Deferred tax assets:
Enterprise tax . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . ¥728 ¥ 1,643
Inventories . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
19,057
20,250
Provision for doubtful accounts and loss on bad debts . . . . . . . . . . . . . . . . . . . . . . . . .
1,255
1,399
Accrued expenses . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
10,982
20,517
Employee benefits . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
24,52826,063
Depreciation and amortization . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
33,17135,898
Securities . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
2,744
1,530
Net operating losses and tax credit carry forwards . . . . . . . . . . . . . . . . . . . . . . . . . . . .
20,45430,241Other . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
6,163
4,144
Total gross deferred tax assets . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Valuation allowance . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

119,082(25,192)

141,685(34,414)

Net deferred tax assets . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

¥ 93,890¥107,271

Deferred tax liabilities:
Depreciation and amortization . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Securities . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Prepaid benefit cost . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Other . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

¥ 13,952
99,9182,786
4,708¥ 16,365
152,251165
7,203

Total deferred tax liabilities . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

¥121,364¥175,984

Net deferred tax liabilities . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

¥ (27,474) ¥ (68,713)

Net deferred tax assets and liabilities at March 31, 2012 and 2013 are reflected in the consolidated balance sheets
under the following captions.
March 31,
2012
2013
(Yen in millions)Deferred income taxes—current assets . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Other assets . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Other current liabilities . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Deferred income taxes—non-current liabilities . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

¥ 45,049 ¥ 47,349
20,24535,753(2,589)(5,586)(90,179) (146,229)

Net deferred tax liabilities . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

¥(27,474) ¥ (68,713)

F-55

Notes to the Consolidated Financial Statements—(Continued)
Kyocera Corporation and Consolidated Subsidiaries
At March 31, 2013, Kyocera had net operating losses carried forward of approximately ¥105,961 million, which
are available to offset future taxable income. Of these net operating losses carried forward, the amount of¥33,633 million recorded at domestic subsidiaries will expire within next nine years, and the amount ofapproximately ¥14,291 million recorded at U.S. subsidiaries will expire within next 20 years. Certain otherforeign subsidiaries have net operating losses carried forward totaling approximately ¥58,037 million of whichmost have no expiration date.
At March 31, 2013, Kyocera had tax credits carried forward of ¥2,563 million, which are available to offset
future income taxes. Of these tax credits carried forward, the amount of ¥692 million and ¥1,520 million
recorded at foreign subsidiaries will expire within 20 years and will be available without expiration, respectively.
Kyocera intends to reinvest certain undistributed earnings of foreign subsidiaries for an indefinite period of time.
Therefore, no deferred tax liabilities have been provided on undistributed earnings of these subsidiaries, which
are not expected to be remitted in the foreseeable future. Kyocera estimates this unrecognized deferred tax
liabilities are ¥9,550 million at March 31, 2013. The undistributed earnings of these subsidiaries are¥268,554 million at March 31, 2013.
Total gross deferred tax assets at March 31, 2012 and 2013 were reduced by valuation allowances of¥25,192 million and ¥34,414 million, respectively. The decrease for the year ended March 31, 2011 was due
mainly to a reversal of valuation allowance against deferred tax assets at certain subsidiaries with increasing
realization of deferred tax assets triggered by a significantly improved operating results.
A reconciliation of the beginning and end amount of gross valuation allowance for deferred tax asset is asfollows:
2011

March 31,
2012
2013
(Yen in millions)

Balance at beginning of year . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Increase . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Decrease . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Other* . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

¥ 40,270 ¥24,687 ¥25,192
1,226
2,667
9,824
(15,885) (3,523) (4,356)
(924)
1,361
3,754

Balance at end of year . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

¥ 24,687*¥25,192¥34,414

Other consists mainly of foreign currency translation adjustments and business combinations.

A reconciliation of the beginning and end amount of gross unrecognized tax benefits is as follows:
2011

March 31,
2012
2013
(Yen in millions)

Balance at beginning of year . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Increase—tax position in prior years . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Increase—tax position in current year . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Decrease—tax position in prior years . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Settlements with taxing authorities . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Lapse of statute of limitations . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

¥ 8,352 ¥ 6,874 ¥3,050
1,112
277
1,430
1,936
2,135
51
(2,517)(868)(33)(2,002) (5,350)
(428)
(7)
(18)
(6)

Balance at end of year . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

¥ 6,874

F-56¥ 3,050¥4,064

Notes to the Consolidated Financial Statements—(Continued)
Kyocera Corporation and Consolidated Subsidiaries
Gross unrecognized tax benefits on the consolidated balance sheets that if recognized would affect the effective
tax rate were ¥3,050 million and ¥4,064 million, at March 31, 2012 and 2013, respectively. Kyocera expects thata significant change in unrecognized tax benefits might occur within the next 12 months. However, Kyocera
anticipates such change will not have significant impact on Kyocera’s consolidated results of operations andfinancial position.
Kyocera recorded interest and penalties related to unrecognized tax benefits as current income tax expenses in
the consolidated statement of income in the amount of ¥(92) million, ¥59 million and ¥(25) million for the year
ended March 31, 2011, 2012 and 2013, respectively, and as other non-current liabilities in the consolidatedbalance sheet in the amounts of ¥275 million and ¥228 million at March 31, 2012 and 2013, respectively. The
above table excludes this accrual for estimated interest and penalties.
At March 31, 2013 Kyocera is subject to income tax examinations by tax authorities for the tax year 2012
onwards in Japan, and for the tax year 2009 onwards in the United States for its major jurisdictions.
17. SUPPLEMENTAL EXPENSE INFORMATION
Supplemental expense information is as follows:
Years ended March 31,
2011
2012
2013
(Yen in millions)

Research and development expenses . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . ¥49,474 ¥45,559 ¥47,519
Advertising expenses . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
7,583
7,912
7,221
Shipping and handling cost included in selling, general and administrative
expenses . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
16,883
17,203
19,636
18. SEGMENT REPORTING
Kyocera manufactures and sells a highly diversified range of products, including components involving fineceramic technologies and applied ceramic products, telecommunications and information equipment etc.
Kyocera categorizes its operations into seven reporting segments: (1) Fine Ceramic Parts Group,(2) Semiconductor Parts Group, (3) Applied Ceramic Products Group, (4) Electronic Device Group,(5) Telecommunications Equipment Group, (6) Information Equipment Group, and (7) Others.
Main products or businesses of each reporting segment are as follows:(1) Fine Ceramic Parts Group
Components for Semiconductor Processing Equipment and Flat Panel Display (FPD) Manufacturing Equipment,
Information & Telecommunication Components,
General Industrial Machinery Components,
Sapphire Substrates, andAutomotive Components

F-57

Notes to the Consolidated Financial Statements—(Continued)
Kyocera Corporation and Consolidated Subsidiaries(2) Semiconductor Parts Group
Ceramic Packages for Crystal and SAW Devices, CMOS/CCD Image Sensor Ceramic Packages,
LSI Ceramic Packages, Wireless Communication Device Packages,
Optical Communication Device Packages and Components, andOrganic Multilayer Packages(3) Applied Ceramic Products Group
Residential and Commercial Use Solar Power Generating Systems, Solar Cells and Modules,
Cutting Tools, Micro Drills,
Medical and Dental Implants, andJewelry and Applied Ceramic Related Products(4) Electronic Device Group
Ceramic Capacitors, Tantalum Capacitors,
SAW Devices, RF Modules, EMI Filters,
Clock Oscillators, Crystal Units, Ceramic Resonators, Optical Low Pass Filters,
Connectors,
Thermal Printheads, Inkjet Printheads,
Amorphous Silicon Photoreceptor Drums,
LCDs, and Touch Panels(5) Telecommunications Equipment Group
Mobile Phones, andPHS related Products such as PHS Handsets and PHS Base Stations(6) Information Equipment Group
Monochrome and Color Printers and Multifunctional Products,
Wide Format Systems,
Document Solutions,Application Software, andSupplies(7) Others
Information Systems & Telecommunication Services, Engineering Business, Management Consulting Business,
Epoxy Molding Compounds for Semiconductor Encapsulation, Electrical Insulators,
Flexible Printed Circuit Sheet Materials, Synthetic Resin Molded Parts,
Realty Development Business, and
LED Lighting Systems
Inter-segment sales, operating revenue and transfers are made with reference to prevailing market prices.
Transactions between reportable segments are immaterial and not shown separately.

F-58

Notes to the Consolidated Financial Statements—(Continued)
Kyocera Corporation and Consolidated Subsidiaries
Operating profit for each reporting segment represents net sales, less related costs and operating expenses,
excluding corporate gains and equity in losses of affiliates and unconsolidated subsidiaries, income taxes and net
income attributable to noncontrolling interests.
Assets for each reporting segment represent those assets associated with a specific reporting segment. Corporate
assets consist primarily of cash and cash equivalents, the facilities of corporate headquarters and various otherinvestments and assets that are not specific to each reporting segment.
Kyocera’s sales to KDDI Corporation and its consolidated subsidiaries which are mainly recorded in the
Telecommunications Equipment Group are as follows:
Years ended March 31,
2011
2012
2013

Amount of sales to KDDI Corporation and its consolidated subsidiaries(Yen in millions) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . ¥130,554 ¥121,130 ¥92,901
Ratio of amount of sale to KDDI Corporation and its consolidated
subsidiaries to consolidated net sales (%) . . . . . . . . . . . . . . . . . . . . . . . . . . . .
10.3
10.2
7.3

F-59

Notes to the Consolidated Financial Statements—(Continued)
Kyocera Corporation and Consolidated Subsidiaries
Information by reporting segment at and for the years ended March 31, 2011, 2012 and 2013 is summarized on
the following page:
Reporting segments
2011

Net sales:
Fine Ceramic Parts Group . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Semiconductor Parts Group . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Applied Ceramic Products Group . . . . . . . . . . . . . . . . . . . . . . . . . . .
Electronic Device Group . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Telecommunications Equipment Group . . . . . . . . . . . . . . . . . . . . . .
Information Equipment Group . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Others . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Adjustments and eliminations . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Net sales . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

¥76,269 ¥174,687
197,642
242,641
225,168
239,916
139,383(28,782)¥1,266,924

2011

Income before income taxes:
Fine Ceramic Parts Group . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Semiconductor Parts Group . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Applied Ceramic Products Group . . . . . . . . . . . . . . . . . . . . . . . . . . .
Electronic Device Group . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Telecommunications Equipment Group . . . . . . . . . . . . . . . . . . . . . .
Information Equipment Group . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Others . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Years ended March 31,
2012
2013
(Yen in millions)¥

80,372 ¥
153,420
179,784
228,721
178,669
243,457
151,987(25,540)¥1,190,870

74,852
167,241
211,439
271,570
177,314250,534
159,902(32,798)¥1,280,054

Years ended March 31,
2012
2013
(Yen in millions)11,96937,331
29,04941,646
2,121
25,845
9,651¥

12,622
27,754
6,459
16,036
1,469
29,451
8,054

¥

7,614
30,37917,924(4,014)
1,340
21,750
10,542

Total operating profit . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Corporate gains and Equity in losses of affiliates andunconsolidated subsidiaries . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Adjustments and eliminations . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

157,612

101,845

85,535

16,722(2,002)

13,840(792)

17,248(1,420)

Income before income taxes . . . . . . . . . . . . . . . . . . . . . . .

