UNITED STATESSECURITIES AND EXCHANGE COMMISSION
Washington, DC 20549

FORM 20-F‘
È

REGISTRATION STATEMENT PURSUANT TO SECTION 12(b) OR (g) OF THE SECURITIES EXCHANGEACT 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, 2009

OR
‘ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGEACT OF 1934
For the transition period fromtoOR
‘ SHELL COMPANY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGEACT 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/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, 2009, 183,528,034 shares of common stock were outstanding, comprised of 176,625,254 Shares and 6,902,780 American Depositary Shares(equivalent to 6,902,780 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 ‘ 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 Activities . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
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. Offering 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
13
13
15
25
28
30
30
30
57
62
64
65
65
66
66
70
70
71
72
73
73
74
74
75
75
75
75
75
77
77
77
77
77
77
77
77
86
86
87

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 . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

91
91
91
91
92
94

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

95
95
95
95
96
96
96
97
98
99
99

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

102
102
102
103

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:•

general conditions in the Japanese or global economy;•

unexpected changes in economic, political and legal conditions in China;•

our ability to launch innovative products and otherwise meet the advancing technical requirements ofour customers, particularly in the highly competitive markets for ceramics, semiconductors andelectronic components;•

intense competitive pressures to which our products are subject;•

manufacturing delays or defects resulting from outsourcing or internal manufacturing processes;•

various export risks which may affect the significant percentage of our revenues derived from overseas
sales;•

the effect of foreign exchange fluctuations on our results of operations;•credit risk on trade receivables;•

industry demand for skilled employees;•

insufficient protection of our intellectual property;•

expenses associated with licenses we require to continue to manufacture and sell products;•

our research and development not producing desired results;•

companies or assets acquired by us not produce the returns or benefits, or bring in business
opportunities;•

our market or supply chains being affected by terrorism, plague, wars or similar events;•

earthquakes and other natural disasters affecting our headquarters and major facilities;•

environmental liability and compliance obligations by tightening of environmental laws andregulations;•

impairment losses on investments in equity securities;•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 2009” refers to Kyocera’s fiscal year ended March 31, 2009, and other fiscal years are referred
to in a corresponding manner.

•

Unless otherwise indicated, we have translated the yen amounts for the year ended March 31, 2009, as
of March 31, 2009 and thereafter presented in this annual report on Form 20-F into U.S. dollars solely
for your convenience. The rate we used for such translations was ¥99.00 = $1.00, which was the noonbuying rate in New York City for cable transfers in foreign currencies as certified for customs purposesby the Federal Reserve Bank of New York on March 31, 2009, rounded to the nearest yen. Thesetranslations do not imply that the yen amounts actually represent, or have been or could be converted
into, equivalent amounts in U.S. dollars.

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.
2005
2006
2007
2008
2009
2009
(Yen in millions, U.S. dollars and shares in thousands, except per share amounts)

For the years ended March 31:
Net sales . . . . . . . . . . . . . . . . . . . . .
Profit from operations . . . . . . . . . . .
Income from continuing
operations . . . . . . . . . . . . . . . . . .
Net income . . . . . . . . . . . . . . . . . . .
Earnings per share:
Income from continuing operations:
Basic . . . . . . . . . . . . . . . . . . . .
Diluted . . . . . . . . . . . . . . . . . . .
Net income:Basic . . . . . . . . . . . . . . . . . . . .
Diluted . . . . . . . . . . . . . . . . . . .
Weighted average number of shares
outstanding:
Basic . . . . . . . . . . . . . . . . . . . .
Diluted . . . . . . . . . . . . . . . . . . .

¥1,173,660
97,660¥1,173,544
99,695¥1,283,897
135,102¥1,290,436
152,420¥1,128,586
43,419$11,399,859
438,576

42,65745,90866,08869,696

101,329
106,504

107,244
107,244

29,506
29,506

298,040
298,040¥

227.52227.47¥352.44352.21¥538.52537.35¥566.58565.80¥157.27157.23244.86244.81371.68371.43566.03564.79566.58565.80157.27157.23

187,489
187,528

187,514
187,640

188,160
188,573

189,283
189,544

187,618
187,661

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 . . . . . . . . . . . . . . . .
Stockholders’ equity . . . . . . . . . . . .
Depreciation . . . . . . . . . . . . . . . . . . . . . .
Capital expenditures . . . . . . . . . . . . . . .

¥1,745,519
33,557
115,703
1,174,851¥ 58,699¥ 63,160

80
0.74

¥
$

100
0.84

¥1,931,522
33,360115,7031,289,077¥ 62,942¥ 88,860

¥
$

110
0.91

¥2,130,464
7,283
115,7031,514,560¥ 70,155¥ 69,896* Translated into U.S. dollars based on the exchange rates at each payment date.

6

¥
$

120
1.10

¥1,976,746
8,298
115,703
1,451,165¥ 75,630¥ 85,101

¥
$

$

1.59
1.59
1.59
1.59

120
1.26

¥1,773,802
28,538
115,703
1,323,663¥ 83,753¥ 63,055$17,917,192
288,263
1,168,717
13,370,333$ 845,990$ 636,919

Note: On August 1, 2006 Kyocera sold all of its shares in Kyocera Leasing Co., Ltd., a subsidiary engaged infinancing services. As a result, business results and profit on sale for Kyocera Leasing Co., Ltd. for fiscal 2007
have been recorded as income from discontinued operations in conformity with Statement of Financial
Accounting Standards No. 144, “Accounting for the impairment or disposal of Long-Lived Assets.” Figures forfiscal 2005 and 2006 have been retrospectively reclassified for comparative purposes.
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

2005 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
2006 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
2007 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
2008 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
2009 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

114.30120.93121.81124.09110.48102.26104.41110.0796.88
87.80

107.49113.15116.92114.31100.62

107.22117.48117.56
99.85
99.15

93.71
94.20
98.55
99.34
100.71
99.24

87.84
87.80
89.09
93.85
96.49
94.45

91.28
90.12
92.92
97.86
98.98
96.64

90.79
89.83
97.74
99.15
98.76
95.55

For most recent six months

December 2008 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
January 2009 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
February 2009 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
March 2009 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
April 2009 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
May 2009 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

The noon buying rate for Japanese yen on June 26, 2009 was $1.00 = ¥95.19
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.
(1) The continuing downturn in the Japanese and global economy may significantly reduce demand for
Kyocera’s products
In the second half of fiscal 2009, global economic conditions deteriorated significantly due to instability in theinternational financial markets stemming from the sub-prime mortgage crisis originating in the United States,
resulting in a lack of available credit, increased volatility in international financial markets, a decline in
consumer confidence and widespread reduction of business activity generally. With respect to Kyocera’s
business environment, demand for our products has materially decreased during this period. Kyocera assumes
that the current economic downturn may be prolonged and has concerns regarding the impact of a long-term
recession in the Japanese and global economy. If the downturn in the global economy has further negative
impacts on corporate investment or consumer spending in the markets for semiconductors, mobile phonehandsets and personal computer (PC) related equipment in the electronics industry, and on solar energy products,
on which Kyocera is substantially dependent for its growth, there can be no assurance that Kyocera’s business,financial condition and results of operations will not continue to be materially adversely affected.
7

(2) Unexpected changes in economic, political and legal conditions in China, in which Kyocera is becoming
increasingly active, may have an adverse effect on Kyocera’s business
Based on its expectation that the Chinese markets for information and communication related products, including
electronic components, mobile phone handsets, PCs and PC peripherals, and for solar energy related products
will continue to grow continuously, Kyocera has been making substantial investments in new production andmarketing facilities in China. Kyocera now has principal production facilities located in Shanghai, Dongguan,
and Tianjin, and plans to make additional investments to increase production capacity at these sites and to
concurrently increase its marketing and distribution capabilities in China. Although the Chinese economy has
been growing at a rapid rate in recent years, and the central government has been increasingly utilizing market
forces as opposed to central economic planning, growth has been uneven among various regions of the country
and among various sectors of the economy. Unexpected changes in the central government’s economic policy orin the business climate, including those due to changes in institutional systems in various parts of the country,
may adversely affect its information and communication related markets in which Kyocera seeks to manufactureand sell its products. In addition, China is in the process of developing a comprehensive system of laws andregulations dealing with economic matters, such as currency controls, and foreign corporations currently active inthe country, such as Kyocera, face risks and uncertainties including enforcement of contractual terms,
administrative intrusion by local governments and difficulty with expatriation of profits.
(3) 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 has a variety ofbusinesses 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 in certain of its businesses to the same degree as its competitors, orthese 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 factors 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 over fiscal 2010 partly
depending 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 foreach business. To maintain these competitive advantages, it is critical to maintaining close ties with customers sothat Kyocera can ensure that it is able to meet required specifications and be the first supplier to create anddeliver the product. Kyocera’s gross margins may be reduced if the environment changes in the way that Kyocera
cannot maintain these important relationships with customers or market share or if it is forced in the future tofurther reduce prices in response to the actions of its competitors.
(4) Small manufacturing delays or defects resulting from outsourcing or internal manufacturing processes
can adversely 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. Kyocera has experienced occasional delays in obtaining
components and sub-assemblies because the manufacturing process for these items is very complex and requires
a long lead-time. Kyocera’s revenues derived from sales of these products will be materially and adversely
affected if Kyocera is unable to obtain a high quality, reliable and timely supply of these components andsub-assemblies. In addition, any reduction in the precision of these components will cause delays andinterruptions in Kyocera’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 non-functional. These factors can result8

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 its financial results.
(5) 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 58.1% of its total revenues in fiscal 2009.
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 export of Kyocera’s
products;•

Kyocera may experience difficulties in the timeliness of collection of accounts receivable due fromforeign customers and be forced to write off those receivables;•

tariffs and other barriers may make Kyocera’s products less cost competitive;•

shipping and handling costs of Kyocera’s products may increase;•

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

(6) Currency exchange rate fluctuations could adversely affect Kyocera’s financial results
Kyocera conducts business in countries outside of Japan, which exposes it to fluctuations in foreign currency
exchange rates. Kyocera may enter into short-term forward exchange transaction to hedge this risk according to
its outlook on future exchange rates; nevertheless, fluctuations in foreign currency exchange rates could have an
adverse effect on its business. Fluctuations in foreign currency exchange rates may affect its results of operations
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 therelevant currencies may affect the cost of imported items required in its operations.
(7) 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
accounts receivable face difficulty in making payments due to economic downturn, Kyocera’s results ofoperations and financial position may be adversely affected.
(8) Industry demand for skilled employees, particularly engineering and technical personnel, exceeds thenumber of personnel available
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
skilled personnel in all areas of its business. The competition for attracting and retaining these employees,
9especially engineers in key fields, including software design in telecommunications, is intense. Because of thisintense competition for these skilled employees, Kyocera may be unable to retain its existing personnel or attract
additional qualified employees in the future.
(9) 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 and adversely
affect its business, financial condition and results of operations.
Kyocera is actively pursuing patents on some of its recent inventions, but these patents may not be issued. Even
if these patents are issued, they may be challenged, invalidated or circumvented. In addition, the laws of certain
other countries may not protect Kyocera’s intellectual property to the same extent as Japanese laws.
(10) 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 patent rights. Although Kyocera is
not currently involved in any litigations relating to its intellectual property except in the ordinary course of its
business, 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.

(11) 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 market
acceptance.
(12) Companies or assets acquired by Kyocera may require more cost than expected for integration, and may
not produce returns or benefits, or bring in business opportunities, which Kyocera expects
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
10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. In
addition, as a result of business combinations, Kyocera recognizes goodwill or intangible assets of the acquiredcompanies under generally accepted accounting principles. Kyocera may be required to record impairment losses
if their fair values are below their carrying amounts.
(13) Kyocera’s markets or supply chains may be adversely affected by terrorism, plague, wars or similar events
Kyocera as a global company has been expanding its business worldwide. At the same time, we will be exposed
to risks of our getting involved in terrorism, plague, war and other similar events. In the case that those eventsoccur, Kyocera’s operating activities would be suspended. Furthermore, there would be delay, disorder orsuspension in Kyocera’s R&D, manufacturing, sales and services. If such delay or disruption occurs andcontinues for a long period of time, Kyocera’s business, financial condition and results of operations may be
adversely affected.
(14) Kyocera’s headquarters and major facilities are subject to devastating effects of earthquakes and othernatural disasters
Kyocera’s headquarters and major facilities including plants, sales offices and R&D centre 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, floods and so on. For instance, if a strong earthquake occurs, Kyocera’s R&D or
manufacturing facilities could be devastated. In this case, Kyocera’s operating activities would be suspended andmanufacturing and shipment would be delayed. Due to this, Kyocera would lose its sales and profits.
Furthermore, Kyocera may incur a great amount of expenses, such as medical care expenses for injured
employees and damage expenses for the damaged machines or facilities. As a consequence, Kyocera’s operating
result and financial condition may be adversely affected.
(15) 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 air emissions, wastewater discharges, the handling, disposal and remediation 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 of our processes, products or
packaging, restrictions on the use of certain materials in or on design aspects of our products or productpackaging, and responsibility for disposal of products or product packaging. As well as our current operations,these laws and regulations can be applied to our past operations and may be applicable to the past operations ofbusinesses acquired from other companies even if such operations occurred before our acquisitions. In addition,these laws and regulations which are applied to Kyocera can be more stringent or the scope of the laws andregulations can be broadened in the future. We establish reserves for specifically identified potential
environmental liabilities when such liabilities are probable and can be reasonably estimated. In case we fail tocomply with such laws and regulations, we could be required by the relevant governmental organizations to pay
penalty costs or remediation compensation. Furthermore, we may make voluntary payments to compensate forenvironmental problems if we deem such compensation to be necessary. The cost obligations noted above may
adversely affect our results of operations and financial positions.
(16) 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 itself, which Kyocera generally
holds on a long-term basis for business relationship purposes. A substantial portion of these investments consistsof shares of common stock of public companies in Japan, including KDDI Corporation (a Japanese
telecommunication service provider), and Japanese financial institutions. As of March 31, 2009, Kyocera
11

Corporation’s equity interest in KDDI Corporation was 12.76%. As of March 31, 2009, the aggregate fair valueof equity securities included in available-for-sale securities was ¥291,137 million ($2,941 million), with grossunrealized gains in the amount of ¥22,099 million ($223 million) and gross unrealized losses in the amount of¥1,118 million ($11 million). If there is a decline in the fair value, i.e., the market price, of the shares Kyocera
holds in those companies over a period of time, and it determines that the decline is other-than-temporary,
Kyocera will need to record an impairment loss for the applicable fiscal period. 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 whichlack merit for Kyocera, market conditions may not permit it to do so at the time, speed or price it may wish.
(17) Changes in accounting standards may adversely impact our results of operations and financial positions.
Adoptions of new accounting standards, or changes in accounting standards may have an unpredictable adverse
impact on our results of operation and financial positions. In addition, if Kyocera modifies its accounting
software or information systems to introduce changes in accounting standards, certain investments or expenses
may be required.
(18) 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.
(19) 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 Board of Corporate
Auditors and the Corporation Act of Japan govern our corporate affairs. Legal principles relating to such mattersas 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.
(20) 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.

12

(21) 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 ourboard 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.
(22) 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, the U.S.
dollar amount of cash dividends and other cash payments made to holders of our ADSs would be reduced if thevalue 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 that was incorporated under the laws of Japan in 1959 with thename 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 expanded into another new business through the acquisition of Yashica Co., Ltd., a camera and camera lensmanufacturer. 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 the electronic connector market through our acquisition of Elco International Corporation(currently Kyocera Elco Corporation).
In the 1990s, we strengthened our position as an internationally integrated electronic components manufacturer
through our acquisition of AVX Corporation, a maker of capacitors and other passive electronic components, inJanuary 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, applied13

ceramic products and electronic components and devices to mainly electronic equipment manufacturers in IT
industrial fields, and “the Equipment Business,” in which Kyocera manufactures and sells telecommunications
and information equipment and optical instruments, such as mobile phone handsets, PHS-related products, copiermachines, multifunctional peripherals and ECOSYS printers 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. to establish our U.S. subsidiary, Kyocera Wireless Corp. In April 2000, weinvested in Kyocera Mita Corporation, 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 Mita Corporation to further enhance our information equipment business by pursuing groupsynergies.
In addition, we also strengthened the components business resources to become a leading company in IT-related
applications. In August 2002, we made Toshiba Chemical Corporation (currently Kyocera Chemical
Corporation) a wholly-owned subsidiary through a share exchange in order to reinforce our electronic
components and materials businesses by pursuing group synergies between fine chemical and fine ceramic
technologies.
With the aim of becoming a more global enterprise and enhancing our profitability, we have been expanding our
production in China through Chinese production bases located in Shanghai and Dongguan since the middle of the
1990s. Kyocera also established a sales company, Kyocera (Tianjin) Sales and Trading 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 a subsidiary,
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 Kinseki Corporation), a major producer ofartificial crystal related products, a wholly-owned subsidiary through a share exchange to strengthen ourElectronic Device Group. In addition, to further enhance our organic circuit board business by pursuing groupsynergies, we also entered into an agreement with IBM Corporation and IBM Japan, Ltd. for the transfer fromIBM Japan, Ltd. to Kyocera of its Surface Laminar Circuitry (SLC) business and we completed the transfer of
IBM Japan, Ltd.’s SLC business from IBM Japan, Ltd. to a newly-established wholly-owned subsidiary, Kyocera
SLC Technologies Corporation in August 2003. In April 2004, Kyocera integrated the organic material
components business into Kyocera SLC Technologies Corporation and the marketing division of Kyocera
Kinseki Corporation was merged into the marketing division of the electronic components of Kyocera
Corporation and the manufacturing division of crystal related components of Kyocera Corporation wastransferred to Kyocera Kinseki Corporation through corporate splits.
In September 2004, Kyocera and Kobe Steel, Ltd. established Japan Medical Materials Corporation and Kyocera
Corporation transferred its medical materials business to Japan Medical Materials Corporation through corporate
splits. The shareholding ratios of Kyocera and Kobe Steel, Ltd. in Japan Medical Materials Corporation are 77%
and 23%, respectively.
In October 2004, Kyocera Corporation invested in WILLCOM, Inc. which succeeded the PHS-related businessof DDI Pocket, Inc. to enhance our PHS-related business.
To meet with strong demand for solar energy products, Kyocera established Kyocera Solar Europe S.R.O. for theassembling of solar modules in the Czech Republic in April 2005.
In August 2006, Kyocera sold all of its shares in Kyocera Leasing Co., Ltd. to Diamond Lease Company Limited(presently Mitsubishi UFJ Lease & Finance Company Limited). Kyocera decided the sale to concentrate ourmanagement resources on our core businesses in order to enhance and improve our corporate value.
14

In April 2008, Kyocera acquired the mobile phone related business of SANYO Electric Co., Ltd. (SANYO) tostrengthen and improve the profitability of the Telecommunications Equipment Group.
For further enhancement of sales channel of the Information Equipment Group, Kyocera Mita Corporation madeTA Triumph-Adler AG (TAAG), a leading specialist in the information technology business and a distributor ofprinters and multifunctional peripherals in Germany, a subsidiary through the voluntary public takeover offer inJanuary 2009.
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 electronics devices,
equipment, services and networks. Our manufacturing and distribution operations are conducted worldwide. Asof March 31, 2009, we have 181 subsidiaries and 4 affiliates outside Japan and 30 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.
Business Strategy
Kyocera aims to be respected by society as “The Company” from the perspective of corporate ethics, while
maintaining continuous sales growth and high profitability. To achieve this management vision, Kyocera’s
management policy is to further drive business expansion to be “a creative company that continues to grow.” Inorder to implement this policy, Kyocera aims to increase corporate value by expanding businesses; namely bypromoting efficient use of management resources and further strengthening consolidated group management.
<Target of Pre-tax Income to Net Sales Ratio>
To be “a creative company that continues to grow,” Kyocera aims to achieve its target of a pre-tax income ratioof 15% or higher.
<Medium Term Management Strategy>
Kyocera promotes “high-value-added diversification” as its management strategy to realize such management
policy. This involves ensuring that each business is highly profitable and pursuing synergies among eachbusiness with the objective of driving sustainable growth even in an ever-changing business environment.
Specifically, Kyocera aims to: 1) exploit competitive advantages; 2) strengthen existing businesses; and 3) create
new businesses.
(1) Exploit Competitive Advantages
Sources of competitive advantage for Kyocera over other companies in implementing its diversification strategy
are the “Kyocera Philosophy,” which places people’s hearts at its core, the “Amoeba Management System,”
which is unique to Kyocera and has been a driving force for growth since Kyocera Corporation’s earliest days,
and a strong financial structure. With these foundations firmly in place, Kyocera endeavors to strengthen
competitiveness in technological development, sales and marketing in the high-growth potential markets for
information and communication and for environment and energy, and to translate its diversification strategy into
improved business performance.
15(2) Strengthen Existing Businesses
Kyocera strives to continuously improve profitability in all existing businesses within Kyocera Group.
Elsewhere, by strengthening ties and maximizing synergies between headquarters Kyocera Corporation andKyocera Group companies, Kyocera seeks to improve profitability in each business segment on a consolidated
basis. In promoting a global strategy in each business, Kyocera has created development, manufacturing andsales systems in optimal locations, while the integration of Group-wide resources helps boost the competitivenessof existing businesses. Kyocera regularly reviews those businesses that have lost market competitiveness and thatshow little promise of expansion going forward.
(3) Create New Businesses
Kyocera endeavors to create businesses that will become its core going forward in order to improve consolidated
performance over the medium term. To achieve this goal, Kyocera integrates Group-wide management resources
to develop new technologies and products and create new markets. The focus of Kyocera’s business creation
strategy lies in the markets for information and communication and for environmental and energy.
Challenges
In order for Kyocera Group as a whole to overcome the current difficult circumstances and improve its
performance, Kyocera has substantially changed its management structure by promoting young members of the
management team as officers and directors of Kyocera Corporation and the group companies.
Kyocera faces the following challenges in fiscal 2010 and beyond.
(1) Establish Highly Profitable Corporate Structure
In fiscal 2010, it is expected that harsh business environment will continue, where expansion of sales is difficult.
However, Kyocera will endeavor to enhance its corporate structure and to secure profitability even in the face ofthe current sluggish business environment. Particularly, Kyocera will manage its business by thoroughly
implementing the “Kyocera Philosophy” and the “Amoeba Management System” to achieve “maximum sales
and minimum costs” by all employees’ effort. In order to improve profitability as quickly as possible, alldivisions will engage in all-out cost cutting, including the reduction of manufacturing costs and review of capital
expenditures plans.
Kyocera will improve the profitability of existing businesses and develop competitive new products andtechnologies to establish a highly profitable structure by efficiently utilizing Kyocera’s management resources topursue synergetic effects.
(2) Business Expansion in Important Markets
Kyocera will expand its businesses in the information and communication market and the environment andenergy market. In the information and communication market, it is ensuring the linkage of new business
opportunities with its business expansion, such as commencement of provision of new generation high speed
wireless communication service in the Japanese market. It also aims to expand its component business andequipment business by releasing products meeting the need for advanced digital consumer equipment in a timely
fashion.
In the environment and energy market, further growth is expected due to raising awareness of environmental
issues. Kyocera will continue to implement strategic investments to expand production capacity for solar cells
and modules. It will also make efforts to reduce manufacturing costs and to improve conversion efficiency andexpand solar energy business as a core business of Kyocera Group. In addition, it will make further efforts to16

expand its business in the environment and energy market by creating new products and expanding product items
such as solid oxide fuel cell (SOFC) based power generating units for home use, utilizing its fine ceramicmaterials technologies.
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
Information & Telecommunication Components,
Sapphire Substrates,
Components for Semiconductor Processing Equipment,
Components for LCD Manufacturing Equipment,
Automotive Components,
General Industrial Ceramic Components(2) Semiconductor Parts Group
Ceramic Packages for Crystal and SAW Devices,
CCD/CMOS Sensor Ceramic Packages,
LSI Ceramic Packages,
Wireless Communication Device Packages,
Optical Communication Device Packages and Components,
Organic Multilayer Packages and Substrates(3) Applied Ceramic Products Group
Residential and Industrial Solar Power Generating Systems,
Solar Cells and Modules,
Cutting Tools, Micro Drills,
Medical and Dental Implants,
Jewelry and Applied Products(4) Electronic Device Group
Ceramic Capacitors, Tantalum Capacitors,
Timing Devices (Temperature Compensated Crystal Oscillators (TCXOs), Crystal Units, Clock Oscillators andCeramic Resonators),
Surface Acoustic Wave (SAW) Devices, RF Modules, EMI Filters,
Connectors,
Thermal Printheads, Inkjet Printheads,
Amorphous Silicon Photoreceptor Drums,
Liquid Crystal Displays (LCDs)(5) Telecommunications Equipment GroupCDMA Mobile Phone Handsets,
Personal Handy Phone System (PHS) Related Products (PHS Mobile Phone Handsets, PHS Base Stations)
Wireless Broadband Systems such as iBurst™
17

(6) Information Equipment GroupECOSYS Printers,
Copying Machines,
Multifunctional Peripherals(7) Others
Telecommunications Engineering Business,
Integration Business on Information Systems and Network Infrastructures,
Data Center Business,
Management Consulting Business,
Chemical Materials for Electronic Components, Electrical Insulators, Molded Products,
Hotel Business(1) Fine Ceramic Parts Group
Products in this reporting segment are widely used in the computing, telecommunications, automotive andvarious other industrial sectors. These products are made from a variety of ceramic materials, such as siliconcarbide, silicon nitrides and zirconia as well as alumina, utilizing their characteristics of heat resistance,
corrosion resistance and wear resistance.
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, substrate for HDD
thin film magnetic heads, sapphire substrates for LCD projectors and LEDs, components for semiconductor
processing equipment, components for LCD manufacturing equipment, mechanical seals for pumps, engine
components for the automobile industry, friction tight discs and thread guides for yarn texturing machines in the
textile industry, rings for fishing rods, nozzles and parts for papermaking machinery.
(2) Semiconductor Parts Group
Kyocera develops, manufactures and sells inorganic (ceramic) and organic packages in this reporting segment.
Ceramic packages have the characteristic of being extremely air tight, and can be small and thin, while also
having exceptional heat resistance and heat dissipation. In addition, they have good high frequency properties
and facilitate the embedding of passive components. Kyocera develops, manufactures and sells various ceramic
packages and components capitalized on material’s characteristics. Major products in this reporting segment areceramic packages for crystal and SAW devices, CCD/CMOS sensorceramic packages, LSI ceramic packages
such as ball grid array packages and optical communication device packages and ceramic parts for fiber-optic
communications connectors. Ceramic packages for crystal and SAW devices are used for SAW filters andtemperature compensated crystal oscillators (TCXOs), which are mostly inserted into mobile phone handsets.
CCD/CMOS sensorceramic packages are mainly used in camera-equipped mobile phone handsets and digital stillcameras. Ball grid array packages are used in MPUs and other logic ICs, which are mainly inserted into high-end
servers.
In the organic package business, Kyocera established a specialized high density organic circuit board
manufacturer, Kyocera SLC Technologies Corporation. Kyocera SLC Technologies Corporation develops,
manufactures and sells system in a package (SiP) substrates used in mobile phone handsets and organic flip-chippackages for high-end application specific integrated circuits (ASICs).

18

(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, applied solar cell products and residential andindustrial solar power generating systems. We are expanding our solar cell and module production capacity inJapan and commenced assembly of solar modules by KYOCERA (Tianjin) Solar Energy Co., Ltd. in China,
which was established as our manufacture and sales subsidiary of solar modules in May 2003. In addition,
Kyocera commenced assembly of solar module in KYOCERA Solar, Inc. Mexico Plant in Tijuana, Mexico, for
U.S. market in October 2004. To increase sales in Europe, Kyocera also commenced assembly of solar module inCzech Republic in October 2005. Kyocera produces solar cells and modules in global quadripartite production
system.
2) Cutting Tools
Kyocera develops, manufactures and sells cutting tools for metal processing in industrial production, particularlyin the automotive industry. To expand its cutting tools business, Kyocera Corporation acquired Tycom
Corporation (currently Kyocera Tycom Corporation, a consolidated subsidiary), which was a U.S.-based
manufacturer of micro drill for printed circuit boards, in January 2001.
3) Medical and Dental Implants
Kyocera established Japan Medical Materials Corporation with Kobe Steel, Ltd. by integrating the medical
material businesses in September 2004. Japan Medical Materials Corporation produces a wide range of products
such as dental implants, artificial bone and joint prosthesis, artificial knee joint replacement systems, and ceramicmaterials helping heal hip fractures by combinations of material, processing technologies of ceramics andtitanium alloys and integrating business resources such as development, manufacturing, marketing and sales
channels with Kyocera and Kobe Steel, Ltd.
4) Jewelry and Applied Ceramic Related Products
Recrystallized jewelry comprises mainly synthetic emeralds, alexandrines and rubies. These stones are
manufactured using a single crystal growth technology developed by us, and are chemically and physicallyequivalent to natural stones. Kyocera also develops, produces and sells applied ceramic related products such as
kitchen knives utilizing ceramic characteristics of wear resistance and corrosion resistance against acidity andalkalinity.
(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 miniaturization, low voltage, highfrequency and low energy consumption, and we develop, manufacture and sell high-value-added products suchas miniature ceramic capacitors with high capacitance, tantalum capacitors, miniature timing devices like
TCXOs, RF modules and connectors for mobile phone handsets and PCs. We also develop, manufacture and sellthin-film products such as thermal printheads, amorphous silicon photoreceptor drums and LCDs for consumer
electronic equipment, office automation equipment and industrial equipment.
We are strengthening our manufacturing and sales in China to enhance price competitiveness and to cultivate
new markets. Shanghai Kyocera Electronics Co., Ltd. mainly produces ceramic capacitors. We aim to expand
sales in China through the sales subsidiaries in China which market our products made in China and around theworld.
19

To expand this reporting segment business, we are pursuing the synergies with subsidiaries. AVX Corporationand its consolidated subsidiaries, which develops, manufactures and sells ceramic capacitors, tantalum capacitorsand other passive components for information and communication equipment, has a global manufacturing andsales network. AVX Corporation is a major contributor to our Electronic Device Group sales and pursues
synergies with development and manufacturing in the ceramic capacitor business. In our timing device business,
Kyocera Corporation acquired Kinseki, Limited (currently Kyocera Kinseki Corporation, a consolidated
subsidiary) through a share exchange in August 2003. The marketing division of Kyocera Kinseki Corporation
was merged 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
Kinseki Corporation through corporate splits in April 2004.
(5) Telecommunications Equipment Group
This reporting segment includes CDMA mobile phone handsets business and telecommunication systemequipment business such as PHS mobile phone handsets and base stations. These products are produced anddistributed mainly for KDDI Corporation and WILLCOM, Inc., as well as for other U.S. telecommunication
service providers. KDDI Corporation is a telecommunications service company, in which we made an equity
investment when it was founded in 1984, when the telecommunications business, which had previously beenmonopolized by a national telephone company, was opened to private companies. KDDI Corporation and its
subsidiaries are currently engaged in providing domestic, long distance, international telephone services andmobile phone services. WILLCOM, Inc. provides PHS services and Kyocera owns 30% stakes of WILLCOM,Inc.
In the mobile phone handsets business, we focus on CDMA protocol. We acquired the CDMA mobile phonehandset business of Qualcomm Inc. and established Kyocera Wireless Corp., a wholly-owned subsidiary in
February 2000. In addition, we established Kyocera Wireless (INDIA) PVT. Ltd., a subsidiary that develops
software for CDMA mobile phone handsets, in June 2003. In September 2005, we decided to outsource the
manufacturing division of Kyocera Wireless Corp. to Flextronics International Ltd., a leading provider ofelectronics manufacturing services.
With the objective of further enhancing the Telecommunications Equipment Group, Kyocera acquired the mobile
phone business of SANYO in April 2008. Through this acquisition, Kyocera seeks to expand sales and improve
profitability in the Telecommunications Equipment Group by integrating product development and design
technologies of SANYO with the management resources of Kyocera.
In the telecommunication system equipment business, we are expanding this business by cultivating markets
through the expansion of PHS technology. Specifically, we are promoting new PHS mobile phone handsets andbase stations compatible with the high speed data transmission services offered by WILLCOM, Inc in Japan. We
also promote iBurstTM, a wireless internet system, which enable internet services to be used at broadband speedwith wireless technology in overseas market. In addition, we develop next generation telecommunicationequipment such as for next generation PHS, WiMAX and Long Term Evolution (LTE) services, which will becommenced from the latter half of 2009 and on ward, in Japan.
(6) Information Equipment GroupThe major products in this reporting segment comprise page printers, copying machines and multifunctional
peripherals. Our page printers are marketed under the name of “ECOSYS” with a focus on the concepts of longlife cycle, ecology and economy, which use our amorphous silicon photoreceptor drums.
In April 2000, Kyocera Mita Corporation became our wholly-owned subsidiary. Kyocera Corporation’s
ECOSYS printer unit was merged into this subsidiary, enabling us to build a unified presence in the document
solutions business. Further efficiencies have resulted from the merger of our printer and copier sales operations
20

with those of Kyocera Mita Corporation. We have enhanced our product line through the standardization ofengines between the printers, copying machines and multifunctional peripherals. We established a plant, Kyocera
Mita Office Equipment (Dongguan) Co., Ltd. in Dongguan, China due mainly to strengthen our pricecompetitiveness in December 2001.
In January 2009, Kyocera Mita Corporation acquired TAAG, a sales company of information equipment inGermany, in order to expand the sales channels in Europe.
(7) Others
This reporting segment includes revenues from telecommunication network systems. This segment also develops,
manufactures and sells electronic component materials, electric insulators and synthetic resin molded products.
Kyocera Communication Systems Co., Ltd. operates a total telecommunications network system business, fromsystem development to design, construction and maintenance services. In addition, Kyocera Communication
Systems Co., Ltd. provides data center services for mobile phone content distribution services and IT solutions
services for business users by developing new products featuring network services as well as system integration
services. Kyocera Communication Systems Co., Ltd. also operates management consulting business based on
operating of “Amoeba Management System,” which is Kyocera’s unique management method.
Kyocera Chemical Corporation, which joined Kyocera in August 2002, mainly produces electronic component
materials, and will develop new products by pursuing the synergies with fine chemical technologies and ourcomponents technologies such as those employed by the Electronic Device Group.
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 the sales in the Fine Ceramic Parts Group, the Semiconductor Parts Group and the Electronic Device
Group are made directly to component and equipment manufacturers who incorporate them into their own
products.
In the Applied Ceramic Products Group, solar energy products for residential use and public/industrial use aresold primarily to users via sales subsidiaries and distributors. Cutting tools are sold to users such as automobile
parts and construction machinery parts makers, etc. through wholesale dealers and distributors. Jewelry andapplied ceramic related products are sold mainly through direct retail shops, as well as through distributors.
Dental implants, artificial bones and joint prostheses are sold mainly to dental clinics and hospitals throughdistributors.
In the Telecommunications Equipment Group, we primarily sell products directly to communications carriers inJapanese and overseas markets. Our key sales destinations are KDDI Corporation and WILLCOM, Inc. in Japan.
The Information Equipment Group markets products such as ECOSYS printers, copier machines andmultifunctional peripherals under the TASKalfa brand mainly through distributors and wholesalers both in Japanand abroad.
In the Others reporting segment, services from the telecommunications engineering business and the data center
business of Kyocera Communication Systems Co., Ltd., as well as from our management consulting business are21

provided directly to customers and users. Electronic materials and components 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 predominantly
in U.S. dollars 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 lessen theeffect of these fluctuations and to absorb rising costs by making steady internal improvements, including cost
reductions. We have also concluded long-term agreements with suppliers for certain raw materials aimed atensuring stable supply to meet plans to increase production, and a fair purchase price.
In fiscal 2009, we procured a sufficient level of raw materials and other materials to carry out our productionplans, and we do not have any concern about shortage of raw materials and supplies during fiscal 2010.
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 affect significant impact on Kyocera’s entire operation. The following table sets
forth information, as of March 31, 2009, 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

Country

Contents

PeriodMotorola, Inc.

United States

License under patents
regarding mobile phone

From July 1, 2004 toJune 30, 2009

Canon IncorporatedJapan

License under patents
regarding electric photo
printer

From April 1, 2002 topatent expiration

22

Competitive Position(1) Fine Ceramic Parts Group
Since our founding, Kyocera has worked continuously to develop fine ceramic materials and to cultivate newmarkets. At present, we provide fine ceramic products to a wide array of industries, notably the semiconductor
fabrication equipment market, the information and communication market, the general industrial machinery
market and the automotive market.
Although competitors in this reporting segment are mainly Japanese manufacturers and differ in each market,
Kyocera has established a competitive advantage in materials technology, accumulated since our founding, andin outstanding production technology and capability, which enables us to meet customer requirements,
particularly in terms of product dimension, size and amount. We also boast an internal integrated system fromfundamental research to next-generation product development through our R&D divisions, and this differentiates
us from the competitors.
(2) Semiconductor Parts GroupIn this reporting segment, our goal is to further strengthen our competitive position in both the ceramic andorganic package businesses in the global market. To achieve this, we strive to provide high-value-added products
and to develop new applications such as wireless and optical communications in the telecommunications market,
and in the digital consumer equipment, automotive and medical industries, etc.
In the ceramic package business, Kyocera is already one of the global leaders in packages for crystal and SAW
devices and CCD/CMOS sensor packages. We also aim to be a market leader in other ceramic package areas andto increase customer satisfaction by applying our technological and managerial expertise.
In the organic package field, which we entered relatively late, to strengthen our technological expertise andexpand business, we acquired the SLC business of IBM Japan, Ltd. in August 2003, and established Kyocera
SLC Technologies Corporation. In April 2004, we integrated the organic material components business into
Kyocera SLC Technologies Corporation, and established a new plant in Ayabe, Kyoto in June 2005. We aim tostrengthen our position in the organic package business going forward by developing more advanced package
technology and by mass producing of various packages and substrates.
(3) Applied Ceramic Products GroupIn the solar energy business where the market is expanding rapidly supported by enhanced environmental
awareness on a global basis, many companies entered into the market and the competition is becoming intense.
Kyocera has been providing solar energy products for more than thirty years and has various expertise andexperiences in terms of manufacturing and development as well as of global marketing. Kyocera manufactures
products in-house through silicon casting to cell and module processes, and can afford to reduce costs andenhance efficiency in every process. Based on these our strengths such as quality, the world’s highest level ofconversion efficiency of multi-crystalline solar cells and long-term product reliability, Kyocera manufactures our
products in Japan, China, Mexico and Czech and will expand its production capacity in each site towards further
business expansion.
We are also one of the biggest suppliers of cutting tools in Japan, with the major application being for the
automotive industry. Although we have many global competitors, we will work to expand sales of new products
in order to further increase our share in the Japanese and Asian markets.
(4) Electronic Device Group
Kyocera develops, manufactures and sells various capacitors, timing devices, connectors and thin-film devices.
One of our competitive advantages is that we can supply a wide variety of components compared with our23competitors. Though we have many competitors in this field, not only in Japan but also throughout Asia, and themarket is particularly competitive in terms of price, quality and delivery, most of our competitors in thisreporting segment are Japanese manufacturers.
Kyocera is one of the biggest manufacturers of timing devices in the world. AVX Corporation, a U.S. subsidiary,competes with overseas manufacturers in developing, manufacturing and selling tantalum capacitors. Our thinfilm products, such as thermal printheads and amorphous silicon photoreceptor drums, are mainly used in
information equipment, notably printers, copying machines and multifunctional peripherals. Amorphous silicon
photoreceptor drums have outstanding resistance to wear compared with organic photoconductor (OPC) drums.
Incorporating our amorphous silicon photoreceptor drums into information equipment helps to realize longer
lasting products among the competition.
We are also continuing to seek synergies within Kyocera in order to expand sales, reduce costs and increase
market share in this reporting segment. As one measure to increase sales, we are making full use of the sales
channel of AVX Corporation in the overseas market. In production, our domestic sites specialize in
manufacturing high-value-added ceramic capacitors that are compact and have high capacity, while we makemaximum use of our facilities in China to manufacture general ceramic capacitors, as one example. Through thisstructure, we can reduce manufacturing costs and strengthen price competitiveness.
(5) Telecommunications Equipment GroupIn the Japanese market, our main competitors for mobile phone handsets are Japanese manufacturers. In themobile phone handset market outside Japan, Kyocera competes with European, U.S. and Asian manufacturers. In
terms of telecommunication system equipment business, our main competitors are Japanese manufacturers. In
April 2008, Kyocera acquired the mobile phone business of SANYO. Through this move, we aim to further
strengthen development, manufacturing and sale of CDMA handsets worldwide, and to expand business intelecommunication system equipment business including next generation PHS system, WiMAX system and LTE
system.
(6) Information Equipment GroupWe have many competitors in Japan and abroad in information equipment business, such as printers, copying
machines and multifunctional peripherals. Although the scale of sales in this reporting segment is relatively small
compared with our competitors, and our global market share is not high, our major strength is differentiation of
our products from those of the competitors.
Our products are based on our unique “ECOSYS” concept that provides long life cycle and thus environmental
friendliness, while also having the benefit of low running costs for users, by utilizing our highly durable
amorphous silicon photoreceptor drum with exceptional abrasion resistance. Our ECOSYS concept is used in the
majority of our printers, copying machines and multifunctional peripherals, in both monochrome and color, andfrom low-speed to high-speed models. These products are recognized as green products for the office,particularly in Europe, where environmental awareness is particularly high.
With the objective of expanding its product line-up, Kyocera launched and started sales of the TASKalfa brandof multifunctional peripherals in January 2009, which complements the ECOSYS brand of printers. Features of
TASKalfa include use of micro-particle toner that is produced at a new toner plant in Japan, which wasestablished in fiscal 2009, and containment of toner consumption and power consumption. TASKalfa products
incorporate a new software platform and have expandability via connectivity with external systems andapplications.

24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
property, consumer and business taxation, and exchange controls. We do not believe that such governmental
regulations currently have material effects on Kyocera’s business.
Kyocera is also subject to various regulations concerning the environment of the countries where we operate.
These regulations cover air emissions, wastewater discharges, the handling, disposal and remediation 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 of our 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. They also include several
new 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), the European Union’s
Registration, Evaluation, Authorization and Restriction of Chemicals (REACH), and similar regulations requiredin other countries and areas including China. Based on our periodic reviews of the operating policies andpractices at all of our facilities, we believe that our operations are currently in substantial compliance, in allmaterial respects, with all applicable environmental laws and regulations and that the cost of continuing
compliance will not have a material effect on our financial condition or results of operations.
In addition, AVX Corporation, a subsidiary in the United States, is subject to federal, state and local laws andregulations concerning the environment in the United States and to the environmental laws and regulations of theother countries in which it operates. Specifically, AVX Corporation is subject to oversight by the United States
Environmental Protection Agency (“EPA”), and is currently engaged in ongoing negotiations with the EPA, state
governmental agencies and other private parties with respect to various clean-up and remediation activities. AVX
Corporation is not involved in any pending or threatened proceedings that would require curtailment of its
operations, and based on its periodic reviews of the operating policies and practices at its facilities, believes thatits operations are currently in substantial compliance, in all material respects, with all applicable environmental
laws and regulations and that the cost of continuing compliance will not have a material effect on its financial
condition or results of operations.
C. Organizational Structure
We had 221 subsidiaries and affiliates as of March 31, 2009. 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.

25

The following table sets forth information, as of March 31, 2009, with respect to our significant subsidiaries.
Country ofIncorporation

Percentage
held by
KyoceraUnited States

100.00%

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

Japan

100.00%

Manufacture and sale oforganic multilayer printed
circuit boards

Kyocera America, Inc. . . . . . . . . . . . . . . . . . . . . . . United States

100.00%

Manufacture and sale of fineceramic-related products

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

China

100.00%

Manufacture and sale of fineceramic-related products andelectronic devices

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

Japan

100.00%

Sale of solar energy products

Japan Medical Materials Corporation . . . . . . . . . . .

Japan

77.00%Development, manufactureand sale of medical materials
and equipment

Kyocera Solar, Inc. . . . . . . . . . . . . . . . . . . . . . . . . . United States

100.00%

Manufacture and sale of solar
energy products

Kyocera Tycom Corporation . . . . . . . . . . . . . . . . . United States

100.00%

Manufacture and sale of micro
drillsKyocera (Tianjin) Solar Energy Co., Ltd. . . . . . . .

China

90.00%

Manufacture of solar energy
products

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

China

90.00%

Manufacture and sale ofcutting tools and thin-film
devices

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

Korea

90.00%

Manufacture and sale ofcutting tools

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

Czech

100.00%

Manufacture of solar energy
products

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

Mexico100.00%

Manufacture of fine ceramicrelated products and solar
modules

Kyocera Kinseki Corporation . . . . . . . . . . . . . . . . .

Japan

100.00%

Manufacture of electronic
devices

Kyocera Elco Corporation . . . . . . . . . . . . . . . . . . .

Japan

100.00%

Manufacture and sale ofelectronic devices

Name

Main Business(1) Fine Ceramic Parts Group
Kyocera Industrial Ceramics Corporation . . . . . . .

(2) Semiconductor Parts Group
Kyocera SLC Technologies Corporation . . . . . . . .

(3) Applied Ceramic Products Group(4) Electronic Device Group

26

Country ofIncorporation

Percentage
held by
Kyocera

AVX Corporation . . . . . . . . . . . . . . . . . . . . . . . . . . United States

71.49%

Manufacture and sale ofelectronic devices

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

100.00%

Manufacture of electronic
devices

Kyocera Wireless Corp. . . . . . . . . . . . . . . . . . . . . . United States

100.00%

Sale of telecommunications
equipment

Kyocera Wireless (India) PVT. Ltd. . . . . . . . . . . . .

India

100.00%R&D of telecommunications
equipment

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

Malaysia

100.00%

Manufacture of
telecommunications
equipment

Kyocera Mita Corporation . . . . . . . . . . . . . . . . . . .

Japan

100.00%Development and manufactureof information equipment

Kyocera Mita Japan Corporation . . . . . . . . . . . . . .

Japan

100.00%

Sale of information equipment

Kyocera Mita America, Inc. . . . . . . . . . . . . . . . . . . United States

100.00%

Sale of information equipment
mainly in North America

TA Triumph-Adler AG . . . . . . . . . . . . . . . . . . . . . .

Germany

94.19%

Sale of information equipment
mainly in Europe

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

China

92.76%

Manufacture and sale ofinformation equipment

Kyocera Mita Europe B.V. . . . . . . . . . . . . . . . . . . .

Netherlands

100.00%

Sale of information equipment
mainly in Europe

Kyocera Mita Deutschland GmbH . . . . . . . . . . . . .

Germany

100.00%

Sale of information equipment
mainly in Europe

Kyocera Communication Systems Co., Ltd. . . . . .

Japan

76.30%

Provision of IT services

Kyocera Optec Co., Ltd. . . . . . . . . . . . . . . . . . . . . .

Japan

100.00%

Manufacture and sale of
optical equipment components

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

Japan

100.00%Real estate services

Hotel Kyocera Co., Ltd. . . . . . . . . . . . . . . . . . . . . .

Japan

100.00%Hotel management andoperations

Hotel Princess Kyoto Co., Ltd. . . . . . . . . . . . . . . . .

Japan

100.00%Hotel management andoperations

Kyocera International Co., Ltd. . . . . . . . . . . . . . . .

Japan

100.00%Insurance and travel agency

Name

Korea

Main Business(5) Telecommunications Equipment Group(6) Information Equipment Group(7) Others

27

Country ofIncorporation

Percentage
held by
KyoceraJapan

100.00%

Manufacture and sale ofelectronic materials

Kyocera International, Inc. . . . . . . . . . . . . . . . . . . . United States

100.00%Holding company andheadquarters in North America

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

Singapore

100.00%

Sale of fine ceramic-related
products and electronic
devices mainly in Asia

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

Germany

100.00%

Sale of fine ceramic-related
products, solar energy
products and thin-film devices
mainly in Europe

Kyocera (Tianjin) Sales & Trading Corporation . .

China

90.00%

Sale of fine ceramic-related
products, solar energy
products, cutting tools andinformation equipment mainly
in China

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

Korea

100.00%

Sale of fine ceramic-related
products and solar energy
products mainly in Asia

Name

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

Main Business(8) Regional Holding or Sales Companies

In addition to the above consolidated subsidiaries, Kyocera had 170 other consolidated subsidiaries as ofMarch 31, 2009. Kyocera also had interests in two subsidiaries accounted for by the equity method and 10
affiliates accounted for by the equity method as of March 31, 2009.
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. In addition, we market passive components produced by AVX
Corporation in 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
our materials technologies into its ceramic capacitor production. We have been seeking better ways to cooperatein expanding our electronic device businesses. Currently, three of our directors are members of AVX
Corporation’s board 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 and development, and we are seeking and pursuing synergies to be a leading passive component
manufacturer. AVX Corporation posted net income of $80,846 thousand in fiscal 2009 and its performance
contributed significantly to 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
Our manufacturing operations are conducted in Japan, the United States, Mexico, El Salvador, Brazil, the United
Kingdom, Germany, France, the Czech Republic, Singapore, South Korea, China, Malaysia, Israel, Thailand andPhilippines. As of March 31, 2009, we had property, plants and equipment with a net book value of¥266,054 million ($2,687 million). During the five years ended March 31, 2009, we invested a total of¥370,072 million ($3,738 million) for additions to property, plants and equipment. Our property, plants andequipment are subject to some material encumbrances or environmental issues. See Item 5.A “Operating Results”
of this annual report on Form 20-F.
28

The following table sets forth information, as of March 31, 2009, with respect to our manufacturing facilities
with floor space of more than 250,000 square feet.

Name of Plant

Location

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

Owned

295

Yamagata Higashine Plant . . Higashine, Yamagata
Nagano Okaya Plant . . . . . . . Okaya, Nagano

Owned
Owned

379
384

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

Owned

389

Tamaki Plant . . . . . . . . . . . . . Watarai, Mie
Shiga Gamo Plant . . . . . . . . . Higashi-Ohmi, Shiga

Owned
Owned

288
713

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

Owned

1,555

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

Owned

288

Hirakata Plant . . . . . . . . . . . . Hirakata, Osaka
Kagoshima Sendai Plant . . . . Satsuma-Sendai,
Kagoshima

Owned
Owned

604
2,112

Kagoshima Kokubu Plant . . . Kirishima, Kagoshima Owned

2,747

Kagoshima Hayato Plant . . . . Kirishima, Kagoshima Owned

278

Telecommunications
equipment,
Semiconductor parts,
Fine ceramic parts
Electronic components
Fine ceramic parts,
Electronic components,
Cutting tools
Electronic parts andmaterials
Information equipment
Fine ceramic parts,
Semiconductor parts
Fine ceramic parts,
Electronic components,
Solar cells, Cutting tools
Organic multilayer
printed circuit boards
Information equipment
Fine ceramic parts,
Semiconductor parts,
Electronic components,
Cutting tools
Fine ceramic parts,
Semiconductor parts,
Electronic components
Electronic components

Owned
Owned

300
569

Semiconductor parts
Electronic components

Owned

300

Information equipment

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

Owned

420

Electronic components

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

Leased322

Czech Republic
Lanskroun Plant . . . . . . . . . . Lanskroun
Uherske Hradiste Plant . . . . . Uherske Hradiste

Owned
Owned

360
275

United States
Balboa Plant . . . . . . . . . . . . . San Diego, California
Myrtle Plant . . . . . . . . . . . . . Myrtle Beach, South
Carolina
South Carolina Plant . . . . . . . Fountain Inn, South
Carolina
El Salvador

29

2010

Electronic components
Electronic components
Electronic components

Name of Plant

Location

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

China
Tianjin Plant . . . . . . . . . . . . Tianjin
Shilong Plant . . . . . . . . . . . . Dongguan, Guandong
Shilong Plant . . . . . . . . . . . . Dongguan, Guandong

Owned
Owned
Owned

520
2,331
795

Electronic components
Information equipment
Cutting tools, Electronic
components
Semiconductor parts,
Electronic components

Shanghai Pudong Plant . . . . Shanghai

Owned

1,132

Owned

264

Electronic components

Owned

332

Electronic components

Owned

315

Telecommunications
equipment

ThailandThailand Plant . . . . . . . . . . . Thailand
Philippines
Philippines Plant . . . . . . . . . Philippines
Malaysia
Malaysia Plant . . . . . . . . . . . Malaysia

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, 2009
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 for the information and communications
market and environment and energy market worldwide. Kyocera Corporation was established in 1959 as amanufacturer of ceramic parts for electronic equipment and has been expanding and diversifying its businessmainly through active mergers and acquisitions, as well as applying its fine ceramic technologies to the areas ofsemiconductor parts, electronic devices, telecommunication, metal processing, medical and dental implants andsolar energy fields. Kyocera develops, produces and distributes a variety of parts and devices for electronicequipment such as printers and multifunctional peripherals as well as consumer electronic equipment such as
mobile phone handsets. Kyocera earns revenue and income and generates cash through sales of these products.
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
30

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 2009, the impact of the financial crisis triggered in the United States in September 2008 affected the real
economy, resulting in rapid deceleration in the global economy commencing the second half of fiscal 2009. In
the Japanese economy, exports decreased significantly due to the slowdown in overseas economies andappreciation of the yen against the U.S. dollar and Euro, while there was a significant decline in corporate
production activity. As a result, the recession in the Japanese economy has become evident rapidly.
Due to the impact of the slumping global consumer spending, the digital consumer equipment market, which is aprincipal market for Kyocera Corporation and its consolidated subsidiaries, posted sluggish growth in sales ofmobile phone handsets, PCs, flat panel TV sets and digital still cameras. In addition, the business environment
has changed dramatically commencing the second half of fiscal 2009 due to the sharp decline in corporate
information technology investment. As a result, sales for both components business and equipment businessdecreased compared with fiscal 2008. The solar energy market expanded worldwide, due in part to subsidies
from national governments despite harsh environment.
Consolidated net sales for fiscal 2009 amounted to ¥1,128,586 million ($11,400 million), a decrease of 12.5%
compared with fiscal 2008, due primarily to the impact of a decrease in demand affected by deteriorating
business environment and to the yen’s appreciation.
Amid such a harsh business environment, Kyocera continued to pursue synergies by effectively utilizing
management resources and to aggressively release new products, while also promoting comprehensive Groupwide cost reductions. Nonetheless, profit from operations for fiscal 2009 decreased by 71.5% compared withfiscal 2008 to ¥43,419 million ($439 million) due mainly to a decrease in demand and product selling priceerosion. Income before income taxes decreased by 68.0% to ¥55,982 million ($565 million) due to the decreasein profit from operations. Net income decreased by 72.5% to ¥29,506 million ($298 million).
Average exchange rates for fiscal 2009 were ¥101 to the U.S. dollar and ¥143 to the Euro, marking appreciationof ¥13 and ¥19, respectively, compared with fiscal 2008. As a result, net sales and income before income taxes
after translation into the yen for fiscal 2009 were pushed down by approximately ¥91,000 million ($919 million)and ¥23,000 million ($232 million), respectively.

31

Results of Operations
Fiscal 2009 compared with Fiscal 2008
The following table shows a summary of Kyocera’s results of operations for fiscal 2008 and fiscal 2009:
2008
AmountYears ended March 31,
2009%
Amount%(Yen in millions and U.S. dollars in thousands)

Increase(Decrease)%

Net sales . . . . . . . . . . . . . . . . . . . . . . . . . . . ¥1,290,436
Cost of sales . . . . . . . . . . . . . . . . . . . . . . . .
883,763

100.0
68.5

¥1,128,586
836,638$11,399,859
8,450,889

100.0
74.1

(12.5)(5.3)

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

406,673

31.5

291,948

2,948,970

25.9(28.2)

254,253

19.7

248,5292,510,394

22.1

(2.3)

Profit from operations . . . . . . . . . . . . . . . . .
Interest and dividend income . . . . . . . . . . .
Interest expense . . . . . . . . . . . . . . . . . . . . . .
Foreign currency transaction losses, net . . .
Equity in earnings of affiliates andunconsolidated subsidiaries . . . . . . . . . .
Losses on sales of securities, net . . . . . . . .
Losses on impairment of securities . . . . . . .
Other, net . . . . . . . . . . . . . . . . . . . . . . . . . . .

152,420
18,444(1,480)
(956)

11.8
1.4
(0.1)
(0.1)

43,41915,441(1,206)(91)

438,576
155,970(12,182)
(919)

3.8
1.4
(0.1)
(0.0)

(71.5)(16.3)
—
—

6,091
(622)
(248)
1,193

0.5
(0.1)
(0.0)
0.1

6,460
(2,840)(7,141)
1,940

65,253(28,687)(72,131)
19,595

0.6
(0.3)
(0.6)
0.2

6.1
—
—
62.6

22,422

1.7

12,563

126,8991.2(44.0)

Income before income taxes andminority interests . . . . . . . . . . . . . .
Income taxes . . . . . . . . . . . . . . . . . . . . . . . .

174,842
60,23513.5
4.6

55,982
22,779565,475
230,091

5.0
2.1(68.0)(62.2)

Income before minority interests . . . .
Minority interests . . . . . . . . . . . . . . . . . . . .

114,607(7,363)8.9(0.6)

33,203(3,697)335,384(37,344)

2.9
(0.3)

(71.0)—Net income . . . . . . . . . . . . . . . . . . . . . . . . .

¥ 107,244

8.3

298,040

2.6(72.5)¥

29,506$

Net sales
Consolidated net sales for fiscal 2009 decreased by ¥161,850 million ($1,635 million), or 12.5%, to¥1,128,586 million ($11,400 million), compared with ¥1,290,436 million in fiscal 2008.
Net sales in the Components Business, which comprised 51.1% of consolidated net sales, decreased by¥102,935 million ($1,040 million) in fiscal 2009, or 15.1%, to ¥577,055 million ($5,829 million) compared withfiscal 2008. This was principally due to stagnation in production activity in numerous industries, namely digitalconsumer equipment including mobile phone handsets and PCs, semiconductors, and automotive relatedindustries, particularly in the second half, while inventory adjustments continued apace for equipment andcomponents by Kyocera’s customers, causing component demand to drop. In contrast, sales in the Applied
Ceramic Products Group decreased only slightly compared with fiscal 2008 owing to steady expansion indemand for solar energy business, mainly in Europe and the United States, until the third quarter.
Net sales in the Equipment Business, which comprised 39.7% of consolidated net sales, decreased by¥49,508 million ($500 million) in fiscal 2009, or 10.0%, to ¥448,055 million ($4,526 million) compared withfiscal 2008. Although sales in both Japanese and overseas market weakened, sales in the Telecommunications
Equipment Group decreased slightly compared with fiscal 2008, due to the acquisition of the mobile phonebusiness of SANYO. Sales in the Information Equipment Group decreased compared with fiscal 2008, due to the32impact of the yen’s appreciation against the Euro and U.S. dollar, coupled with the sharp decline in investments
in information technology at corporate sectors, especially in Europe and the United States.
A detailed analysis and discussion of Kyocera’s net sales by reporting segment and geographic segment are as
follows:
Net sales by reporting segment
The following table shows a breakdown of Kyocera’s total consolidated net sales for fiscal 2008 and fiscal 2009by the seven reporting segments:
2008
AmountYears ended March 31,
2009%
Amount%(Yen in millions and U.S. dollars in thousands)

Fine Ceramic Parts Group . . . . . . . . . . . . . . ¥ 81,309
Semiconductor Parts Group . . . . . . . . . . . .
154,538
Applied Ceramic Products Group . . . . . . . .
149,942
Electronic Device Group . . . . . . . . . . . . . .
294,201

6.3
12.0
11.6
22.8

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

679,990
220,817
276,746

52.7
17.1
21.5

Total Equipment Business . . . . . . . . .
Others . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Adjustments and eliminations . . . . . . . . . . .

497,563
138,494(25,611)¥1,290,436¥

61,730135,137
148,917
231,271$

Increase(Decrease)%623,535
1,365,020
1,504,212
2,336,071

5.4
12.0
13.2
20.5

(24.1)(12.6)(0.7)(21.4)

577,055
218,758
229,297

5,828,838
2,209,677
2,316,131

51.1
19.4
20.3

(15.1)(0.9)(17.1)

38.6
10.7
(2.0)

448,055
126,043(22,567)

4,525,808
1,273,162(227,949)

39.7
11.2
(2.0)

(10.0)
(9.0)
—

100.0

¥1,128,586$11,399,859

100.0(12.5)(1) Fine Ceramic Parts Group
Sales in this reporting segment in fiscal 2009 decreased by ¥19,579 million ($198 million), or 24.1%, to¥61,730 million ($624 million), compared with ¥81,309 million in fiscal 2008.
Component demand was decreased in fiscal 2009 as prolonged stagnation in the semiconductor market since
fiscal 2008 resulted in a year-on-year decline in sales of ceramic parts for semiconductor fabrication equipment,
while there was a sharp decline in production activity in numerous industries, namely the digital consumer
equipment and automotive industries. Overall sales in this reporting segment for fiscal 2009 were pushed down
by approximately ¥3,100 million ($31 million) compared with fiscal 2008 due to the impact of the yen’s
appreciation.
(2) Semiconductor Parts Group
Sales in this reporting segment in fiscal 2009 decreased by ¥19,401 million ($196 million), or 12.6%, to¥135,137 million ($1,365 million), compared with ¥154,538 million in fiscal 2008.
Sales of both ceramic packages and organic packages decreased compared with fiscal 2008. This was due
primarily to rapid deterioration in demand for ceramic packages used mainly in mobile phone handsets anddigital still cameras, and for organic packages used mainly in servers from the latter half of the second quarter offiscal 2009. Overall sales in this reporting segment for fiscal 2009 were pushed down by approximately¥9,400 million ($95 million) compared with fiscal 2008 due to the impact of the yen’s appreciation.

33

(3) Applied Ceramic Products Group
Sales in this reporting segment in fiscal 2009 decreased by ¥1,025 million ($10 million), or 0.7%, to¥148,917 million ($1,504 million), compared with ¥149,942 million in fiscal 2008.
Despite an increase in sales in the solar energy business due primarily to growth in demand in Europe and theUnited States until the third quarter, this decrease was due to lower sales in the cutting tools business and theimpact of the yen’s appreciation against the foreign currencies.
In the solar energy business, despite the yen’s appreciation against the Euro from the second half and a rapid
decline in demand in Europe and the United States in the fourth quarter, production volume of solar cells andmodules in fiscal 2009 increased by approximately 45% compared with fiscal 2008, while product selling prices
remained relatively stable. However, sales in the cutting tools business decreased due to stagnation in production
activity in automotive industries from the second half. Overall sales in this reporting segment for fiscal 2009were pushed down by approximately ¥11,100 million ($112 million) compared with fiscal 2008 due to the impactof the yen’s appreciation.
(4) Electronic Device Group
Sales in this reporting segment in fiscal 2009 decreased by ¥62,930 million ($636 million), or 21.4%, to¥231,271 million ($2,336 million), compared with ¥294,201 million in fiscal 2008.
There were main reasons for this decrease: a decline in demand, a reduction in product selling prices, and the
yen’s appreciation. Demand for digital consumer equipment such as mobile phone handsets and PCs decreased
due to the global economic downturn, forcing a rapid decline in production of digital consumer equipment andinventory adjustments for components thereof from the second half. In line with deterioration in the supplydemand situation, component prices also dropped compared with the end of fiscal 2008. In addition, sales at
AVX Corporation, a core overseas subsidiary in this reporting segment, decreased by $229 million, or 14.1%, to$1,390 million, compared with $1,619 million in fiscal 2008. Overall sales in this reporting segment for fiscal
2009 were pushed down by approximately ¥27,800 million ($281 million) compared with fiscal 2008 due to theimpact of the yen’s appreciation.
(5) Telecommunications Equipment Group
Sales in this reporting segment in fiscal 2009 decreased by ¥2,059 million ($21 million), or 0.9%, to¥218,758 million ($2,210 million), compared with ¥220,817 million in fiscal 2008.
Although the mobile phone business acquired from SANYO contributed approximately ¥87,000 million ($879
million) to segment sales in fiscal 2009, replacement demand for mobile phone handsets in the Japanese market
weakened sharply due to the introduction of an installment sales method, while sales in the United States
decreased and new product development was delayed, leading to an overall decline in sales compared with fiscal
2008. In addition, sales in this reporting segment for fiscal 2009 were pushed down by approximately¥11,400 million ($115 million) compared with fiscal 2008 due to the impact of the yen’s appreciation. Shipment
volume of mobile phones and PHS handsets in fiscal 2009 decreased by approximately 13% compared withfiscal 2008.
(6) Information Equipment Group
Sales in this reporting segment in fiscal 2009 decreased by ¥47,449 million ($479 million), or 17.1%, to¥229,297 million ($2,316 million), compared with ¥276,746 million in fiscal 2008.
A sharp decline in corporate information technology investment due to the economic downturn in the second half
led to lower sales of printers and digital multifunctional peripherals. Kyocera acquired additional equity interest34

in TAAG, a German-based distributor of information equipment, to turn it into a consolidated subsidiary inJanuary 2009 with the objective of further expanding business in the Information Equipment Group in Europe.
Sales volume of both printers and digital multifunctional peripherals decreased by approximately 10%. Overallsales in this reporting segment for fiscal 2009 were pushed down by approximately ¥27,500 million ($278
million) compared with fiscal 2008 due to the impact of the yen’s appreciation.
(7) Others
Sales in this reporting segment in fiscal 2009 decreased by ¥12,451 million ($126 million), or 9.0%, to¥126,043 million ($1,273 million), compared with ¥138,494 million in fiscal 2008. Sales at Kyocera
Communication Systems Co., Ltd decreased due mainly to stagnation in telecommunications infrastructure
related business, while sales in the electronic component materials business of Kyocera Chemical Corporation
also decreased.
Net sales by geographic segment
The following table shows a breakdown of Kyocera’s total consolidated net sales for fiscal 2008 and fiscal 2009,
distinguishing between domestic and overseas sales and, with respect to overseas sales, showing the geographicalareas in which such sales were made:2008
AmountJapan . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . ¥ 507,837
United States of America . . . . . . . . . . . . . .
248,760
Europe . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
229,830
Asia . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
232,425
Others . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
71,584¥1,290,436

Years ended March 31,
2009%
Amount%(Yen in millions and U.S. dollars in thousands)

Increase(Decrease)%39.4 ¥ 473,387 $ 4,781,687
19.3
201,5022,035,374
17.8
200,483
2,025,081
18.0
183,347
1,851,990
5.5
69,867705,727

41.9
17.9
17.8
16.2
6.2

(6.8)
(19.0)(12.8)(21.1)
(2.4)

100.0

100.0

(12.5)¥1,128,586$11,399,859

Sales in Japan, which comprised 41.9% of consolidated net sales, decreased by ¥34,450 million ($348 million),or 6.8%, to ¥473,387 million ($4,782 million), compared with ¥507,837 in fiscal 2008, due to a decline indemand for components used in digital consumer equipment.
Overseas sales, which comprised 58.1% of consolidated net sales, decreased by ¥127,400 million ($1,287
million), or 16.3%, to ¥655,199 million ($6,618 million), compared with ¥782,599 million in fiscal 2008.
Almost all of Kyocera’s overseas sales were denominated in U.S. dollar or the Euro. In fiscal 2009, the yen
appreciated ¥13 against the U.S. dollar and appreciated ¥19 against the Euro on average, compared with fiscal
2008. Net sales in U.S. dollars amounted to approximately $3,900 million and net sales in Euro amounted toapproximately €1,350 million in fiscal 2009. Including the impact of exchange rate changes against othercurrencies, consolidated net sales were pushed down by approximately ¥91,000 million ($919 million) comparedwith fiscal 2008.
Sales in United States in fiscal 2009 decreased by ¥47,258 million ($477 million), or 19.0%, to ¥201,502 ($2,035
million), compared with ¥248,760 million in fiscal 2008, due mainly to the impact of the yen’s appreciation,
combined with sluggish growth in sales in the Telecommunications Equipment Group and the Information
Equipment Group, and a decline in demand for electronic components.