¥ 172,332¥ 114,893¥ 101,363

F-60

Notes to the Consolidated Financial Statements—(Continued)
Kyocera Corporation and Consolidated Subsidiaries
Years ended March 31,
2011
2012
2013
(Yen in millions)

Depreciation and amortization:
Fine Ceramic Parts Group . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . ¥ 5,106 ¥ 6,767 ¥ 6,403
Semiconductor Parts Group . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
10,786
11,795
12,850Applied Ceramic Products Group . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
13,786
14,84315,152
Electronic Device Group . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
13,81813,76215,155
Telecommunications Equipment Group . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
10,172
8,949
7,514
Information Equipment Group . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
11,027
10,131
9,723
Others . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
4,767
4,668
4,734
Corporate . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
2,082
2,205
2,066
Total . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

¥71,544¥73,120¥73,597

Years ended March 31,
2011
2012
2013
(Yen in millions)Write-down of inventories:
Fine Ceramic Parts Group . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . ¥ 146 ¥ 105 ¥ 252
Semiconductor Parts Group . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
266
703
228
Applied Ceramic Products Group . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
1,000
6,115
1,498
Electronic Device Group . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
265
991
956
Telecommunications Equipment Group . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
2,581
2,216
7,127
Information Equipment Group . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
972
1,169
1,106
Others . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
61
187
340
Corporate . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
———Total . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

F-61¥ 5,291¥11,486¥11,507

Notes to the Consolidated Financial Statements—(Continued)
Kyocera Corporation and Consolidated Subsidiaries

2011

Capital expenditures:
Fine Ceramic Parts Group . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Semiconductor Parts Group . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Applied Ceramic Products Group . . . . . . . . . . . . . . . . . . . . . . . . . . .
Electronic Device Group . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Telecommunications Equipment Group . . . . . . . . . . . . . . . . . . . . . .
Information Equipment Group . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Others . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Corporate . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Total . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Years ended March 31,
2012
2013
(Yen in millions)¥

11,31912,99817,66012,118
3,886
7,437
2,747
2,515

¥

11,05013,27913,001
14,193
4,142
6,199
2,800
1,744

¥

3,348
14,727
7,963
14,071
3,069
6,536
2,837
4,137

¥

70,680¥66,408¥56,6882011

Assets by reporting segment:
Fine Ceramic Parts Group . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Semiconductor Parts Group . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Applied Ceramic Products Group . . . . . . . . . . . . . . . . . . . . . . . . . . .
Electronic Device Group . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Telecommunications Equipment Group . . . . . . . . . . . . . . . . . . . . . .
Information Equipment Group . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Others . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

¥57,682
111,406
258,618
351,432
111,634
247,486
132,381

March 31,
2012
(Yen in millions)¥

68,637112,121265,093
417,105
109,975
246,834
138,3042013¥

62,453
118,524
327,465
448,141
119,894
263,837
158,617

1,270,639

1,358,069

1,498,931

Corporate and investments in and advances to affiliates andunconsolidated subsidiaries . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Adjustments and eliminations . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

749,603(73,676)

729,646(93,612)892,098(108,176)

Total assets . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

¥1,946,566¥1,994,103¥2,282,853

F-62

Notes to the Consolidated Financial Statements—(Continued)
Kyocera Corporation and Consolidated Subsidiaries
Information for revenue from external customers by destination and long-lived assets based on physical location
as of and for the years ended March 31, 2011, 2012 and 2013 are summarized as follows:
Geographic segments
2011

Years ended March 31,
2012
2013
(Yen in millions)

Net sales:
Japan . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Asia . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
United States of America . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Europe . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Others . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

¥ 559,883
215,913220,706
210,131
60,291¥ 559,344
205,469
166,706
204,887
54,464¥ 574,202
235,520
215,032
198,868
56,432

Net sales . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

¥1,266,924¥1,190,870¥1,280,054

2011

March 31,
2012
(Yen in millions)2013

Long-lived assets:
Japan . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Asia . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
United States of America . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Europe . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Others . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

¥ 185,969
29,293
11,164
14,9746,354¥ 187,566
35,545
12,787
18,7255,914¥ 182,987
45,585
14,293
19,623
6,336

Total . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

¥ 247,754¥ 260,537¥ 268,824

There are no individually material countries with respect to revenue from external customers and long-lived
assets in Asia, Europe and Others.
19. EARNINGS PER SHARE
A reconciliation of the numerators and the denominators of basic and diluted earnings per share computations is
as follows:
Years ended March 31,
2011
2012
2013
(Yen in millions except per share amounts)

Net income attributable to shareholders of Kyocera Corporation . . . . . . . .

¥122,448¥79,357¥66,473

Basic earnings per share:
Net income attributable to shareholders of Kyocera Corporation . . . .

667.23432.58362.36

Diluted earnings per share:
Net income attributable to shareholders of Kyocera Corporation . . . .

667.23432.58362.36F-63

Notes to the Consolidated Financial Statements—(Continued)
Kyocera Corporation and Consolidated Subsidiaries

2011

Basic average number of shares outstanding . . . . . . . . . . . . . . . . . . . . . . . .
Diluted average number of shares outstanding . . . . . . . . . . . . . . . . . . . . . . .

Years ended March 31,
2012
2013
(shares in thousands)

183,517
183,517

183,451
183,451

183,442
183,442

20. SUPPLEMENTAL CASH FLOW INFORMATION
Supplemental information related to the Consolidated Statements of Cash Flows is as follows:
2011

Cash paid during the year:
Interest . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Income taxes . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Non-cash investing and financing activities:
Obtaining assets by entering into capital lease . . . . . . . . . . . . . . . . . . .
Acquisitions of businesses:
Fair value of assets acquired . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Fair value of liabilities assumed . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Cash acquired . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Years ended March 31,
2012
2013
(Yen in millions)¥ 1,637
34,994¥ 1,741
34,889¥ 1,433
26,112¥ 1,003¥804¥ 1,547¥ 2,475
(608)
(422)

¥ 85,003(45,621)(3,928)¥27,329(4,793)(4,003)

Subtotal . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

1,445

35,454

18,533

Additional payment for acquisitions of businesses in the past years . .

136

—

—

Total . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

¥ 1,581¥ 35,454¥18,533

F-64

SIGNATURES
Pursuant to the requirements of Section 12 of the Securities Exchange Act of 1934, Kyocera certifies that itmeets all of the requirements for filing on Form 20-F and has duly caused this annual report to be signed on its
behalf by the undersigned, thereunto duly authorized.
Kyocera Corporation(Company)
By

June 28, 2013/s/ SHOICHI AOKI
Shoichi Aoki
Director, Managing Executive Officer andGeneral Manager ofCorporate Financial and Accounting GroupINDEX OF EXHIBITS
Exhibit
NumberDescription

1.1

Articles of Incorporation (English translation)

1.2

Share Handling Regulations of the Registrant (incorporated by reference to the Registrant’s annual
report on Form 20-F filed on June 29, 2011)

1.3

Regulations of the Board of Directors of the Registrant (incorporated by reference to the Registrant’s
annual report on Form 20-F filed on June 29, 2011)

1.4

Regulations of the Audit & Supervisory Board of the Registrant (English translation)

2.1

Amended and Restated Deposit Agreement, dated as of June 29, 1998 among Kyocera Corporation,
Citibank N.A. as Depositary and all owners and holders from time to time of American Depositary
Receipts, as amended by Amendment No.1 thereto, dated as of January 5, 1999 (incorporated byreference to the Registrant’s annual report on Form 20-F filed on September 24, 2001), as further
amended by Amendment No.2 thereto, dated as of December 21, 2007, including the form ofAmerican Depositary Receipt (incorporated by reference to Post-effective Amendment No.2 to theRegistrant’s Registration Statement on Form F-6 filed on December 4, 2007 (File No. 333 - 07222))

4.1

Supplemental Consent Decree with Defendant AVX Corporation containing agreement among
AVX Corporation, the United States Environmental Protection Agency and the Commonwealth of
Massachusetts, dated October 10, 2012

8.1

List of Significant Subsidiaries (See “Organizational Structure” in Item 4.C. of the Registrant’s
annual report on Form 20-F)

11.1

Code of Ethics (incorporated by reference to the Registrant’s annual report on Form 20-F filed on
July 5, 2007)

12.1

Certification of the principal executive officer of the Registrant required by Rule 13a-14(a)12.2

Certification of the principal financial officer of the Registrant required by Rule 13a-14(a)13.1

Certification of the principal executive officer of the Registrant required by Rule 13a-14(b) andSection 1350 of Chapter 63 of Title 18 of the United States Code

13.2

Certification of the principal financial officer of the Registrant required by Rule 13a-14(b) andSection 1350 of Chapter 63 of Title 18 of the United States Code

15.1

Consent of PricewaterhouseCoopers Kyoto with respect to its report on the audit of the financial
statements included in the Registrant’s annual report on Form 20-F

101

Instance Document

101

Schema Document101

Calculation Linkbase Document

101

Labels Linkbase Document

101

Presentation Linkbase Document

101

Definition Linkbase Document

Exhibit 1.1(TRANSLATION)

ARTICLES OF INCORPORATION

June 26, 2013

KYOCERA CORPORATION

(TRANSLATION)
ARTICLES OF INCORPORATIONOFKYOCERA CORPORATIONCHAPTER I
GENERAL PROVISIONS
Article 1.

Trade Name

The name of the Company shall be “KYOCERA KABUSHIKI KAISHA” (in English “KYOCERACORPORATION”).
Article 2.

Objects

The objects of the Company shall be to engage in the following businesses:(1) Manufacture and sale of and research on fine ceramics and various kinds of products utilizing fineceramics;(2) Manufacture and sale of and research on single crystal materials and various kinds of products 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;(7) Manufacture and sale of and research on component parts of automobiles;(8) Manufacture and sale of and research on precious metals, precious stones and semiprecious stones andvarious 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 andornaments;(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) Construction and sale of power plants, and power generation business and management and operation
thereof;(14) Manufacture and sale of and research on optical machinery and instruments and precision machineryand instruments and parts hereof;(15) Manufacture and sale of and research on machinery and equipment for business use and machinery andequipment for industrial use and parts thereof;(16) Manufacture and sale of and research on photosensitive materials for photographic use;(17) Design, control and contract of construction relating to public works, building, electric equipment andpiping construction;(18) Sale, purchase, lease, maintenance and brokerage of real estate;-1-(19) Lease, maintenance and management of facilities relating to sports, recreation, medical care, hotels andrestaurants, and the travel agency business;(20) Road freight handling and warehousing;(21) Business relating to non-life insurance agency and life insurance canvassing, and general leasing,factoring and finance business;(22) Sale and purchase of various kinds of plants and technology related thereto;(23) Design and sale of software relating to computers;(24) Disposition through sale and the like and acquisition through purchase and the like of patents and otherindustrial property rights and know-how appertaining to the preceding items and acting as intermediaryin such transactions;(25) Businesses relating to import and export of any of the foregoing items; and(26) All commercial activities relating or incidental to any of the foregoing.
Article 3.

Location of Principal Office

The principal office of the Company shall be located in Kyoto City.
Article 4.

Organizations

The Company shall have the following organizations other than the General Meeting of Shareholders andDirectors.
(1) The Board of Directors(2) Audit & Supervisory Board Members(3) The Audit & Supervisory Board(4) Accounting Auditors
Article 5.