35

Sales in Europe in fiscal 2009 decreased by ¥29,347 million ($296 million), or 12.8%, to ¥200,483 million($2,025 million), compared with ¥229,830 million in fiscal 2008, due mainly to the impact of the yen’s
appreciation coupled with a decrease in sales in the Information Equipment Group caused by a reduction in
information technology investment.
Sales in Asia in fiscal 2009 decreased by ¥49,078 million ($496 million), or 21.1%, to ¥183,347 million ($1,852
million), compared with ¥232,425 million in fiscal 2008, due primarily to a decline in demand for components
used in digital consumer equipment and the yen’s appreciation.
Sales in Others in fiscal 2009 decreased by ¥1,717 million ($17 million), or 2.4%, to ¥69,867 million ($706
million), compared with ¥71,584 million in fiscal 2008, due to a decrease in sales in the Information Equipment
Group, which offset the addition of the sales from mobile phone handset related business acquired from SANYO.
Cost of sales and gross profit
In fiscal 2009, cost of sales decreased by ¥47,125 million ($476 million), or 5.3%, to ¥836,638 million ($8,451
million) from ¥883,763 million in fiscal 2008. The ratio of cost of sales to net sales was 74.1% in fiscal 2009, an
increase of 5.6 percentage points as compared with 68.5% in fiscal 2008. This was due mainly to an increase in
the Telecommunication Equipment Group with the acquisition of the mobile phone related business fromSANYO of which the ratio of cost of sales to net sales was relatively high, in addition to deterioration of profit
due to a decline in selling prices of various components, which was partially offset by comprehensive Groupwide cost reduction activity.
Raw material costs of ¥319,738 million ($3,230 million) accounted for 38.2% of the total cost of sales in fiscal
2009, which decreased by ¥57,465 million ($580 million), or 15.2%, from ¥377,203 million in fiscal 2008. Labor
costs of ¥165,809 million ($1,675 million) accounted for 19.8% in fiscal 2009, which decreased by¥1,733 million ($18 million), or 1.0%, from ¥167,542 million in fiscal 2008. Depreciation expense of¥70,162 million ($709 million) accounted for 8.4% in fiscal 2009, which increased by ¥8,497 million ($86
million), or 13.8%, from ¥61,665 million in fiscal 2008 due to expanded capital expenditures in fiscal 2008.
As a result, gross profit in fiscal 2009 decreased by ¥114,725 million ($1,159 million), or 28.2%, to¥291,948 million ($2,949 million) from ¥406,673 million in fiscal 2008. The gross profit ratio to net sales
decreased by 5.6 percentage points from 31.5% to 25.9%.
SG&A expenses and profit from operations
Selling, general and administrative (SG&A) expenses in fiscal 2009 decreased by ¥5,724 million ($58 million),or 2.3%, to ¥248,529 million ($2,510 million) compared with ¥254,253 million in fiscal 2008. This was due
mainly to gains on sales of certain properties of ¥8,314 million ($84 million) which were recorded as deductionsof SG&A expenses, however, Kyocera recorded impairment losses of ¥2,240 million ($23 million) in goodwill
related to the subsidiary in the United States, and of ¥2,309 million ($23 million) of long-lived assets which wereused for a production of Organic Light-Emitting Diode (OLED) displays in fiscal 2009.
Labor costs of ¥122,883 million ($1,241 million) accounted for 49.4% of total SG&A expenses in fiscal 2009,
which decreased by ¥655 million ($7 million), or 0.5%, from ¥123,538 million in fiscal 2008. Sales promotion
and advertising cost of ¥36,668 million ($370 million) accounted for 14.8% in fiscal 2009, which decreased by¥3,876 million ($39 million), or 9.6%, from ¥40,544 million in fiscal 2008.
Although SG&A expenses decreased as mentioned above, profit from operations decreased by ¥109,001 million($1,101 million), or 71.5%, to ¥43,419 million ($439 million), compared with ¥152,420 million in fiscal 2008,
due to a further decrease in gross profit. The operating margin decreased by 8.0 percentage points to 3.8% in
fiscal 2009, compared with 11.8% in fiscal 2008.
36

Interest and dividend income
Interest and dividend income in fiscal 2009 decreased by ¥3,003 million ($30 million), or 16.3%, to¥15,441 million ($156 million), compared with ¥18,444 million in fiscal 2008. This was due mainly to a decreaseof interest income in AVX Corporation resulting from lower interest rate in the United States.
Interest expense
Interest expense in fiscal 2009 decreased by ¥274 million ($3 million), or 18.5%, to ¥1,206 million ($12 million),compared with ¥1,480 million in fiscal 2008. This was due mainly to payments of a part of borrowings atoverseas subsidiaries.
Foreign currency translation
During fiscal 2009, the average exchange rate for the yen appreciated by ¥13, or 11.4%, against the U.S. dollar,
and by ¥19, or 11.7%, against the Euro, as compared with fiscal 2008. At March 31, 2009, the yen appreciated by¥2, or 2.0%, against the U.S. dollar, and by ¥28, or 17.7%, against the Euro, as compared with March 31, 2008.
Kyocera recorded foreign currency transaction losses of ¥91 million ($1 million) in fiscal 2009.
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
In fiscal 2009, Kyocera’s earnings on equity-method investments increased by ¥369 million ($4 million), or
6.1%, to ¥6,460 million ($65 million), compared with ¥6,091 million in fiscal 2008.
Kyocera’s equity in earnings of affiliates and unconsolidated subsidiaries in fiscal 2009 was derived mainly frominterests in WILLCOM, Inc. Kyocera Corporation owns a 30% interest in WILLCOM, Inc., which operates a
PHS service in Japan. Kyocera Corporation accounted for this investment using the equity method. The increase
in Kyocera’s earnings on equity-method investments was mainly derived from an increase in net income at
WILLCOM, Inc.
Losses on sales of securities, net in fiscal 2009 increased by ¥2,218 million ($22 million), or 356.6%, to¥2,840 million ($29 million), compared with ¥622 million in fiscal 2008. This was resulted from sales of certain
securities which was held by Kyocera as a part of its asset allocation.
Losses on impairment of securities in fiscal 2009 increased by ¥6,893 million ($70 million) to ¥7,141 million($72 million), compared with ¥248 million in fiscal 2008. Kyocera recognized impairment losses as a result ofsignificant declines in market value of certain securities. The major part of such losses was derived from theshares of Mitsubishi UFJ Financial Group, Inc. and its amount was ¥3,935 million ($40 million).
Income before income taxes
Income before income taxes in fiscal 2009 decreased by ¥118,860 million ($1,201 million), or 68.0%, to¥55,982 million ($565 million) compared with ¥174,842 million in fiscal 2008.
Operating profit in the Components Business decreased by ¥68,543 million ($692 million), or 68.3%, to¥31,830 million ($322 million) in fiscal 2009, compared with fiscal 2008 due mainly to a decline in capacity
utilization rate owing to a sharp reduction in demand, and to a reduction in product selling prices.

37

The Equipment Business recorded an operating loss of ¥4,216 million ($43 million) in fiscal 2009, a decrease of¥50,540 million ($511 million) compared with fiscal 2008, due to significant profit declines in the
Telecommunications Equipment Group and the Information Equipment Group.
Operating profit (loss) by reporting segment
The following table shows a breakdown of Kyocera’s consolidated income before income taxes, and operating
profit for fiscal 2008 and fiscal 2009 by the seven reporting segments:
Years ended March 31,
Increase2008
2009(Decrease)
Amount%*Amount%*%(Yen in millions and U.S. dollars in thousands)

Fine Ceramic Parts Group . . . . . . . . . . . . . . . . . . . . . ¥ 11,167 13.7 ¥ (240) $ (2,424) —Semiconductor Parts Group . . . . . . . . . . . . . . . . . . .
20,027 13.0
8,671
87,586
6.4
Applied Ceramic Products Group . . . . . . . . . . . . . . .
32,655 21.8
27,469277,464 18.4
Electronic Device Group . . . . . . . . . . . . . . . . . . . . . .
36,524 12.4
(4,070)(41,111) ——(56.7)(15.9)—

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

100,373 14.8
6,786
3.1
39,538 14.3

31,830(17,713)
13,497

321,515
5.5(178,919) —136,333
5.9(68.3)—(65.9)

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

46,324
9,635

9.3
7.0

(4,216)
14,106(42,586) —142,485 11.2—
46.4

Operating profit . . . . . . . . . . . . . . . . . . . . .
Corporate . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Equity in earning of affiliates and unconsolidated
subsidiaries . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Adjustments and eliminations . . . . . . . . . . . . . . . . . .

156,332
12,49712.1—

41,720
7,632

421,414
77,091

3.7—(73.3)(38.9)

6,091 —
(78) —

6,460
170

65,253
1,717

—
—

6.1
—

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

¥174,842¥ 55,982$ 565,475

5.0(68.0)

13.5* % to net sales of each corresponding segment(1) Fine Ceramic Parts Group
This reporting segment recorded operating loss of ¥240 million ($2 million) in fiscal 2009.
Production activity in numerous industries, namely the semiconductor, digital consumer equipment andautomotive industries, declined sharply due to the global economic downturn, which led to a substantial slump incomponent demand. Operating profit decreased by ¥11,407 million ($115 million) compared with
¥11,167 million in fiscal 2008 due to the reduction in production volume and decline in capacity utilization rate.
Other factors behind the profit decline included an increase in depreciation costs. Operating profit in thisreporting segment in fiscal 2009 was pushed down by approximately ¥900 million ($9 million) compared withfiscal 2008 due to the impact of the yen’s appreciation.
(2) Semiconductor Parts GroupOperating profit in this reporting segment in fiscal 2009 decreased by ¥11,356 million ($115 million), or 56.7%,
to ¥8,671 million ($88 million), compared with ¥20,027 million in fiscal 2008.
In particular, the capacity utilization rate declined significantly from the second half due to a decrease incomponent demand for mobile phone handsets, digital still cameras and servers, and to a slump in38

telecommunications infrastructure related investment, leading to lower profitability from ceramic packages andorganic packages. Operating profit in this reporting segment in fiscal 2009 was pushed down by approximately¥2,100 million ($21 million) compared with fiscal 2008 due to the impact of the yen’s appreciation.
(3) Applied Ceramic Products GroupOperating profit in this reporting segment in fiscal 2009 decreased by ¥5,186 million ($52 million), or 15.9%, to¥27,469 million ($277 million), compared with ¥32,655 million in fiscal 2008.
Despite the significant impact of the yen’s appreciation, the solar energy business posted profit for fiscal 2009
due to the positive effects of sales growth coupled with comprehensive cost reductions in each production
process. Overall operating profit in this reporting segment declined, however, due to stagnant production activity
and continued inventory adjustments in automobile industries, a substantial decline in production volume of
cutting tools caused by a decrease in demand, and impairment loss on goodwill of ¥2,240 million ($23 million) at
a subsidiary. Operating profit in this reporting segment in fiscal 2009 was pushed down by approximately¥6,200 million ($63 million) compared with fiscal 2008 due to the impact of the yen’s appreciation.
(4) Electronic Device Group
This reporting segment recorded operating loss of ¥4,070 million ($41 million) in fiscal 2009, a decrease of¥40,594 million ($410 million) compared with operating profit of ¥36,524 million in fiscal 2008.
The capacity utilization rate was down, particularly for ceramic capacitors, timing devices, and connectors, due
to a sharp decline in component demand from the second half owing to lower production of mobile phonehandsets, PCs and digital consumer electronics. In addition, the decline in demand led to intense component pricecompetition, causing prices to drop significantly, by around 20% in certain components. The yen’s appreciation
also forced profits down by approximately ¥4,600 million ($46 million) compared with fiscal 2008. Furthermore,
the decrease in profit reflected an impairment loss of ¥2,309 million ($23 million) on long-lived asset used for
production of Organic Light-Emitting Diode (OLED) displays, AVX Corporation’s restructuring charges ofapproximately ¥1,800 million ($18 million) related to employee separations and facility consolidations, and
AVX Corporation’s accrual of ¥1,711 million ($17 million) for estimated environmental remediation costs.
(5) Telecommunications Equipment Group
This reporting segment recorded operating loss of ¥17,713 million ($179 million) in fiscal 2009, a decrease of¥24,499 million ($247 million) compared with operating profit of ¥6,786 million in fiscal 2008.
Profitability in the mobile phone handset business acquired from SANYO was depressed due to deterioration inmarket conditions and to a considerable decline in sales of handsets in Japan and overseas owing to a reduction in
the number of new models released. Profitability was also decreased in Kyocera’s traditional mobile phonehandset business as sales at Kyocera Wireless Corp., a subsidiary in the U.S., declined due to delayeddevelopment of new products and to the economic downturn. Other factors behind the decline in profit wereincreases in depreciation and amortization costs and R&D expenses by ¥8,193 million ($83 million) and¥3,468 million ($35 million), respectively, compared with fiscal 2008, due mainly to the acquisition of themobile phone related business from SANYO. Employee separations were implemented at Kyocera WirelessCorp. in the fourth quarter to enhance profitability from the following fiscal period, and this resulted in therecording of approximately ¥1,300 million ($13 million).
(6) Information Equipment GroupOperating profit in this reporting segment in fiscal 2009 decreased by ¥26,041 million ($263 million), or 65.9%,
to ¥13,497 million ($136 million), compared with ¥39,538 million in fiscal 2008.
39

Operating profit for fiscal 2009 was pushed down by approximately ¥7,200 million ($73 million) compared withfiscal 2008 due to the impact of the yen’s appreciation against the Euro and U.S. dollar. A significant decline ininvestments in information technology at corporate sectors led to reduction in sales volumes of both printers andmultifunctional peripherals compared with fiscal 2008. In addition, product selling prices dropped between 5% to
15% on a full-year basis for both printers and multifunctional peripherals.
(7) Others
Operating profit in this reporting segment in fiscal 2009 increased by ¥4,471 million ($45 million), or 46.4%, to¥14,106 million ($142 million), compared with ¥9,635 million in fiscal 2008.
Despite profit declines at Kyocera Communication Systems Co., Ltd. and Kyocera Chemical Corporation due todeterioration in the business environment, recorded ¥9,352 million ($94 million) of gains on sales of property,
plant and equipment, net which includes gains on sales of certain properties.
(8) Corporate
Corporate income and losses mainly constitute investment management income, and income and expenses
related to the provision of management-related services by Kyocera’s head office to each reporting segment.
Corporate income decreased by ¥4,865 million ($49 million), or 38.9%, to ¥7,632 million ($77 million)
compared with ¥12,497 million in fiscal 2008. This was mainly due to losses on sales of securities and losses on
impairment of securities recognized in fiscal 2009.
Taxes
Current and deferred income taxes in fiscal 2009 decreased by ¥37,456 million ($378 million), or 62.2%, to¥22,779 million ($230 million) compared with ¥60,235 million in fiscal 2008.
The effective tax rate of 40.7% in fiscal 2009 was 6.2 points higher than the effective rate in fiscal 2008 of
34.5%. This was due mainly to an increase in valuation allowances on deferred tax assets recorded at certain
foreign subsidiaries with pre-tax losses.
For detailed information, see Note 19 to the Consolidated Financial Statements in this annual report on Form
20-F.
Minority interests
Minority interests in fiscal 2009 amounted to ¥3,697 million ($37 million) and minority interests related to AVX
Corporation, which accounted for approximately 30% of minority ownership interests, amounted to¥2,406 million ($24 million). Minority interests in fiscal 2009 decreased by ¥3,666 million ($37 million), or
49.8%, compared with minority interests of ¥7,363 million in fiscal 2008. This was due mainly to a decrease in
net income at AVX Corporation.

40

Fiscal 2008 compared with Fiscal 2007
The following table shows a summary of Kyocera’s results of operations for fiscal 2007 and fiscal 2008:
Years ended March 31,
2007
2008
Amount%Amount%Increase(Decrease)%

Net sales . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . ¥1,283,897
Cost of sales . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
900,470

100.0
70.1

¥1,290,436
883,763

100.0
68.5

0.5
(1.9)

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

383,427
248,325

29.9
19.4

406,673
254,253

31.5
19.7

6.1
2.4

Profit from operations . . . . . . . . . . . . . . . . . . . . . . . . .
Interest and dividend income . . . . . . . . . . . . . . . . . . . . . . .
Interest expense . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Foreign currency transaction losses, net . . . . . . . . . . . . . . .
Equity in earnings of affiliates and unconsolidated
subsidiaries . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Gains (losses) on sales of securities, net . . . . . . . . . . . . . . .
Other, net . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

135,102
15,472(1,647)
(65)

10.5
1.2
(0.1)
(0.0)

152,420
18,444(1,480)
(956)

11.8
1.4
(0.1)
(0.1)

12.8
19.2
—
—

2,621
3,819
1,238

0.2
0.3
0.1

6,091
(622)
945

0.5
(0.1)
0.1

132.4
—
(23.7)

21,4381.7

22,422

1.7

4.6

Income from continuing operations before income taxes
and minority interests . . . . . . . . . . . . . . . . . . . . . . . . . . .
Income taxes . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

156,540
48,88712.2
3.8

174,842
60,235

13.5
4.6

11.7
23.2

Income from continuing operations before minority
interests . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Minority interests . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

107,653(6,324)8.4(0.5)

114,607(7,363)

8.9
(0.6)

6.5
—

Income from continuing operations . . . . . . . . . . . . . . . . . .
Income from discontinued operations . . . . . . . . . . . . . . . . .

101,329
5,175

7.9
0.4

107,244
—

8.3
—

5.8
—

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

¥ 106,504

8.3¥ 107,244

8.3

0.7

Net sales
Consolidated net sales for fiscal 2008 increased by ¥6,539 million, or 0.5%, to ¥1,290,436 million, comparedwith ¥1,283,897 million in fiscal 2007.
Consolidated net sales in the Components Business in fiscal 2008 increased by ¥29,113 million, or 4.5%, to¥679,990 million compared with fiscal 2007. In particular, sales in the Applied Ceramic Products Group
increased by ¥18,839 million, or 14.4% compared with fiscal 2007. This significant increase in sales in the
Applied Ceramic Products Group was driven by the solar energy business, which was particularly strong in theoverseas market. In addition, a steady increase in production in the digital consumer equipment market until thethird quarter in fiscal 2008 led to growth in sales in the Electronic Device Group by ¥8,045 million, or 2.8%
compared with fiscal 2007. The Semiconductor Parts Group also posted an increase in sales of ¥2,246 million, or
1.5% compared with fiscal 2007. On the other hand, sales in the Fine Ceramic Parts Group in fiscal 2008 slightly
decreased by ¥17 million, compared with fiscal 2007 due to the effect by slowdown in semiconductor industry.
By contrast, consolidated net sales in the Equipment Business in fiscal 2008 decreased by ¥22,401 million, or4.3% to ¥497,563 million compared with fiscal 2007. Sales in the Telecommunication Equipment Groupdecreased by ¥30,366 million, or 12.1% compared with fiscal 2007, due to a decline in sales of mobile phonehandsets. On the other hand, sales in the Information Equipment Group increased by ¥7,965 million, or 3.0%
compared with fiscal 2007, spurred by enhanced sales activities through aggressive new product introductions ofprinters and multi functional peripherals (MFPs).
41

A detailed analysis and discussion of Kyocera’s net sales by reporting segment and geographic segment are as
follows:
Net sales by reporting segment
The following table shows a breakdown of Kyocera’s total consolidated net sales for fiscal 2007 and fiscal 2008by the seven reporting segments:
Years ended March 31,
2007
2008
Amount%Amount(Yen in millions)¥%

Increase(Decrease)%81,309154,538
149,942294,201

6.3
12.0
11.6
22.8

(0.0)
1.5
14.4
2.8

Fine Ceramic Parts Group . . . . . . . . . . . . . . . . . . . . . . . . . . ¥ 81,326
Semiconductor Parts Group . . . . . . . . . . . . . . . . . . . . . . . .
152,292
Applied Ceramic Products Group . . . . . . . . . . . . . . . . . . . .
131,103
Electronic Device Group . . . . . . . . . . . . . . . . . . . . . . . . . .
286,156

6.3
11.9
10.2
22.3

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

650,877
251,183
268,781

50.7
19.6
20.9

679,990
220,817
276,746

52.7
17.1
21.5

4.5
(12.1)
3.0

Total Equipment Business . . . . . . . . . . . . . . . . . . . . .
Others . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Adjustments and eliminations . . . . . . . . . . . . . . . . . . . . . . .

519,964
137,235(24,179)

40.5
10.7
(1.9)

497,563
138,494(25,611)

38.6
10.7
(2.0)

(4.3)
0.9
—

¥1,283,897

100.0¥1,290,436

100.0

0.5

Note 1: Commencing fiscal 2008, the “Optical Equipment Group,” previously a separate reporting segment, hasbeen reclassified into “Others.” Accordingly, net sales of “Others” in fiscal 2007 have been retroactively
reclassified and increased by ¥11,579 million and “Adjustments and eliminations” decreased by ¥(125) million
compared with those previously announced.
(1) Fine Ceramic Parts Group
Sales in this reporting segment in fiscal 2008 remained almost unchanged from fiscal 2007 at ¥81,309 million,
compared with ¥81,326 million in fiscal 2007.
Sales of parts for diesel engines for automobiles, sapphire substrates for LEDs and dielectric parts for mobile
phone base stations all increased. However, there was a decrease in demand for parts for semiconductor
fabrication equipment, one of the core products in this reporting segment, due to a decrease in capital investmentin the semiconductor industry.
(2) Semiconductor Parts Group
Sales in this reporting segment in fiscal 2008 increased by ¥2,246 million, or 1.5%, to ¥154,538 million,
compared with ¥152,292 million in fiscal 2007.
Demands for ceramic packages used in mobile phone handsets and digital-still-cameras increased steadily.
Furthermore, sales of organic packages for servers increased. Sales of parts for optical telecommunications
devices decreased due to demand adjustments and a decline in selling prices, however, leading to only a slightincrease in overall sales in this reporting segment compared with fiscal 2007.

42

(3) Applied Ceramic Products Group
Sales in this reporting segment in fiscal 2008 increased by ¥18,839 million, or 14.4%, to ¥149,942 million,
compared with ¥131,103 million in fiscal 2007.
An increase of approximately 10% in production volume and stable selling price for photovoltaic systems due toworldwide brisk demand, notably in Europe, coupled with the depreciation of the yen against the Euro led to aconsiderable growth in sales in the solar energy business. In addition, sales in the cutting tool business also
increased due to strong sales of new products. As a result, overall sales in this reporting segment increased.
(4) Electronic Device Group
Sales in this reporting segment in fiscal 2008 increased by ¥8,045 million, or 2.8%, to ¥294,201 million,
compared with ¥286,156 million in fiscal 2007.
Demands for capacitors and timing devices decreased in Asia in the fourth quarter of fiscal 2008. Production ofdigital consumer equipment was solid throughout fiscal 2008, however, resulting in steady growth in sales in thisreporting segment compared with fiscal 2007. Decline in selling prices occurred only within 10% range overall
compared with fiscal 2007, although more than 10% decline were recognized in some products.
(5) Telecommunications Equipment Group
Sales in this reporting segment in fiscal 2008 decreased by ¥30,366 million, or 12.1%, to ¥220,817 million,
compared with ¥251,183 million in fiscal 2007.
Although sales in PHS related products remained on par with fiscal 2007, sales in the mobile phone handset
business declined by approximately 14% compared with fiscal 2007. Shipment volume of mobile phone and PHS
handsets in fiscal 2008 decreased by approximately 6%, to approximately 12.9 million units compared withapproximately 13.7 million units in fiscal 2007.
(6) Information Equipment Group
Sales in this reporting segment in fiscal 2008 increased by ¥7,965 million, or 3.0%, to ¥276,746 million,
compared with ¥268,781 million in fiscal 2007. Sales of printers, particularly in Europe, increased spurred byaggressive new product introductions and enhanced sales activities.
Unit sales of printers, copying machines and MFPs in fiscal 2008 increased by approximately 6% toapproximately 1.20 million units compared with approximately 1.13 million units in fiscal 2007. In addition,
sales of MFPs and consumables also increased compared with fiscal 2007.
(7) Others
Sales in this reporting segment in fiscal 2008 increased by ¥1,259 million, or 0.9%, to ¥138,494 million,
compared with ¥137,235 million in fiscal 2007. This increase was due mainly to growth of sales in thetelecommunications engineering business for mobile telecommunication market at Kyocera Communication
Systems Co., Ltd.

43

Net sales by geographic segment
The following table shows a breakdown of Kyocera’s total consolidated net sales for fiscal 2007 and fiscal 2008,
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,
2007
2008
Amount%Amount(Yen in millions)%

Increase(Decrease)%

Japan . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . ¥ 496,959
United States of America . . . . . . . . . . . . . . . . . . . . . . . . . .
274,361
Europe . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
215,672
Asia . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
216,663
Others . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
80,242

38.7
21.4
16.8
16.9
6.2

¥ 507,837
248,760
229,830
232,425
71,584

39.4
19.3
17.8
18.0
5.5

2.2
(9.3)
6.6
7.3
(10.8)¥1,283,897

100.0¥1,290,436

100.0

0.5

Sales in Japan, which comprised 39.4% of consolidated net sales, increased by ¥10,878 million, or 2.2%, to¥507,837 million, compared with ¥496,959 million in fiscal 2007. This growth was mainly led by an increase insales in the Semiconductor Parts Group. This increase was caused by a rise in demand for both ceramic andorganic packages and by a sales increase in “Others” business due to sales growth at Kyocera Communication
Systems Co., Ltd.
Overseas sales, which comprised 60.6% of consolidated net sales, decreased by ¥4,339 million, or 0.6%, to¥782,599 million, compared with ¥786,938 million, in fiscal 2007.
Although sales in Asia and Europe increased, sales in the United Stated and in Others declined.
Sales in the United States in fiscal 2008 decreased by ¥25,601 million, or 9.3%, to ¥248,760 million, comparedwith ¥274,361 million in fiscal 2007, due mainly to a decline in sales of mobile phone handsets at Kyocera
Wireless Corp.
Sales in Europe in fiscal 2008 increased by ¥14,158 million, or 6.6%, to ¥229,830 million, compared with
¥215,672 million in fiscal 2007, due to sales growth of products in the Information Equipment Group such as
printers and MFPs combined with growth in sales in the Applied Ceramic Products Group driven by expanded
sales in the solar energy business.
Sales in Asia in fiscal 2008 increased by ¥15,762 million, or 7.3%, to ¥232,425 million, compared with
¥216,663 million in fiscal 2007, due to sales growth of the Electronic Device Group for digital consumer
equipment.
Sales in Others in fiscal 2008 decreased by ¥8,658 million, or 10.8%, to ¥71,584 million, compared with
¥80,242 million in fiscal 2007, due mainly to sales declines in the Telecommunication Equipment Group in Latin
America and Oceania, offset by sales increases in the Information Equipment Group in Latin America andMiddle East.
Almost all of Kyocera’s overseas sales were denominated in the U.S. dollars or the Euro. On average, the yen
appreciated against the U.S. dollar by ¥3 and depreciated against the Euro by ¥12, compared with fiscal 2007.
Net sales in U.S. dollars amounted to $4,154 million and net sales in Euro amounted to €1,404 million in fiscal
2008.

44

In converting these currencies into the yen, the positive impact produced by the yen’s depreciation against theEuro outweighed the negative impact of the yen’s appreciation against the U.S. dollar, increasing net sales byapproximately ¥5,900 million compared with fiscal 2007.
Cost of sales and gross profit
In fiscal 2008, cost of sales decreased by ¥16,707 million, or 1.9%, to ¥883,763 million from ¥900,470 million in
fiscal 2007. Raw material costs of ¥377,203 million accounted for 42.7% of the total cost of sales, and laborcosts of ¥167,542 million accounted for 19.0%. The change in depreciation methods in Kyocera Corporation andits domestic subsidiaries caused an increase of ¥11,295 million in the depreciation expense of cost of sales.
However, due mainly to an increase in the contribution ratio to net sales of the Components Business, of which
the ratio of cost of sales to net sales was relatively low, as well as due to improved productivity, the ratio of costof sales to net sales was 68.5% in fiscal 2008, a decrease of 1.6 points as compared with 70.1% in fiscal 2007.
As a result, gross profit increased in fiscal 2008 by ¥23,246 million, or 6.1%, to ¥406,673 million from¥383,427 million in fiscal 2007. The gross profit to net sales ratio increased by 1.6 percentage points from 29.9%
to 31.5%.
SG&A expenses and profit from operations
Selling, general and administrative (SG&A) expenses in fiscal 2008 increased by ¥5,928 million, or 2.4%, to¥254,253 million compared with ¥248,325 million in fiscal 2007. Labor cost was ¥123,538 million, or 48.6% of
total SG&A expenses, and sales promotion and advertising cost was ¥40,544 million, or 15.9% of total SG&A
expenses. The proportion of SG&A expenses to net sales increased by 0.3 percentage points to 19.7% in fiscal
2008 from 19.4% in fiscal 2007. This increase primarily reflected increases in labor costs in sales subsidiaries in
Europe due to the average depreciation of the yen against the Euro compared with fiscal 2007, as well as
increases in depreciation expense in Kyocera Corporation and its domestic subsidiaries due to the change indepreciation methods. The depreciation expense increased by ¥998 million due to the change in depreciation
methods.
Although SG&A expenses increased as above, profit from operations increased by ¥17,318 million, or 12.8%, to¥152,420 million, compared with ¥135,102 million in fiscal 2007, due to a further increase in gross profit. The
operating margin rose by 1.3 percentage points to 11.8% in fiscal 2008, compared with 10.5% in fiscal 2007.
Interest and dividend income
Interest and dividend income in fiscal 2008 increased by ¥2,972 million, or 19.2%, to ¥18,444 million, comparedwith ¥15,472 million in fiscal 2007. This was mainly due to favorable investment management results and anincrease in dividend income from KDDI Corporation. Kyocera has an investment policy aimed at low risk,stability and liquidity, and does not invest in high-risk financial instruments only for pursuing profits.
Interest expense
Interest expense in fiscal 2008 decreased by ¥167 million, or 10.1%, to ¥1,480 million, compared with
¥1,647 million in fiscal 2007. This was mainly due to a decrease of borrowings at domestic subsidiaries, in spiteof a slight upward trend of interest rates in the Japanese financial market.
Foreign currency translation
During fiscal 2008, the average exchange rate for the yen appreciated by ¥3, or 2.6%, against the U.S. dollar anddepreciated by ¥12, or 8.0%, against the Euro, as compared with fiscal 2007. At March 31, 2008, the yen had
appreciated by ¥18, or 15.3%, against the U.S. dollar and had depreciated by ¥1, or 0.6%, against the Euro, as
compared with March 31, 2007. Kyocera recorded foreign currency transaction losses of ¥956 million in fiscal
2008.
45

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
In fiscal 2008, Kyocera’s earnings on equity-method investments increased by ¥3,470 million, or 132.4%, to¥6,091 million, compared with ¥2,621 million in fiscal 2007.
Kyocera’s equity in earnings of affiliates and unconsolidated subsidiaries in fiscal 2008 was derived mainly frominterests in WILLCOM, Inc.
Kyocera Corporation owns a 30% interest in WILLCOM, Inc., which operates a PHS service in Japan. Kyocera
Corporation accounted for this investment using the equity method. The increase in net income at WILLCOM,
Inc. was caused by an increase in net sales due to a steady increase in customers in fiscal 2008. As a result,
Kyocera’s earnings on equity-method investments increased significantly.
Gains (losses) on sales of securities, net in fiscal 2008 decreased by ¥4,441 million, from a gain of¥3,819 million in fiscal 2007 to a loss of ¥622 million in fiscal 2008. Gains in fiscal 2007 were due mainly torealization of unrealized gains by sale of investment securities.
Income from continuing operations before income taxes
Income from continuing operations before income taxes in fiscal 2008 increased by ¥18,302 million, or 11.7%, to¥174,842 million compared with ¥156,540 in fiscal 2007.
Due mainly to an increase in depreciation costs of ¥9,510 million, or 20.8%, in fiscal 2008 compared with fiscal
2007, which resulted from a comprehensive review of the value of fixed assets, operating profit in Components
Business decreased by ¥4,335 million, or 4.1%, to ¥100,373 million in fiscal 2008 compared with fiscal 2007.
In Equipment business, however, the profits of both the Telecommunications Equipment Group and theInformation Equipment Group increased significantly by ¥12,063 million to ¥46,324 million, or 35.2% comparedwith fiscal 2007. In addition, interest and dividend income and equity in earnings of affiliates and unconsolidated
subsidiaries, as mentioned earlier, also increased by ¥2,972 million, or 19.2%, and by ¥3,470 million, or 132.4%,
respectively.

46

Operating profit by reporting segment
The following table shows a breakdown of Kyocera’s consolidated income from continuing operations before
income taxes, and operating profit for fiscal 2007 and fiscal 2008 by the eight reporting segments:
Years ended March 31,
2007
2008
Amount%*Amount%*(Yen in millions)

Increase(Decrease)%

Fine Ceramic Parts Group . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . ¥ 15,677
Semiconductor Parts Group . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
22,210Applied Ceramic Products Group . . . . . . . . . . . . . . . . . . . . . . . . .
22,334
Electronic Device Group . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
44,487

19.3
14.6
17.0
15.5

¥ 11,167
20,02732,65536,524

13.7
13.0
21.8
12.4

(28.8)(9.8)
46.2(17.9)

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

104,708291
33,970

16.1
0.1
12.6

100,373
6,786
39,538

14.8
3.1
14.3

(4.1)
—
16.4

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

34,261
6,881

6.6
5.0

46,324
9,635

9.3
7.0

35.2
40.0

Operating profit . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Corporate . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Equity in earnings of affiliates and unconsolidated
subsidiaries . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Adjustments and eliminations . . . . . . . . . . . . . . . . . . . . . . . . . . . .

145,850 11.4
8,569 —

156,332 12.1
12,497 —7.2
45.8

2,621 —
(500) —

6,091 —
(78) —

132.4—

Income from continuing operations before income taxes . . . . . . .