Public Notices

Method to give public notices by the Company shall be electronic public notice, provided, however, that if,
due to accident or other unavoidable reason, the use of the electronic public notice becomes impossible, public
notices by the Company shall appear in The Nihon Keizai Shimbun (in English “The Nikkei”).

CHAPTER IISHARES
Article 6.

Total Number of Shares Authorized to Be Issued

The total number of shares authorized to be issued by the Company shall be 600,000,000.
Article 7.

Acquisition of its Own Shares by the Company

The Company may, under the provisions of Article 165, Paragraph 2 of the Companies Act, acquire its own
shares through market, etc., pursuant to a resolution of the Board of Directors.
Article 8.

Number of Shares Constituting a Share Unit

The number of shares constituting a single share unit of the Company shall be 100.
-2-Article 9.

Rights Relating to Shares not Constituting a Full Share Unit

Shareholders of the Company cannot exercise their rights relating to shares not constituting a full share unitthat they own except for the following:(1) The right provided for in the provisions of Article 189, Paragraph 2, of the Companies Act;
(2) The right to make a request provided for in the provisions of Article 166, Paragraph 1 of theCompanies Act;
(3) The right to receive allocation of offered shares and offered stock acquisition rights pursuant to thenumber of shares that the shareholders own; and(4) The right to make a request provided for in the immediately following Article.
Article 10.

Request to Sell Shares by Shareholders Holding Shares not Constituting a Full Share Unit

Shareholders of the Company may, in accordance with the provisions of the Share Handling Regulations of
the Company, require the Company to sell such number of shares as will, when aggregated with the shares notconstituting a full share unit owned by them, constitute a full share unit.
Article 11.

Manager of Shareholders Register

1. The Company shall have a Manager of the Shareholders Register.
2. The Manager of the Shareholders Register and its management office shall be determined by resolution of
the Board of Directors and public notice thereof shall be given.
3. The preparation and keeping of the Shareholders Register and the Register of Stock Acquisition Rights
and other matters relating to the share handling of the Shareholders Register and the Register of Stock
Acquisition Rights shall be entrusted to the Manager of the Shareholders Register, and the Company shall nothandle them.
Article 12.

Share Handling Regulations

The matters relating to the share handling and fees relating to the shares of the Company shall be provided
for in the Share Handling Regulations of the Company established by the Board of Directors in addition to thelaws and regulations and the Articles of Incorporation.
CHAPTER III
GENERAL MEETING OF SHAREHOLDERS
Article 13.

Convocation of General Meeting of Shareholders

An Ordinary General Meeting of Shareholders of the Company shall be convened within three months after
the last day of each business year and Extraordinary General Meeting of Shareholders shall be convened
whenever necessary.
Article 14.

Record Date of Ordinary General Meeting of Shareholders

The record date of the voting rights at the Ordinary General Meeting of Shareholders of the Company shallbe March 31 in each year.
Article 15.

Person to Convene General Meeting of Shareholders and the Chairperson

1. A General Meeting of Shareholders shall be convened by the President, and the President shall act as thechairperson.
-3-2. Should the President be unable to so act, other Director designated by the Board of Directors in advance(in that order) shall convene the General Meeting of Shareholders and act as the chairperson.
Article 16.

Internet Disclosure and Deemed Provision of Reference Documents for General Meeting of
Shareholders, etc.

The Company may, by disclosing the information relating to the matters that shall be described or indicatedin reference documents for the General Meeting of Shareholders, business report, financial statements andconsolidated financial statements through Internet in accordance with the Ministerial Ordinance of the Ministryof Justice, in connection with the convocation of the General Meeting of Shareholders, deem that it has provided
the same to the shareholders.
Article 17.

Adoption of Resolutions

1. Unless otherwise provided for by the laws and regulations or the Articles of Incorporation, resolutions of
a General Meeting of Shareholders shall be adopted by a majority of the voting rights of the shareholders who areentitled to exercise the voting rights, present at the meeting.
2. Resolutions pursuant to Article 309, Paragraph 2 of the Companies Act shall be adopted by two-thirds ormore of the voting rights of the shareholders, who are entitled to exercise the voting rights, present at themeeting, at which the shareholders holding one-third or more of the voting rights of all shareholders who areentitled to exercise the voting rights must present.
Article 18.

Exercise of Voting Rights by Proxy

1. A shareholder of the Company may exercise his/her voting rights at a General Meeting of Shareholders
by proxy who shall be another shareholder of the Company possessing voting rights.
2. In case of the preceding paragraph, a shareholder or proxy shall submit to the Company a document
evidencing his/her proxy right at each General Meeting of Shareholders.
CHAPTER IV
DIRECTORS AND THE BOARD OF DIRECTORS
Article 19.

Number of Directors

The authorized number of Directors of the Company shall be twenty (20).
Article 20.

Method of Election of Directors

1. Directors shall be elected at the General Meeting of Shareholders.
2. The election of Directors shall be made by a majority of voting rights of shareholders, who are entitled toexercise the voting rights present at the meeting, at which the shareholders holding one-third or more of thevoting rights of all shareholders who are entitled to exercise the voting rights must present.
3. For the election of Directors, no cumulative voting shall be used.
Article 21.

Term of Office of Directors

1. The term of office of a Director shall end at the adjournment of the Ordinary General Meeting of
Shareholders for the last business year ending within two years after assumption of office.
2. The term of office of the Director elected to increase the number of the Directors or to fill a vacancy shallterminate when the term of office of the other Directors in office shall expire.
-4-Article 22.

Representative Directors, Executive Directors, Chairman Emeritus, Advisors and Counselors

1. The Board of Directors shall appoint, by resolution, Representative Directors.
2. The Board of Directors may appoint, by resolution, a Chairperson of the Board of Directors and a
President and Directors, one or more Vice-Chairpersons and Directors, Executive Vice-Presidents and Directors,
Senior Managing Directors, Managing Directors and Advisors and Directors.
3. The Board of Directors may appoint, by resolution, a Chairperson Emeritus.
4. The Board of Directors may appoint, by resolution, Advisors and Counselors.
Article 23.

Remuneration, etc. of Directors

Remunerations, bonuses and any other financial benefits received by Directors from the Company ascompensation for undertaking their functions (hereinafter referred to as the “Remuneration, etc.”) shall be
determined by resolution at a General Meeting of Shareholders.
Article 24.

Person to Convene the Board of Directors and the Chairperson

1. Unless otherwise provided for by the laws and regulations, the Chairperson of the Board of Directors
shall convene the meeting of the Board of Directors and act as the chairperson.
2. Should there be a vacancy for the Chairperson of the Board of Directors or should the Chairperson of theBoard of Directors be unable to so act, the President shall, and should the President be unable to so act, other
Director designated by the Board of Directors in advance (in that order) shall convene the Board of Directors andact as the chairperson.
Article 25.

Convocation Notice of Meetings of the Board of Directors

1. Convocation notice of meetings of the Board of Directors shall be dispatched to each Director and
Audit & Supervisory Board Member at least three days prior to the date set for such meetings; provided,
however, that such period may be shortened in case of emergency.
2. The Board of Directors may be held without taking convocation procedures if unanimous consent isobtained from all Directors and Audit & Supervisory Board Members.
Article 26.

Omission of Resolution in the Board of Directors

The Company may deem that resolution at the meeting of the Board of Directors to approve the matter that
requires resolution at the meeting of the Board of Directors has been adopted, when all Directors who are able toparticipate in resolution of such matter have given their consents thereto in writing or through electronic record,
except for the case where any of the Audit & Supervisory Board Members raises objection against it.
Article 27.

The Board of Directors Regulations

Unless otherwise provided for by the laws and regulations or the Articles of Incorporation, mattersconcerning the Board of Directors shall be provided for in the Board of Directors Regulations established by the
Board of Directors.
Article 28.

Exemption from Liability of Outside Directors

The Company may, under the provisions of Article 427, Paragraph 1 of the Companies Act, enter into acontract with any Outside Director, to limit the liability for damages caused by his/her dereliction of duty,
provided that the maximum amount of liability pursuant to such contract shall not exceed the minimum amountof liability provided for in Article 425, Paragraph 1 of the Companies Act.
-5-

CHAPTER V
AUDIT & SUPERVISORY BOARD MEMBERS
AND THE AUDIT & SUPERVISORY BOARD
Article 29.

Number of Audit & Supervisory Board Members

The authorized number of Audit & Supervisory Board Members of the Company shall be six (6).
Article 30.

Method of Election of Audit & Supervisory Board Members

1. Audit & Supervisory Board Members shall be elected at a General Meeting of Shareholders.
2. The election of Audit & Supervisory Board Members shall be made by a majority of voting rights ofshareholders, who are entitled to exercise the voting rights present at the meeting, at which the shareholders
holding one-third or more of the voting rights of all shareholders who are entitled to exercise the voting rights
must present.
Article 31.

Term of Office of Audit & Supervisory Board Members

1. The term of office of an Audit & Supervisory Board Member shall end at the adjournment of theOrdinary General Meeting of Shareholders for the last business year ending within four years after assumption of
office.
2. The term of office of the Audit & Supervisory Board Member elected to fill a vacancy shall terminate
when the term of office of the other Audit & Supervisory Board Members in office shall expire.
Article 32.

Full-time Audit & Supervisory Board Member(s)The Audit & Supervisory Board shall elect, by resolution, full-time Audit & Supervisory Board Member(s).
Article 33.

Remuneration etc. of Audit & Supervisory Board Members

Remuneration etc. of Audit & Supervisory Board Members shall be determined by resolution at a General
Meeting of Shareholders.
Article 34.

Convocation Notice of Meetings of the Audit & Supervisory Board

1. Convocation notice of meetings of the Audit & Supervisory Board shall be dispatched to each Audit &Supervisory Board Member at least three days prior to the date set for such meetings; provided, however, thatsuch period may be shortened in case of emergency.
2. The Audit & Supervisory Board may be held without taking the convocation procedures if unanimous
consent is obtained from all Audit & Supervisory Board Members.
Article 35.

Regulations of the Audit & Supervisory Board

Unless otherwise provided for by the laws and regulations or the Articles of Incorporation, mattersconcerning the Audit & Supervisory Board shall be provided for in the Regulations of the Audit & Supervisory
Board established by the Audit & Supervisory Board.
Article 36.

Exemption from Liability of Outside Audit & Supervisory Board Members

The Company may, under the provisions of Article 427, Paragraph 1 of the Companies Act, enter into acontract with any Outside Audit & Supervisory Board Member, to limit the liability for damages caused by his/her dereliction of duty, provided that the maximum amount of liability pursuant to such contract shall not exceed
the minimum amount of liability provided for in Article 425, Paragraph 1 of the Companies Act.
-6-

CHAPTER VI
ACCOUNTS
Article 37.

Business YearThe business year of the Company shall be a one-year period commencing on April 1 in each year andending on March 31 of the following year.
Article 38.

Record Date of Dividends of Distributable Amount

1. Record date of the year-end dividends of the Company shall be March 31 in each year.
2. In addition to the preceding paragraph, the Company may distribute the dividends of distributable amountby setting record dates.
Article 39.

Interim Dividends

The Company may distribute interim dividends, by resolution of the Board of Directors by setting a record
date as of September 30 in each year.
Article 40.

Period of Limitation for Dividends

If assets distributed as dividends are not collected within three years from the date when the distribution
thereof becomes due, the Company shall be exempt from its obligation to distribute such dividends.

-7-

Exhibit 1.4(TRANSLATION)REGULATIONS OF THE AUDIT & SUPERVISORY BOARD

KYOCERA CORPORATIONTHE AUDIT & SUPERVISORY BOARD
Amended on November 1, 2012 (English translation only)REGULATIONS OF THE AUDIT & SUPERVISORY BOARDOF
KYOCERA CORPORATION
Article 1.

PurposeAll matters relating to the Audit & Supervisory Board of the Company shall be governed by laws andregulations and the Articles of Incorporation and by these Regulations.
Article 2.

Organization

1. The Audit & Supervisory Board shall consist of all Audit & Supervisory Board Members.
2. The Audit & Supervisory Board shall appoint Standing Audit & Supervisory Board Members and a
Chairman of the Audit & Supervisory Board.
Article 3.

Purpose of the Audit & Supervisory Board

The Audit & Supervisory Board shall receive reports on, discuss and resolve important matters relating to
the auditing; provided, however, that each Audit & Supervisory Board Member shall not be prevented fromexercising its powers.
Article 4.

Duties of the Audit & Supervisory Board

The Audit & Supervisory Board shall undertake the following duties; provided, however, that no decision as
set forth in item (3) may prevent each Audit & Supervisory Board Member from exercising its powers:(1) Preparation of Audit Reports;(2) Appointment and dismissal of Standing Audit & Supervisory Board Members; and(3) Determination of auditing guidelines, methods of research on status of business and assets and othermatters related to conduct of duties of Audit & Supervisory Board Members.
Article 5.

Appointment and Dismissal of Standing Audit & Supervisory Board Members

The Audit & Supervisory Board shall appoint or dismiss Standing Audit & Supervisory Board Members
from among the Audit & Supervisory Board Members by resolution of the Audit & Supervisory Board.
Article 6.

Chairman

1. The Audit & Supervisory Board shall elect a Chairman from among the Audit & Supervisory Board
Members by resolution of the Audit & Supervisory Board.
2. The Chairman of the Audit & Supervisory Board shall conduct these duties delegated to him/her by the
Audit & Supervisory Board, as well as the duties set forth in paragraph 1 of Article 9; provided, however, that,
the Chairman shall not prevent each Audit & Supervisory Board Member from exercising its powers.
Article 7.

Specified Audit & Supervisory Board Member

The Audit & Supervisory Board shall appoint the Chairman as a Specified Audit & Supervisory Board
Member, and such Specified Audit & Supervisory Board Member shall undertake the following duties:(1) Receiving from the Directors the business report and its annexed detailed specifications and financialrelated statements and delivering the same to the other Audit & Supervisory Board Members;-1-(2) Notifying the Representative Directors of the contents of the Audit Report prepared by the Audit &Supervisory Board concerning the business report and its annexed detailed specifications;(3) Establishing an agreement with the Representative Directors as to the date on which the notice referred
to in the preceding item shall be provided;(4) Receiving notice of the contents of the Accounting Audit Report prepared by the Accounting Auditorsand notifying the other Audit & Supervisory Board Members of the contents of the same;(5) Establishing an agreement with the Representative Directors and the Accounting Auditors as to thedate on which the notice referred to in the preceding item shall be received;(6) Notifying the Representative Directors and the Accounting Auditors of the contents of the Audit
Report prepared by the Audit & Supervisory Board concerning the financial-related statements; and(7) Establishing an agreement with the Representative Directors as to the date on which the notice referred
to in the preceding item shall be provided.
Article 8.

Meetings

Meetings of the Audit & Supervisory Board shall, in principle, be held at least four (4) times each fiscal
year; provided, however, that extraordinary meetings may be held whenever necessary.
Article 9.

Person Entitled to Convene Meetings

1. The Chairman shall convene and manage the meetings of the Audit & Supervisory Board.
2. Any Audit & Supervisory Board Member may request the Chairman, to convene a meeting of the
Audit & Supervisory Board.
3. If, notwithstanding any request as set forth in the immediately preceding paragraph, the Chairman does
not convene a meeting of the Audit & Supervisory Board, the requesting Audit & Supervisory Board Member
may convene and manage such meeting of the Audit & Supervisory Board.
Article 10.

Convocation Procedure

1. In order to convene a meeting of the Audit & Supervisory Board, a notice of the meeting of the Audit &Supervisory Board shall be dispatched to each Audit & Supervisory Board Member at least three (3) days prior to
the date of such meeting.
2. The convocation procedure for a meeting of the Audit & Supervisory Board may be omitted with theconsent of all Audit & Supervisory Board Members.
Article 11.

Manner of Adopting Resolutions

1. Resolutions of the Audit & Supervisory Board shall be adopted by the majority vote of the Audit &Supervisory Board Members.
2. Resolutions shall be adopted following deliberation based on sufficient materials.
Article 12.

Resolutions on Auditing Policy

1. Matters such as auditing policy, auditing plan, auditing methods and allocation of duties shall be
determined by resolution of the Audit & Supervisory Board.
-2-2. All matters other than those referred to in the immediately preceding paragraph, which any Audit &Supervisory Board Member deems necessary in conducting its duties, including budget for auditing expenses,
shall be determined by resolution of the Audit & Supervisory Board.
3. Substance of the following systems and other matters shall be determined by resolution of the Audit &Supervisory Board, and the Audit & Supervisory Board shall request the Directors to improve such systems andother matters:(1) Matters concerning employee supporting the Audit & Supervisory Board Members’ conduct of theirduties;(2) Matters concerning independence from the Directors of the employees referred to in the immediately
preceding paragraph;(3) A system concerning reports to the Audit & Supervisory Board Members, including those from the
Directors and employees; and(4) Other systems to ensure the audits by the Audit & Supervisory Board Members are conductedeffectively.
Article 13.

Regular Meetings with Representative Directors, etc.

1. The Audit & Supervisory Board shall seek to promote mutual understanding between the Representative
Directors and the Audit & Supervisory Board by, among other things, holding meetings with the Representative
Directors on a regular basis and exchanging opinions on issues to be addressed by the Company, improvement of
the environment for audit by the Audit & Supervisory Board Members and important auditing issues, etc., as well
as by making requests judged to be necessary.
2. The Audit & Supervisory Board shall explain auditing policy, auditing plan and status of implementationof auditing and the effect thereof, as appropriate, to the Representative Directors and the Board of Directors.
3. The Audit & Supervisory Board shall, based on the system provided in paragraph 3, item 3 of theimmediately preceding Article, receive reports from Directors and employees on matters determined, in
consultation with the Directors, to be reported to the Audit & Supervisory Board by the Directors and theemployees, as well as such matters as may be provided by law.
Article 14.

Reports to the Audit & Supervisory Board

1. Each Audit & Supervisory Board Member shall report to the Audit & Supervisory Board on the status of
conducting its duties on a regular basis and from time to time as well as whenever requested by the Audit &Supervisory Board.
2. An Audit & Supervisory Board Member who receives a report from the Accounting Auditors, theDirectors, the employees of any internal auditing department, etc. or other staff shall report the same to the
Audit & Supervisory Board.
3. The Audit & Supervisory Board shall request the Accounting Auditors, the Directors, the employees of
any internal auditing department, etc. and other staff, to make reports whenever necessary.
4. In connection with paragraphs 1 through 3 of this Article, if any of the Audit & Supervisory Board
Members, the Accounting Auditors, the Directors, the employees of any internal auditing department, etc. orother staff reports to all of the Audit & Supervisory Board Members any matter that should be reported to the
Audit & Supervisory Board, no further report to the Audit & Supervisory Board on such matter will benecessary.
-3-Article 15.

Measures for Reports

If the Audit & Supervisory Board receives any of the following reports, the Audit & Supervisory Board
shall conduct necessary research and take appropriate measures depending on the situation:(1) A report from a Director stating that such Director has discovered a fact which may be materially
prejudicial to the Company;(2) A report from an Accounting Auditor that such Accounting Auditor has discovered misconduct or amaterial fact violating laws or regulations or the Articles of Incorporation, in connection with a
Director’s conduct of duties; or(3) A report from a Director or an employee on such matters as have been determined in advance upon
consultation with the Directors.
Article 16.

Preparation of Audit Report

1. The Audit & Supervisory Board shall prepare an Audit Report based on the Audit Report(s) prepared byeach of the Audit & Supervisory Board Members after deliberation.
2. If the content of the Audit Report prepared by the Audit & Supervisory Board differs from that of the
Audit Report prepared by any of the Audit & Supervisory Board Members, and if such Audit & Supervisory
Board Member so requests, the Audit & Supervisory Board shall append the matters set forth in such Audit &Supervisory Board Member’s Audit Report to the Audit Report prepared by the Audit & Supervisory Board.
3. Either the signature or the name and seal (including electronic signature) of each Audit & Supervisory
Board Member shall be affixed to the Audit Report prepared by the Audit & Supervisory Board. The Standing
Audit & Supervisory Board Members and outside Audit & Supervisory Board Members shall be identified orrecorded as such in the Audit Report.
4. Paragraphs 1 through 3 of this Article shall apply mutatis mutandis to interim financial statements or
consolidated statements, if prepared by the Company.
Article 17.

Consent to the Appointment of the Audit & Supervisory Board Members

1. The following matters relating to the appointment of the Audit & Supervisory Board Members shall behandled by resolution of the Audit & Supervisory Board:(1) Consent to submission to the General Meeting of Shareholders of any proposal relating to theappointment of Audit & Supervisory Board Member(s);(2) Request to include in the agenda of the General Meeting of Shareholders any appointment of Audit &Supervisory Board Member(s); and(3) Request to submit to the General Meeting of Shareholders any proposal relating to the appointment ofAudit & Supervisory Board Member(s).
2. The immediately preceding paragraph shall apply mutatis mutandis to appointment of Audit &Supervisory Board Member(s) to fill a vacancy.
Article 18.

Consent, etc. to Appointment of Accounting Auditors

1. The Audit & Supervisory Board shall evaluate the appropriateness of re-appointment of Accounting
Auditors.
-4-

2. The following matters relating to the appointment, non-reappointment and dismissal of the Accounting
Auditors shall be handled by resolution of the Audit & Supervisory Board:(1) Consent to submission to the General Meeting of Shareholders of any proposal relating to theappointment of Accounting Auditor(s);(2) Consent to inclusion in the agenda of the General Meeting of Shareholders of the dismissal or nonreappointment of Accounting Auditor(s);(3) Request to submit to the General Meeting of Shareholders any proposal relating to the appointment of
Accounting Auditor(s);(4) Request to include in the agenda of the General Meeting of Shareholders the appointment, dismissal or
non-reappointment of Accounting Auditor(s); and(5) Appointment of a provisional Accounting Auditor in the case of absence of an Accounting Auditor.
3. Consent, to be given by all Audit & Supervisory Board Members, to dismiss any Accounting Auditor for
any of the reasons as provided by law shall be obtained upon consultation at a meeting of the Audit &Supervisory Board. In such case, an Audit & Supervisory Board Member nominated by the Audit & Supervisory
Board shall report such dismissal and the reason therefor at the General Meeting of Shareholders to be held
immediately following such dismissal.
4. The consent referred to in the immediately preceding paragraph may be given in written form or byelectronic record in case of urgent necessity.
Article 19.

Consent to Remuneration, etc. of Accounting Auditors

Consent to remuneration of the Accounting Auditors or those who provisionally conduct the duties of an
Accounting Auditor shall be resolved at the Audit & Supervisory Board.
Article 20.