¥156,540

12.2¥174,842

13.5

11.7

* % to net sales of each corresponding segment
Note 2: Commencing fiscal 2008, the “Optical Equipment Group,” previously a separate reporting segment, hasbeen reclassified into “Others.” Accordingly, operating profit of “Others” in fiscal 2007 have been retroactively
reclassified and decreased by ¥1,895 million compared with those previously announced.
(1) Fine Ceramic Parts GroupOperating profit in this reporting segment in fiscal 2008 decreased by ¥4,510 million, or 28.8%, to¥11,167 million compared with ¥15,677 million in fiscal 2007.
This was primarily due to an increase of ¥2,995 million in depreciation costs, or 67.2% compared with fiscal
2007.
(2) Semiconductor Parts GroupOperating profit in this reporting segment in fiscal 2008 decreased by ¥2,183 million, or 9.8%, to¥20,027 million, compared with ¥22,210 million in fiscal 2007.
Although losses shrank substantially in the organic package business, overall operating profit in this reporting
segment decreased due mainly to an increase in depreciation costs of ¥2,086 million, or 17.0% compared withfiscal 2007, in addition to a decline in selling prices.
(3) Applied Ceramic Products GroupOperating profit in this reporting segment in fiscal 2008 increased by ¥10,321 million, or 46.2%, to¥32,655 million, compared with ¥22,334 million in fiscal 2007.
47

Significant sales increases in the solar energy business largely contributed to this growth in operating profit inthis reporting segment.
(4) Electronic Device GroupOperating profit in this reporting segment in fiscal 2008 decreased by ¥7,963 million, or 17.9%, to¥36,524 million, compared with ¥44,487 million in fiscal 2007.
This substantial decrease in operating profit compared with fiscal 2007 was due to rising production costs led byrising raw material prices and an increase in depreciation costs in total of ¥2,861 million, or 13.6%.
(5) Telecommunications Equipment GroupOperating profit in this reporting segment in fiscal 2008 increased by ¥6,495 million, to ¥6,786 million comparedwith ¥291 million in fiscal 2007.
Despite of an effort to reduce production costs, sales declined substantially in the mobile phone handset businesscompared with fiscal 2007, resulting in a decrease in operating profit to ¥4.2 billion compared with ¥4.9 billion
in fiscal 2007. Operating profit in PHS related business, on the other hand, improved considerably in fiscal 2008,
posted a substantial increase of ¥7.2 billion, led to ¥2.6 billion, compared with ¥4.6 billion loss in fiscal 2007 due
to concentration of the PHS business in the Japanese market.
(6) Information Equipment GroupOperating profit in this reporting segment in fiscal 2008 increased by ¥5,568 million, or 16.4%, to¥39,538 million, compared with ¥33,970 million in fiscal 2007.
This significant increase in operating profit was due to increased in sales of new product introductions and thecontribution of increased sales of consumables, which constituted approximately 40% of sales in this reporting
segment, in addition to the positive effect of the yen’s depreciation against the Euro.
(7) Others
Operating profit in this segment in fiscal 2008 increased by ¥2,754 million, or 40.0%, to ¥9,635 million,
compared with ¥6,881 million in fiscal 2007.
This was due mainly to improved profitability at Kyocera Communication Systems Co., Ltd. and improved
productivity in the optical related business.
(8) Corporate
Corporate income and losses mainly constitute investment management income, and income and expenses
related to the provision of management-related services by Kyocera’s head office to each reporting segment.
Corporate income increased by ¥3,928 million, or 45.8%, to ¥12,497 million compared with ¥8,569 million in
fiscal 2007. Interest and dividend income, which were the main contributors, increased compared with fiscal
2007. As a result, corporate profit increased compared with fiscal 2007.
Taxes
Current and deferred income taxes in fiscal 2008 increased by ¥11,348 million, or 23.2%, to ¥60,235 million
compared with ¥48,887 million in fiscal 2007.
48

Current income taxes in fiscal 2007 included the tax refunds of ¥4,305 million. The tax refunds were related tothe cancellation of a portion of ¥12,748 million additional taxes imposed by Osaka Regional Tax Bureau on
March 28, 2005 which Kyocera had expensed in the year ended March 31, 2005. Current income taxes in fiscal
2008 included the tax expense of ¥3,242 million by applying the Financial Accounting Standards Board
Interpretation No. 48, “Accounting for Uncertainty in Income Taxes -an interpretation of FASB statement
No. 109” (“FIN 48”).
The effective tax rate of 34.5% in fiscal 2008 was 3.3 points higher than the effective rate in fiscal 2007 of
31.2%. The increase in the effective tax rate is due mainly to the decrease in tax refunds in fiscal 2007 by 2.8
points from the Japanese statutory tax rate, while the increase by 1.9 points from applying FIN 48 and a decreaseof 0.9 points due to a change in tax rates in Chinese subsidiaries in fiscal 2008.
For detailed information, see Note 19 to the Consolidated Financial Statements in this annual report on
Form 20-F.
Minority interests
Minority interests in fiscal 2008 amounted to ¥7,363 million and minority interests related to AVX Corporation,
which accounted for approximately 30% of minority ownership interests, amounted to ¥4,964 million. Minority
interests in fiscal 2008 increased by ¥1,039 million compared with minority interests of ¥6,324 million in fiscal
2007. This was due mainly to an increase in net income at Kyocera Communication Systems Co., Ltd., which
accounted for approximately 25% of minority ownership interests.
Discontinued operations
On August 1, 2006, Kyocera sold all of our shares in Kyocera Leasing Co., Ltd. (presently Diamond Asset
Finance Company Limited) to Diamond Lease Company Limited (presently Mitsubishi UFJ Lease & Finance
Company Limited) for ¥25,274 million, aiming to concentrate Kyocera’s management resources on its corebusinesses to enhance and improve its corporate value. In recent years active reorganization has been ongoing
within the financing industry. Under such circumstances, Kyocera considered it better for Kyocera Leasing Co.,
Ltd. to work with Diamond Lease Company Limited and not with Kyocera, which is mainly engaged in
manufacturing, to enable Kyocera Leasing Co., Ltd. to continue to grow and further develop its businesses.
Kyocera also believed this sale would enable Kyocera to concentrate management resources on its businesses
requiring enhancement to improve its corporate value. Kyocera accounted for the results of operations and thesale of Kyocera Leasing Co., Ltd. less appreciable income taxes as discontinued operations in accordance with
Statement of Financial Accounting Standards No. 144, “Accounting for the Impairment or Disposal of LongLived Assets,” in its consolidated statements of income.
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 with respect to its financial presentation.
49

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.
As a result of continuous strict controls and adjustments on inventories, Kyocera recognized inventory writedowns of ¥5,141 million and ¥8,719 million ($88 million) in fiscal 2008 and 2009, respectively. The amounts ofthese inventory write-downs by reporting segments appear in Note 21 to the Consolidated Financial Statements
included in this annual report on Form 20-F. A large portion of these inventory write-downs arose frominventories of telecommunications equipment and electronic device. These products turned out to be obsolete
because of their short product lives, and were subject to a decrease in demand and a decline in price.
The majority of Kyocera’s inventories are produced for the IT industry. Each of these products generally has ashort product life, and is susceptible to market demand and price fluctuations. In light of the impacts bysegments, inventory write-downs significantly affect all the segments. If market conditions and demand in theinformation technology industry are less favorable than Kyocera’s projections, additional write-downs may berequired.
Impairment of securities and investments
Kyocera records impairment charges for debt and equity securities when it believes that the decline of fair value
is other-than-temporary. Kyocera regularly reviews each security and investment for impairment based on theextent 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 securities (current asset) and investment securities (non-current) of¥248 million and ¥7,141 million ($72 million) in fiscal 2008 and 2009, respectively. Mainly, Kyocera recorded
losses on impairment of certain equity securities due to the decline in fair value below cost for considerable
length of time and the extent was severe in fiscal 2009.
Kyocera is currently a major shareholder of KDDI Corporation. The price fluctuation of the shares of KDDI
Corporation may affect Kyocera’s financial conditions. At March 31, 2009, the unrealized gain of¥15,540 million ($157 million) on the shares of KDDI Corporation held by Kyocera had decreased comparedwith that of ¥99,697 million as of at March 31, 2008, reflecting a fluctuation of the market price of the shares ofKDDI Corporation during fiscal 2009. As the operating results of KDDI Corporation were stable, theperformance of the shares of KDDI Corporation is considered to be temporary. For detailed information on the
gross unrealized gain or loss, see Note 4 to the Consolidated Financial Statements in this report.
50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 flow 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.
Kyocera recognized ¥2,309 million ($23 million) of a loss on impairment on the long-lived assets which wereused for a production of OLED displays in the Electronic Device Group and included such loss in selling, generaland administrative expenses.
Since qualities and characteristics of OLED displays requested by the users heightened recently and Kyocerachanged the target of production in which they were used, Kyocera transferred such business from amanufacturing department to a research and development department. As a result of this transfer, Kyocera
reviewed the future plan of OLED displays business and concluded the expected undiscounted cash flow fromthe long-lived assets of OLED displays business was less than its carrying value. Consequently, Kyocera
recorded a loss on impairment based on the amount by which the carrying value exceeded the fair value of thelong-lived assets of OLED displays business. The fair value of the long-lived assets of OLED displays business
was estimated by using the expected present value of future cash flow.
Goodwill and other intangible assets
Kyocera has adopted SFAS No. 142, “Goodwill and Other Intangible Assets. “This requires that, rather thanbeing amortized, goodwill and intangible assets with indefinite useful lives are tested for impairment at least
annually and also following any events or changes in circumstances that might lead to impairment. Intangible
assets with definite useful lives are amortized over their respective estimated useful lives to their estimatedresidual values and reviewed for impairment whenever events or changes in circumstances indicate that theircarrying amount may not be recoverable.
In fiscal 2009, Kyocera recognized ¥26,449 million ($267 million) of goodwill in total as results of theacquisition of the mobile phone-related business from SANYO by Kyocera Corporation included in the
Telecommunications Equipment Group and additional equity interest in TAAG by Kyocera Mita Corporation toturn TAAG into a consolidated subsidiary included in the Information Equipment Group. In fiscal 2008, Kyocera
recognized ¥10,413 million of goodwill as a result of the acquisition of American Technical Ceramics Corp. by
AVX Corporation included in the Electronic Device Group. For detailed information of this acquisition, seeNote 3 to the Consolidated Financial Statements in this report.
In fiscal 2009, Kyocera recognized impairment losses on goodwill in the amounts of ¥2,240 million ($23 million)in the Applied Ceramic Products Group and ¥1,217 million ($12 million) in the Others segment. The sluggish
performances at a U.S. subsidiary in the Applied Ceramic Products Group and at a Japanese subsidiary in Others
segment led to significant decline in their fair values. The fair values of those goodwill were determined throughthe use of various methodologies such as discounted cash flows and comparable valuations of similar companies.
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, 2009, deferred tax assets amounted to ¥91,403 million51

($923 million), which Kyocera considers will reasonably be realized in the future. This estimate is reasonable
when compared with the amounts of income from continuing operations before income taxes and income taxes infiscal 2009.
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 its consolidated balance sheets andchanges 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
Effect on projected
benefit obligation
benefit obligation
as of March 31, 2009
as of March 31, 2009
(Yen in millions and U.S. dollars in thousands)

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

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

52¥ 4,239(3,999)$ 42,818(40,394)

Effect on income
before income taxes
for the year ending
March 31, 2010

Effect on income
before income taxes
for the year ending
March 31, 2010

¥

(91)
88
(325)
325

$

(919)
889
(3,283)
3,283

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 amountis reasonably estimable. In making these estimates, Kyocera considers the progress of the lawsuits, the situationsof other companies that are subject to similar lawsuits and other relevant factors. The amounts of liabilities
accrued are based on estimates and may be significantly affected by further developments or the resolution ofthese contingencies in the future.
AVX Corporation, a subsidiary in the U.S., has been named as a potentially responsible party (“PRP”) in stateand federal administrative proceedings seeking contribution for costs associated with the correction andremediation of environmental conditions at various waste disposal and operating sites. AVX Corporation
continues to monitor these actions and proceedings and to vigorously defend its interests. AVX Corporation
currently has reserves for current remediation, compliance and legal cost related to these matters.
In July 2007, AVX Corporation received oral notification from the Environmental Protection Agency (“EPA”),
and in December 2007, written notification from the U.S. Department of Justice indicating that the United States
is preparing to exercise the reopener provision under a 1991 consent decree relating to the environmental
conditions at, and remediation of, New Bedford Harbor in the Commonwealth of Massachusetts. The EPA has
indicated that remediation costs through December 6, 2007 (which remediation is ongoing) are approximately¥31,213 million ($315 million). AVX Corporation has not yet completed an investigation of the monies spent or
its available defenses in light of the notification. AVX Corporation has also not yet determined whether or towhat extent other parties may bear responsibility for these costs.
On April 1, 2008, the U.S. Department of Justice indicated that the future work to be performed at the harbor is
expected to exceed hundreds of millions of dollars under current estimates. AVX Corporation anticipates further
discussions with the U.S. Department of Justice, the EPA and the Commonwealth of Massachusetts.
The potential impact of this matter on Kyocera’s financial position, results of operations and cash flows cannot
be determined at this time.
Revenue recognition
Kyocera sells various types of products, including fine ceramic parts, semiconductor parts, andtelecommunications equipment. Kyocera recognizes revenue upon completion of the earnings process, which
occurs when products are shipped or delivered to customers in accordance with the terms of an agreement of sale,
there is a fixed or determinable selling price, title and risk of loss have been transferred, and collectibility isreasonably assured. Most of these conditions are satisfied at the time of delivery to customers in domestic sales(FOB destination) and at the time of shipment (FOB shipping) for export sales.
Sales returns
Kyocera records an estimated sales return allowance at the time of sales based on its historical returns
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.

53

Uncertainty in income taxes
Kyocera adopts an interpretation of FASB statement No. 109 “Accounting for Uncertainty in Income Taxes—aninterpretation of FASB statement No. 109” (FIN 48). 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 the recognition accounted for under FIN48.
At March 31, 2009, gross unrecognized tax benefits amounted to ¥10,518 million ($106 million). Kyocera does
not anticipate the final resolution of procedures to have a material impact on the consolidated statements ofincome in the future.
Recently adopted Accounting Standards
In September 2006, the FASB issued SFAS No. 157, “Fair Value Measurements.” The purpose of SFAS No. 157
is to define fair value, establish a framework for measuring fair value and enhance disclosures about fair value
measurements. The measurement and disclosure requirements related to financial assets and financial liabilities
were effective for fiscal years beginning April 1, 2008. The adoption of SFAS No. 157 for financial assets andfinancial liabilities has no material impact on Kyocera’s consolidated results of operations, financial positions
and cash flows.
In February 2008, the FASB issued FASB Staff Position (FSP) No. 157-1, “Application of FASB Statement
No. 157 to FASB Statement No. 13 and Other Accounting Pronouncements That Address Fair Value
Measurements for Purposes of Lease Classification or Measurement under Statement 13” and FSP No. 157-2,“Effective Date of FASB Statement No. 157. “FSP No. 157-1 amended SFAS No. 157 to remove certain leasingtransactions from its scope and was effective for fiscal years beginning April 1, 2008. FSP No. 157-2 postponed
one year the effective date of SFAS No. 157 for all non-financial assets and non-financial liabilities. FSP
No. 157-2 is effective for fiscal years beginning after November 15, 2008. As such effective April 1, 2009,
Kyocera will apply the guidance of SFAS No. 157 for all non financial assets and non financial liabilities.
In October 2008, the FASB issued FSP No. 157-3, “Determining the Fair Value of a Financial Asset When theMarket for that Asset is Not Active” (FSP No. 157-3). FSP No. 157-3 clarifies the application of SFAS No. 157
in a market that is not active, and addresses application issues such as the use of internal assumptions whenrelevant observable data does not exist, the use of observable market information when the market is not active,
and the use of market quotes when assessing the relevance of observable and unobservable data. FSP No. 157-3
is effective beginning for the three months ended December 31, 2008. The adoption of FSP 157-3 has no material
impact on Kyocera’s consolidated results of operations, financial positions and cash flows.
In September 2006, the FASB issued SFAS No. 158, “Employers’ Accounting for Defined Benefit Pension andOther Postretirement Plans-an amendment of FASB Statements No. 87, 88, 106, and 132 (R).” SFAS No. 158
requires an employer to measure the funded status of a benefit plan as of the date of its fiscal year-end statementof financial position for the years ending after December 15, 2008. Kyocera adopted this measurement dateprovision for fiscal years beginning April 1, 2008 and measured the funded status of its benefit plans at the dateof its fiscal year-end statement of financial position. As a result of applying the transition method of thisprovision, retained earnings and other comprehensive income at April 1, 2008 decreased by ¥522 million ($5million) and ¥418 million ($4 million), respectively.
In February 2007, the FASB issued SFAS No. 159, “The Fair Value Option for Financial Assets and Financial
Liabilities—including an amendment of FASB Statement No. 115.” SFAS No. 159 provides companies with an
option to report selected financial assets and liabilities at fair value. Unrealized gains and losses on items forwhich the fair value option has been elected will be recognized in earnings. SFAS No. 159 is effective for fiscal
years beginning April 1, 2008. For adoption of SFAS No. 159, see Note 4 to the Consolidated Financial
Statements in this annual report on Form 20-F.
54

In March 2008, the FASB issued SFAS No. 161, “Disclosures about Derivative instruments and Hedging
Activities an Amendment of FASB Statement No. 133.” SFAS No. 161 requires enhanced disclosures regarding
an entity’s derivative and hedging activities to provide adequate information about (a) how and why an entity
uses derivative instruments, (b) how derivative instruments and related hedged items are accounted for under
SFAS No. 133 and its related interpretations, and (c) how derivative instruments and related hedged items affectan entity’s financial position, financial performance and cash flows. SFAS No. 161 is effective for fiscal years
and interim periods beginning after November 15, 2008. As SFAS No. 161 does not impact the measurement or
recognition of derivative instruments, the adoption of the SFAS No. 161 did not have any impact on Kyocera’s
consolidated results of operations, financial positions and cash flows.
In May 2008, the FASB issued SFAS No. 162, “The Hierarchy of Generally Accepted Accounting Principles.”
SFAS No. 162 identifies the sources of accounting principles and the framework for selecting the principles usedin the preparation of financial statements of nongovernmental entities that are presented in conformity withgenerally accepted accounting principles in the United States of America. The sources of accounting principles
that are generally accepted are categorized in descending order as follows:a)

FASB Statements of Financial Accounting Standards and Interpretations, FASB Statement 133
Implementation Issues, FASB Staff Positions and American Institute of Certified Public Accountants(AICPA) Accounting Research Bulletins and Accounting Principles Board Opinions that are notsuperseded by actions of the FASBb)

FASB Technical Bulletins and, if cleared by the FASB, AICPA Industry Audit and Accounting Guides
and Statements of Positionc)

AICPA Accounting Standards Executive Committee Practice Bulletins that have been cleared by the
FASB, consensus positions of the FASB Emerging Issues Task Force (EITF) and the Topics discussed
in Appendix D of EITF Abstracts (EITF D-Topics) andd)

Implementation guides (Q&As) published by the FASB staff, AICPA Accounting Interpretations,
AICPA Industry Audit and Accounting Guides and Statements of Position not cleared by the FASB
and practices that are widely recognized and prevalent either generally or in the industry SFAS No. 162
was effective on November 15, 2008.

The adoption of SFAS No. 162 did not have any impact on Kyocera’s consolidated results of operations,financial positions and cash flows.

Recently Issued Accounting Standards
In December 2007, the FASB issued SFAS No. 141 (revised 2007) (SFAS No. 141(R)), “Business
Combinations,” which requires assets, liabilities and noncontrolling interests be measured at fair value. Under
SFAS No. 141(R), transaction and restructuring costs are required to be generally expensed, as well as contingent
consideration and in-process research and development be recorded at fair value on acquisition date as a part offair value of acquired business. In addition, any tax adjustment made after the measurement period impacts
income tax expenses. The FASB issued FASB Staff Position (FSP) 141(R)-1, “Accounting for Assets Acquiredand Liabilities Assumed in a Business Combination That Arise from Contingencies” as amendment of SFAS
No. 141(R) in April 2009. FSP141(R)-1 requires the companies to recognize at fair value, at the acquisition date,an asset acquired or a liability assumed in a business combination that arises from a contingency if theacquisition-date fair value of that asset or liability can be determined during the measurement period. Otherwise
they will be processed based on the requirement of SFAS No. 5, “Accounting for Contingencies.” SFAS
No. 141(R) and FSP141(R)-1 are effective for fiscal years beginning on or after December 15, 2008. Kyocera
does not expect the adoption of SFAS No. 141(R) and FSP141(R)-1 will have any material impact on Kyocera’s
consolidated results of operations, financial positions and cash flows.
55

In December 2007, the FASB issued SFAS No. 160, “Noncontrolling Interests in Consolidated Financial
Statement an Amendment of Accounting Research Bulletin No. 51.” SFAS No. 160 establishes accounting andreporting standards for ownership interests in subsidiaries held by parties other than the parent, the amount ofconsolidated net income attributable to the parent and to the noncontrolling interest, changes in a parent’s
ownership interest, and the valuation of retained noncontrolling equity investments when a subsidiary isdeconsolidated. SFAS No. 160 also establishes disclosure requirements that clearly identify and distinguishbetween the interests of the parent and the interests of the noncontrolling owners. SFAS No. 160 is effective forfiscal years beginning on or after December 15, 2008. Kyocera does not expect the adoption of SFAS NO. 160
will have any material impact on Kyocera’s consolidated results of operations, financial positions and cash flows.
In December 2008, the FASB issued FSP No. 132(R)-1, “Employers’ Disclosures about Postretirement Benefit
Plan Assets,” which provides guidance on employers’ disclosures of a defined benefit pension or otherpostretirement plan. Specifically, employers are required to disclose information about fair value measurementsof plan assets. FSP No. 132(R)-1 will be effective for fiscal years ending after December 15, 2009. As FSP
No. 132(R)-1 is a provision for disclosure, the adoption of FSP No. 132(R)-1 will not have any impact on
Kyocera’s consolidated results of operations, financial positions and cash flows.
In April 2009, the FASB issued three FASB Staff Positions, (a) FSP No. 157-4, “Determining Fair Value When
the Volume and Level of Activity for the Asset or Liability Have Significantly Decreased and Identifying
Transactions That Are Not Orderly,” (b) FSP No. 115-2 and FSP No. 124-2, “Recognition and Presentation of
Other-Than Temporary Impairments” and (c) FSP No. 107-1 and APB No. 28-1, “Interim Disclosures about Fair
Value of Financial Instruments.”(a) FSP No. 157-4 provides guidance on how to estimate the fair value of assets or liabilities when thevolume and level of activity for asset or liability have significantly decreased and on identifying
circumstances that indicate a transaction is not orderly. In addition, FSP No. 157-4 requires disclosure
in interim and annual periods of the inputs and valuation techniques used to estimate fair value and a
discussion of changes in valuation techniques.
(b) FSP No. 115-2 and FSP No. 124-2 amends the other-than-temporary impairment guidance for debt
securities and presentation and disclosure requirement of other-than-temporary impairments of debt
and equity securities.
(c) FSP No. 107-1 and APB No. 28-1 requires interim disclosures regarding the fair values of financial
instruments that are within the scope of SFAS No. 107. Additionally, FSP No. 107-1 and APB
No. 28-1 requires disclosure of the methods and significant assumptions used to estimate the fair valueof financial instruments on a interim basis as well as changes of the methods and significant
assumptions from previous periods.
These three FASB Staff Positions are effective for interim and annual reporting periods ending after June 15,
2009. The adoption of these three FASB Staff Positions is not expected to have a significant impact on Kyocera’s
consolidated results of operations, financial positions and cash flows.
In May 2009, the FASB issued SFAS No. 165, “Subsequent Events.” The purpose of SFAS No. 165 is toestablish general standards of accounting for and disclosure of events that occur after the balance sheet date but
before financial statements are issued or are available to be issued. SFAS No. 165 is effective for interim or
annual financial periods ending June 15, 2009. Kyocera does not expect the adoption of SFAS No. 160 will haveany material impact on Kyocera’s consolidated results of operations, financial positions and cash flows.
In June 2009, the FASB issued SFAS No. 166, “Accounting for Transfers of Financial Assets—an amendment of
FASB Statement No. 140.” SFAS No. 166 removes the concept of a qualifying special-purpose entity fromStatement 140 and removes the exception from applying FASB Interpretation No. 46 (revised December 2003),
Consolidation of Variable Interest Entities, to qualifying special-purpose entities and establishes specificconditions for reporting a transfer of a portion of a financial asset as a sale. SFAS No. 166 must be applied as of56the beginning of each reporting entity’s first annual reporting period that begins after November 15, 2009, forinterim periods within that first annual reporting period and for interim and annual reporting periods thereafter.
Kyocera is currently evaluating the impact that SFAS No. 166 will have on Kyocera’s consolidated results ofoperations, financial positions and cash flows.
In June 2009, the FASB issued SFAS No. 167, “Amendments to FASB Interpretation No. 46(R).” SFAS No. 167
requires an enterprise to perform an analysis to identify the primary beneficiary of a variable interest entity andalso requires ongoing reassessments of whether an enterprise is the primary beneficiary of a variable interest
entity. SFAS No. 167 shall be effective as of the beginning of each reporting entity’s first annual reporting periodthat begins after November 15, 2009, for interim periods within that first annual reporting period, and for interim
and annual reporting periods thereafter. Kyocera is currently evaluating the impact that SFAS No. 167 will haveon Kyocera’s consolidated results of operations, financial positions and cash flows.
B. Liquidity and Capital Resources
Capital resources
In fiscal 2009, in accordance with global economic deterioration commencing the second half of fiscal 2009, ademand for product rapidly decreased and product selling price significantly declined. Appreciation of the yen
against the Euro and the U.S. dollar had a large negative impact on Kyocera’s financial result.
However, Kyocera’s net cash provided by operating activities in fiscal 2009 was ¥97,794 million ($988 million),and cash and cash equivalents, at March 31, 2009 were ¥269,247 million ($2,720 million). Kyocera held liquid
financial assets, additionally. Based on those facts, Kyocera does not expect to face financial difficulties in near
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 stockholders.
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. As of March 31, 2009, Kyocera’s short-termborrowings and long-term debt including current portion totaled ¥53,403 million ($539 million). The ratio tototal assets of 3.0% still reflected a low level of dependence. Most borrowings were denominated in the U.S.
dollar and the yen but certain borrowings were denominated in other foreign currencies. Details of theseborrowings are described in “Tabular Disclosure of Contractual obligations,” which also includes the information
regarding obligations for the acquisition or construction of property, plant and equipment.
Capital expenditures in fiscal 2009 decreased by ¥22,046 million ($223 million), or 25.9%, to ¥63,055 million($637 million) compared with ¥85,101 million in fiscal 2008. In fiscal 2009, Kyocera made capital expendituresin the solar energy business to expand production capacity, but Kyocera reduced capital expenditures in otherbusinesses in the fourth quarter due to the weak business environment. R&D expenses increased by¥4,327 million ($44 million), or 7.0%, to ¥65,932 million ($666 million) compared with ¥61,605 million in fiscal
2008. In fiscal 2009, Kyocera’s research and development activities developed new products and strengthened
functions of products in the Electronic Device Group, Telecommunications Equipment Group and theInformation Equipment Group. In the Telecommunications Equipment Group R&D, expenditures particularly
increased by ¥3,468 million ($35 million) compared with fiscal 2008 due to an acquisition of the mobile phonehandset related business of SANYO. Nearly all capital and R&D expenditures were funded by using cash in
hand.
During fiscal 2010, Kyocera expects total capital expenditures to be approximately ¥43,000 million ($434
million) and total R&D expenses to be approximately ¥58,000 million ($586 million). Kyocera expects that total
capital expenditures will decrease compared with fiscal 2009, except the solar energy business in which Kyocera
will expand production capacity. Kyocera expects that R&D expenditures will decrease compared with fiscal
2009, however the proportion of R&D expenditures to net sales will be flat compared with fiscal 2009. Nearly all57

capital and R&D expenditures will be funded by using cash in hand. Kyocera believes that Kyocera needs toinvest its resources continuously in the development of new business areas and improved technology in order tocreate new products, commercialize advanced technologies and thereby secure future earnings streams.
In fiscal 2009, Kyocera contributed ¥12,102 million ($122 million) to its benefit pension plans, and in fiscal
2010, Kyocera forecasts to contribute ¥9,643 million ($97 million) to its benefit pension plans. During fiscal
2009, instabilities of financial markets led to a weak performance of benefit plan assets and projected benefit
obligations increased due to a decrease in assumptions used in actuarial calculations. However, as of March 31,
2009, Kyocera’s funded status of benefit pension plans ensured the sources of funds sufficient to cover thepension benefits paid to participants and beneficiaries, and large amounts of additional contributions are notconsidered to be necessary. Kyocera expects contributions to pension plan assets will be made by using cash inhand.
In fiscal 2009, Kyocera Corporation paid cash dividends totaling ¥22,755 million ($230 million), at ¥120 ($1.2)
per share. Kyocera Corporation received approval at the general meeting of shareholders held on June 25, 2009
for the payment of year-end dividends totaling ¥11,012 million ($111 million), ¥60 ($0.6) per share, on June 26,
2009 to all stockholders of record on March 31, 2009.
Based on the resolution at the meeting of the Board of Directors held on November 27, 2008, Kyocera acquired
its own shares in the market as its treasury stock from November 28, 2008 to December 22, 2008. The total
number of shares acquired and the total acquisition price were 6,256,000 shares and ¥38,000 million ($384
million), respectively. Due mainly to this acquisition, the balance of treasury stock at March 31, 2009 increasedby ¥(35,279 million) ($(356 million)), to ¥(50,568 million) ($(511 million)), compared with ¥(15,289 million) as
of March 31, 2008. This acquisition was funded by using cash in hand. Kyocera Corporation acquires treasury
stock to facilitate the implementation of flexible capital policies and to develop its business in a dynamic mannerin response to changes in the operating environment.
As described in Note 3 to the consolidated Financial Statement, Kyocera acquired the businesses and the shares.
These acquisition costs, net of cash acquired were ¥47,512 million ($480 million), and nearly all acquisitions
were funded by using cash in hand.
As of March 31, 2009, Kyocera’s working capital totaled ¥714,355 million ($7,216 million), a decrease of¥102,188 million ($1,032 million), or 12.5%, compared with ¥816,543 million as of March 31, 2008. This wasdue mainly to decreases in cash generated by operations affected by weak business environment, and increases incash demands, such as payments for acquisition costs for business combination and treasury stock. Despite this,its working capital requirements, capital expenditures, debt repayments and other obligations were funded byusing cash in hand.
Kyocera believes cash in hand will be sufficient to fund all cash requirements outlined above at least throughfiscal 2010. Consequently, Kyocera does not currently intend to use any other external financing sources thatmight 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 or long-term borrowings,
as well as financing directly in the capital markets through issuances of debt or equity securities. As evidenced
by equity to assets ratio of 74.6% at March 31, 2009, 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.
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 position, possibly resulting in reduced liquidity.

58

Cash flows
Fiscal 2009 compared with Fiscal 2008
The following table shows a summary of Kyocera’s cash flows for fiscal 2008 and fiscal 2009:
Years ended March 31,
Increase
2008
2009
2009
(Decrease)
AmountAmountAmount%(Yen in millions and U.S. dollars in thousands)

Cash flows from operating activities . . . . . . . . . . . . . . . . . . . . .
Cash flows from investing activities . . . . . . . . . . . . . . . . . . . . .
Cash flows from financing activities . . . . . . . . . . . . . . . . . . . . .
Cash and cash equivalents at end of year . . . . . . . . . . . . . . . . . .