Consent to Partial Exemption of Directors from their Liability

1. The following consents, to be given by all Audit & Supervisory Board Members, shall be obtained upon
consultation at a meeting of the Audit & Supervisory Board:(1) Consent to submission to the General Meeting of Shareholders of any proposal relating to partial
exemption of Directors from their liability;(2) Consent to submission to the General Meeting of Shareholders of any proposal relating to amendmentof the Articles of Incorporation to make it possible to partly exempt Directors from their liability; and(3) Consent to submission to the General Meeting of Shareholders of any proposal relating to amendmentof the Articles of Incorporation to make it possible to enter into agreements with outside Directors
providing partial exemption of outside Directors from their liability.
2. The consents referred to in the immediately preceding paragraph may be given in written form or byelectronic record in case of urgent necessity.
Article 21.

Consent to Participate for Assistance

1. Consent, to be given by all Audit & Supervisory Board Members, to participation by the Company in any
shareholder litigation in order to assist a defendant Director shall be obtained upon consultation at a meeting of
the Audit & Supervisory Board.
2. The consent referred to in the immediately preceding paragraph may be given in written form or byelectronic record in case of urgent necessity.
-5-Article 22.

Consultation concerning Exercising Powers of the Audit & Supervisory Board Members

The Audit & Supervisory Board Members may consult at a meeting of the Audit & Supervisory Board about
the following matters prior to exercise of their powers or performance of their duties:(1) Explanation responding to inquiries posed in a notification by a shareholder prior to the General
Meeting of Shareholders;(2) Reporting to the Board of Directors and requesting convocation of a meeting of the Board of Directors;(3) Results of research on proposals and documents to be submitted to the General Meeting of
Shareholders;(4) Request for suspension of action by a Director that is beyond the purposes of the Company orotherwise in violation of laws or regulations or the Articles of Incorporation;(5) Providing an opinion at the General Meeting of Shareholders as to, among others, the appointment,
dismissal, resignation and remuneration of the Audit & Supervisory Board Members;(6) Matters relating to litigation between the Company and any of the Directors; and(7) Other matters relating to litigation.
Article 23.

Consultation concerning Remuneration, etc.

Consultation concerning remuneration, etc. of the Audit & Supervisory Board Members may be conducted by
the Audit & Supervisory Board, subject to the unanimous consent from all Audit & Supervisory Board Members.
Article 24.

Minutes

1. The Audit & Supervisory Board shall prepare minutes stating the following matters, and either thesignature or the name and seal (including electronic signature) of each Audit & Supervisory Board Member
present at the meeting shall be affixed to the minutes:(1) The time and place at which the meeting was held (including methods of attendance of Audit &Supervisory Board Members, Directors or Accounting Auditors attending such meeting from otherplaces, if any);(2) Substance of the proceedings of the meeting and the results thereof;(3) If any opinion or statement regarding the following matters is expressed at such meeting, a summary ofsuch opinion or statement:(a) a report from a Director stating that such Director has discovered a fact which may be materially
prejudicial to the Company; and(b) a report from an Accounting Auditor that such Accounting Auditor has discovered misconduct ora material fact violating laws or regulations or the Articles of Incorporation in connection with a
Director’s conduct of duties;(4) Names of the Directors and/or Accounting Auditors who attended the meeting of the Audit &Supervisory Board; and(5) The name of the Chairman of the Audit & Supervisory Board.
2. If a report to the Audit & Supervisory Board is deemed unnecessary pursuant to paragraph 4 of Article 14,
minutes setting forth the following matters shall be prepared:(1) The substance of the matter on which a report was deemed unnecessary;(2) The date on which a report to the Audit & Supervisory Board was deemed unnecessary; and(3) The name(s) of the Audit & Supervisory Board Member(s) who engaged in preparation of the minutes.
-6-

3. The minutes referred to in paragraphs 1 and 2 of this Article, shall be kept for ten (10) years at the head
office of the Company.
Article 25.

Secretariat of the Audit & Supervisory Board

Employees supporting the Audit & Supervisory Board Members’ conduct of their duties, such as staff for
the Audit & Supervisory Board, shall handle secretarial business concerning convocation of meetings of the
Audit & Supervisory Board, preparation of the minutes thereof and other affairs concerning the management of
the Audit & Supervisory Board.
Article 26.

Auditing Standards of the Audit & Supervisory Board Members

Matters concerning the Audit & Supervisory Board and audits by the Audit & Supervisory Board Members
shall be governed by laws and regulations, the Articles of Incorporation, these Regulations and the auditing
standards of the Audit & Supervisory Board Members determined by the Audit & Supervisory Board.
Article 27.

Amendment to and Abolishment of these Regulations

Amendment to and abolishment of these Regulations shall be made by the Audit & Supervisory Board.

-7-

SUPPLEMENTARY PROVISIONS
These Regulations came into force on June 1, 2010.
These Regulations:—Established on June 30, 1994.
—Amended in part on July 29, 1997.
—Amended in part on May 1, 2002.
—Amended on July 30, 2004.
—Amended on July 19, 2006.
—Amended on June 1, 2010.
—Amended on November 1, 2012. (English translation only)-8-Case 1:83-cv-03882-WGY Document 2617-1 Filed 10/10/12 Page 1 of 26

UNITED STATES DISTRICT COURT
DISTRICT OF MASSACHUSETTS

UNITED STATES OF AMERICA,
Plaintiff,v.
AVX CORPORATION, et al.,Defendants.
COMMONWEALTH OF MASSACHUSETTS,
Plaintiff,v.
AVX CORPORATION, et al.,Defendants.

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CIVIL ACTION NO. 83-3882-Y

SUPPLEMENTAL CONSENT DECREE WITH DEFENDANT AVX CORPORATIONThis Supplemental Consent Decree (“Supplemental Decree”), upon entry by the Court,
supplements and modifies the Consent Decree with Defendant AVX Corporation that wasentered by this Court on February 3, 1992 with regard to the New Bedford Harbor Site (the“1992 Consent Decree”) by adding new provisions, deleting certain provisions, and revisingcertain other provisions, which affect the parties’ rights and obligations only on and after the dateof entry of this Supplemental Decree. Except as specifically provided in this Supplemental
Decree, all provisions of the 1992 Consent Decree otherwise remain in full force and effect. The
1992 Consent Decree is attached hereto as Appendix A.
The 1992 Consent Decree resolved the claims that the United States of America ("UnitedStates") and the Commonwealth of Massachusetts ("Commonwealth") (collectively referred to as"Plaintiffs") then had against AVX Corporation ("AVX”).

Case 1:83-cv-03882-WGY Document 2617-1 Filed 10/10/12 Page 2 of 26

This Supplemental Decree resolves claims that Plaintiffs now seek to assert against AVX,
which claims Plaintiffs contend are authorized or provided for in Paragraphs 16 and 18 of the
1992 Consent Decree.
Together, the 1992 Consent Decree and this Supplemental Decree resolve Plaintiffs’
claims against AVX with regard to the New Bedford Harbor Site except as set forth in these
Decrees.
Introduction
Subsequent to the entry of the 1992 Consent Decree, the United States Environmental
Protection Agency (“EPA”) implemented the remedy for Operable Unit 2 (“OU2”) at the Site, as
set forth in the April 6, 1990 Record of Decision (“ROD”), as modified. EPA completed thework for the OU2 remedy in May 2000.
On September 25, 1998, EPA issued a ROD selecting the remedy for Operable Unit 1(“OU1”) at the Site, including the State enhanced remedy. The Commonwealth concurred on the
OU1 selected remedy. The remedy for OU1, as modified, at the Site includes: the dredging anddisposal of contaminated sediment; construction of on-site containment facilities for dredged
sediment contaminated with polychlorinated biphenyls; long-term monitoring and maintenanceof the facilities; long-term monitoring of the Site; and institutional controls.
Following the issuance of the OU1 ROD, from 1999 through 2004, EPA performed
remedial design and remedial action activities. In 2004, EPA began full-scale dredging ofcontaminated sediment as part of the OU1 remedy.
Pursuant to a cost-sharing agreement known as the “Superfund State Contract Between
the Commonwealth of Massachusetts and the U.S. Environmental Protection Agency for the
Response Related to the New Bedford Harbor Site Upper and Lower Harbor Operable Unit, New
2

Case 1:83-cv-03882-WGY Document 2617-1 Filed 10/10/12 Page 3 of 26

Bedford, Massachusetts,” last executed on February 28, 2000, as amended, the Commonwealthhas been, inter alia, obligated to fund and has funded a portion of the OU1 remedy that EPA has
performed, and the Commonwealth has been obligated to perform certain operation andmaintenance activities.
The United States and the Commonwealth assert that the conditions giving rise to claims
against AVX, as set forth in the reservations of rights in Paragraphs 16 and 18 of the 1992
Consent Decree, have occurred, thereby allowing Plaintiffs to seek from AVX response costs or
performance of the OU1 remedy.
On April 18, 2012, EPA issued to AVX a Unilateral Administrative Order (Docket No.
CERCLA-01-2012-0045) (“Administrative Order”), pursuant to Section 106 of CERCLA, 42
U.S.C. § 9606, and the 1992 Consent Decree, directing AVX to perform a remedial design and to
implement the remedial design by performing a remedial action and performing operation andmaintenance of such remedial action for the OU1 remedy.
The parties have engaged in good faith negotiations with one another to resolve theallegations and rights of Plaintiffs under Paragraphs 16 and 18 of the 1992 Consent Decree andthe defenses and rights of AVX regarding Plaintiffs’ claims.
The United States, the Commonwealth, and AVX agree, and by modifying the 1992
Consent Decree as provided in this Supplemental Decree, this Court finds that the settlement
memorialized in this Supplemental Decree, without prolonged and complicated litigation andwithout the admission or adjudication of any issue of fact or law, is the most appropriate meansof resolving the parties’ claims and defenses, will expedite the cleanup of the New Bedford
Harbor Site, and that this Supplemental Decree is fair, reasonable, and in the public interest.

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Case 1:83-cv-03882-WGY Document 2617-1 Filed 10/10/12 Page 4 of 26

Upon entry of this Supplemental Decree by this Court, EPA will withdraw theAdministrative Order and AVX will withdraw its Freedom of Information Act requests (to EPA,
the United States Department of Justice and the United States Army Corps of Engineers) and
Massachusetts Public Records Law requests to the Commonwealth (including to the Departmentof Environmental Protection).
The parties to the 1992 Consent Decree have entered into this Supplemental Decree
supplementing or modifying certain provisions of the 1992 Consent Decree specifically related
to the claims asserted by Plaintiffs, by adding new provisions, deleting certain provisions, andrevising certain other provisions subject to Court approval, as specified herein.
NOW, THEREFORE, it is hereby ORDERED, ADJUDGED, AND DECREED:This Supplemental Decree supplements or modifies those provisions of the 1992 Consent
Decree as specified herein by adding new provisions, deleting certain provisions, and revisingcertain other provisions, which affect the parties’ rights and obligations only on and after the dateof entry of this Supplemental Decree. Except as specifically provided in this Supplemental
Decree, all provisions of the 1992 Consent Decree otherwise remain in full force and effect. In
the case of any conflict between the 1992 Consent Decree and this Supplemental Decree, thisSupplemental Decree shall control. Further, nothing in this Supplemental Decree shall limit,
modify or otherwise affect the rights or obligations of any party in either the Administrative
Settlement Agreement and Order on Consent for Non-Time Critical Removal Action (CERCLA
Docket No. 01-2010-0017) between AVX and EPA, effective June 3, 2010, or the Administrative
Consent Order and Notice of Responsibility in the Matter of AVX Corporation, File No. ACOSE-09-3P-016, Release Tracking Number 4-0601 between AVX and the Commonwealth. having
an effective date of June 3, 2010.
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Jurisdiction
1.