¥196,935 ¥ 97,794 $ 987,818
14,894(201,957) (2,039,970)(28,071)(62,417)(630,475)
447,586
269,247
2,719,667(50.3)—
122.4(39.8)Net cash provided by operating activities in fiscal 2009 decreased by ¥99,141 million ($1,001 million), or 50.3%,
to ¥97,794 million ($988 million) from ¥196,935 million in fiscal 2008. This was due mainly to a decrease in net
income.
Cash flow from investing activities turned from ¥14,894 million of cash inflows in fiscal 2008 to¥201,957 million ($2,040 million) of cash outflows in fiscal 2009, which represented a decrease in cash inflow
by ¥216,851 million ($2,190 million) compared with fiscal 2008.
This was due mainly to a decrease in withdrawal of certificate deposits and time deposits, and a decrease inproceeds from sales and maturities of available-for-sale securities.
Net cash used in financing activities in fiscal 2009 increased by ¥34,346 million ($347 million), or 122.4%, to¥62,417 million ($630 million) from ¥28,071 million in fiscal 2008.
This was due mainly to purchases of treasury stock from November 28, 2008 to December 22, 2008.
Due mainly to the yen’s appreciation against the Euro and the U.S. dollar between March 31, 2008 andMarch 31, 2009 resulted in decreases in cash and cash equivalents of ¥11,759 million ($119 million).
At March 31, 2009, cash and cash equivalents totaled ¥269,247 million ($2,720 million). This represented adecrease of ¥178,339 million ($1,801 million), or 39.8%, from ¥447,586 million at March 31, 2008. Most of
Kyocera’s cash and cash equivalents were denominated in yen but certain cash and cash equivalents, mainly inoverseas subsidiaries, were denominated in foreign currencies, such as the U.S. dollar.
Fiscal 2008 compared with Fiscal 2007
The following table shows a summary of Kyocera’s cash flows for fiscal 2007 and fiscal 2008:
Years ended March 31,
Increase
2007
2008(Decrease)
AmountAmount%(Yen in millions)

Cash flows from operating activities . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Cash flows from investing activities . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Cash flows from financing activities . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Cash and cash equivalents at end of year . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

59¥ 149,644 ¥196,935(151,703)
14,894(20,645) (28,071)
282,208
447,586

31.6
—
36.0
58.6

Net cash provided by operating activities in fiscal 2008 increased by ¥47,291 million, or 31.6%, to¥196,935 million from ¥149,644 million in fiscal 2007. Although accrued income taxes that increased in fiscal
2007 decreased in fiscal 2008, receivables and inventories that increased in fiscal 2007 decreased significantly infiscal 2008. As a result, net cash provided by operating activities in fiscal 2008 increased.
Cash flow from investing activities turned from ¥151,703 million of cash outflows in fiscal 2007 to¥14,894 million of cash inflows in fiscal 2008, and increased by ¥166,597 million compared with fiscal 2007.
This was due mainly to a decrease in purchase of available-for-sales securities and a large increase in withdrawalof time deposits, which exceeded increases in purchases of property, plant and equipment, and intangible assets.
This increase was also due to acquisitions of businesses as well as an absence of proceeds from the sale of sharesof Kyocera Leasing Co., Ltd. in fiscal 2007.
Net cash used in financing activities in fiscal 2008 increased by ¥7,426 million, or 36.0%, to ¥28,071 million
from ¥20,645 million in fiscal 2007. This was due mainly to a decrease in short-term borrowings that had
increased in fiscal 2007. This decrease exceeded a decrease in payments of long-tem debts in fiscal 2008.
On August 1, 2006, Kyocera sold its shares of Kyocera Leasing Co., Ltd., a subsidiary engaged in financing
services. As a result, both the amounts of proceeds from issuance of short-tem and long-term debts, and theamounts of payments of short-term and long-term debt, which were included in financial activities, decreased infiscal 2008. However, such decreases did not have significant effects on Kyocera’s cash flows in total.
The yen’s appreciation against the U.S. dollar between March 31, 2007 and March 31, 2008 resulted in decreases
in cash and cash equivalents of ¥18,380 million.
At March 31, 2008, cash and cash equivalents totaled ¥447,586 million. This represented an increase of¥165,378 million, or 58.6%, from ¥282,208 million at March 31, 2007. 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 stockholders’ equity
Kyocera’s total assets at March 31, 2009 decreased by ¥202,944 million ($2,050 million), or 10.3% to¥1,773,802 million ($17,917 million), compared with ¥1,976,746 million at March 31, 2008.
Cash and cash equivalents decreased by ¥178,339 million ($1,801 million), or 39.8%, to ¥269,247 million($2,720 million). This was due mainly to the effect of payment for acquisition of the mobile phone handsets
related business and its related assets and liabilities from SANYO and acquisitions of certificate of deposits inaddition to a purchase of treasury stocks at Kyocera Corporation.
Short-term investments increased by ¥54,640 million ($552 million), or 37.0%, to ¥202,143 million ($2,042
million), due mainly to acquisitions of certificate deposits at Kyocera Corporation.
Trade receivables-Accounts decreased by ¥46,768 million ($472 million), or 22.8%, to ¥158,754 million ($1,604
million), due mainly to a decrease in sales caused by declines in overall demand due to downturn of economic
conditions and the yen’s appreciation.
Other current assets increased by ¥23,128 million ($234 million), or 41.9%, to ¥78,263 million ($791 million),
due mainly to an increase of advance payments of the long-term purchase agreements for certain materials at
Kyocera Corporation and combined with short-term lease receivable owned by TAAG, a newly consolidated
subsidiary by Kyocera Mita.
Securities and other investments decreased by ¥85,520 million ($864 million), or 19.6%, to ¥351,849 million($3,554 million), due mainly to declines in market values of the shares of KDDI Corporation and other equity
securities at March 31, 2009 compared with March 31, 2008.
60

Total property, plant and equipment at cost, net of accumulated depreciation, decreased by ¥19,845 million ($200
million), or 6.9%, to ¥266,054 million ($2,687 million). Capital expenditure in fiscal 2009 was ¥63,055 million($637 million), and depreciation was ¥83,753 million ($846 million).
Goodwill increased by ¥23,432 million ($237 million), or 58.9%, to ¥63,226 million ($639 million), due mainly
to an acquisition of the mobile phone handsets related business from SANYO by Kyocera Corporation and aacquisition of additional interests in TAAG by Kyocera Mita. Intangible assets increased by ¥30,248 million($306 million), or 101.4%, to ¥60,077 million ($607 million) as well.
Other assets increased by ¥12,027 million ($121 million), or 24.6%, to ¥60,904 million ($615 million) due
mainly to an increase of long-term lease receivable owned by TAAG, a newly consolidated subsidiary by
Kyocera Mita.
Kyocera’s total liabilities at March 31, 2009 decreased by ¥69,865 million ($706 million), or 15.2%, to¥390,714 million ($3,947 million), compared with ¥ 460,579 million at March 31, 2008.
Notes and accounts payable-Trade decreased by ¥32,811 million ($331 million), or 34.4%, to ¥62,579 million($632 million) compared with March 31, 2008, due mainly to a decline in purchases in line with a slump in sales.
Notes and accounts payable-Other decreased by ¥23,305 million ($235 million), or 34.9%, to ¥43,452 million($439 million) due mainly to a decline in capital expenditure in line with downturn of economic conditions and adecrease in payables for acquisitions of certificate deposits at Kyocera Corporation.
Accrued income taxes decreased by ¥19,688 million ($199 million), or 72.6%, to ¥7,430 million ($75 million)
due mainly to a reduction of overall operating profits.
Long-term debt increased by ¥20,240 million ($204 million), or 243.9%, to ¥28,538 million ($288 million) due
to an increase of long-term debt owned by TAAG, a newly consolidated subsidiary by Kyocera Mita.
Accrued pension and severance liabilities increased ¥19,526 million ($197 million), or 129.8%, to¥34,567 million ($349 million) due mainly to a weak performance of benefit plan assets affected by instabilities
of financial markets and an increase in projected benefit obligation resulted from a decrease in discount rates
applied to actuarial calculation.
Deferred taxes liabilities decreased by ¥46,477 million ($469 million), or 39.4%, to ¥71,539 million ($723
million), due mainly to declines in market values of the shares of KDDI Corporation and other equity securities
at March 31, 2009 compared with March 31, 2008.
Minority interests in subsidiaries, principally AVX Corporation, decreased by ¥5,577 million ($56 million), or
8.6%, to ¥59,425 million ($600 million), compared with ¥65,002 million at March 31, 2008, due mainly to the
reduction of operating profit of subsidiaries caused by aggravation of business conditions.
Total stockholders’ equity at March 31, 2009 decreased by ¥127,502 million ($1,288 million), or 8.8%, to¥1,323,663 million ($13,370 million), compared with ¥1,451,165 million at March 31, 2008.
Retained earnings at March 31, 2009 increased by ¥6,229 million ($63 million), or 0.5%, due to a net income forfiscal 2009 of ¥29,506 million ($298 million) offset by a cumulative effect of applying SFAS No. 158 of the¥522 million ($5 million) as of April 1, 2008 and cash dividend payments of ¥22,755 million ($230 million).
Accumulated other comprehensive income decreased by ¥98,739 million ($997 million), to ¥(54,673 million)($(552 million)). Net unrealized gains on securities decreased by ¥53,178 million ($537 million), or 82.1%, due
mainly to declines in market values of the shares of KDDI Corporation and other equity securities at March 31,
2009 compared with March 31, 2008.
61

Pension adjustment decreased by ¥12,812 million ($129 million), or 99.6%, to ¥53 million ($1 million).
Unamortized actuarial gains decreased due mainly to a weak performance of benefit plan assets affected byinstabilities of financial markets and an increase in projected benefit obligation resulted from a decrease indiscount rates applied to actuarial calculation.
Foreign currency translation adjustments decreased by ¥32,408 million ($327 million), or 95.9%, to ¥(66,202
million) ($(669 million)), due mainly to the appreciation of the yen against the Euro.
The stockholders’ equity ratio at March 31, 2009 was 74.6%, up 1.2 percentage points from 73.4% at March 31,
2008.
C. Research and Development Activities
Kyocera continuously aims at expanding sales and boosting profitability in its Components and Equipment
Businesses. To achieve these objectives, Kyocera seeks to create new technologies, products and businesses byintegrating group-wide management resources while advancing and focusing technological capabilities.
Kyocera will channel its energies into high-growth-potential areas; namely, the markets for information andcommunication and for environmental and energy. R&D activities are conducted in all of these markets. Specificinitiatives in each reporting segment are as follows.
(1) Fine Ceramic Parts GroupBy making effective use of fine ceramic materials technology, processing technology and design technology,
Kyocera is seeking to strengthen the development of fine ceramic components such as for next generation
semiconductor processing equipment, and higher quality sapphire substrates for LEDs, the demand for which is
expected to expand.
In the automotive market, efforts are being undertaken to develop products that meet the need for advanced
electronics and safety and growing concerns with the environment. Specific endeavors include the development
and production of camera modules to enhance driving safety, and glow plugs that utilize the high temperature
durability of ceramics and piezoelectric-stacks that enable precision control for the fuel injection of diesel engine
cars, which are becoming more widespread in Europe.
(2) Semiconductor Parts Group
Kyocera is advancing the development of new ceramic packages and organic packages for digital consumer
equipment, where demand is expected to expand. In the ceramic package business, efforts are being made to develop
smaller, thinner and more highly sophisticated ceramic packages that meet advancements in electronic equipment. In
the organic package business, Kyocera is developing new flip chip packages for next-generation high-performancesemiconductors and system in a package (SiP) to realize even thinner packages with narrower pitches.
(3) Applied Ceramic Products Group
While striving to further increase the conversion efficiency and strengthen cost reduction of solar cells for theenvironmental preservation market, Kyocera is developing a variety of next-generation solar cells. Kyocera isalso eagerly working toward the practical application of SOFCs, which are expected to be the next-generation
distributed power generation system for small-scale power sources.
(4) Electronic Device Group
Kyocera develops small, thin ceramic capacitors and various filters for mobile phone handsets in the wirelesstelecommunications market. In the industrial machinery and information equipment markets, Kyocera isdeveloping various sensors and actuators through piezoelectric ceramic technology.
62

In the thin film components, Kyocera is developing thermal printheads for barcode printers that incorporate “ecogeneration specifications” as part of a new environmental concept, as well as inkjet printheads capable of highspeed full-color prints, and STN color LCDs with touch panel.
(5) Telecommunications Equipment GroupBy making effective use of component, device and software technologies within the group, Kyocera isconducting research and development towards introduction of high-value-added products for the mobile
telecommunications equipment market, in which functions are becoming increasingly advanced. Kyocera is also
strengthening the development of equipment such as base stations and terminals for next generation
telecommunication systems that enable stable, high-speed and high-data rate communication.
(6) Information Equipment Group
Kyocera is promoting the development of more color-based and solutions-oriented printers, multifunction
peripherals and other information equipment based on the “ECOSYS” concept, which realizes longer engine life,
reduced running costs and minimal waste. We are pursuing this goal through the incorporation of our amorphoussilicon photoreceptor drum with high abrasion resistance. Apart from bolstering the lineup for both black andwhite and color ECOSYS printers and multifunction peripherals, Kyocera is advancing the development of
document solutions products that can handle the integrated management of documents and digital information.
Efforts are also being made to strengthen security functions.
(7) Others
Kyocera Communications Systems Co., Ltd. is conducting the development of technologies related to network
infrastructure creation and of applied systems that are key to next-generation mobile telecommunications and theconvergence of telecommunications and broadcasting. In addition, Kyocera Communications Systems develops
infrastructure systems facilitating the progress of information technology in the medical field by utilizing RFID
(Radio Frequency Identification), for instance.
Kyocera Chemical Corporation is currently strengthening the development of materials for semiconductor andelectronic components. Focused efforts include the development of epoxy molding compounds forsemiconductors and the development of conductive paste for electronic components.
R&D expenses by reporting segment are as follows.
Years ended March 31,
Increase
2007
2008
2009
(Decrease)
AmountAmountAmount%(Yen in millions and U.S. dollars in thousands)

Fine Ceramic Parts Group . . . . . . . . . . . . . . . . . . . . . . . . . . ¥ 3,769
Semiconductor Parts Group . . . . . . . . . . . . . . . . . . . . . . . .
3,757
Applied Ceramic Products Group . . . . . . . . . . . . . . . . . . . .
4,138
Electronic Device Group . . . . . . . . . . . . . . . . . . . . . . . . . . 12,123¥ 3,655
3,498
5,146
11,641¥ 3,346
3,227
4,992
12,690$ 33,798
32,59650,424
128,182

(8.5)
(7.7)
(3.0)
9.0

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

23,787
15,123
17,98323,94012,396
19,587

24,255
15,864
20,127

245,000
160,242
203,303

1.3
28.0
2.8

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

33,106
4,207

31,983
5,682

35,991
5,686

363,545
57,43512.5
0.1

R&D expenses . . . . . . . . . . . . . . . . . . . . . . . . . . ¥61,100¥61,605¥65,932$665,980

7.0

—

—

% to net sales . . . . . . . . . . . . . . . . . . . . . . . . . . .
63

4.8%

4.8%

5.8%

Note: Commencing fiscal 2008, the “Optical Equipment Group,” previously a separate reporting segment, hasbeen reclassified into “Others.” Accordingly, R&D expenses of “Others” in fiscal 2007 have been retroactively
reclassified.
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 4B “Business Overview” in this annual report on
Form 20-F.
D. Trend Information
Kyocera endeavors to strengthen competitiveness in technological development, sales and marketing in the corehigh-growth potential markets for information and communications, and environment and energy, and we seek totranslate our diversification strategy into improved business performance.
In fiscal 2009, the impact of the financial crisis triggered in the United States affected the real economy, fuelingdeceleration in the global economy from the second half, which resulted in stagnation in production activity incore industrial sectors. This led to sudden production adjustments in digital consumer equipment and inventory
adjustments for components thereof in the information and communications market, which had been expanding
steadily.
Despite major production and inventory adjustments in the second half, which are projected to improve thesituation moderately, particularly in mobile phone handsets, PCs, digital consumer electronics and otherconsumer products, full-fledged recovery in the information and communications market is not expected until thelatter half of fiscal 2010 and beyond. Meanwhile, the semiconductor equipment market and the automotive
market are projected to recover from fiscal 2011.
Although it will take time before genuine recovery, the information and communications market is expected tocontinue growing, since digital consumer equipment is becoming increasingly advanced, and systems are being
created for new next-generation high-speed wireless communication services scheduled to commence in thedomestic market in fiscal 2010. These market trends are expected to have a positive impact on performance inboth Kyocera’s components business and equipment business.
Despite temporary restraint in IT-related investment at government and other public offices and in the corporate
sector, digital MFPs featuring higher speed, better security functionality and enhanced energy conservation
capability is projected to remain in demand. The Information Equipment Group will seize the opportunity toincrease business by expanding its line-up of high-speed printers and color digital MFPs in accord with thesemarket requirements.
In the environment and energy market, demand for solar energy products has slowed temporarily, especially inEurope, due to the global economic downturn and financial crisis. However, environmental awareness is
expected to continue growing, thus driving expansion in the solar energy market over the medium to long term.
Subsidy policies implemented by various governments also support the proliferation of solar energy systems. As
a result, demand for solar energy systems is projected to increase in Europe, the United States, Japan and other
Asian nations in the medium to long term. In line with this market trend, Kyocera will continue making strategic
capital investments to increase production of solar cells and strive to expand solar energy business.
Kyocera will also make further efforts to expand business in the environment and energy market by creating new
products and expanding product items such as SOFC based power generating units utilizing fine ceramicmaterials technologies for home use, and components that contribute to a reduction in exhaust gas for the
automotive market.

64

E. Off-Balance Sheet Arrangements
Refer to Note 16 in The Consolidated Financial Statements included in this annual report on Form 20-F. As apart of our ongoing business, we have no unconsolidated special purpose financing or partnership entities that arelikely to create material contingent obligations.
F. Tabular Disclosure of Contractual Obligations
The following tables provide 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, 2009. Kyocera
anticipates that the funds required to fulfill these debt obligations and commitments will be cash in hand.
Contractual obligations

Less than
1 yearShort-term borrowings . . . . . . . . . . . . . . . . . . . . . .
Interest payments for short-term borrowings* . . . .
Long-term debt (including due within oneyear) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Interest payments for long-term debt* . . . . . . . . . .
Supply agreement material used in operation . . . .
Operating Leases . . . . . . . . . . . . . . . . . . . . . . . . . .
Obligations for the acquisition or construction ofproperty, plant and equipment . . . . . . . . . . . . . .

¥ 11,000215

2-3 years

4-5 years
Thereafter(Yen in millions)

¥

¥

—
—

—
—

¥

—
—

Total

¥

11,000215

13,865
1,799
14,666
6,237

18,131
1,854
38,626
7,316

8,463
488
50,651
2,826

1,944
62
193,524
1,075

42,403
4,203
297,467
17,454

11,153———

11,153

Total Contractual Obligations . . . . . . . . . . . . . . . .

¥ 58,935¥ 65,927¥ 62,428¥ 196,605¥ 383,895

Contractual obligations

Less than
1 year2-3 years
4-5 years
Thereafter(U.S. dollars in thousands)

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

$111,111
2,172

$

—
—

140,051
18,171
148,141
63,000183,142
18,727
390,162
73,899112,657

Total Contractual Obligations . . . . . . . . . . . . . . . .

$595,303

$

—
—

$

Total

—
—

$ 111,111
2,172

85,485
4,930
511,626
28,545

19,636626
1,954,788
10,859428,31442,454
3,004,717
176,303———112,657$665,930$630,586$1,985,909$3,877,728* For Kyocera’s variable interest rate of borrowings and debt, Kyocera utilized the rates in effect as ofMarch 31, 2009 when estimating schedule of interest payments.
In addition to contractual obligations shown in the above tables, Kyocera forecasts to contributing ¥9,643 million($97 million) to its defined benefit pension plans in fiscal 2010, and Kyocera recorded liabilities for grossunrecognized tax benefits in accordance with FIN48 by ¥10,518 million ($106 million) at March 31, 2009, which
are not included in the above tables because it is unable to make reasonable estimates of the period ofsettlements. For detailed information, see Note 19 to the Consolidated Financial Statements in this annual reporton Form 20-F.

65

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.
The following table shows Kyocera’s Directors and Corporate Auditors as of June 25, 2009.
Name

Makoto Kawamura . . . . . . . . . . . . .

Date of Birth

Position

August 13, 1949

Representative Director andChairmanYuzo Yamamura . . . . . . . . . . . . . . December 4, 1941
Representative Director andVice Chairman
Tetsuo Kuba . . . . . . . . . . . . . . . . . . February 2, 1954
Representative Director andPresident
Tatsumi Maeda . . . . . . . . . . . . . . . . January 1, 1953
Representative Director andVice President
Hisao Hisaki . . . . . . . . . . . . . . . . . . July 2, 1946
Director
Yasuyuki Yamamoto . . . . . . . . . . . April 2, 1951
Director
Yoshihiro Kano . . . . . . . . . . . . . . . April 5, 1953
Director
Goro Yamaguchi . . . . . . . . . . . . . . January 21, 1956
Director
Shoichi Aoki . . . . . . . . . . . . . . . . . . September 19, 1959 Director
Katsumi Komaguchi . . . . . . . . . . . . March 5, 1951
DirectorRodney N. Lanthorne . . . . . . . . . . . February 5, 1945
Director
John S. Gilbertson . . . . . . . . . . . . . December 4, 1943
Director
Yoshihiko Nishikawa . . . . . . . . . . . September 11, 1945 Full-time Corporate Auditor
Kokichi Ishibitsu . . . . . . . . . . . . . . December 25, 1943 Full-time Corporate Auditor
Osamu Nishieda . . . . . . . . . . . . . . . January 10, 1943
Corporate Auditor
Kazuo Yoshida . . . . . . . . . . . . . . . . January 10, 1948
Corporate Auditor
Yoshinari Hara . . . . . . . . . . . . . . . . April 3, 1943
Corporate Auditor

Since

2005
(Chairman 2009)
2003
2008
(President 2009)
2008
1991
2009
2009
2009
2009
2009
1989
1995
2005
2008
1993
2008
2009

Makoto Kawamura has served as a Representative Director and Chairman of Kyocera Corporation since 2009.
He became a Director in 2001 and retired in 2003. He rejoined as a Representative Director and President in2005. He joined Kyocera Corporation in 1973 and has served as Chairman of the Board of Directors of
Dongguan Shilong Kyocera Optics Co., Ltd., Representative Trustee of Japan Photovoltaic Energy Association,
Representative Director and Chairman of Kyocera Mita Corporation, Representative Director and Chairman of
Kyocera SLC Technologies Corporation, Representative Director and Chairman of Kyocera Display InstituteCo., Ltd., and Representative Director and Chairman of Kyocera Realty Development.
Yuzo Yamamura has served as a Representative Director and Vice Chairman since 2006. He rejoined Kyocera
Corporation as a Director in 2003. He first became a Director in 1987 and the President and Representative
Director of Kyocera Elco Corporation in 1992. He retired from a Director in 1993. He rejoined Kyocera
Corporation as a Senior Managing and Representative Director in 1995 and retired again in 1999. He originallyjoined Kyocera Corporation in 1965 and has served as a Director and the Executive Advisor of Kyocera Elco
Corporation and the General Manager of Corporate Communication Equipment Group.
Tetsuo Kuba has served as a Representative Director and President of Kyocera Corporation since 2009. He
became an Executive Officer in 2003, a Managing Executive Officer in 2005, a Senior Managing Executive
66Officer in 2007 and a Director in 2008. He joined Kyocera Corporation in 1982 and has served as the Chairmanof the Board of Directors of Shanghai Kyocera Electronics Co., Ltd.
Tatsumi Maeda has served as a Representative Director and Vice President of Kyocera Corporation since 2009.
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 joined Kyocera Corporation in 1975
and has served as the Chairman of the Board of Kyocera (Tianjin) Solar Energy Co., Ltd., Representative
Director and Chairman of Kyocera Solar Corporation, Representative Director and Chairman and President inKyocera Korea Co., Ltd., and General Manager of Solar Energy Group and Corporate Electronic Components
Group.
Hisao Hisaki has served as a Director of Kyocera Corporation since 1991. He became a Managing Executive
Officer in 2003 and retired in 2005. He joined Kyocera Corporation in 1969 and has served as a Senior Managing
Executive Officer and Chairman of the Board and the General Manager of Kyocera Tianjin Sales and Trading
Corporation.
Yasuyuki Yamamoto has served as a Director of Kyocera Corporation since 2009. He became an Executive
Officer in 2003 and a Senior Executive Officer in 2008. He joined Kyocera Corporation in 1976 and has served
as a Managing Executive Officer and the Deputy General Manager of Corporate Communication Equipment
Group.
Yoshihiro Kano has served as a Director of Kyocera Corporation since 2009. He became an Executive Officer in2005. He joined Kyocera International, Inc. in 1980, transferred to Kyocera Corporation in 1991 and has served
as a Managing Executive Officer and the General Manager of Corporate Development Group.
Goro Yamaguchi has served as a Director of Kyocera Corporation since 2009. He became an Executive Officer
in 2003 and a Senior Executive Officer in 2005. He joined Kyocera Corporation in 1978 and has served as aManaging Executive Officer and the General Manager of Corporate Semiconductor Components 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.
Katsumi Komaguchi has served as a Director of Kyocera Corporation since 2009. He became an Executive
Officer in 2008. He joined Kyocera Corporation in 1986 and has served as a Managing Executive Officer and theRepresentative Director and President of Kyocera Mita Corporation.
Rodney N. Lanthorne has served as a Director of Kyocera Corporation since 1989. He became a Director in 1989,
a Managing Director in 1990 and a Senior Managing and Representative Director in 1999. He joined Kyocera
International, Inc. in 1979 and has served as Director and President of Kyocera International, Inc.
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, President andChief Executive Officer of AVX Corporation.
Yoshihiko Nishikawa has served as a Full-time Corporate Auditor of Kyocera Corporation since 2005. He
became a Director in 1995 and retired in 2003. He joined Kyocera Corporation in 1970.
Kokichi Ishibitsu has served as a Full-time Corporate Auditor of Kyocera Corporation since 2008. He became a
Director in 1991 and retired in 2000. He joined Kyocera Corporation in 1975.
Osamu Nishieda has served as a Corporate Auditor of Kyocera Corporation since 1993. He has served as an
In-House Council of Kyocera Corporation.
67

Kazuo Yoshida has served as a Corporate Auditor of Kyocera Corporation since 2008. He has served as Professor
at Kyoto University.
Yoshinari Hara has served as a Corporate Auditor of Kyocera Corporation since 2009. He has served as Chief
Corporate Adviser of Daiwa Securities Group Inc.
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 25, 2009.
Name

Position

Tetsuo Kuba . . . . . . . . . Executive Officer and President
Tatsumi Maeda . . . . . . . Executive Officer and Vice President(General Manager of Corporate Solar Energy Group and Corporate Electronic
Components Group)Hisao Hisaki . . . . . . . . . Senior Managing Executive Officer(Chairman of the Board and General Manager of Kyocera Tianjin Sales and Trading
Corporation)
Yasuyuki Yamamoto . . Managing Executive Officer(Deputy General Manager of Corporate Communication Equipment Group)
Yoshihiro Kano . . . . . . . Managing Executive Officer(General Manager of Corporate Development Group)
Goro Yamaguchi . . . . . . Managing Executive Officer(General Manager of Corporate Semiconductor Components Group)
Shoichi Aoki . . . . . . . . . Managing Executive Officer(General Manager of Corporate Financial & Accounting Group)
Katsumi Komaguchi . . . Managing Executive Officer(Representative Director and President of Kyocera Mita Corporation)
Hisashi Sakumi . . . . . . . Managing Executive Officer(General Manager of Corporate Environment Group)
Tsutomu Yamori . . . . . . Managing Executive Officer(General Manager of Corporate General Affairs Human Resources Group)
Akiyoshi Okamoto . . . . Managing Executive Officer(General Manager of Shanghai Kyocera Electronics Co., Ltd.)
Eiichi Toriyama . . . . . . Managing Executive Officer(Deputy General Manager of Corporate Communication Equipment Group (In chargeof Overseas Sales) and Representative Director and President of Kyocera
Communications, Inc.)
Osamu Nomoto . . . . . . . Senior Executive Officer(General Manager of Corporate Legal and Intellectual Property Group)
Keijiro Minami . . . . . . . Senior Executive Officer(General Manager of Corporate R&D Group for Components and Devices)
Yoshihito Ohta . . . . . . . Senior Executive Officer(General Manager of Corporate Office of the Chief Executives)
Takenori Ugari . . . . . . . Senior Executive Officer(Deputy General Manager of Corporate Communication Equipment Group)
68

Name

Position

Yasushi Matsumura . . . Executive Officer(Representative Director and Vice President of Kyocera Kinseki Corporation)
Junichi Jinno . . . . . . . . . Executive Officer(General Manager of Corporate R&D Group for Equipment and Systems)
Gen Takayasu . . . . . . . . Executive Officer(Deputy General Manager of Corporate Electronic Components Group)
Junzo Katsuki . . . . . . . . Executive Officer(Deputy General Manager of Corporate Communication Equipment Group (In chargeof Domestic Sales))
Masakazu Mitsuda . . . . Executive Officer(General Manager of Corporate Business Systems Administration Group)
Toshimi Gejima . . . . . . Executive Officer(General Manager of R&D Center Kagoshima, Corporate R&D Group for
Components and Devices)
Michiaki Furuhashi . . . . Executive Officer(General Manager of General Affairs Division, Corporate General Affairs Human
Resources Group)
Mitsuru Imanaka . . . . . . Executive Officer(Representative Director and President of Kyocera Fineceramics GmbH)
Yoichi Yamashita . . . . . Executive Officer(General Manager of Corporate Production Technology & Development Group)
Robert E. Whisler . . . . . Executive Officer(Director and President of Kyocera America Inc.)John S. Rigby . . . . . . . . Executive Officer(Director and President of Kyocera Industrial Ceramics Corporation)
Masaki Kozu . . . . . . . . . Executive Officer(General Manager of Corporate Education Group)
Hitoshi Takao . . . . . . . . Executive Officer(General Manager of Corporate Thin Film Components Group)
Yoshiharu Nakamura . . Executive Officer(Deputy General Manager of Dongguan Shilong Kyocera Optec Co., Ltd.)
Kazumasa Umemura . . . Executive Officer(General Manager of International Division, Corporate Office of the Chief
Executives)
Takafumi Matsuda . . . . Executive Officer(General Manager of Jewelry& Application Products Division)
Masaaki Itoh . . . . . . . . . Executive Officer(General Manager of Corporate Communications Division, Corporate General Affairs
Human Resources Group)
Masahisa Shimizu . . . . . Executive Officer(Deputy General Manager of Corporate 2nd Mobile Communication Equipment
Division, Corporate Communication Equipment Group)
Tsuyoshi Egami . . . . . . Executive Officer(Deputy General Manager of Corporate Mobile Communication Equipment Technical
Division, Corporate Communication Equipment Group)

69

Name

Position

Kouji Mae . . . . . . . . . . . Executive Officer(Representative Director and President of Kyocera SLC Technologies Corporation)
Motoo Kobayashi . . . . . Executive Officer
Representative Director and president of Kyocera Communication Systems Co., Ltd.)
Nobuo Kitamura . . . . . . Executive Officer(Deputy General Manager of Corporate Solar Energy Group)
Ken Ishii . . . . . . . . . . . . Executive Officer(General Manager of Corporate Cutting Tool Group)
Takeshi Oda . . . . . . . . . Executive Officer(General Manager of Corporate Mobile Communication Equipment Technical
Division, Corporate Communication Equipment Group)
B. Compensation
The aggregate amount of compensation, including bonuses, paid by Kyocera Corporation and its certain
subsidiaries in fiscal 2009 to all Directors, Corporate Auditors and Executive Officers of Kyocera Corporation
was ¥ 1,667 million ($ 17 million).
Under our prior remuneration system for Directors and Corporate Auditors, which was revised as explained
below, when a Director or Corporate Auditor retired, a proposal to pay a lump sum retirement allowance wassubmitted to the ordinary general meeting of shareholders for approval. After such approval, the amount to be
paid to each Director was considered and fixed by the Board of Directors, and the amount to be paid to each
Corporate Auditor was also consulted with and fixed by the Board of Corporate Auditors. The amount to be paid
to each Executive Officer is considered and fixed by the Board of Directors. Annual provisions were made in theaccounts of Kyocera Corporation for the estimated cost of the retirement allowance for Directors, Corporate
Auditors and Executive Officers. The annual provisions and costs charged to income for such retirement
allowance in fiscal 2009 were ¥ 163 million ($2 million).
Our remuneration system for Directors and Corporate Auditors was revised following the approval of such
revision by our shareholders at the general meeting of shareholders held on June 25, 2009. As revised, the abovementioned retirement allowances were abolished, and instead the Directors receive “basic remuneration,” theaggregate amount of which shall be no more than ¥ 400 million per year, and “bonuses,” the aggregate amount of
which shall not exceed the lower of 0.2% of the consolidated net income of Kyocera Corporation for the relevant
fiscal year and ¥ 300 million per year. For those Directors who also serve as employees of Kyocera Corporation,such basic remuneration and bonuses do not include any salaries for their services as employees. The Corporate
Auditors receive “basic remuneration,” the aggregate amount of which shall be no more than ¥ 100 million peryear, and will not receive bonuses.
We have neither disclosed to our shareholders nor otherwise made public any of the information specified in thisitem for individually named Directors, Executive Officers or Corporate Auditors.
C. Board Practices
In accordance with the requirements of the Corporation Act of Japan (the Corporation Act), our Articles ofIncorporation provide for not more than five Corporate Auditors. Corporate Auditors are elected at a general
meeting of shareholders, and their normal term of office is four years. However, Corporate Auditors may serve
any number of consecutive terms. At least half of the Corporate Auditors must be persons who have not been
Directors or employees of Kyocera Corporation or its subsidiaries (Outside Corporate Auditors). Corporate
Auditors form the Board of Corporate Auditors. Corporate Auditors are under a statutory duty to oversee theadministration of our affairs by the Directors, to examine our financial statements and business reports to be70submitted by the Board of Directors to the general meetings of shareholders and to report their opinions thereon
to the shareholders. They are obliged to attend meetings of the Board of Directors and to express their opinions,but they are not entitled to vote. Corporate Auditors also have a statutory duty to provide their report on the audit
report prepared by our independent certified public accountants to the Board of Corporate Auditors, which must
submit its audit report to the Board of Directors. The Board of Corporate Auditors will also determine mattersrelating to the duties of the Corporate Auditors, such as audit policy and methods of investigation of our affairs.
Under the Corporation Act, the Directors and Corporate Auditors are liable for any damages suffered by us as aresult 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 Corporate Auditors may, except in the case of willful
misconduct or gross negligence or in certain other cases, be limited by a liability limitation agreement enteredinto between the Outside Corporate Auditors and us, up to an amount to be calculated in accordance with therelevant provisions of the Corporation Act with reference to annual remuneration, retirement allowance andprofits received upon exercise or transfer 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. It is customary
to provide lump-sum severance benefits to Directors and Corporate Auditors upon retirement and we provide
such benefits in accordance with our internal regulations.
There is no arrangement or understanding between any Director or Corporate Auditor and any other person
pursuant to which he was elected as a Director or a Corporate Auditor.
There is no family relationship between any Director or Corporate Auditor and any other Director or Corporate
Auditor.
D. Employees
At March 31, 2009, Kyocera had 59,514 employees, of whom 3,213 worked in the Fine Ceramic Parts Group,
8,347 worked in the Semiconductor Parts Group, 6,170 worked in the Applied Ceramic Products Group, 17,718
worked in the Electronic Device Group, 4,782 worked in the Telecommunications Equipment Group, 12,775
worked in the Information Equipment Group, 4,879 worked for Others and 1,630 worked in Corporate.
Although the number of employees worked in the Telecommunications Equipment Group increased by 1,800 asa result of the acquisition of the mobile phone-related business from Sanyo, total number of employees worked in
the reporting segments other than the Telecommunications Equipment Group at March 31, 2009 decreased by
8,782 compared with those at March 31, 2008 due mainly to employee separations at subsidiaries outside Japan.
Kyocera Corporation had 13,973 employees, and their average age and average service years were 39.0 and 15.1
respectively.
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 three ofour subsidiaries in Japan are unionized. Employees at our Japanese subsidiaries are not otherwise unionized. Our
employees in the United States are generally unionized, and employees at some of our subsidiaries in othercountries are unionized as well. Employees of our overseas subsidiaries belong to industry-wide labor unions, as
opposed to a company-specific union like the Kyocera Union. Our relationship with our employee union groups
is generally good. However, no assurance can be given that, in response to changing economic conditions and theour actions, labor unrest or strikes will not occur.