The United States District Court for the District of Massachusetts ("Court") has

jurisdiction over the subject matter of this action and the parties to this Supplemental Decree
pursuant to 28 U.S.C. §§ 1331 and 1345, Section 113(b) of CERCLA, 42 U.S.C. § 9613(b),Section 7003 of RCRA, 42 U.S.C. § 6973, Section 504 of the CWA, 33 U.S.C. § 1564, andSection 13 of the 1899 Act, 33 U.S.C. § 407, and has pendent jurisdiction over the claims arisingunder state law. This Court has personal jurisdiction over AVX which, for purposes of thisSupplemental Decree, waives all objections and defenses that it may have to jurisdiction of the
Court or to venue in this District.
Applicability of Supplemental Decree2.

Paragraph 2 in the 1992 Consent Decree is unchanged except that:A.

In the first sentence of Paragraph 2.A., the location of AVX’s executive

offices is changed from “New York, New York” to “Fountain Inn, South Carolina”;
B.

At the end of the initial clause of the final sentence of Paragraph 2.A., “ofthe 1992 Consent Decree and Paragraph 16 of this Supplemental Decree” is inserted after“Paragraphs 14 and 15” and before the comma; andC.

At the end of Paragraph 2.C. “including the Massachusetts Department ofTransportation, including as successor to Massachusetts Department of Public Works” is inserted
after “permitted by law” and before the period.
3.

The provisions of this Supplemental Decree shall apply to and be binding on the

United States and the Commonwealth and on AVX and its successors and assigns. Changes in
the ownership or corporate form or status of AVX shall have no effect on AVX's obligations
under this Supplemental Decree.
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Effect of Settlement
4.

This Supplemental Decree was negotiated and executed by the parties hereto ingood faith to avoid expensive and protracted litigation and is a fair and equitable settlement ofclaims which were contested as to validity, liability and amount. Neither this Supplemental
Decree, nor any part thereof, nor the entry into, nor any performance under this Supplemental
Decree by AVX shall constitute or be construed as a finding or admission or acknowledgementof the factual or legal allegations contained in the Complaints, Administrative Order, or otherpleadings in this case, of any liability, fault or wrongdoing, or evidence of such, or an admissionof violation of any law, rule, regulation, or policy, by AVX, or by its parent company, affiliates,
subsidiaries or related entities, directors, officers, stockholders, employees, agents, assigns,
trustees, contractors, or successors or predecessors (including their respective parent companies,
affiliates, subsidiaries or related entities, directors, officers, stockholders, employees, agents,
assigns, trustees, and contractors), nor shall this Supplemental Decree nor any performancehereunder create any rights on behalf of any other person not a party to this Supplemental
Decree. AVX expressly reserves any and all rights (including any right to contribution),
defenses, claims, demands, and causes of action which it may have with respect to any matter,action, event, claim or proceeding relating in any way to the New Bedford Harbor Site (ashereafter defined) against any other person not a party to this Supplemental Decree. AVX
further specifically reserves the right to contest any allegations in the Complaints, Administrative
Order, or other pleadings in this case, except as otherwise specified herein. Additionally,
pursuant to Section 122(d)(1)(B) of CERCLA, 42 U.S.C. § 9622(d)(1)(B), the fact of AVX'sparticipation in this Supplemental Decree shall not be admissible in any judicial or6Case 1:83-cv-03882-WGY Document 2617-1 Filed 10/10/12 Page 7 of 26

administrative proceeding other than as provided in this Supplemental Decree, or in a suit forcontribution.
5.

Upon approval and entry of this Supplemental Decree by the Court, the 1992

Consent Decree, as modified by this Supplemental Decree, shall constitute a final judgment
between and among Plaintiffs and AVX.
Definitions
6.

This Supplemental Decree incorporates the definitions set forth in Section 101 of

CERCLA, 42 U.S.C. § 9601. In addition, all initially-capitalized terms used herein, unlessdefined in this Supplemental Decree, shall have the meaning provided in the 1992 Consent
Decree.
A.

"Aerovox Facility" has the same meaning as “Site” in Paragraph 8.ee. of

the Administrative Settlement Agreement and Order on Consent for Non-Time Critical Removal
Action (CERCLA Docket No. 01-2010-0017) between AVX and EPA, effective June 3, 2010,
the text of which is attached hereto as Appendix B.
B.

“New Bedford Harbor Site” or “Site.” The definition in the 1992 Consent

Decree is unchanged except that the final sentence is deleted and replaced with “The Site does
not include any portion of the Aerovox Facility.”C.

“RODs” means the record of decision for OU2 at the New Bedford Harbor

Site signed on April 6, 1990, and the record of decision for OU1 at the New Bedford Harbor Sitesigned on September 25, 1998.
D.

“Superfund Interest Rate” means the rate specified for interest on

investments of the EPA Hazardous Substance Superfund established by 26 U.S.C. § 9507,
compounded annually on October 1 of each year, in accordance with 42 U.S.C. § 9607(a). The
7

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applicable rate of interest shall be the rate in effect at the time the interest accrues. The rate ofinterest is subject to change on October 1 of each year.
Payment Terms
7.

Payments Required Under this Supplemental DecreeA.

AVX shall pay $366,250,000, plus interest, in three payments as specified

herein to Plaintiffs, to resolve Plaintiffs’ claims against AVX, which claims Plaintiffs contend
are authorized or provided for in Paragraphs 16 and 18 of the 1992 Consent Decree.
(1)

As an initial payment, within thirty (30) days after the date of entryof this Supplemental Decree, AVX shall pay to Plaintiffs not less than $133,350,000.00,
plus interest on $366,250,000 at the Superfund Interest Rate from August 1, 2012 throughthe date of the initial payment.
(2)

As a second payment, within one year after the date of entry of thisSupplemental Decree, AVX shall pay to Plaintiffs not less than the amount that makes
the sum of all payments made by AVX through the date of the second payment, exclusiveof all interest payments, total not less than $244,166,666.67, plus interest at theSuperfund Interest Rate on the unpaid balance from the date of the initial payment or, inthe event that one or more prepayment(s) pursuant to Paragraph 7.B. below has been
made during the intervening time period, from the date of the immediately prior payment
through the date of this second payment.
(3)

As a third and final payment, within two years after the date ofentry of this Supplemental Decree, AVX shall pay to Plaintiffs not less than the amountthat makes the sum of all payments, exclusive of all interest payments, made by AVX
through the date of the third and final payment equal to $366,250,000, plus interest at the8Case 1:83-cv-03882-WGY Document 2617-1 Filed 10/10/12 Page 9 of 26

Superfund Interest Rate on the unpaid balance from the date of the second payment or, inthe event that one or more prepayment(s) pursuant to Paragraph 7.B. below has been
made during the intervening time period, from the date of the immediately prior payment
through the date of this third and final payment.
B.

Notwithstanding the terms of Paragraph 7.A. above, AVX may prepay anyscheduled payment, or portion of any scheduled payment, provided that any prepayment includes
interest at the Superfund Interest Rate on the unpaid balance from the date of the prior payment
through the date of the prepayment.
C.

In the event of AVX’s failure to make any payment pursuant to Paragraph

7.A. on the date such payment is due, or in the event of AVX’s failure to satisfy any of the
Financial Guarantee provisions of Paragraphs 11 through 14 of this Supplemental Decree,
Plaintiffs jointly or individually may, without notice or demand, declare the entire unpaidbalance and any accrued interest and stipulated penalties then unpaid immediately due andpayable.
8.

Payments pursuant to Paragraph 7 of this Supplemental Decree shall be made to

EPA by Fedwire Electronic Funds Transfer (“EFT”) to:Federal Reserve Bank of New YorkABA = 021030004
Account = 68010727
SWIFT address = FRYNUS33
33 Liberty Street
New York, NY 10045
Field Tag 4200 of Fedwire message should read"D 68010727 Environmental Protection Agency"

9

Case 1:83-cv-03882-WGY Document 2617-1 Filed 10/10/12 Page 10 of 26

9.

At the time of any payment, AVX shall send notice that payment has been madeto:A.

EPA Region 1 by email at stanley.elainet@epa.gov, and by mail to:
Elaine T. Stanley
Remedial Project Manager
United States Environmental Protection Agency
Region 1, New England
5 Post Office Square, Suite 100
Boston, MA 02109

B.

EPA Cincinnati Finance Office by email at
acctsreceivable.cinwd@epa.gov, or by mail to:
EPA Cincinnati Finance Office
26 Martin Luther King Drive
Cincinnati, Ohio 45268

C.

Commonwealth recipients:
By mail to:
Office of the Attorney General
Chief, Environmental Protection Division
One Ashburton Place
Boston, MA 02108
andChief Financial Officer
MassDEP
One Winter Street
Boston, MA 02108
and by e-mail to paul.craffey@state.ma.us.

Any notice of payment shall refer to Site/Spill ID Number 0143 and Department ofJustice case number 90-11-2-32/2 for this action, case name: United States and Commonwealthof Massachusetts v. AVX Corporation, et al., and to MassDEP Release Tracking Number 40000122.
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Case 1:83-cv-03882-WGY Document 2617-1 Filed 10/10/12 Page 11 of 26

10.

Any payments received by EPA, on behalf of Plaintiffs, pursuant to Paragraph 7

above shall be deposited by EPA in the New Bedford Harbor Reopener Special Account to beretained and used to conduct or finance future response actions at or in connection with the Site.
If response actions are completed and funds remain in the Special Account, Plaintiffs shall
distribute the remaining balance towards their past costs at the Site, pursuant to an agreement
between Plaintiffs. If response actions are complete and all past costs have been reimbursed, andall obligations under said agreement between Plaintiffs have been satisfied, remaining funds may
be transferred to the EPA Hazardous Substance Superfund.
Financial Guarantee
11.

AVX shall establish and maintain a financial guarantee in the amount of theoutstanding balance due under this Supplemental Decree following AVX’s initial payment
pursuant to Paragraph 7.A.(1) above, plus accrued and unpaid interest, if any, at the Superfund
Interest Rate starting on August 1, 2012, for the sole benefit of Plaintiffs until the final payment
is made under Paragraph 7.A.(3) above. Any payments made pursuant to the Financial
Guarantee provisions in Paragraphs 11 through 14 of this Supplemental Decree shall be paid toPlaintiffs in accordance with Paragraphs 8 and 9 above, and shall be deposited in accordancewith Paragraph 10 above, to be retained and used as provided therein. The financial guarantee,
which must be satisfactory in form and substance to Plaintiffs, shall be in the form of one ormore of the following mechanisms (provided that, if AVX intends to use multiple mechanisms,
such multiple mechanisms shall be limited to surety bonds guaranteeing payment, letters ofcredit, trust funds, and insurance policies):

11Case 1:83-cv-03882-WGY Document 2617-1 Filed 10/10/12 Page 12 of 26

A.

A surety bond unconditionally guaranteeing payment that is issued by asurety company among those listed as acceptable sureties on federal bonds as set forth inCircular 570 of the U.S. Department of the Treasury;B.

One or more irrevocable letters of credit, payable to or at the direction of

Plaintiffs, that is issued by one or more financial institution(s) (1) that has the authority to issueletters of credit and (2) whose letter-of-credit operations are regulated and examined by a federal
or state agency;C.

A trust fund established for the benefit of Plaintiffs, that is administeredby a trustee (1) that has the authority to act as a trustee and (2) whose trust operations are
regulated and examined by a federal or state agency;D.

A policy of insurance that (1) provides Plaintiffs with acceptable rights asa beneficiary thereof, and (2) is issued by an insurance carrier (i) that has the authority to issue
insurance policies in the applicable jurisdiction(s), and (ii) whose insurance operations are
regulated and examined by a federal or state agency;E.

A demonstration by AVX that it meets the financial test criteria of

40 C.F.R. § 264.143(f), provided that all other requirements of 40 C.F.R. § 264.143(f) are met toPlaintiffs’ satisfaction; orF.

A written guarantee executed in favor of Plaintiffs, by one or more of thefollowing: (1) a direct or indirect parent company of AVX, or (2) a company that has a“substantial business relationship” (as defined in 40 C.F.R. § 264.141(h)); provided, however,that any company providing such a guarantee must demonstrate to the satisfaction of Plaintiffs
that it satisfies the financial test and reporting requirements for owners and operators set forth insubparagraphs (1) through (8) of 40 C.F.R. § 264.143(f) that it proposes to guarantee hereunder.
12

Case 1:83-cv-03882-WGY Document 2617-1 Filed 10/10/12 Page 13 of 26

12.

AVX has selected and Plaintiffs have found satisfactory, as an initial financial

guarantee, the financial test pursuant to Paragraph 11.E. above in the form attached hereto as
Appendix C.1. Within ten (10) days after the date of entry of this Supplemental Decree, AVX
shall execute or otherwise finalize all instruments or other documents required in order to makethe selected financial guarantee(s) legally binding in a form substantially identical to the
document attached hereto as Appendix C.1., and such financial guarantee(s) shall thereupon be
fully effective. Within thirty (30) days after the date of entry of this Supplemental Decree, AVX
shall submit copies of all executed and/or otherwise finalized instruments or other documents
required in order to make the selected financial guarantee(s) legally binding to the EPA Regional
Financial Management Officer at 5 Post Office Square, Suite 100, Boston, MA 02109, with acopy to the Regional Administrator at the same address. AVX shall simultaneously submit to
Chief Financial Officer, MassDEP, One Winter Street, Boston, MA 02108 a duplicate copy of all
submittals to EPA made pursuant to this Paragraph.
13.

If, at any time after the date of entry of this Supplemental Decree, AVX provides

a financial guarantee by means of a demonstration pursuant to Paragraph 11.E., AVX shalleffect, in accordance with the requirements of 40 C.F.R. § 264.143(f), the following:A.

The initial submission of required financial reports and statements from

AVX’s chief financial officer (“CFO”) and independent certified public accountant (“CPA”), in
the forms attached hereto as Appendices C.1. and C.3., respectively;
B.

The annual resubmission of such documents within ninety (90) days after

the close of AVX’s fiscal year in the forms attached hereto as Appendices C.2. and C.3.;
C.

The prompt notification of EPA after AVX determines that it no longer

satisfies the financial test requirements set forth at 40 C.F.R. § 264.143(f)(1), and in any event
13

Case 1:83-cv-03882-WGY Document 2617-1 Filed 10/10/12 Page 14 of 26

within ninety (90) days after the close of any fiscal year in which AVX no longer satisfies suchfinancial test requirements; andD.

In addition to the initial submission and annual resubmissions from

AVX’s CFO pursuant to Paragraphs 13.A. and 13.B. above, quarterly certifications (based on themost recent financial statements and in the form attached hereto as Appendix C.4.) indicating
that, based on a reasonable inquiry, the CFO is not aware of any transactions or events likely toarise within the next reporting period that would materially impair AVX’s ability to make thepayments on the outstanding balance. AVX shall simultaneously submit to MassDEP at theaddress provided in Paragraph 12 above a duplicate copy of all submittals to EPA made pursuant
to this Paragraph.
14.

In the event that Plaintiffs determine at any time that a financial guarantee

provided by AVX under Paragraph 11.E. above is inadequate based on the requirements of
40 C.F.R. § 264.143(f) and the Financial Guarantee provisions in Paragraphs 11 through 13 ofthis Supplemental Decree, or in the event that AVX becomes aware of information indicatingthat a financial guarantee provided is inadequate or otherwise no longer satisfies therequirements due to any other reason, AVX, within thirty (30) days after receipt of notice ofPlaintiffs’ determination or, as the case may be, within thirty (30) days after AVX becomesaware of such information, shall obtain and present to Plaintiffs for approval a proposal for arevised or alternative form of financial guarantee listed in Paragraph 11 above that satisfies all
requirements set forth in that Paragraph; provided, however, that if AVX cannot obtain such
revised or alternative form of financial guarantee within such 30-day period, and provided
further that AVX shall have commenced to obtain such revised or alternative form of financial
guarantee within such 30-day period, and thereafter diligently proceeds to obtain the same,
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Plaintiffs shall extend such period for such time as is reasonably necessary for AVX in theexercise of due diligence to obtain such revised or alternative form of financial guarantee, such
additional period not to exceed thirty (30) days.
Covenants Not To Sue By Plaintiffs
15.

In consideration of the payments made pursuant to Paragraph 7 above, and except

as specifically provided in Paragraphs 19, 20.A. and 20.B. of the 1992 Consent Decree andParagraph 16 of this Supplemental Decree:A.

The United States and the Commonwealth covenant not to sue or to takeany other civil judicial or administrative action against AVX as authorized or provided for in
Paragraphs 16, 17, and 18 of the 1992 Consent Decree;B.

The United States and the Commonwealth further covenant not to sue or

to take any other civil judicial or administrative action against AVX for claims reserved by
Plaintiffs in Paragraphs 20.C. and 20.D. of the 1992 Consent Decree, subject to the further
exception of the reservations set forth in Paragraphs 16.C. and 16.D. below; andC.

Furthermore, the last two sentences of Paragraph 14 of the 1992 Consent

Decree shall be deleted and the following sentence added: “These covenants not to sue shall takeeffect upon receipt by the Plaintiffs of the payments required in Paragraphs 7-13 above.”
D.

The covenants not to sue set forth in Paragraphs 15.A. and 15.B. above,and the modification to Paragraph 14 of the 1992 Consent Decree set forth in Paragraph 15.C.
above, shall take effect upon AVX’s payment of all monetary amounts including interest that are
required pursuant to Paragraph 7 above and payment of all interest accrued on late payments andaccrued stipulated penalties described in Paragraph 18 below, if any.

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16.

As to the covenants not to sue in Paragraph 15 above, the United States and theCommonwealth reserve all rights against AVX with respect to all matters other than thoseexpressly specified in Paragraph 15 above, including:A.

Claims based on a failure by AVX to satisfy the requirements of thisSupplemental Decree;
B.

Claims for criminal liability;

C.

Claims arising from the past, present, or future disposal, release or threatof release of hazardous substances or oil or hazardous materials outside of the New Bedford
Harbor Site; andD.

Claims arising from the past, present, or future disposal, release or threatof release of hazardous substances or oil or hazardous materials taken from the New Bedford
Harbor Site (but excluding claims arising from the past, present, or future disposal, release or
threat of release of hazardous substances or oil or hazardous materials taken from the New
Bedford Harbor Site after the date of entry of this Supplemental Decree consistent with Section
122(f)(2)(A) of CERCLA, 42 U.S.C. § 9622(f)(2)(A)).
Covenants by Defendant AVX
17.

A.

Paragraph 21 in the 1992 Consent Decree is deleted in its entirety and is

replaced with Paragraphs 17.B. through 17.E. in this Supplemental Decree.
B.

AVX hereby releases and covenants not to sue or assert any claims, or tobring any administrative action, against the United States or the Commonwealth for any claims
arising from the New Bedford Harbor Site or any response actions taken at the Site, including
but not limited to the counterclaims asserted in AVX's Answers to the Complaints, and including
but not limited to any direct or indirect claim pursuant to Section 112 of CERCLA, 42 U.S.C.
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Case 1:83-cv-03882-WGY Document 2617-1 Filed 10/10/12 Page 17 of 26§ 9612, or pursuant to any other statute, regulation, common law, or legal theory, against theHazardous Substances Superfund, for reimbursement relating to the New Bedford Harbor Site,provided, however, that: (i) in the event that Plaintiffs institute proceedings against AVX
pursuant to Paragraph 19 of the 1992 Consent Decree, AVX reserves the right to reassert thecounterclaim against the U.S. Army Corps of Engineers as set forth in its Answer to theComplaints solely as, and to the extent of, a setoff against the claims asserted by Plaintiffs; and(ii) as described in Paragraph 17.E. of this Supplemental Decree, AVX reserves its rights as set
forth in Paragraph 17.E. of this Supplemental Decree. AVX hereby releases and covenants not
to sue or assert any claims, or to bring any administrative action against the United States or the
Commonwealth arising out of the implementation of the RODs, as modified, including the Stateenhanced remedy. Nothing in this Supplemental Decree shall be deemed to constitutepreauthorization of a claim within the meaning of Section 111 of CERCLA, 42 U.S.C. § 9611.
C.

AVX waives any rights it may have to seek judicial or administrative

review of the RODs, as modified, and of any actions taken to implement the RODs, as modified,including the State enhanced remedy. AVX further waives any direct or indirect claim relating
to the New Bedford Harbor Site pursuant to M.G.L. c. 30, §§ 61-62H and 301 C.M.R. § 11.00 etseq.
D.

AVX waives any rights it may have to seek a setoff or offsets pursuant toParagraph 22 of the 1992 Consent Decree; accordingly Paragraph 22 of the 1992 Consent Decree
is deleted.
E.

To the extent that the United States or the Commonwealth assert a claim

against AVX for non-compliance with the terms of this Supplemental Decree, AVX reserves its
rights and defenses arising from that claim.
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Stipulated Penalties
18.

A.

If any payment required by Paragraph 7 of this Supplemental Decree is notmade by the date specified in that Paragraph, AVX shall be liable to the United States for intereston 90% of the overdue amount(s), from the time payment was due until full payment is made, atthe higher of (1) the rate established by the Department of the Treasury under 31 U.S.C. § 3717
and 4 C.F.R. § 102.13, or (2) ten percent per annum, and AVX shall be liable to the
Commonwealth for interest on 10% of the overdue amount(s), from the time payment was due
until full payment is made, at the rate set forth in Section 13 of Chapter 21E, Massachusetts
General Laws.
B.

If any payment required by Paragraph 7 of this Supplemental Decree is notmade by the date specified therein, AVX shall pay stipulated penalties in the following amounts
for each day of each and every violation of said requirements:
Days of Delay

Penalty Per Violation Per Day

1-14$25,000/day

15-30$50,000/day

Beyond 30 Days

$75,000/day

C.

Stipulated penalties due to Plaintiffs under this Supplemental Decree shallbe paid 90% to the United States and 10% to the Commonwealth. Payments to the United Statesshall be made to the United States Treasury according to EFT instructions to be provided to
AVX at the time Stipulated Penalties arise. Payments due to the Commonwealth for accrued
interest on late payments and for accrued stipulated penalties shall be made to the Office of the
Attorney General, with a copy of such payment to MassDEP, at the addresses listed in Paragraph
9.C. above.
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D.