71

E. Share Ownership
Kyocera’s Directors, Corporate Auditors and Executive Officers as of June 25, 2009 owned 932,068 shares ofKyocera Corporation in total (904,353 shares of common stock of Kyocera Corporation and 27,715 ADRs of
Kyocera Corporation), or 0.5% of the outstanding shares of Kyocera Corporation at March 31, 2009. The
numbers of shares owned by each Directors, Corporate Auditors and Executive Officers are shown in thefollowing table.
Name

Makoto Kawamura . . . . . . . . . . . . . . . . . . . . . .
Yuzo Yamamura . . . . . . . . . . . . . . . . . . . . . . . .
Tetsuo Kuba . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Tatsumi Maeda . . . . . . . . . . . . . . . . . . . . . . . . .
Hisao Hisaki . . . . . . . . . . . . . . . . . . . . . . . . . . .
YasuyukiYamamoto . . . . . . . . . . . . . . . . . . . . .
Yoshihiro Kano . . . . . . . . . . . . . . . . . . . . . . . . .
Goro Yamaguchi . . . . . . . . . . . . . . . . . . . . . . . .
Shoichi Aoki . . . . . . . . . . . . . . . . . . . . . . . . . . .
Katsumi Komaguchi . . . . . . . . . . . . . . . . . . . . .
Rodney N. Lanthorne . . . . . . . . . . . . . . . . . . . .
John S. Gilbertson . . . . . . . . . . . . . . . . . . . . . . .
Yoshihiko Nishikawa . . . . . . . . . . . . . . . . . . . .
Kokichi Ishibitsu . . . . . . . . . . . . . . . . . . . . . . . .
Osamu Nishieda . . . . . . . . . . . . . . . . . . . . . . . . .
Kazuo Yoshida . . . . . . . . . . . . . . . . . . . . . . . . .
Yoshinari Hara . . . . . . . . . . . . . . . . . . . . . . . . . .
Hisashi Sakumi . . . . . . . . . . . . . . . . . . . . . . . . .
Tsutomu Yamori . . . . . . . . . . . . . . . . . . . . . . . .
Akiyoshi Okamoto . . . . . . . . . . . . . . . . . . . . . . .
Eiichi Toriyama . . . . . . . . . . . . . . . . . . . . . . . . .
Osamu Nomoto . . . . . . . . . . . . . . . . . . . . . . . . .
Keijiro Minami . . . . . . . . . . . . . . . . . . . . . . . . .
Yoshihito Ota . . . . . . . . . . . . . . . . . . . . . . . . . . .
Takenori Ugari . . . . . . . . . . . . . . . . . . . . . . . . . .
Yasushi Matsumura . . . . . . . . . . . . . . . . . . . . . .
Junichi Jinno . . . . . . . . . . . . . . . . . . . . . . . . . . .
Gen Takayasu . . . . . . . . . . . . . . . . . . . . . . . . . .
Junzo Katsuki . . . . . . . . . . . . . . . . . . . . . . . . . .
Masakazu Mitsuda . . . . . . . . . . . . . . . . . . . . . . .
Toshimi Gejima . . . . . . . . . . . . . . . . . . . . . . . . .
Michiaki Furuhashi . . . . . . . . . . . . . . . . . . . . . .
Mitsuru Imanaka . . . . . . . . . . . . . . . . . . . . . . . .
Yoichi Yamashita . . . . . . . . . . . . . . . . . . . . . . .
Robert E. Whisler . . . . . . . . . . . . . . . . . . . . . . .
John S. Rigby . . . . . . . . . . . . . . . . . . . . . . . . . . .
Masaki Kozu . . . . . . . . . . . . . . . . . . . . . . . . . . .
Hitoshi Takao . . . . . . . . . . . . . . . . . . . . . . . . . .
Yoshiharu Nakamura . . . . . . . . . . . . . . . . . . . . .
Kazumasa Umemura . . . . . . . . . . . . . . . . . . . . .
Takafumi Matsuda . . . . . . . . . . . . . . . . . . . . . . .
Masaaki Itoh . . . . . . . . . . . . . . . . . . . . . . . . . . .
Masahisa Shimizu . . . . . . . . . . . . . . . . . . . . . . .

Title

Number of Shares

Representative Director and Chairman
Representative Director and Vice Chairman
Representative Director and President
Representative Director and Vice President
Director
Director
Director
Director
Director
Director
Director
Director
Full-time Corporate Auditor
Full-time Corporate Auditor
Corporate Auditor
Corporate Auditor
Corporate Auditor
Managing Executive Officer
Managing Executive Officer
Managing Executive Officer
Managing Executive Officer
Senior Executive Officer
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

3,000
82,000
2,000
1,140
5,171
259
199
7,178
1,085
1,923
3,628 (ADR)
18,867 (ADR)
2,222
1,923
736,086
36
—
9,000
2,898
5,262
3,398
2,544
1,099
3,599
164
1,699
—
1,200
1,198
1,699
1,480
9,406
1,100
199
4,539 (ADR)
681 (ADR)
1,982
160
1,246
82
918
246
87

72

Name

Title

Tsuyoshi Egami . . . . . . . . . . . . . . . . . . . . . . . . .
Kouji Mae . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Motoo Kobayashi . . . . . . . . . . . . . . . . . . . . . . .
Nobuo Kitamura . . . . . . . . . . . . . . . . . . . . . . . .
Ken Ishii . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Takeshi Oda . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Number of Shares

Executive Officer
Executive Officer
Executive Officer
Executive Officer
Executive Officer
Executive Officer

16
5,200
1,699
175
2,007
368

Stock Option Plans
Previously, Kyocera provided three stock option plans for its Directors, Corporate Auditors, Corporate Executive
Officers and certain key employees. The exercise periods for stock options under these plans all ended on
September 30, 2008.
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 stockholders of record of Kyocera Corporation at March 31, 2009.
Name

State Street Bank and Trust Company(Standing proxy: Mizuho Corporate Bank, Ltd.) . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Japan Trustee Services Bank, Ltd.
(Trust Account) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
The Master Trust Bank of Japan, Ltd.
(Trust Account) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Japan Trustee Services Bank, Ltd.
(Trust Account 4G) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Kyocera Corporation . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
The Bank of Kyoto, Ltd. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Kazuo Inamori . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
The Bank of Tokyo-Mitsubishi UFJ, Ltd. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
The Inamori Foundation . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Citibank As Depositary Bank For Depositary Receipt Holders(Standing proxy: The Bank of Tokyo- Mitsubishi UFJ, Ltd.) . . . . . . . . . . . . . . . . . . .
Total . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Shares owned(in thousands)

Ownership(%)

13,587

7.10

12,495

6.53

11,855

6.20

9,763
7,781
7,218
6,806
5,076
4,680

5.10
4.07
3.77
3.56
2.65
2.45

3,839
83,101

2.01
43.44

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, Mitsubishi UFJ
Financial Group, Inc. and its related partners informed us that it became a holder of over 5% of the total issued
73

voting shares of Kyocera Corporation on January 9, 2009 as follows. However, they are not included in the above
major shareholders because we do not identify them as a single holder on our shareholders record as ofMarch 31, 2009. None of them has voting rights that are different from those of other shareholders.
Name

Mitsubishi UFJ Financial Group, Inc. and its
related partners . . . . . . . . . . . . . . . . . . . . . . . . . .

Shares owned

Holding 11,208 thousand shares
as of December 29, 2008

Ownership
(%)

5.86

Dodge & Cox and its related partners also informed us that they became a holder of over 5% of the total issued
voting shares of Kyocera Corporation on June 4, 2009 as follows. However, they are not included in the above
major shareholders because we do not identify them as a single holder on our shareholders record as ofMarch 31, 2009. None of them has voting rights that are different from those of other shareholders.
Name

Dodge & Cox . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Shares owned

Holding 9,977 thousand shares
as of May 29, 2009

Ownership
(%)

5.22

According to Citibank N.A., depositary for Kyocera’s ADSs, as of March 31, 2009, 6,902,780 shares ofKyocera’s common stock were held in the form of ADSs and there were 793 ADS holders of record in the UnitedStates. According to Kyocera’s register of shareholders, as of March 31, 2009, there were 65,582 holders ofKyocera’s common stock of record worldwide. As of March 31, 2009, there were 130 record holders ofKyocera’s common stock with addresses in the United States, holding 32,900,756 shares of the outstanding
common stock on that date. Because some of these shares were held by brokers or other nominees, the number ofrecord 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 and Related Party Transactions
In fiscal 2009, Kyocera’s sales to KDDI Corporation amounted to ¥127,225 million ($1,285 million), or 11.3%
of consolidated net sales.
KDDI Corporation provides telecommunication services, and Kyocera sells mainly telecommunicationequipment to KDDI Corporation. Kyocera Corporation made an equity investment in KDDI Corporation when it
was founded, and currently a director of Kyocera Corporation is a director of KDDI Corporation. At March 31,
2009, 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 productdistribution. All of the agreements and ongoing contractual commitments between Kyocera and KDDI
Corporation have been made on an arm’s-length basis. Kyocera expects that KDDI Corporation will remain asignificant customer in the future.
For information regarding related party transactions with WILLCOM, Inc., an affiliate company of Kyocera, seenote 7 to the Consolidated financial Statements in this annual report on Form 20-F.
C. Interests of Experts and Counsel
Not Applicable.

74

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-3 of this annual report on Form 20-F.
Dividend 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 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. In addition, Kyocera determines dividend amounts based on an overall assessment, taking into
account various factors including the amount of capital expenditures necessary for medium to long-term
corporate growth.
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 year-end
dividend, Kyocera may pay an interim dividend by resolution of its board of directors and without shareholder
approval.
Kyocera also has adopted policies to ensure a sound financial basis, and, for such purpose, it sets aside othergeneral reserves in preparation for the creation of 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 fiscal 2009 and pursuant to the aforementioned policies, Kyocera distributed a
year-end dividend in the amount of 60 yen per share for the year ended March 31, 2009. When aggregated with
the interim dividend in the amount of 60 yen per share, the total annual dividend was 120 yen per share, the sameamount as fiscal 2008.
We held a board of directors meeting for the interim dividend on October 30, 2008.
B. Significant Changes
Except as disclosed in this annual report on Form 20-F, there have been no significant changes since March 31,
2009.
Item 9.

The Offer and Listing

A. Offering 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.

75

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

2005 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
2006 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
2007 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
2008 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
2009 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

¥ 9,630
10,83011,59013,39010,940¥7,080
7,090
8,180
7,760
4,330

$ 90.90
91.59
98.01
110.01100.78$67.81
62.58
71.73
73.09
45.41

High

Low

High

Low

¥ 6,720
7,360
6,420
7,090
7,640
8,170

¥5,430
5,600
5,620
5,310
6,320
7,180

$ 74.64
76.61
69.77
72.45
78.80
82.03

$57.38
62.77
57.78
52.98
64.91
75.71

Most Recent 6 months

December 2008 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
January 2009 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
February 2009 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
March 2009 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
April 2009 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
May 2009 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

* 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.
The following table shows the information about high and low sales prices for each quarterly period in fiscal
2008 and 2009 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
2008
1st

2nd

3rd

4th

Common Stock:Market price per share (A) . . . . . . . . . . . . . . . . . . . . . . . .

—High ¥13,180 ¥13,390 ¥11,190 ¥9,560—Low 10,970
9,930
9,300
7,760
Cash dividends paid per share . . . . . . . . . . . . . . . . . . . . . .
60.00
—
60.00
—

American Depositary Share:
Market price per share (B) . . . . . . . . . . . . . . . . . . . . . . . .

—High $108.00 $110.01 $ 95.97 $89.97
—Low
94.07
87.16
81.00
73.09
Cash dividends paid per share (C) . . . . . . . . . . . . . . . . . . .
0.48
—
0.54
—
2009

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

1st

2nd

3rd

4th

¥10,940
8,180
60¥10,080
7,650—¥ 8,090
4,330
60¥7,3605,310—

American Depositary Share:
Market price per share (B) . . . . . . . . . . . . . . . . . . . . . . . .

—High $100.78 $ 94.09 $ 76.16 $76.61
—Low
82.23
72.86
45.41
52.98
Cash dividends paid per share (C) . . . . . . . . . . . . . . . . . . .
0.56
—
0.64
—

(A) Price on the Tokyo Stock Exchange(B) Price on the New York Stock Exchange(C) Translated into U.S. dollars based on the exchange rates at each payment date76

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.
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 Corporation 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 Corporation
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;77

(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) Manufacture and sale of and research on optical machinery and instruments and precision machinery andinstruments and parts hereof;(14) Manufacture and sale of and research on machinery and equipment for business use and machinery andequipment for industrial use and parts thereof;(15) Manufacture and sale of and research on photosensitive materials for photographic use;(16) Design, control and contract of construction relating to public works, building, electric equipment andpiping construction;(17) Sale, purchase, lease, maintenance and brokerage of real estate;(18) Lease, maintenance and management of facilities relating to sports, recreation, medical care, hotels andrestaurants, and the travel agency business;(19) Road freight handling and warehousing;(20) Business relating to non-life insurance agency and life insurance canvassing, and general leasing, factoring
and finance business;(21) Sale and purchase of various kinds of plants and technology related thereto;(22) Design and sale of software relating to computers;(23) Disposition through sale and the like and acquisition through purchase and the like of patents and otherindustrial property rights and know-how appertaining to the preceding items and acting as intermediary insuch transactions;(24) Businesses relating to import and export of any of the foregoing items; and(25) All commercial activities relating or incidental to any of the foregoing.
Directors
Under the Corporation 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
Corporation Act and the Regulations of the Board of Directors of Kyocera Corporation, the Directors mustrefrain from engaging in any business competing with Kyocera Corporation unless approved by the Board of
Directors and any 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 Corporation Act and the Articles of Incorporation of
Kyocera Corporation provide that remuneration of Directors and Corporate Auditors shall be determined at a
general meeting of shareholders.
Except as stated below, neither the Corporation Act nor Kyocera Corporation’s Articles of Incorporation makeany special provision as to a Director’s or Corporate Auditor’s power to vote in connection with theircompensation; or the borrowing powers exercisable by a Representative Director (or a Director who is given
power by a Representative Director to exercise such powers), their retirement age or requirement to hold any
shares of capital stock of Kyocera Corporation.
78

The Corporation 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; allocate remuneration andbonuses of Directors as previously determined or approved by the general meeting of shareholders; or determine
the amount and manner of payment of retirement allowances or condolence money payable to Directors,
determination of which has been previously entrusted to the Board of Directors by the general meeting ofshareholders.
Capital Stock
GeneralOn January 5, 2009, a new central clearing system for shares of Japanese listed companies was establishedpursuant to the Law Concerning Book-Entry Transfer of Corporate Bonds, Shares, etc. (including regulations
promulgated thereunder, the Book-Entry Law), and the shares of all Japanese companies listed on any Japanesestock exchange, including Kyocera Corporation’s shares, became subject to this new 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 new clearing system, in order for any person to hold, sell or otherwise
dispose of 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 management institution. The holder of an account at an account management institution is presumed tobe the legal owner of the shares held in such account.
Under the Corporation Act of Japan 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 ofKyocera 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 accountmanaging institution. Such notice will be forwarded to us through JASDEC. Japanese securities companies andcommercial 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.
79The registered beneficial 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 Corporation 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;(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 Corporation 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 Corporation 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 third business
day prior to the record date.
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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)
“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
non-consolidated balance sheet as of the end of the last fiscal year) all or certain part of such exceeding amountas calculated 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.
81

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 Corporation Act) by a general
meeting of shareholders, then the Distributable Amount must be adjusted to take into account the amount of profit
or loss, and the amount of consideration for any of its treasury stock disposed of by it, during the period in respectof which such interim financial statements have been prepared. Kyocera Corporation may prepare non-consolidated
interim financial statements consisting of a balance sheet as of any date subsequent to the end of the last fiscal year
and an income statement for the period from the first day of the current fiscal year to the date of such balance sheet.
Interim financial statements so prepared by Kyocera Corporation must be audited by its Corporate Auditors andindependent certified public accountants, as required by ordinances of 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 resident proxy or mailingaddress thereof in Japan) at least two weeks prior to the date set for the meeting. Under the Corporation 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 Corporation Act and Kyocera Corporation’s Articles of Incorporation, however, thequorum for the election of Directors and Corporate Auditors is one-third of the total number of voting 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 by electronic means if
the Board of Directors approves such method of exercising voting rights.
The Corporation Act provides that certain important matters shall be approved by a “special resolution” of a general
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 the voting 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;
82

(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 Corporate Auditor;(vi) exemption from a portion of liability of Kyocera Corporation’s Directors, Corporate Auditors 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 Corporation Act);(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 Corporation 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 convene a general
meeting of shareholders, to propose a matter to be considered at a general meeting of shareholders, and to bringderivative actions, depending upon the number of shares held by them and the duration of 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 Daiko Clearing Services Corporation. Daiko Clearing Services
Corporation maintains Kyocera Corporation’s register of shareholders and registers the names and addresses ofKyocera Corporation’s shareholders and other relevant information in Kyocera Corporation’s register ofshareholders upon notice thereof from JASDEC, as described in (“—Record date”)
83Record date
March 31 is the record date for the determination of shareholders entitled to receive Kyocera Corporation’s
year-end 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 toother rights and for other 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.
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 Corporation 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
is permitted to reduce the number of shares constituting a unit or to abolish the unit share system in its entirety by84

amending Kyocera Corporation’s Articles of Incorporation without approval by shareholders. The number ofshares constituting one unit may not exceed the lesser of 1,000 and one-two hundredth of the total number ofissued shares.
Under the new clearing system, shares constituting less than one unit are transferable. However, because sharesconstituting less than one unit do not comprise a trading unit, 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 Corporation Act or an ordinance of the Ministry of Justice, including the right toreceive distribution of Surplus.
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 new clearing system, such request must be made throughthe relevant 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.
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, and85

except for general limitations under the Corporation 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. Althoughtransactions 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.
On June 26, 2009, the closing price of our shares of Common Stock on the Tokyo Stock Exchange was ¥7,340
per share. The following table shows the daily price limit for a stock on the Tokyo Stock Exchange with a closing
price of between ¥5,000 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 ¥20,000, or fall to between ¥3,000 and ¥5,000. 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 ¥3,000 Less than ¥5,000 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Over ¥5,000 Less than ¥10,000 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Over ¥10,000 Less than ¥20,000 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

¥ 500¥1,000¥2,000For 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
During the preceding two years we have not entered into any material contracts, other than in the ordinary courseof business.
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.

86

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. These statements
are subject to changes in the applicable Japanese laws or double taxation conventions occurring after that date.
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,•

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 not having a “permanent establishment” in Japan. A “permanentestablishment” in Japan is generally a fixed place of business for industrial or commercial activity inJapan. Under the Treaty, the maximum withholding rate for most qualified portfolio shareholders islimited to 10% of the gross amount of the dividends and 5% of the gross amount of the dividends if thebeneficial 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 more than 50%) of the voting stock of
the issuing company. The Treaty provides that no Japanese tax will be imposed on dividends paid to aqualified pension fund that is a United States resident, if such dividends are not derived from thecarrying on of a business, directly or indirectly, by such pension 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, Australia, Belgium, Canada, Denmark,Finland, Germany, Ireland, Italy, Luxembourg, the Netherlands, New Zealand, Norway, Singapore, Spain,
Sweden and Switzerland. Japan’s income tax treaties with France and the United Kingdom have recently been
amended to reduce the maximum withholding tax rate to 10%. In principle, the rate of Japanese withholding tax
applicable to dividends paid by Kyocera Corporation to non-residents or non-Japanese corporations is 20%.
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
5% or more 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, 2011 and (ii) 15% fordividends due and payable on or after January 1, 2012. 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 beapplicable.
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 from87

the sale of shares or ADSs within Japan by a non-resident of Japan or non-Japanese corporation not having apermanent 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.
United States Taxation
The following discusses United States federal income tax consequences of the ownership of shares or ADSs. It
only applies to U.S. holders (as defined below) who hold their shares or ADSs as capital assets. It does notaddress special classes of holders, some of whom may be subject to special rules including:•tax-exempt entities,•

certain insurance companies,•

broker-dealers,•

traders in securities that elect to use a mark-to-market method of accounting for securities holdings,•

investors liable for alternative minimum tax,•

investors that hold shares or ADSs as part of a straddle or a hedging or conversion transaction,•

investors whose functional currency is not the U.S. dollar, or•investors that actually or constructively own 10% or more of Kyocera Corporation’s voting stock.

This discussion is based on the tax laws of the United States, including the Internal Revenue Code of 1986, as
amended, its legislative history, existing and proposed regulations 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.
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.
88

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 paid in taxable years beginningbefore January 1, 2011 that constitute qualified dividend income will be taxable at a maximum rate of 15%
provided that the shares or ADSs are held for more than 60 days during the 121-day period beginning 60 days
before the ex-dividend 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 must be included in income when the investor, in the case of shares, or the depositary, in the caseof 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 U.S. dollars. Generally, any gain or loss resulting from currency exchange fluctuations during theperiod from the date the investor includes the dividend payment in income to the date it converts the payment
into 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 maximum 15% tax rate. 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. Please see “Japanese Taxation,” above, for the procedures for obtaining a tax refund.
Dividends will constitute income from sources outside the United States. Dividends will, depending on theinvestor’s circumstances, generally be either “passive” or “general” income for purposes of computing theforeign 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 that isrecognized in taxable years beginning before January 1, 2011 is generally taxed at a maximum rate of 15% 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.
89

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.

The special PFIC tax rules described above will not apply to the investor if it makes a QEF election, that is, if theinvestor elects to have Kyocera Corporation treated as a qualified electing fund and Kyocera Corporation
provides certain required information to the investor. Kyocera Corporation does not intend to provide U.S.
holders with such information as may be required to make a QEF election effective.
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 will90

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.
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 amark-to-market 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 for which the mark-to-market election applies. Dividends that the investor receives that do not constitutequalified dividend income are not eligible for taxation at the 15% maximum rate applicable to qualified dividend
income. Instead, the investor must include the gross amount of any such dividend paid by Kyocera Corporationout of our accumulated earnings and profits (as determined for United States federal income tax purposes) in its
gross income, 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 must file Internal Revenue Service Form 8621.
F. Dividends and Paying Agents
Not Applicable.
G. Statement by Experts
Not Applicable.
H. Documents on Display
We are subject to the informational requirements of the Securities Exchange Act of 1934 and, in accordance
therewith, we will file annual reports on Form 20-F within six months of our fiscal year-end and other reports
and information on Form 6-K with the Securities and Exchange Commission. These reports and otherinformation 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 prescribing the furnishing and content of proxy statements toshareholders.
I. Subsidiary Information
Not Applicable.

91

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. In the normal course of business,
Kyocera also faces other risks such as country risk, credit risk, or legal risk, but they are not represented in thefollowing tables.
Foreign Currency Exchange Risk
Kyocera enters into foreign currency forward contracts and currency swap contracts to hedge certain existing
assets and liabilities denominated in foreign currencies, principally the U.S. dollar and the Euro. All suchcontracts currently in effect will generally mature within four months. The following tables provide information
about Kyocera’s major foreign currency forward contracts and currency swap contracts existing at March 31,
2009, which include hedge accounting setting forth the contract amounts, fair value, weighted average exchange
rates and currency swap contracts. 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)
Euro/Yen
US$/YenCZK/STG(Yen in millions)Contract amounts . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Fair value . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Weighted average contractual rates . . . . . . . . . . . . . . . . . . . . . . . . .

¥45,604(2,629)0.008

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

¥ 5,239(238)
94.556

Currency swaps

Contract amounts . . . . . . . . . . . . . . . . .
Swap rates . . . . . . . . . . . . . . . . . . . . . . .

2010¥27,001
(845)
0.011

¥ 4,934(22)
29.419(S$ Receive/THB Pay)
Expected maturity date
2011
2012
2013
2014
Thereafter(Yen in millions)

¥ 52
50
49
47
46
0.039 0.039 0.040 0.041 0.041

87
0.042

¥ 4,934(1)
29.558¥ 4,900
(0)
0.049

Total

Fair value¥331—¥ (10)—

Forward exchange contracts to sell foreign currencies(Pay/Receive)
Euro/Yen
US$/YenCZK/STG(U.S. dollars in thousands)

Contract amounts . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Fair value . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

$460,646(26,556)

Forward exchange contracts to purchase foreign currencies(Receive/Pay)
Yen/US$CZK/STG
US$/CZK(U.S. dollars in thousands)

Contract amounts . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Fair value . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

$52,919(2,404)92$272,737(8,535)$49,838(222)$49,838(10)$49,495(0)Currency swaps

2010

2011

Contract amounts . . . . . . . . . . . . . . .

$525

505

(S$ Receive/THB Pay)
Expected maturity date
2012
2013
2014
Thereafter(U.S. dollars in thousands)

495

475

465

879

Total

Fair value$3,344$(101)

Interest Rate Risk
Kyocera may enter into interest rate swaps and other contracts to reduce market risk exposure to changes ininterest rates. The tables below provide information about Kyocera’s financial instruments that are sensitive tochanges in interest rates.
Expected maturity date
2011
2012
2013
2014
(Yen in millions)Long term debt(including due within one year)

Averagepay rate

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

5.09% ¥13,865 10,827 7,304 6,029 2,434

2010

Thereafter

1,944

Total

Fair value¥42,403 ¥42,611

Interest rate swaps
Notional
Averageprincipal
receiveamounts
rate(Variable to Fixed)

650

Averagepay rate

2010

2011

4.42%

¥—

—

4.46%

Expected maturity date
2012
2013
2014
Thereafter(Yen in millions)

—

650

—

Total

Fair value

—

¥650

¥(49)

Thereafter

Total

Fair value—¥2,275¥0Interest rate caps
Expected maturity date
Contract
Amounts

Premium
Paid

Average
Pay Rate

2010

2011

2012
2013
2014
(Yen in millions)

2,275

16

4.41%

¥1,625

650

—

—

—

Expected maturity date
2012
2013
2014 Thereafter(U.S. dollars in thousands)Long term debt(including due within one year)

Averagepay rate

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

5.09% $140,051 109,364 73,778 60,899 24,586 19,636 $428,314 $430,414

2010

2011

Total

Fair value

Interest rate swaps
Notional
Averageprincipal
receiveamounts
Rate(Variable to Fixed)

6,565

4.46%

Average
Pay Rate

2010

2011

Expected maturity date
2012
2013
2014
Thereafter(U.S. dollars in thousands)

Total

Fair value

4.42%

$—

—

—

—

$6,565$(495)

Thereafter

Total

Fair value—$22,980$0Contract
amounts

Premium
Paid

Average
Pay Rate

2010

22,980162

4.41%$16,4146,565—Interest rate caps
Expected maturity date
2011
2012
2013
2014
(U.S. dollars in thousands)

6,566

—

—

—

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,93net of taxes, as a separate component of stockholders’ equity. Gross unrealized gains on marketable equity
securities, which were ¥22,099 million ($223 million), included ¥15,540 million ($157 million) derived fromunrealized gain of KDDI Corporation held by Kyocera. Detailed information appears in Note 4 to theConsolidated Financial Statements included in this annual report on Form 20-F. Kyocera evaluates whether
declines in fair value of debt and equity securities with readily determinable fair values are other-than-temporary.
Other-than-temporary declines in fair value are recorded as a realized loss with a new cost basis. This evaluation
is based mainly on the duration and the extent to which the fair value is less than cost and the anticipated
recoverability of fair value in the future. Other-than-temporary loss on debt and equity securities with readily
determinable fair values for the years ended March 31, 2007, 2008 and 2009 amounted to ¥797 million,¥174 million and ¥6,875 million ($69 million), respectively. At March 31, 2009, Kyocera held the following
available-for-sale marketable equity and debt securities.
March 31, 2009
Cost
Fair Value
Cost
Fair Value(Yen in millions and U.S. dollars in thousands)

Due within 1 year . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Due after 1 year to 5 years . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Due after 5 years . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Equity securities . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Item 12.

¥

5,306
9,423
2,871
270,156

¥

5,097
8,945
2,537
291,137$

53,596
95,181
29,0002,728,849$¥287,756¥307,716$2,906,626$3,108,243

Description of Securities Other Than Equity Securities

Not Applicable.

94

51,48590,35425,6262,940,778

PART II
Item 13.

Defaults, Dividend Arrearages and Delinquencies

None.
Item 14.

Material Modification to Rights of Security Holders and Use of Proceeds

None.
Item 15.

Controls and Procedures

Evaluation of Disclosure Controls and Procedures
Kyocera’s management, with the participation of its principal executive and principal financial officers,
evaluated the effectiveness of Kyocera’s disclosure controls and procedures (as defined in Rules 13a-15(e) under
the U.S. Securities Exchange Act of 1934) as of March 31, 2009. Based on that evaluation, Kyocera’s principal
executive and principal financial officers concluded that the disclosure controls and procedures were effective asof 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). Because of its inherent
limitations, internal control over financial reporting may not prevent or detect misstatements. Also, projections ofany 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 issued by the Committee of Sponsoring Organizations of the Treadway
Commission (COSO). Based on this evaluation, Kyocera’s management concluded that Kyocera’s internal
control over financial reporting was effective as of March 31, 2009. Kyocera’s independent registered public
accounting firm, Kyoto Audit Corporation , has audited the effectiveness of Kyocera’s internal control overfinancial reporting as of March 31, 2009, as stated in their report which appears on page F-1 of this annual reporton Form 20-F.
Kyocera’s management has excluded TA Triumph Adler AG (TAAG) in Germany and its subsidiaries from its
assessment of internal control over financial reporting as of March 31, 2009. Kyocera Mita Corporation, oursubsidiary, consolidated TAAG from January 21, 2009. Total assets of TAAG and its subsidiaries as ofMarch 31, 2009 and its total revenues for the period from January 21, 2009 through March 31, 2009 represent
approximately 5% and less than 1%, respectively, of the related consolidated financial statement amounts ofKyocera as of and for the year ended March 31, 2009.
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, 2009. Based on that evaluation, there was no change in Kyocera’s internal control over financial
reporting that occurred during the year ended March 31, 2009 that materially affected, or is reasonably likely tomaterially affect, Kyocera’s internal control over financial reporting.

95

Item 16A. Audit Committee Financial Expert
The Board of Corporate Auditors 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 Board of Corporate Auditors after thegeneral shareholders’ meeting on June 25, 2009. Previously, Mr. Shigekazu Tamura, who retired as a Corporate
Auditor on June 25, 2009, qualified as an “audit committee financial expert.” Candidates to replace him and one
other Corporate Auditors who were elected as Corporate Auditor at the general shareholders’ meeting on
June 25, 2009, had been selected on the basis of their meeting the requirements for a corporate auditor under the
Corporation Act of Japan. We were unable to find a candidate who also met the requirements for an “audit
committee financial expert” as specified by Item 16A of Form 20-F in time for the general shareholders’meeting. We believe, however, that the combined knowledge, skills and experience of the current Corporate
Auditors enable them, as 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 Corporate Auditors have the power and authority toengage outside experts, including those who have the attributes described in Item 16A(b) of Form 20-F, as they
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
Kyoto Audit Corporation served as our independent registered public accounting firm for fiscal 2008 and fiscal
2009 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 rendered by Kyoto
Audit Corporation, a cooperating firm of PricewaterhouseCoopers, and member firms ofPricewaterhouseCoopers to Kyocera in fiscal 2008 and fiscal 2009.
Years ended March 31,
2008
2009
2009
(Yen in millions andU.S. dollars in thousands)

Audit Fees (1) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Audit-related Fees (2) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Tax Fees (3) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
All Other Fees (4) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

¥1,6379479
18¥1,46093306
9$14,748
939
3,091
91

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

¥2,143¥1,868$18,869(1) Amounts represent fees for the annual audit of Kyocera for fiscal 2008 and fiscal 2009, reviews ofKyocera’s financial statements for interim periods, other regulatory filings in fiscal 2008 and fiscal 2009
and the statutory audit of internal control over financial reporting for fiscal 2008 and fiscal 2009.
(2) Amounts primarily represent fees for other procedures related to documents filed with the SEC andconsultations concerning financial accounting and reporting standards in fiscal 2008 and fiscal 2009.
Amounts for fiscal 2009 also included due diligence services concerning business combinations.
(3) Amounts represent fees for tax services performed by the tax department of the independent registeredpublic accounting firm other than financial audit and international tax compliance in fiscal 2008 and fiscal
2009.
(4) All other fees for fiscal 2008 included fees for advisory assurance service of the preparation of Kyocera’s
sustainability report, which was made once every two years.
96Policies and Procedures of the Board of Corporate Auditors
In accordance with the regulations of the Securities and Exchange Commission issued pursuant to Sections 202
and 208 of the Sarbanes-Oxley Act of 2002, our Board of Corporate Auditors has adopted a pre-approval policy
regarding non-audit work performed by Kyoto Audit Corporation and by member firms of thePricewaterhouseCoopers network for Kyocera and its subsidiaries, other than such 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 pre-approval procedures, “General
Pre-Approval” and “Specific Pre-Approval.”
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 Board of Corporate Auditors 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 Board of Corporate Auditors includes these services in a
“General Pre-Approved List.” In addition, our Board of Corporate Auditors 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 Board of Corporate Auditors for such services. After reviewing the details and estimated fee levels
for each engagement, Kyocera’s Board of Corporate Auditors may make a specific pre-approval decision onthese services. Also, if any approved services in the General Pre-Approved List exceed the fee levels prescribedon the List, each of Kyocera group companies (other than AVX Corporation) must submit an application to
Kyocera’s Board of Corporate Auditors for new fee levels for such services. Kyocera’s Board of Corporate
Auditors may make a pre-approval decision after reviewing the details of the services and the estimated fee
levels for each engagement.
All of the services provided by Kyoto Audit Corporation, a cooperating firms of PricewaterhouseCoopers, or bymember firm of PricewaterhouseCoopers network since Rule 2-01(c)(7) of Regulation S-X became effective
were approved by Kyocera’s Board of Corporate Auditors pursuant to the pre-approval policy described above,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. Exemption 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 boards of corporate auditors meeting certain requirements. For a New York Stock Exchangelisted Japanese company with a board of corporate auditors, the requirements for relying on paragraph (c)(3) ofRule 10A-3 are as follows:(a) The board of corporate auditors 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 corporate auditors.
(b) Japanese law must and does require the board of corporate auditors to be separate from the board of
directors.
(c) None of the members of the board of corporate auditors is elected by management, and none of thelisted company’s executive officers is a member of the board of corporate auditors.
(d) Japanese law must and does set forth standards for the independence of all members of the board ofcorporate auditors from the listed company or its management. Also, under Japanese law, at least halfof a company’s corporate auditors must be “outside” corporate auditors, to whom additional
independence requirements apply.
97

(e) The board of corporate auditors, 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.
(f)

To the extent permitted by Japanese law:•

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

the board of corporate auditors 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 board of corporate
auditors, 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 board of corporate auditors, and(iii) ordinary administrative expenses of the board of corporate auditors that are necessary or
appropriate in carrying out its duties.