Interest and stipulated penalties shall accrue from the due date of thepayment regardless of whether Plaintiffs have notified AVX of the overdue payment. AVX shall
pay any accrued interest on late payments or stipulated penalties that have accrued within fifteen(15) days after receipt of a demand by the United States or the Commonwealth for payment.
Such demand shall be sent by certified or express mail to: Chief Financial Officer, AVX
Corporation, 1 AVX Boulevard, Fountain Inn, SC 29644. A copy of any demand shall be sent tocounsel for AVX to: Mary K. Ryan and Gary L. Gill-Austern, Nutter, McClennen & Fish,
Seaport West, 155 Seaport Boulevard, Boston, MA 02210. Interest under and stipulated
penalties under this Paragraph do not preclude Plaintiffs from seeking any other remedies orsanctions that may be available to them on account of AVX's failure to comply with the terms ofthis Supplemental Decree.
E.

In calculating its income tax, AVX shall not deduct any penalties under

this Supplemental Decree pursuant to this Paragraph 18.
Retention of Response Authority
19.

This Supplemental Decree shall not be construed to limit the authority of theUnited States or the Commonwealth to take any and all response actions relating to the New
Bedford Harbor Site authorized by federal or state law.
Compliance with Other Laws
20.

This Supplemental Decree shall not be construed to in any way to relieve AVX or

any other person or entity from the obligation to comply with any federal, state or local law.

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Retention of Jurisdiction
21.

The Court shall retain jurisdiction of this matter between Plaintiffs and AVX forthe purpose of entering such further orders, direction, or relief as may be appropriate for theconstruction, implementation, or enforcement of this Supplemental Decree.
Public Comment
22.

This Supplemental Decree shall be subject to a 30-day public comment period

consistent with Section 122(d)(2) of CERCLA, 42 U.S.C. § 9622(d)(2), and 28 C.F.R. § 50.7.
The United States reserves the right to withdraw or withhold its consent if comments regarding
this Supplemental Decree disclose facts or considerations which indicate that this Supplemental
Decree is inappropriate, improper or inadequate. In the event of the United States’ withdrawal
from this Supplemental Decree, the Commonwealth reserves its right to withdraw from thisSupplemental Decree. The Commonwealth also reserves the right to withdraw or withhold its
consent to the entry of this Supplemental Decree if comments received disclose facts or
considerations which show that this Supplemental Decree violates State law. In the event of theCommonwealth’s withdrawal from this Supplemental Decree, the United States reserves its rightto withdraw from this Supplemental Decree. AVX consents to the entry of this Supplemental
Decree without further notice.

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Case 1:83-cv-03882-WGY Document 2617-1 Filed 10/10/12 Page 21 of 26

THE FOREGOING Supplemental Decree among plaintiffs the United States of America
and the Commonwealth of Massachusetts and defendant AVX Corporation in United States v.
AVX Corporation, Civ. No. 83-3882-Y (D. Mass.), is hereby
APPROVED AND ENTERED THISDAY OF, 201_.

__________________________________

United States District Judge
District of Massachusetts

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Case 1:83-cv-03882-WGY Document 2617-1 Filed 10/10/12 Page 22 of 26

SUPPLEMENTAL CONSENT DECREE: Civ. No. 83-3882-Y (D.Mass.)
FOR THE UNITED STATES:IGNIA S. MORENO
Assi nt Attorney General
Environment and Natural Resources Division
U.S. Department of Justice~~~_o
JEROME W. MacLAUGHLIN
KEITH T. TASHIMABRADLEY L. LEVINE
Trial Attorneys
Environmental Enforcement Section
Environment and Natural Resources Division
U.S. Department of Justice
P.O. Box 7611
Ben Franklin Station
Washington, D.C. 20044

CARMEN M. ORTIZ
United States Attorney for theDistrict of Massachusetts
JENNIFER SERAFYNAssistant United States Attorney
District of Massachusetts
John Joseph Moakley Federal Courthouse
1 Courthouse Way, Suite 9200
Boston, MA 02210

22

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Case 1:83-cv-03882-WGY Document 2617-1 Filed 10/10/12 Page 24 of 26

SUPPLEMENTAL CONSENT DECREE: Civ. No. 83-3882-Y (D.Mass.)
FOR THE COMMONWEALTH OF MASSACHUSETTS:

MATTHEW BROCK
Assistant Attorney General
Environmental Protection Division
One Ashburton Place
Boston, Massachusetts 02108

447
KENINT KIMMELL
Commissioner
Department of Environmental Protection
Commonwealth of Massachusetts
One Winter Street
Boston, Massachusetts 02108

Case 1:83-cv-03882-WGY Document 2617-1 Filed 10/10/12 Page 25 of 26

SUPPLEMENTAL CONSENT DECREE: Civ. No. 83-3882-Y (D.Mass.)
FOR A VX CORPORATION:

KURTP. CUMMINGS
Chief Financial Officer, Vice President,
Treasurer and Secretary
AVX Corporation
1 A VX Boulevard
Fountain Inn, SC 29644

25

Case 1:83-cv-03882-WGY Document 2617-1 Filed 10/10/12 Page 26 of 26

APPENDICES

Appendix A —1992 Consent Decree

Appendix B —Paragraph 8.ee. from Administrative Settlement Agreement and Order onConsent for Non-Time Critical Removal Action (CERCLA Docket No. 012010-0017) between AVX and EPA, effective June 3, 2010

Appendix C —Financial Assurance Forms
C.1.
Form of Initial Submission
C.2.
Sample CFO Letter
C.3.
Sample CPA Report
C.4.
Form of Quarterly Certification

26

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APPENDIX A

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B
Case 1:83-cv-03882-WGY Document 2617-3 Filed 10/10/12 Page 1 APPENDIX
of 3

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APPENDIX C.2.

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APPENDIX C.3.

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Exhibit 12.1
CERTIFICATION
I, Goro Yamaguchi, certify that:1.

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

Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to statea material fact necessary to make the statements made, in light of the circumstances under which suchstatements were made, not misleading with respect to the period covered by this report;

3.

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

4.

The company’s other certifying officer and I are responsible for establishing and maintaining disclosure
controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control
over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the company andhave:(a) Designed such disclosure controls and procedures, or caused such disclosure controls and procedures tobe designed under our supervision, to ensure that material information relating to the company,
including its consolidated subsidiaries, is made known to us by others within those entities, particularly
during the period in which this report is being prepared;(b) Designed such internal control over financial reporting, or caused such internal control over financial
reporting to be designed under our supervision, to provide reasonable assurance regarding thereliability of financial reporting and the preparation of financial statements for external purposes inaccordance with generally accepted accounting principles;(c) Evaluated the effectiveness of the company’s disclosure controls and procedures and presented in thisreport our conclusions about the effectiveness of the disclosure controls and procedures, as of the endof the period covered by this report based on such evaluation; and(d) Disclosed in this report any change in the company’s internal control over financial reporting that
occurred during the period covered by the annual report that has materially affected, or is reasonably
likely to materially affect, the company’s internal control over financial reporting; and5.

The company’s other certifying officer and I have disclosed, based on our most recent evaluation of internal
control over financial reporting, to the company’s auditors and the audit committee of the company’s boardof directors (or persons performing the equivalent functions):(a) All significant deficiencies and material weaknesses in the design or operation of internal control overfinancial reporting which are reasonably likely to adversely affect the company’s ability to record,
process, summarize and report financial information; and(b) Any fraud, whether or not material, that involves management or other employees who have asignificant role in the company’s internal control over financial reporting.

Date: June 28, 2013

/s/ GORO YAMAGUCHI
Name: Goro Yamaguchi
Title: President and Representative Director(Principal Executive Officer)

Exhibit 12.2
CERTIFICATION
I, Shoichi Aoki, certify that:1.

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

Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to statea material fact necessary to make the statements made, in light of the circumstances under which suchstatements were made, not misleading with respect to the period covered by this report;

3.

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

4.

The company’s other certifying officer and I are responsible for establishing and maintaining disclosure
controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control
over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the company andhave:(a) Designed such disclosure controls and procedures, or caused such disclosure controls and procedures tobe designed under our supervision, to ensure that material information relating to the company,
including its consolidated subsidiaries, is made known to us by others within those entities, particularly
during the period in which this report is being prepared;(b) Designed such internal control over financial reporting, or caused such internal control over financial
reporting to be designed under our supervision, to provide reasonable assurance regarding thereliability of financial reporting and the preparation of financial statements for external purposes inaccordance with generally accepted accounting principles;(c) Evaluated the effectiveness of the company’s disclosure controls and procedures and presented in thisreport our conclusions about the effectiveness of the disclosure controls and procedures, as of the endof the period covered by this report based on such evaluation; and(d) Disclosed in this report any change in the company’s internal control over financial reporting that
occurred during the period covered by the annual report that has materially affected, or is reasonably
likely to materially affect, the company’s internal control over financial reporting; and5.

The company’s other certifying officer and I have disclosed, based on our most recent evaluation of internal
control over financial reporting, to the company’s auditors and the audit committee of the company’s boardof directors (or persons performing the equivalent functions):(a) All significant deficiencies and material weaknesses in the design or operation of internal control overfinancial reporting which are reasonably likely to adversely affect the company’s ability to record,
process, summarize and report financial information; and(b) Any fraud, whether or not material, that involves management or other employees who have asignificant role in the company’s internal control over financial reporting.

Date: June 28, 2013/s/ SHOICHI AOKIName: Shoichi Aoki
Title: Director, Managing Executive Officer
and General Manager ofCorporate Financial and Accounting Group(Principal Financial Officer)

Exhibit 13.1
CERTIFICATION
Pursuant to 18 U.S.C. § 1350, the undersigned officer of Kyocera Corporation (the “Company”) hereby
certifies, to such officer’s knowledge, that the Company’s annual report on Form 20-F for the year ended
March 31, 2013 (the “Report”) fully complies with the requirements of Section 13(a) or 15(d), as applicable, of
the Securities Exchange Act of 1934 and that the information contained in the Report fairly presents, in allmaterial respects, the financial condition and results of operations of the Company.
Dated: June 28, 2013
/s/ GORO YAMAGUCHI
Name: Goro Yamaguchi
Title: President and Representative Director(Principal Executive Officer)

Exhibit 13.2
CERTIFICATION
Pursuant to 18 U.S.C. § 1350, the undersigned officer of Kyocera Corporation (the “Company”) hereby
certifies, to such officer’s knowledge, that the Company’s annual report on Form 20-F for the year ended March 31,
2013 (the “Report”) fully complies with the requirements of Section 13(a) or 15(d), as applicable, of the Securities
Exchange Act of 1934 and that the information contained in the Report fairly presents, in all material respects, thefinancial condition and results of operations of the Company.
Dated: June 28, 2013/s/ SHOICHI AOKIName: Shoichi Aoki
Title: Director, Managing Executive Officer
and General Manager ofCorporate Financial and Accounting Group(Principal Financial Officer)

Exhibit 15.1
CONSENT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM
We hereby consent to the incorporation by reference in the Registration Statements on Form S-8 (Nos.33-84904,
33-98132, 33-99134, 33-99140, 33-99150, 33-99154, 333-121098 and 333-138316) of Kyocera Corporation of
our report dated June 27, 2013 relating to the financial statements and the effectiveness of internal control overfinancial reporting, which appears in this Form 20-F.
/s/ PricewaterhouseCoopers Kyoto
Kyoto, Japan
June 27, 2013