In our assessment, our Board of Corporate Auditors, 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. Purchase 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.

Period(c) Total Number of
Shares (or Units)
Purchased as Part of
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(a) Total
Number of
Shares(or Units)
Purchased(b) Average
Price Paid
per Share(or Unit)

1,579
1,082
1,229
7,601
3,072

¥ 8,566.47
9,660.06
10,445.23
9,524.40
9,284.98

—
—
—
—
—

—
—
—
—
—

April 1 to April 30, 2008 . . . . . . . . . .
May 1 to May 31, 2008 . . . . . . . . . . .
June 1 to June 30, 2008 . . . . . . . . . . .
July 1 to July 31, 2008 . . . . . . . . . . . .
August 1 to August 31, 2008 . . . . . . .
September 1 to September 30,
2008 . . . . . . . . . . . . . . . . . . . . . . . .
October 1 to October 31, 2008 . . . . . .
November 1 to November 30,
2008 . . . . . . . . . . . . . . . . . . . . . . . .
December 1 to December 31, 2008 . .
January 1 to January 31, 2009 . . . . . .
February 1 to February 28, 2009 . . . .
March 1 to March 31, 2009 . . . . . . . .

1,970
994

8,591.19
6,636.47————

216,272
6,045,344
138
1,678
2,197

5,936.00
6,078.97
6,159.57
6,012.38
5,923.83

215,200
6,040,800
—
—
—

—
—
—
—
—

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

6,283,156

6,082.68

6,256,000—98

(1) A resolution approved at the meeting of our board of directors held on November 27, 2008 authorized
Kyocera to acquire up to 8,000,000 shares with an aggregate purchase price of ¥38,000 million ($ 384
million) during the period from November 28, 2008 to December 22, 2008.
(2) As of December 24, 2008, Kyocera had completed the share repurchase plans or programs listed above.
(3) Under the Corporation Act, a holder of shares constituting less than one full unit may request Kyocera topurchase such shares at their market value. Except the purchase of 6,256,000 shares, purchases described in
the above table were made pursuant to such requests by shareholders. As to “unit share system,” seeMemorandum and Articles of Association—Capital stock—in “Item 10. Additional Information.”
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 a board of corporate auditors, theCorporation Act of Japan (the Corporation Act) has
no independence requirement with respect todirectors. The task of overseeing management andindependent auditors is assigned to the corporate
auditors, who are separate from Kyocera
Corporation’s management. All Corporate auditors
must meet certain independence requirements under
the Corporation Act.
For large Japanese companies with a board ofcorporate auditors, including Kyocera Corporation,
half or more of the members of such board must be“outside” corporate auditors. Such “outside”
corporate auditors must meet additional
independence requirements under the Corporation
Act. An “outside” corporate auditor means acorporate auditor who has not served as a director,
manager or other employee of Kyocera Corporationor any of its subsidiaries previously.
As of March 31, 2009, Kyocera Corporation had fivecorporate auditors, of whom three were outside
corporate auditors.
99

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 a board of corporate
auditors as described above. Under this system, theboard of corporate auditors is a legally separate andindependent body from the board of directors. The
function of the board of corporate auditors is similar
to that of members of the audit committee of a U.S.
company: to audit the performance of the directors,
and review and express opinions on the method ofauditing by Kyocera Corporation’s independent
auditors and on such independent auditors’ audit
reports, for the protection of Kyocera Corporation’sshareholders.
Kyocera Corporation and other large Japanesecompanies, other than those which adopt a committee
system under the Corporation Act or which adopt
restrictions on share transfer, are required to have atleast three corporate auditors. As of March 31, 2008,
Kyocera Corporation had five corporate auditors.
Each corporate auditor serves a four-year term ofoffice. In contrast, the term of office of each directorof Kyocera Corporation is two years.
With respect to the requirements of Rule 10A-3
under the U.S. Securities Exchange Act of 1934
relating to listed company audit committees, Kyocera
Corporation relies on an exemption under that rule
which is available to foreign private issuers withboards of corporate auditors meeting certain
requirements.

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

100

Kyocera Corporation’s directors are elected at a
general meeting of shareholders. Its board of
directors does not have the power to fill vacancies
thereon. Kyocera Corporation’s corporate auditors
are also elected at a general meeting of shareholders.
A proposal by Kyocera Corporation’s board of
directors to elect a corporate auditor must be
approved by a resolution of its board of corporate
auditors. The board of corporate auditors is
empowered to adopt a resolution requesting that
Kyocera Corporation’s directors submit a proposal
for election of a corporate auditor to a general
meeting of shareholders. The corporate auditors havethe right to state their opinions concerning election ofa corporate auditor at the general meeting ofshareholders.

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.

The total amount of compensation for Kyocera
Corporation directors and the total amount ofcompensation for Kyocera Corporation corporate
auditors are proposed to, and voted upon by, ageneral meeting of shareholders. Once the proposal
for each of such total amount of compensation isapproved at the general meeting of shareholders, eachof the board of directors and board of corporate
auditors allocates the respective total amount amongits respective members.

5. An NYSE-listed U.S. company must generally obtainshareholder approval with respect to any equity
compensation plan.

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 Corporation Act. Kyocera
Corporation obtains approval at a general meeting ofshareholders with respect to its issuance of stockacquisition rights for stock option purposes.

101

PART IV
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 & F-2

(2)

Consolidated Balance Sheets at March 31, 2008 and 2009 . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

F-3 & F-4

(3)

Consolidated Statements of Income for the years ended March 31, 2007, 2008 and 2009 . . . . .

F-5

(4)

Consolidated Statements of Stockholders’ Equity for the years ended March 31, 2007, 2008
and 2009 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

F-6 & F-7

Consolidated Statements of Cash Flows for the years ended March 31, 2007, 2008 and2009 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

F-8

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

F-9 to F-63

(5)
(6)

102

Item 19.

Exhibits

Exhibit
NumberDescription

1.1

Articles of Incorporation (English translation)

1.2

Share Handling Regulations of the Registrant (English translation)

1.3

Regulations of the Board of Directors of the Registrant (English translation) (incorporated byreference to the Registrant’s annual report on Form 20-F filed on June 29, 2006)

1.4

Regulations of the Board of Corporate Auditors of the Registrant (English translation) (incorporated
by reference to the Registrant’s annual report on Form 20-F filed on July 5, 2007)

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))

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

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.

103

Report of Independent Registered Public Accounting Firm
To Board of Directors and Stockholders ofKyocera Corporation
In our opinion, the accompanying consolidated balance sheets and the related consolidated statements of income,stockholders’ equity and cash flows present fairly, in all material respects, the financial position of Kyocera
Corporation and its consolidated subsidiaries (the “Company”) at March 31, 2008 and 2009, and the results of
their operations and their cash flows for each of the three years in the period ended March 31, 2009 in conformity
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 of March 31, 2009,
based on criteria established in Internal Control—Integrated Framework issued by the Committee of Sponsoring
Organizations of the Treadway Commission (COSO). The Company’s management is responsible for thesefinancial statements, for maintaining effective internal control over financial reporting and for 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 thesefinancial 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 to obtain reasonableassurance 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 the financial statements
included examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements,
assessing the accounting principles used and significant estimates made by management, and evaluating theoverall 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 the circumstances. We
believe that our audits provide a reasonable basis for our opinions.
As discussed in Note 11 to the consolidated financial statements, the Company changed the manner in which it
accounts for defined benefit pension plans effective March 31, 2007.
As described in Note 1 to the consolidated financial statements, the Kyocera Corporation and its domestic
subsidiaries changed its depreciation method effective April 1, 2007.
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.

F-1

As described in Management’s Report on Internal Control over Financial Reporting appearing under Item 15,
Kyocera’s management has excluded TA Triumph Adler AG (“TAAG”) in Germany and its subsidiaries from its
assessment of internal control over financial reporting as of March 31, 2009. Kyocera Mita Corporation, a
subsidiary of Kyocera Corporation, consolidated TAAG from January 21, 2009. We have also excluded TAAG
from our audit of internal control over financial reporting. Total assets of TAAG and its subsidiaries as ofMarch 31, 2009 and its total revenues for the period from January 21, 2009 through March 31, 2009 represent
approximately 5% and less than 1%, respectively, of the related consolidated financial statement amounts of theCompany as of and for the year ended March 31, 2009.
/s/

Kyoto Audit Corporation

Kyoto, Japan
June 26, 2009.

F-2

Consolidated Balance Sheets
Kyocera Corporation and Consolidated Subsidiaries
March 31, 2008 and 2009ASSETS

2008
2009
2009
(Yen in millions and U.S. dollars
and shares in thousands—Note 2)

Current assets:
Cash and cash equivalents (Note 14) . . . . . . . . . . . . . . . . . . . . . . .
Short-term investments (Notes 4, 14 and 15) . . . . . . . . . . . . . . . . .
Trade receivables (Note 7):
Notes . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Accounts . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

¥ 447,586
147,503¥ 269,247
202,143$ 2,719,667
2,041,849

20,375205,522

13,750158,754

138,889
1,603,576

225,897

172,504

1,742,465

Less allowances for doubtful accounts and sales returns(Note 6) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

(4,352)(4,669)(47,162)

Inventories (Note 5) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Deferred income taxes (Note 19) . . . . . . . . . . . . . . . . . . . . . . . . . .
Other current assets (Notes 8, 13 and 15) . . . . . . . . . . . . . . . . . . . .

221,545
205,212
41,24455,135

167,835
199,641
35,18778,263

1,695,303
2,016,576
355,424
790,535

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

1,118,225

952,316

9,619,354

Investments and advances:
Investments in and advances to affiliates and unconsolidated
subsidiaries (Note 7) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Securities and other investments (Notes 4, 14 and 15) . . . . . . . . . .

16,753437,369

19,376
351,849

195,7173,554,031

454,122371,225

3,749,748

Property, plant and equipment, at cost (Notes 10 and 18):
Land . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Buildings . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Machinery and equipment . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Construction in progress . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

57,155274,206
718,812
17,92057,077
288,460
707,399
6,397

576,535
2,913,737
7,145,445
64,616

Less accumulated depreciation . . . . . . . . . . . . . . . . . . . .

1,068,093(782,194)

1,059,333(793,279)

10,700,333(8,012,919)

Goodwill (Notes 3 and 9) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Intangible assets (Notes 3, 9 and 10) . . . . . . . . . . . . . . . . . . . . . . . . . . .
Other assets (Notes 8 and 19) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

285,899
39,79429,82948,877

266,054
63,22660,07760,904

2,687,414
638,646
606,838
615,192¥1,976,746¥1,773,802$17,917,192

The accompanying notes are an integral part of these statements.

F-3

Consolidated Balance Sheets—(Continued)
Kyocera Corporation and Consolidated Subsidiaries
March 31, 2008 and 2009
LIABILITIES, MINORITY INTERESTS AND STOCKHOLDERS’ EQUITYCurrent liabilities:
Short-term borrowings (Notes 10 and 14) . . . . . . . . . . . . . . . . . . .
Current portion of long-term debt (Notes 10 and 14) . . . . . . . . . . .
Notes and accounts payable:
Trade . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Other . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Accrued liabilities:
Payroll and bonus . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Income taxes . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Other . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Other current liabilities (Notes 13, 15 and 19) . . . . . . . . . . . . . . . .

2008
2009
2009
(Yen in millions and U.S. dollars
and shares in thousands—Note 2)

¥

7,279
3,432

¥

11,00013,865$111,111140,051

95,39066,75762,57943,452

632,111438,90943,207
27,11832,81525,68441,756
7,430
26,96730,912421,778
75,050272,394
312,242

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

301,682

237,961

2,403,646

Long-term debt (Notes 10 and 14) . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Accrued pension and severance liabilities (Note 11) . . . . . . . . . . . . . . .
Deferred income taxes (Note 19) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Other non-current liabilities (Note 19) . . . . . . . . . . . . . . . . . . . . . . . . . .

8,298
15,041
118,016
17,54228,53834,567
71,53918,109288,263
349,162
722,616
182,919

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

460,579

390,7143,946,606

Minority interests in subsidiaries . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

65,00259,425600,253

Stockholders’ equity (Note 17):
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:
1,885 shares at March 31, 2008 and
7,781 shares at March 31, 2009 . . . . . . . . . . . . . . . . . . . . . . . .

115,703
162,864
1,143,821
44,066

115,703
163,151
1,150,050(54,673)

1,168,717
1,647,990
11,616,667(552,253)(15,289)(50,568)(510,788)

Total stockholders’ equity . . . . . . . . . . . . . . . . . . . . . . . .

1,451,165

1,323,663

13,370,333¥1,976,746¥1,773,802$17,917,192

Commitments and contingencies (Note 16)

The accompanying notes are an integral part of these statements.

F-4

Consolidated Statements of Income
Kyocera Corporation and Consolidated Subsidiaries
For the three years ended March 31, 2009
2007

2008
2009
(Yen in millions and U.S. dollars
and shares in thousands,
except per share amounts—Note 2)

2009

Net sales (Notes 7 and 13) . . . . . . . . . . . . . . . . . . . . . . . . . . . ¥1,283,897 ¥1,290,436 ¥1,128,586 $11,399,859
Cost of sales (Note 13) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
900,470
883,763836,638
8,450,889
Gross profit . . . . . . . . . . . . . . . . . . . . . . . . . .
383,427
406,673
291,948
2,948,970
Selling, general and administrative expenses (Note 20) . . . .
248,325
254,253
248,5292,510,394
Profit from operations . . . . . . . . . . . . . . . . . .
135,102
152,420
43,419438,576
Other income (expenses):
Interest and dividend income . . . . . . . . . . . . . . . . . . . . .
15,472
18,444
15,441
155,970
Interest expense . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
(1,647)(1,480)(1,206)(12,182)
Foreign currency transaction losses, net (Note 13) . . . .
(65)
(956)
(91)
(919)
Equity in earnings of affiliates and unconsolidated
subsidiaries (Notes 7 and 13) . . . . . . . . . . . . . . . . . . .
2,621
6,091
6,460
65,253
Gains (losses) on sales of securities, net (Note 4) . . . . .
3,819
(622)
(2,840)(28,687)
Losses on impairment of securities (Note 4) . . . . . . . . .
(85)
(248)
(7,141)(72,131)
Other, net . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
1,323
1,193
1,940
19,59521,43822,422
12,563
126,899
Income from continuing operations before
income taxes and minority interests . . . . . .
156,540
174,842
55,982565,475
Income taxes (Note 19):
Current . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
53,76561,662
18,927
191,182
Deferred . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
(4,878)(1,427)
3,852
38,90948,887
60,235
22,779230,091
Income from continuing operations before
minority interests . . . . . . . . . . . . . . . . . . . .
107,653
114,607
33,203335,384
Minority interests . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
(6,324)(7,363)(3,697)(37,344)
Income from continuing operations . . . . . . . .
101,329
107,244
29,506
298,040
Income from discontinued operations (Note 24) . . . . . . . . . .
5,175
—
—
—
Net income . . . . . . . . . . . . . . . . . . . . . . . . . . . ¥ 106,504 ¥ 107,244 ¥ 29,506 $ 298,040
Earnings per share (Note 22):
Income from continuing operations:
Basic . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . ¥ 538.52 ¥ 566.58 ¥ 157.27 $Diluted . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
537.35565.80157.23
Income from discontinued operations:
Basic . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
27.51
—
—
Diluted . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
27.44
—
—
Net income:Basic . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
566.03566.58157.27
Diluted . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
564.79565.80157.23
Cash dividends declared per share:
Per share of common stock . . . . . . . . . . . . . . . . . .
110.00120.00120.00
Average number of shares of common stock outstanding:
Basic . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
188,160
189,283
187,618
Diluted . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
188,573
189,544
187,661
The accompanying notes are an integral part of these statements.

F-5

1.59
1.59
—
—
1.59
1.59
1.21

Consolidated Statements of Stockholders’ Equity
Kyocera Corporation and Consolidated Subsidiaries
For the three years ended March 31, 2009

CommonStock

Additional
Paid-in
CapitalRetained
Earnings(Note 17)

Accumulated
Other
Comprehensive Treasury
IncomeStock Comprehensive(Note 17)
(Note 17)
Income(Yen in millions and U.S. dollars and shares in thousands—Note 2)

Balance, March 31, 2006 (187,755) . . . . . . . . . . . . . . . . . . . . . . . . ¥115,703 ¥161,994 ¥ 967,576
Net income for the year . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
106,504
Foreign currency translation adjustments . . . . . . . . . . . . . . . .
Minimum pension liability adjustment—net of taxes of ¥108
(Note 11) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Net unrealized gains on securities—net of taxes of ¥70,986(Note 4) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Reclassification adjustments for net gains on securities—net
of taxes of ¥6 (Note 4) . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Net unrealized gains on derivative financial instruments . . . .
Reclassification adjustments for net losses on derivative
financial instruments . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Total comprehensive income for the year . . . . . . . . . . . . . . . .
Adjustment for initially applying SFAS No. 158—net oftaxes of ¥12,035 (Note 11) . . . . . . . . . . . . . . . . . . . . . . . . .
Cash dividends . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Purchase of treasury stock (24) . . . . . . . . . . . . . . . . . . . . . . . .
Reissuance of treasury stock (918) . . . . . . . . . . . . . . . . . . . . .
Stock option plan of subsidiaries . . . . . . . . . . . . . . . . . . . . . .
Balance, March 31, 2007 (188,649) . . . . . . . . . . . . . . . . . . . . . . . . 115,703
Cumulative effect of applying FIN 48 to opening balance(Note 19) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Net income for the year . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Foreign currency translation adjustments . . . . . . . . . . . . . . . .
Pension adjustments—net of taxes of ¥914 (Note 11) . . . . . .
Reclassification adjustments for pension adjustments net oftaxes of ¥1,191 (Note 11) . . . . . . . . . . . . . . . . . . . . . . . . . .
Net unrealized losses on securities—net of taxes of ¥83,189(Note 4) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Reclassification adjustments for net gains on securities—net
of taxes of ¥11 (Note 4) . . . . . . . . . . . . . . . . . . . . . . . . . . .
Net unrealized gains on derivative financial instruments . . . .
Reclassification adjustments for net gains on derivative
financial instruments . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Total comprehensive income (loss) for the year . . . . . . . . . . .
Cash dividends . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Purchase of treasury stock (18) . . . . . . . . . . . . . . . . . . . . . . . .
Reissuance of treasury stock (823) . . . . . . . . . . . . . . . . . . . . .
Stock option plan of subsidiaries . . . . . . . . . . . . . . . . . . . . . .

¥ 72,947¥(29,143)

10,474¥ 106,504
10,474(82)(82)

103,334

103,334(1,313)89(1,313)89

49

49¥ 219,055

17,558(18,787)
127
242
162,363

(251)
7,539
1,055,293

203,056(21,855)

3,968
107,244(36,698)(762)¥ 107,244(36,698)(762)(1,792)(1,792)(118,541)(118,541)(1,330)210(1,330)
210

(77)

(77)
¥ (51,746)(22,684)
254
247

F-6

(211)
6,777

Common
Stock

Additional
Paid-in
CapitalRetained
Earnings(Note 17)

Accumulated
Other
Comprehensive Treasury
IncomeStock(Note 17)
(Note 17)Comprehensive
Income(Yen in millions and U.S. dollars and shares in thousands—Note 2)

Balance, March 31, 2008 (189,454) . . . . . . . . . . . . . . . . . . .
Adjustment for applying SFAS No. 158 to opening
balance of retained earnings—net of taxes of ¥214
(Note 11) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Adjustment for applying SFAS No. 158 to opening
balance of pension adjustments-net of taxes of¥291 (Note 11) . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Net income for the year . . . . . . . . . . . . . . . . . . . . . . . .
Foreign currency translation adjustments . . . . . . . . . .
Pension adjustments—net of taxes of ¥4,945 (Note11) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Reclassification adjustments for pension adjustments
net of taxes of ¥1,393 (Note 11) . . . . . . . . . . . . . . .
Net unrealized losses on securities—net of taxes of¥37,734 (Note 4) . . . . . . . . . . . . . . . . . . . . . . . . . . .
Reclassification adjustments for net losses on
securities—net of taxes of ¥903 (Note 4) . . . . . . . .
Net unrealized losses on derivative financial
instruments (Note 13) . . . . . . . . . . . . . . . . . . . . . . . .
Reclassification adjustments for net losses onderivative financial instruments (Note 13) . . . . . . . .
Total comprehensive income (loss) for the year . . . . .

115,703

162,864

1,143,821

44,066(15,289)

(522)
(418)
29,506

Cash dividends . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
(22,755)
Purchase of treasury stock (6,283) . . . . . . . . . . . . . . . .
Reissuance of treasury stock (357) . . . . . . . . . . . . . . .
106
Stock option plan of subsidiaries . . . . . . . . . . . . . . . . .
181
Balance, March 31, 2009 (183,528) . . . . . . . . . . . . . . . . . . . ¥ 115,703 ¥ 163,151 ¥ 1,150,050
Balance, March 31, 2008 . . . . . . . . . . . . . . . . . . . . . . . . . . . $1,168,717 $1,645,091 $11,553,748
Adjustment for applying SFAS No. 158 to opening
balance of retained earnings—net of taxes of$2,162 (Note 11) . . . . . . . . . . . . . . . . . . . . . . . . . . .
(5,273)Adjustment for applying SFAS No. 158 to opening
balance of pension adjustments—net of taxes of$2,939 (Note 11) . . . . . . . . . . . . . . . . . . . . . . . . . . .
Net income for the year . . . . . . . . . . . . . . . . . . . . . . . .
298,040
Foreign currency translation adjustments . . . . . . . . . .
Pension adjustments—net of taxes of $49,949(Note 11) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Reclassification adjustments for pension adjustments
net of taxes of $14,071 (Note 11) . . . . . . . . . . . . . .
Net unrealized losses on securities—net of taxes of$381,152 (Note 4) . . . . . . . . . . . . . . . . . . . . . . . . . .
Reclassification adjustments for net losses on
securities—net of taxes of $9,121 (Note 4) . . . . . . .
Net unrealized losses on derivative financial
instruments (Note 13) . . . . . . . . . . . . . . . . . . . . . . . .
Reclassification adjustments for net losses onderivative financial instruments (Note 13) . . . . . . . .
Total comprehensive income (loss) for the year . . . . .
Cash dividends . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Purchase of treasury stock . . . . . . . . . . . . . . . . . . . . . .
Reissuance of treasury stock . . . . . . . . . . . . . . . . . . . .
Stock option plan of subsidiaries . . . . . . . . . . . . . . . . .

(32,408)¥ 29,506(32,408)(10,494)(10,494)(1,900)(1,900)(54,894)(54,894)

1,716

1,716

(565)

(565)

224

224
¥ (68,815)(38,219)2,940¥ (54,673)¥ (50,568)$ 445,111$(154,434)(4,222)(327,353)$ 298,040(327,353)(106,001)(106,001)(19,192)(19,192)(554,485)(554,485)

17,334

17,334(5,707)(5,707)

2,262

2,262
$(695,102)(229,848)(386,051)
29,697

1,071
1,828

Balance, March 31, 2009 . . . . . . . . . . . . . . . . . . . . . . . . . . . $1,168,717 $1,647,990 $11,616,667

The accompanying notes are an integral part of these statements.

F-7$(552,253)$(510,788)

Consolidated Statements of Cash Flows
Kyocera Corporation and Consolidated Subsidiaries
For the three years ended March 31, 2009
2007

2008

2009

2009

(Yen in millions andU.S. dollars in thousands—Note 2)
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 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Write-down of inventories . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Deferred income taxes (Note 19) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Minority interests . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Equity in earnings of affiliates and unconsolidated subsidiaries (Note 7) . . . .
(Gains) losses on sales of property, plant and equipment, and intangible
assets, net (Note 20) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Losses on impairment of property, plant and equipment, and intangible
assets (Note 18) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Losses on impairment of goodwill (Note 9) . . . . . . . . . . . . . . . . . . . . . . . . . . .
(Gains) losses on sales of securities, net (Note 4) . . . . . . . . . . . . . . . . . . . . . .
Gains on sales of investment in subsidiaries (Note 24) . . . . . . . . . . . . . . . . . .
Losses on impairment of securities (Note 4) . . . . . . . . . . . . . . . . . . . . . . . . . .
Foreign currency adjustments . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Change in assets and liabilities:(Increase) decrease in receivables . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
(Increase) decrease in inventories . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Increase in other current assets . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Increase (Decrease) in notes and accounts payable . . . . . . . . . . . . . . . . .
Increase (Decrease) in accrued income taxes . . . . . . . . . . . . . . . . . . . . . .
Increase (Decrease) in other current liabilities . . . . . . . . . . . . . . . . . . . . .
Increase (Decrease) in other non-current liabilities . . . . . . . . . . . . . . . . .
Other, net . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

¥ 106,504¥ 107,244¥ 29,506$

298,040

82,182(494)
11,328(4,878)6,324(2,621)87,045(181)
5,141(1,427)
7,363(6,091)

97,577
671
8,719
3,852
3,697
(6,460)985,626
6,778
88,071
38,90937,344(65,253)

271

1,474

(8,314)(83,980)

1,055
1,478
(3,819)(8,252)
956
160

407
—
622
—
248
(1,588)

2,730
3,457
2,840
(203)
7,141
(2,074)27,57634,91928,687(2,051)
72,131(20,949)(32,626)(25,100)(1,901)
6,015
9,066
11,111(7,062)(53)

13,732(9,766)(14,008)
5,177(8,817)
6,010
4,230
120

75,866643(4,536)(77,648)(21,024)(12,404)(737)(5,505)766,3236,495(45,818)(784,323)(212,364)(125,293)(7,444)(55,606)

Total adjustments . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

43,14089,691

68,288689,778

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

149,644

196,935

97,794

987,818

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 investments and advances . . . . . . . . . . . . . . . . . . . . . . .
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 3 and 23) . . . . . . . . . . . . .
Proceeds from sales of investment in subsidiaries (Note 24) . . . . . . . . . . . . . . . . . .
Payments for purchases of property, plant and equipment . . . . . . . . . . . . . . . . . . . .
Payments for purchases of intangible assets . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Proceeds from sales of property, plant and equipment, and intangible assets . . . . .
Acquisition of certificate of deposits and time deposits . . . . . . . . . . . . . . . . . . . . . .
Withdrawal of certificate of deposits and time deposits . . . . . . . . . . . . . . . . . . . . . .
Pro rata distribution of available-for-sale securities . . . . . . . . . . . . . . . . . . . . . . . . .
Other, net . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

(44,582)(26,867)(307)
99,23027,889(756)
24,602(64,751)(8,215)2,693(356,169)
203,076—(7,546)(20,785)(17,959)(3,293)92,02932,784(26,483)—(71,827)(6,442)877(372,798)
423,845(12,818)(2,236)(28,606)(46,187)(2,019)22,02633,756(47,512)299(77,267)(7,924)
12,893(290,536)
230,645—(1,525)(288,950)(466,535)(20,394)
222,485
340,970(479,919)
3,020(780,475)(80,040)
130,232(2,934,707)
2,329,747—(15,404)

Net cash provided by (used in) investing activities . . . . . . . . . . . . . . . . . . . . .

(151,703)

14,894(201,957)(2,039,970)

Cash flows from financing activities:
Increase (Decrease) in short-term debt, net . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Proceeds from issuance of long-term debt . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Payments of long-term debt . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Dividends paid . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Purchase of treasury stock (Note 17) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Reissuance of treasury stock . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Other, net . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

9,369
1,928
(13,361)(20,632)
(251)
7,666
(5,364)(7,202)
5,000(6,647)(24,566)
(211)
7,031
(1,476)

2,536
1,869
(5,588)(24,248)(38,219)
3,045(1,812)

25,616
18,879(56,445)(244,929)(386,051)
30,758(18,303)

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

(20,645)(28,071)(62,417)(630,475)

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

4,103(18,380)(11,759)(118,777)

Net increase (decrease) in cash and cash equivalents . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Cash and cash equivalents at beginning of year . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

(18,601)
300,809

165,378
282,208(178,339)
447,586(1,801,404)
4,521,071

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

¥ 282,208¥ 447,586¥ 269,247$ 2,719,667

The accompanying notes are an integral part of these statements.

F-8

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 majority-owned
subsidiaries and a variable interest entity for which Kyocera Corporation is the primary beneficiary under
Financial Accounting Standard Board (FASB) Interpretation No. 46 (revised December 2003), “Consolidation of
Variable Interest Entities.” All significant intercompany transactions and accounts are eliminated. Investments in
20% to 50% owned companies are accounted for under the equity method, whereby Kyocera includes in net
income its equity in the earnings or losses from these companies.
The consolidated variable interest entity for which Kyocera Corporation is the primary beneficiary does not havea material effect on Kyocera’s financial position and results of operations.
Revenue Recognition:
Kyocera sells various types of products, including fine ceramic parts, semiconductor parts, andtelecommunications equipment. Kyocera recognizes revenue upon completion of the earnings process, which
occurs when products are shipped or delivered to customers in accordance with the terms of an agreement of sale,
there is a fixed or determinable selling price, title and risk of loss have been transferred, and collectibility isreasonably assured. Most of these conditions are satisfied at the time of delivery to customers in domestic sales(FOB destination) and at the time of shipment (FOB shipping) for export sales.
Sales returns
Kyocera records an estimated sales return allowance at the time of sales based on its historical returns
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.
Cash and Cash Equivalents:
Cash and cash equivalents include time deposits and certificates of deposit with original maturities of threemonths or less.
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 rates of exchange for the respective years. Translation adjustments result from theprocess of translating foreign currency financial statements into Japanese yen. These translation adjustments, which
are not included in the determination of net income, are reported in other comprehensive income.
F-9

Notes to The Consolidated Financial Statements—(Continued)
Kyocera Corporation and Consolidated Subsidiaries
Assets and liabilities denominated in foreign currencies are translated at the exchange rates in effect at 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. The amounts ofallowances for doubtful accounts included in other assets at March 31, 2008 and at March 31, 2009 were ¥1,962
million and ¥2,478 million ($25,030 thousand), respectively.
Inventories:
Inventories are stated at the lower of cost or market. For finished goods and work in process, cost is determinedby the average method for approximately 66% and 72% at March 31, 2008 and 2009, respectively, and by othermethods including the first-in, first-out method for the others. For raw materials and supplies, cost is determinedby the first-in, first-out method for approximately 55% and 49% at March 31, 2008 and 2009, respectively, andby other methods including the average method for the others. Kyocera recognizes estimated write-down of
inventories for excess, slow-moving and obsolete inventories.
Securities:
Certain investments in debt and equity securities are accounted for under Statement of Financial AccountingStandards (SFAS) No. 115 “Accounting for Certain Investments in Debt and Equity Securities.” Securities
classified as available-for-sale securities are recorded at fair value, with unrealized gains and losses excluded
from income and reported in other comprehensive income, net of taxes. Securities classified as held-to-maturity
securities are recorded at amortized cost.
Kyocera evaluates whether the declines in fair value of debt and equity securities with readily determinable fairvalues are other-than-temporary. Other-than-temporary declines in fair value are recorded as a realized loss witha new cost basis. This evaluation is based mainly on the duration and the extent to which the fair value is lessthan cost, and the anticipated recoverability in fair value.
Kyocera also reviews its investments accounted by the equity method for impairment quarterly. Factors
considered in assessing whether an indication of other-than-temporary impairment exists include the achievementof business plan objectives and milestones including cash flow projections and the results of planned financing
activities, the financial condition and prospects of each investee company, the fair value of the ownership interest
relative to the carrying amount of the investment, the period of time during which the fair value of the ownershipinterest has been below the carrying amount of the investment and other relevant factors. Impairment to berecognized is measured based on the amount by which the carrying amount of the investment exceeds the fairvalue of the investment. Fair value is determined through the use of various methodologies such as discounted
cash flows, valuation of recent financings and comparable valuations of similar companies.

F-10

Notes to The Consolidated Financial Statements—(Continued)
Kyocera Corporation and Consolidated Subsidiaries
Property, Plant and Equipment and Depreciation:
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 expense in the year incurred.
When assets are sold or otherwise disposed of, the profits 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.
Effective April 1, 2007, Kyocera Corporation and its domestic subsidiaries, as a result of taking the businesssituation into consideration, has adopted “the 250 percent declining-balance depreciation method” for buildings,
machinery and equipment. Estimated useful lives and estimated salvage values were also changed in conjunction
with this change. Under the new provisions of SFAS No. 154 “Accounting Changes and Error Corrections, areplacement of APB Opinion No. 20 and Financial Accounting Standards Board Statement No. 3,” a change indepreciation method is treated as a change in estimate. The effect of the change in depreciation method has beenreflected on a prospective basis beginning April 1, 2007, and prior period results were not restated.
Kyocera Corporation and its domestic subsidiaries believe that the change from the declining-balance
depreciation method to the 250 percent declining-balance depreciation method better reflects future businesssituation and provides a better matching of costs and revenues over the assets’ estimated useful lives. The change
in depreciation methods caused a decrease in net income by ¥7,736 million, basic earnings per share of net
income and diluted earnings per share of net income by ¥40.87 and ¥40.81 for the year ended March 31, 2008,
respectively.
Goodwill and Other Intangible Assets:
Kyocera has adopted SFAS No. 142, “Goodwill and Other Intangible Assets.” This requires that, rather thanbeing amortized, goodwill and intangible assets with indefinite useful lives 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 over their respective estimated useful lives to their estimatedresidual values, and reviewed for impairment whenever events or changes in circumstances indicate that theircarrying amount may not be recoverable.
The principal estimated useful lives for intangible assets are as follows:
SoftwarePatent rights
Customer relationships

2 to 10 years
2 to 10 years
3 to 18 years

Impairment of Long-Lived Assets:
Pursuant to SFAS No. 144, “Accounting for the Impairment or Disposal of Long-Lived Assets,” Kyocera reviews
its long-lived assets and intangible assets with definite useful lives for impairment whenever events or changes incircumstances indicate that its carrying amount may not be recoverable.
F-11

Notes to The Consolidated Financial Statements—(Continued)
Kyocera Corporation and Consolidated Subsidiaries
Long-lived assets and intangible assets with definite useful lives are considered to be impaired when the expectedundiscounted cash flow from the asset group is less than its carrying value. A loss on impairment is recognizedbased on the amount by which the carrying value exceeds the fair value of the long-lived assets and intangible
assets with definite useful lives.
Derivative Financial Instruments:
Kyocera utilizes derivative financial instruments to manage its exposure resulting from fluctuations of foreign
currencies and interest rates. These derivative financial instruments include foreign currency forward contracts
and interest rate swaps. Kyocera does not hold or issue such derivative financial instruments for trading purposes.
Kyocera applies SFAS No. 133, “Accounting for Derivative Instruments and Hedging Activities,” as amended by
SFAS No. 138, “Accounting for Certain Derivative Instruments and Certain Hedging Activities an Amendmentof FASB Statement No. 133.” All derivatives are recorded as either assets or liabilities on the balance sheet andmeasured at fair value. Changes in the fair value of derivatives are charged in current earnings. However cash
flow hedges which meet the criteria of SFAS No. 133 may qualify for hedge accounting treatment. Changes in
the fair value of the effective portion of these hedge derivatives are deferred in other comprehensive income andcharged to earnings when the underlying transaction being hedged occurs.
Kyocera designates certain foreign currency forward contracts and interest rate swaps as cash flow hedges under
SFAS No. 133. Most of Kyocera’s foreign currency forward contracts are entered into as hedges of existing
foreign currency denominated assets and liabilities and as such do not qualify for hedge accounting. Accordingly,
Kyocera records changes in fair value of these foreign currency forward contracts currently in earnings. It is
expected that such changes will be offset by corresponding gains or losses on the underlying assets and liabilities.
Kyocera formally documents all relationships between hedging instruments and hedged items, as well as its risk
management objective and strategy for undertaking various hedge transactions. This process includes allderivatives designated as cash flow hedge are linked to specific assets and liabilities on the balance sheet or
forecasted transactions. Kyocera also formally assesses, both at the hedge’s inception and on an ongoing basis,
whether the derivatives that are used in hedging transactions are highly effective in offsetting cash flows ofhedged items. When it is determined that a derivative is not highly effective as a hedge or that it has ceased to bea highly effective hedge, Kyocera discontinues hedge accounting prospectively. When hedge accounting is
discontinued, and the hedged transaction is no longer expected to occur, the derivative will continue to be carriedon the balance sheet at its fair value, with deferred unrealized gains or losses charged immediately in current
earnings.
Stock-Based Compensation:
Effective April 1 2006, Kyocera adopted SFAS No. 123 (revised 2004) (SFAS No. 123R), “Share – Based
Payment” and recognized the cost resulting from share-based payment transactions in financial statements byadopting fair-value based measurement method in accordance with SFAS No. 123R. Under the modified
prospective method of adoption for SFAS No.123R, Kyocera recognized compensation cost which includes:(a) compensation cost for all stock options granted prior to, but not yet vested as of April 1, 2006, and(b) compensation cost for all stock options granted or modified subsequent to April 1, 2006.
Earnings and Cash Dividends per Share:
Kyocera applies SFAS No.128, “Earnings per Share.” Basic earnings per share is computed based on the average
number of shares outstanding during each period. Diluted earnings per share assumes the dilution that could
occur if all stock options were exercised and resulted in the issuance of common stock.
F-12

Notes to The Consolidated Financial Statements—(Continued)
Kyocera Corporation and Consolidated Subsidiaries
Cash dividends per share are those declared with respect to the earnings for the respective periods for which
dividends are proposed by the Board of Directors. Dividends are charged to retained earnings in the year inwhich they are paid.
Research and Development Expenses and Advertising Expenses:
Research and development expenses and advertising expenses 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.
Recently adopted Accounting Standards:
In September 2006, the FASB issued SFAS No. 157, “Fair Value Measurements. “The purpose of SFAS No. 157
is to define fair value, establish a framework for measuring fair value and enhance disclosures about fair value
measurements. The measurement and disclosure requirements related to financial assets and financial liabilities
were effective for fiscal years beginning April 1, 2008. The adoption of SFAS No. 157 for financial assets andfinancial liabilities has no material impact on Kyocera’s consolidated results of operations, financial positions
and cash flows.
In February 2008, the FASB issued FASB Staff Position (FSP) No. 157-1, “Application of FASB Statement
No. 157 to FASB Statement No. 13 and Other Accounting Pronouncements That Address Fair Value
Measurements for Purposes of Lease Classification or Measurement under Statement 13” and FSP No. 157-2,“Effective Date of FASB Statement No. 157. “FSP No. 157-1 amended SFAS No. 157 to remove certain leasingtransactions from its scope and was effective for fiscal years beginning April 1, 2008. FSP No. 157-2 postponed
one year the effective date of SFAS No. 157 for all non-financial assets and non-financial liabilities. FSP
No. 157-2 is effective for fiscal years beginning after November 15, 2008. As such effective April 1, 2009,
Kyocera will apply the guidance of SFAS No. 157 for all non financial assets and non financial liabilities.
In October 2008, the FASB issued FSP No. 157-3, “Determining the Fair Value of a Financial Asset When theMarket for that Asset is Not Active” (FSP No. 157-3). FSP No. 157-3 clarifies the application of SFAS No. 157
in a market that is not active, and addresses application issues such as the use of internal assumptions whenrelevant observable data does not exist, the use of observable market information when the market is not active,
and the use of market quotes when assessing the relevance of observable and unobservable data. FSP No. 157-3
is effective beginning for the three months ended December 31, 2008. The adoption of FSP 157-3 has no material
impact on Kyocera’s consolidated results of operations, financial positions and cash flows.
In September 2006, the FASB issued SFAS No. 158, “Employers’ Accounting for Defined Benefit Pension andOther Postretirement Plans-an amendment of FASB Statements No. 87, 88, 106, and 132 (R).” SFAS No. 158
requires an employer to measure the funded status of a benefit plan as of the date of its fiscal year-end statementof financial position for the years ending after December 15, 2008. Kyocera adopted this measurement dateprovision for fiscal years beginning April 1, 2008 and measured the funded status of its benefit plans at the dateof its fiscal year-end statement of financial position. As a result of applying the transition method of thisprovision, retained earnings and other comprehensive income at April 1, 2008 decreased by ¥522 million ($5,273
thousand) and ¥418 million ($4,222 thousand), respectively.
F-13

Notes to The Consolidated Financial Statements—(Continued)
Kyocera Corporation and Consolidated Subsidiaries
In February 2007, the FASB issued SFAS No. 159, “The Fair Value Option for Financial Assets and Financial
Liabilities—including an amendment of FASB Statement No. 115. “SFAS No. 159 provides companies with an
option to report selected financial assets and liabilities at fair value. Unrealized gains and losses on items forwhich the fair value option has been elected will be recognized in earnings. SFAS No. 159 is effective for fiscal
years beginning April 1, 2008. For adoption of SFAS No. 159, see Note 4 to the Consolidated Financial
Statements in this annual report on Form 20-F.
In March 2008, the FASB issued SFAS No. 161, “Disclosures about Derivative instruments and Hedging
Activities an Amendment of FASB Statement No. 133.” SFAS No. 161 requires enhanced disclosures regarding
an entity’s derivative and hedging activities to provide adequate information about (a) how and why an entity
uses derivative instruments, (b) how derivative instruments and related hedged items are accounted for under
SFAS No. 133 and its related interpretations, and (c) how derivative instruments and related hedged items affectan entity’s financial position, financial performance and cash flows. SFAS No. 161 is effective for fiscal years
and interim periods beginning after November 15, 2008. As SFAS No. 161 does not impact the measurement or
recognition of derivative instruments, the adoption of the SFAS No. 161 did not have any impact on Kyocera’s
consolidated results of operations, financial positions and cash flows.
In May 2008, the FASB issued SFAS No. 162, “The Hierarchy of Generally Accepted Accounting Principles.”
SFAS No. 162 identifies the sources of accounting principles and the framework for selecting the principles usedin the preparation of financial statements of nongovernmental entities that are presented in conformity withgenerally accepted accounting principles in the United States of America. The sources of accounting principles
that are generally accepted are categorized in descending order as follows:a)

FASB Statements of Financial Accounting Standards and Interpretations, FASB Statement 133
Implementation Issues, FASB Staff Positions and American Institute of Certified Public Accountants(AICPA) Accounting Research Bulletins and Accounting Principles Board Opinions that are notsuperseded by actions of the FASBb)

FASB Technical Bulletins and, if cleared by the FASB, AICPA Industry Audit and Accounting Guides
and Statements of Positionc)

AICPA Accounting Standards Executive Committee Practice Bulletins that have been cleared by the
FASB, consensus positions of the FASB Emerging Issues Task Force (EITF) and the Topics discussed
in Appendix D of EITF Abstracts (EITF D-Topics) andd)

Implementation guides (Q&As) published by the FASB staff, AICPA Accounting Interpretations,
AICPA Industry Audit and Accounting Guides and Statements of Position not cleared by the FASB
and practices that are widely recognized and prevalent either generally or in the industry

SFAS No. 162 was effective on November 15, 2008. The adoption of SFAS No. 162 did not have any impact on
Kyocera’s consolidated results of operations, financial positions and cash flows.
Recently Issued Accounting Standards:
In December 2007, the FASB issued SFAS No. 141 (revised 2007) (SFAS No. 141(R)), “Business
Combinations,” which requires assets, liabilities and noncontrolling interests be measured at fair value. Under
SFAS No.141(R), transaction and restructuring costs are required to be generally expensed, as well as contingent
consideration and in-process research and development be recorded at fair value on acquisition date as a part offair value of acquired business. In addition, any tax adjustment made after the measurement period impacts
income tax expenses.
F-14

Notes to The Consolidated Financial Statements—(Continued)
Kyocera Corporation and Consolidated Subsidiaries
The FASB issued FASB Staff Position (FSP) 141(R)-1, “Accounting for Assets Acquired and Liabilities
Assumed in a Business Combination That Arise from Contingencies” as amendment of SFAS No. 141(R) in
April 2009. FSP141(R)-1 requires the companies to recognize at fair value, at the acquisition date, an asset
acquired or a liability assumed in a business combination that arises from a contingency if the acquisition-datefair value of that asset or liability can be determined during the measurement period. Otherwise they will beprocessed based on the requirement of SFAS No. 5, “Accounting for Contingencies.” SFAS No. 141(R) and
FSP141(R)-1 are effective for fiscal years beginning on or after December 15, 2008. Kyocera does not expect the
adoption of SFAS No. 141(R) and FSP141(R)-1 will have any material impact on Kyocera’s consolidated resultsof operations, financial positions and cash flows.
In December 2007, the FASB issued SFAS No. 160, “Noncontrolling Interests in Consolidated Financial
Statement an Amendment of Accounting Research Bulletin No. 51.” SFAS No. 160 establishes accounting andreporting standards for ownership interests in subsidiaries held by parties other than the parent, the amount ofconsolidated net income attributable to the parent and to the noncontrolling interest, changes in a parent’s
ownership interest, and the valuation of retained noncontrolling equity investments when a subsidiary isdeconsolidated. SFAS No. 160 also establishes disclosure requirements that clearly identify and distinguishbetween the interests of the parent and the interests of the noncontrolling owners. SFAS No. 160 is effective forfiscal years beginning on or after December 15, 2008. Kyocera does not expect the adoption of SFAS No. 160
will have any material impact on Kyocera’s consolidated results of operations, financial positions and cash flows.
In December 2008, the FASB issued FSP No. 132(R)-1, “Employers’ Disclosures about Postretirement Benefit
Plan Assets,” which provides guidance on employers’ disclosures of a defined benefit pension or otherpostretirement plan. Specifically, employers are required to disclose information about fair value measurementsof plan assets. FSP No. 132(R)-1 will be effective for fiscal years ending after December 15, 2009. As FSP
No. 132(R)-1 is a provision for disclosure, the adoption of FSP No. 132(R)-1 will not have any impact on
Kyocera’s consolidated results of operations, financial positions and cash flows.
In April 2009, the FASB issued three FASB Staff Positions, (a) FSP No. 157-4, “Determining Fair Value When
the Volume and Level of Activity for the Asset or Liability Have Significantly Decreased and Identifying
Transactions That Are Not Orderly,” (b) FSP No. 115-2 and FSP No. 124-2, “Recognition and Presentation of
Other-Than Temporary Impairments” and (c) FSP No. 107-1 and APB No. 28-1, “Interim Disclosures about Fair
Value of Financial Instruments.”(a) FSP No. 157-4 provides guidance on how to estimate the fair value of assets or liabilities when thevolume and level of activity for asset or liability have significantly decreased and on identifying
circumstances that indicate a transaction is not orderly. In addition, FSP No. 157-4 requires disclosure
in interim and annual periods of the inputs and valuation techniques used to estimate fair value and a
discussion of changes in valuation techniques.
(b) FSP No. 115-2 and FSP No. 124-2 amends the other-than-temporary impairment guidance for debt
securities and presentation and disclosure requirement of other-than-temporary impairments of debt
and equity securities.
(c) FSP No. 107-1 and APB No. 28-1 requires interim disclosures regarding the fair values of financial
instruments that are within the scope of SFAS No. 107. Additionally, FSP No. 107-1 and APB
No. 28-1 requires disclosure of the methods and significant assumptions used to estimate the fair valueof financial instruments on a interim basis as well as changes of the methods and significant
assumptions from previous periods.

F-15

Notes to The Consolidated Financial Statements—(Continued)
Kyocera Corporation and Consolidated Subsidiaries
These three FASB Staff Positions are effective for interim and annual reporting periods ending after June 15,
2009. The adoption of these three FASB Staff Positions is not expected to have a significant impact on Kyocera’s
consolidated results of operations, financial positions and cash flows.
In May 2009, the FASB issued SFAS No. 165, “Subsequent Events.” The purpose of SFAS No. 165 is toestablish general standards of accounting for and disclosure of events that occur after the balance sheet date but
before financial statements are issued or are available to be issued. SFAS No. 165 is effective for interim or
annual financial periods ending June 15, 2009. Kyocera does not expect the adoption of SFAS No. 160 will haveany material impact on Kyocera’s consolidated results of operations, financial positions and cash flows.
In June 2009, the FASB issued SFAS No. 166, “Accounting for Transfers of Financial Assets—an amendment of
FASB Statement No. 140.” SFAS No. 166 removes the concept of a qualifying special-purpose entity fromStatement 140 and removes the exception from applying FASB Interpretation No. 46 (revised December 2003),
Consolidation of Variable Interest Entities, to qualifying special-purpose entities and establishes specificconditions for reporting a transfer of a portion of a financial asset as a sale. SFAS No. 166 must be applied as of
the beginning of each reporting entity’s first annual reporting period that begins after November 15, 2009, forinterim periods within that first annual reporting period and for interim and annual reporting periods thereafter.
Kyocera is currently evaluating the impact that SFAS No. 166 will have on Kyocera’s consolidated results ofoperations, financial positions and cash flows.
In June 2009, the FASB issued SFAS No. 167, “Amendments to FASB Interpretation No. 46(R).” SFAS No. 167
requires an enterprise to perform an analysis to identify the primary beneficiary of a variable interest entity andalso requires ongoing reassessments of whether an enterprise is the primary beneficiary of a variable interest
entity. SFAS No. 167 shall be effective as of the beginning of each reporting entity’s first annual reporting periodthat begins after November 15, 2009, for interim periods within that first annual reporting period, and for interim
and annual reporting periods thereafter. Kyocera is currently evaluating the impact that SFAS No. 167 will haveon Kyocera’s consolidated results of operations, financial positions and cash flows.
Reclassifications:Certain reclassifications of previously reported amounts have been made to the consolidated balance sheets at
March 31, 2008, the consolidated statements of income for the years ended March 31, 2007 and 2008, theconsolidated statements of cash flows for the years ended March 31, 2007 and 2008 and the corresponding
footnote of the consolidated statement for the years ended March 31, 2007 and 2008 in order to conform to thecurrent year presentation. Such reclassifications have no effect on result of operations, financial positions andcash flows.
2. U.S. DOLLAR AMOUNTS:
The consolidated financial statements as of and for the year ended March 31, 2009 presented herein are
expressed in Japanese yen, and, solely for the convenience of readers, have been translated into U.S. dollar at therate of ¥99 for US$1, the rate prevailing on March 31, 2009.
This translation should not be construed as a representation that the yen amounts shown could be so converted
into U.S. dollar at ¥99 for US$1 or at any other rate.

F-16

Notes to The Consolidated Financial Statements—(Continued)
Kyocera Corporation and Consolidated Subsidiaries
3. BUSINESS COMBINATIONSBusiness combinations in the year ended March 31, 2009
On April 1, 2008, Kyocera acquired the mobile phone handsets related business and its related assets andliabilities from SANYO Electric Co., Ltd. (SANYO) through corporate split. The results of operations of theacquired business was included into Kyocera’s consolidated financial statement since the acquisition date and forthe segment reporting, it is reported in the Telecommunications Equipment Group. The acquired businessconsists of the development, manufacturing and sales of mobile phones, PHS Mobile Phone Handsets andwireless communication systems in Japan and overseas. The acquired business has sales offices and research anddevelopment facilities in Japan, sales locations in North America and manufacturing facilities in Malaysia andChina. Kyocera pursues synergies between distribution channels in North America, development activities anddesign technologies of the acquired business and its existing management resources.
Kyocera has used the purchase method of accounting to record assets acquired and liabilities assumed inaccordance with SFAS No. 141, “Business Combinations.”
The related assets and liabilities were recorded based upon their estimated fair values at the date of acquisition
with the excess being allocated to goodwill as shown in the following table.
Current liabilities in the following table include an amount of payables as of the purchase date that were notindividually stated within the purchase agreement which were collectively assumed from SANYO. As such thesepayables have been included in the allocation of purchase price.
April 1, 2008
(Yen in millions andU.S. dollars in thousands)

Cash and deposits . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Accounts receivable . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Inventory . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Other current assets . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

¥11,037
17,617
12,731
7,564$111,485
177,949
128,596
76,404

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

48,949494,434

Property, plant and equipment . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Intangible assets . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Other non-current assets . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

16,601
13,783
1,493

167,687
139,222
15,081

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

31,877321,990

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

80,826

816,424

Accounts payable . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Other current liabilities . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

41,877
6,176

423,000
62,384

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

48,053

485,384

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

3,538

35,737

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

51,591

521,121

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

29,235295,303

Purchase price . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

47,691

481,727

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

¥18,456$186,424

In addition, in the total amount of goodwill ¥18,456 million ($186,424 thousand), $15,490 million ($156,465
thousand) is expected to be deductible for tax purposes.
F-17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:
March 31,2009
2009
Gross Carrying Accumulated Gross Carrying Accumulated
AmountAmortization
AmountAmortization(Yen in millions and U.S. dollars in thousands)

Intangible assets subject to amortization:
Customer relationships . . . . . . . . . . . . . . . . . . . .
Trademark . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Patent . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

¥ 8,796
2,224
1,620

¥1,759445
203$ 88,848
22,465
16,364$17,768
4,495
2,050

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

¥12,640¥2,407$127,677$24,313

The estimated aggregate amortization expenses for intangible assets that Kyocera recorded due to this acquisition
for the next five years are as follows:(Yen in millions andU.S. dollars in thousands)

Years ending March 31,

2010 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
2011 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
2012 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
2013 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
2014 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

¥2,407
2,407
2,407
2,407
203

$24,313
24,31324,31324,313
2,050

Pro forma information
The followings are the pro forma combined results of operations of Kyocera for the years ended March 31, 2008,
as if above business combination had taken place at the beginning of the period. The pro forma net income
includes ¥1,839 million (net of tax effect) for the amortization of acquired intangibles. The pro forma combined
results of operations are presented for comparative purposes only and are not necessarily indicative of the resultsof operations that may occur in the future or that would have occurred had the acquisitions been in effect on thedate indicated.
Years ending March 31,
2008(Unaudited)

Pro forma net sales . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Pro forma net income . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Pro forma net income per share:
Basic . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
diluted . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

¥1,486,123
97,452514.85514.14On June 30, 2008, Kyocera Industrial Ceramics Corporation acquired all of the outstanding capital stock of On
Time Machining Company, a manufacturing and sales company of cutting tools. The results of operations of theacquired business was included into Kyocera’s consolidated financial statements since the acquisition date andfor segment reporting, it is reported in the Applied Ceramic Products Group. This acquisition had no material
impact on Kyocera’s consolidated results of operations and financial position.
On April 30, 2008, Kyocera Mita Corporation (“Kyocera Mita”) , a subsidiary of Kyocera, acquired thedevelopment operations related to digital multi-function devices for printers and copy machines from Peerless
Systems Corporation.
F-18

Notes to The Consolidated Financial Statements—(Continued)
Kyocera Corporation and Consolidated Subsidiaries
On November 18, 2008, Kyocera Mita announced that it submitted a takeover offer to the shareholders of TA
Triumph-Adler AG (TAAG), a German based sales company of information equipment, which was accounted forby the equity method. On December 15, 2008, this takeover offer was approved by German Federal Supervisory
Authority. During December 16, 2008 to February 2, 2009, a total of 14,184,810 shares of TAAG were tendered,and Kyocera Mita acquired them by February 10, 2009. In addition, from December 8, 2008 to March 31, 2009,
Kyocera Mita acquired 21,372,713 shares of TAAG directly from its shareholders or through the stock market.
The total amount of the acquisition cost was ¥8,234 million ($83,172 thousand), which was funded mainly bycash in hand. As of March 31, 2009, the allocation of the acquisition cost has been prepared based on preliminary
estimates of fair values and is subject to additional adjustment upon completion of the analysis.
As a result of these acquisitions of shares, together with shares which Kyocera Mita had already secured before
the announcement of the takeover offer on November 18, 2008, Kyocera Mita secured a total shareholding of
94.19% in TAAG as of March 31, 2009. As the European Commission approved the purchase of shares in TAAG
by Kyocera Mita on January 21, 2009, TAAG was consolidated by Kyocera from that date.
Kyocera Mita America, Inc., a subsidiary of Kyocera Mita, acquired all operations and related assets, or all of thecapital stock of the following five sales companies of information equipment for the purpose of expanding its
sales channels in the United States of America.
Name

Date of acquisition

Internetworking Innovations, Inc.
Velocity Imaging Products, Inc.
Duplitron Massachusetts, Inc.
Duplitron New Jersey, Inc.
One Stop Business Centers, Inc.

May 30, 2008
July 1, 2008
October 1, 2008
October 1, 2008
December 30, 2008

On October 1, 2008, Kyocera Mita Australia Pty. Ltd., a subsidiary of Kyocera Mita, acquired all operations andrelated assets of Action Copies Pty. Ltd., a sales company of information equipment in Australia.
The results of operations of the acquired businesses were included into Kyocera’s consolidated financial
statements since the acquisition dates and for segment reporting are reported in the Information Equipment
Group. These acquisitions of businesses and shares by Kyocera Mita and its subsidiaries had no material impact
on Kyocera’s consolidated results of operations and financial position.
Business combinations in the year ended March 31, 2008
Kyocera Mita acquired all operations and related assets of Docusource L.L.C. on May 31, 2007. Kyocera Mitaalso acquired by merger all of the outstanding capital stock of Garing Business Machines, Inc. on November 27,
2007. These business acquisitions had no material impact on Kyocera’s consolidated results of operations andfinancial positions.
On September 25, 2007, AVX Corporation (AVX) acquired by merger all of the outstanding capital stock ofAmerican Technical Ceramics Corp. (ATC) in exchange for approximately ¥26,920 million in cash, plus relatedacquisition costs. ATC designs, develops, manufactures and markets electronic components, including ceramic
multilayer capacitors and custom thin film circuits. ATC’s products are used in a broad range of commercial
applications, including wireless infrastructure, fiber optics, medical electronics, semiconductor manufacturing
equipment and satellite equipment. ATC has manufacturing facilities and sales offices in New York,
manufacturing and research and development facilities in Florida, and sales offices in Sweden and China.
F-19

Notes to The Consolidated Financial Statements—(Continued)
Kyocera Corporation and Consolidated Subsidiaries
AVX has used the purchase method of accounting to record the acquisition in accordance with SFAS No.141,“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. As of September 30, 2007, the allocation of
the purchase price was prepared based on preliminary estimates of fair values. The initial estimated purchaseprice allocation was revised as of March 31, 2008 resulting in an increase to goodwill of ¥652 million asreflected in the table below. The results of operations for ATC were included in the accompanying Consolidated
Statement of Operations since the acquisition date. For Kyocera’s segment reporting, ATC is reported in theElectronic Device Group which includes AVX and goodwill associated with the acquisition is allocated to thereporting unit within AVX.
September 25, 2007
(Yen in millions andU.S. dollars in thousands)

Current assets . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Non-current assets . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

¥ 7,550
14,866

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

22,416

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

1,376
3,912

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

5,288

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

17,128Purchase price . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

26,920Goodwill . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

¥ 9,792

Intangible assets that AVX recorded due to the acquisition of ATC are summarized as follows:
Changes in gross carrying amounts of intangible assets subject to amortization and intangible assets not tosubject to amortization were due to translation adjustments.
March 31,2008
2009
Gross Carrying Accumulated Gross Carrying Accumulated
AmountAmortization
AmountAmortization(Yen in millions)Intangible assets subject to amortization:
Customer relationships . . . . . . . . . . . . . . . . . . . .
Other . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

¥5,100
1,205

¥141
59

¥4,998
1,181

¥416
217

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

¥6,305¥200¥6,179¥633

2008
Gross Carrying
Amount2009
Gross Carrying
AmountIntangible assets not subject to amortization:
Trademark . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

¥3,400¥3,332

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

¥3,400¥3,332F-20

Notes to The Consolidated Financial Statements—(Continued)
Kyocera Corporation and Consolidated Subsidiaries

March 31,2009
Gross Carrying
Accumulated
AmountAmortization(U.S. dollars in thousands)

Intangible assets subject to amortization:
Customer relationships . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Other . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

$50,485
11,929$4,202
2,192

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

$62,414$6,3942009
Gross Carrying
AmountIntangible assets not subject to amortization:
Trademark . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

$33,657

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

$33,657

The estimated aggregate amortization expenses for intangible assets that AVX recorded due to the acquisition of
ATC for the next five years are as follows:(Yen in millions andU.S. dollars in thousands)

Years ending March 31,

2010 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
2011 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
2012 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
2013 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
2014 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

¥422
421
421
421
421

$4,263
4,253
4,253
4,253
4,253

The pro forma results for the years ended March 31, 2007 and 2008 were not presented as the amounts wereimmaterial.
4. INVESTMENTS IN DEBT AND EQUITY SECURITIES
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. In gross unrealized gains and losses on equity securities, ¥99,697 million of gross unrealized gain atMarch 31, 2008 and ¥15,540 million ($156,970 thousand) of gross unrealized gain at March 31, 2009 were
derived from a fluctuation in the market value of the shares of KDDI Corporation (KDDI).
Other-than-temporary loss on debt and equity securities with readily determinable fair values for the years ended
March 31, 2007, 2008 and 2009 amounted to ¥797 million, ¥174 million and ¥6,875 million ($69,444 thousand),
respectively. For the year ended March 31, 2009, Kyocera recorded losses on impairment of securities due to thedecline in fair value below cost for a considerable length of time and the extent was severe, most of which was an
impairment loss of ¥3,935 million ($39,747 thousand) of shares of Mitsubishi UFJ Financial Group, Inc.
Kyocera elected the fair value option only for convertible bonds as allowed by SFAS No. 159 for the year ended
March 31, 2009. Gain on convertible bonds amounted to ¥3 million ($30 thousand) was recorded in other, net on
the consolidated statement of income.
F-21

Notes to The Consolidated Financial Statements—(Continued)
Kyocera Corporation and Consolidated Subsidiaries
Investments in debt and equity securities at March 31, 2008 and 2009, included in short-term investments(current assets) and in securities and other investments (non-current assets) are summarized as follows:

Cost*

March 31,2008
Aggregate
Gross
Gross
Fair
Unrealized Unrealized
Value
Gains
LossesCost*(Yen in millions)2009
Aggregate
Gross
Gross
Fair
Unrealized Unrealized
Value
Gains
LossesAvailable-for-salesecurities:
Corporate debt
securities . . . . . . . . . . ¥ 9,205 ¥ 8,971 ¥46
Other debt securities . . .
5,538
5,377
2
Equity securities . . . . . . 275,984 386,162 113,327

¥ 280
163
3,149

¥ 11,884 ¥ 11,359 ¥
16
5,716
5,220
22
270,156 291,137 22,099

¥ 541
518
1,118

Total available-for-salesecurities . . . . . . . . . . . .

290,727

400,510

113,375

3,592

287,756

307,716

22,1372,177

Held-to-maturity
securities:
Corporate debt
securities . . . . . . . . . .
Other debt securities . . .

—15,904—
15,989

—
85

—
—

8,398
19,524

8,375
19,467

2
17

25
74

Total held-to-maturity
securities . . . . . . . . . . . .

15,904

15,98985—

27,922

27,842

19

99

Total investments in debt
and equity securities . . . ¥306,631 ¥416,499 ¥113,460¥3,592¥315,678 ¥335,558 ¥22,156¥2,276

March 31, 2009
Aggregate
Gross
Fair
Unrealized
Value
Gains
(U.S. dollars in thousands)

Gross
Unrealized
Losses

Cost*

Available-for-sale securities:
Corporate debt securities . . . . . . . . . . . . . . . . . . . . . . . . . .
Other debt securities . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Equity securities . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

$ 120,040
57,7372,728,849$ 114,738 $
162
52,727222
2,940,778
223,222$ 5,464
5,232
11,293

Total available-for-sale securities . . . . . . . . . . . . . . . . . . . . . . .

2,906,626

3,108,243

223,606

21,989Held-to-maturity securities:
Corporate debt securities . . . . . . . . . . . . . . . . . . . . . . . . . .
Other debt securities . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

84,829197,21284,596
196,636

20
172

253
748

Total held-to-maturity securities . . . . . . . . . . . . . . . . . . . . . . . .

282,041

281,232

192

1,001

Total investments in debt and equity securities . . . . . . . . . . . . $3,188,667$3,389,475$223,798$22,990F-22

Notes to The Consolidated Financial Statements—(Continued)
Kyocera Corporation and Consolidated Subsidiaries
At March 31, 2009, the contractual maturities of available-for-sale and held-to-maturity securities are
summarized as follows:
March 31, 2009
Held-to-Maturity
Available-for-Sale
Aggregate
Aggregate
Fair
Fair
Cost*
Value
Cost*
Value
(Yen in millions and U.S. dollars in thousands)

Available-for-Sale
Aggregate
Fair
Cost*
Value

Due within
1 year . . . . . .
Due after 1 year
to 5 years . . .
Due after
5 years . . . . .
Equitysecurities . . . .

*

¥

5,306

¥

5,097

¥ 4,998¥ 4,999

9,423

8,945

22,924

22,843

2,871

2,537

—

270,156

291,137¥287,756¥307,716$

53,596$

Held-to-Maturity
Aggregate
Fair
Cost*
Value

51,485$ 50,485$ 50,495

95,18190,354

231,556

230,737—

29,00025,626————2,728,849

2,940,778——¥27,922¥27,842$2,906,626$3,108,243$282,041$281,232

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.

Proceeds from sales of available-for-sale securities and the related gross realized gains and losses for the years
ended March 31, 2007, 2008 and 2009 are as follows:
Years ended March 31,
2007
2008
2009
2009
(Yen in millions and U.S. dollars in thousands)

Proceeds from sales of available-for-sale securities . . . . . . . . . . . . . . .
Gross realized gains . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Gross realized losses . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

¥99,171
6,055
2,305

¥88,617
3,224
4,078

¥17,028
951
3,875$172,000
9,606
39,141For the purpose of computing gains and losses, the cost of those securities is determined by the moving averagemethod.
Kyocera’s available-for-sale securities were classified by length of unrealized loss position at March 31, 2008
and 2009 as follows:
within 1 year
Aggregate
Gross
Fair
Unrealized
Value
LossesMarch 31, 2008
over 1 year
Aggregate
Gross
Fair
Unrealized
Value
Losses

Total
Aggregate
Gross
Fair
Unrealized
Value
Losses(Yen in millions)

Corporate debt securities . . . . . . . . . . . . . . .
Other debt securities . . . . . . . . . . . . . . . . . . .
Equity securities . . . . . . . . . . . . . . . . . . . . . .

¥ 7,279
4,984
14,288

¥ 280
163
3,148

¥—
—

¥—
—
2

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

¥26,551¥3,591

¥

F-23

2

¥

1

¥ 7,279
4,984
14,290

¥ 280
163
3,149

1

¥26,553¥3,592

Notes to The Consolidated Financial Statements—(Continued)
Kyocera Corporation and Consolidated Subsidiaries

within 1 year
Aggregate
Gross
Fair
Unrealized
Value
LossesMarch 31, 2009
over 1 year
Aggregate
Gross
Fair
Unrealized
Value
Losses(Yen in millions)

Total
Aggregate
Gross
Fair
Unrealized
Value
LossesCorporate debt securities . . . . . . . . . . . . . . .
Other debt securities . . . . . . . . . . . . . . . . . . .
Equity securities . . . . . . . . . . . . . . . . . . . . . .

¥ 4,519
1,564
6,192

¥ 460
268
1,118

¥1,742
1,795
—

¥ 81
250
—

¥ 6,261
3,359
6,192

¥ 541
518
1,118

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

¥12,275¥1,846¥3,537¥331¥15,812¥2,177

within 1 year
Aggregate
Gross
Fair
Unrealized
Value
LossesMarch 31, 2009
over 1 year
Total
Aggregate
Gross
Aggregate
Gross
Fair
Unrealized
Fair
Unrealized
Value
Losses
Value
Losses(U.S. dollars in thousands)

Corporate debt securities . . . . . . . . . . . . . .
Other debt securities . . . . . . . . . . . . . . . . . .
Equity securities . . . . . . . . . . . . . . . . . . . . .

$ 45,647
15,79862,545$ 4,647
2,707
11,293$17,596
18,131
—

$ 818
2,525
—

$ 63,243
33,92962,545$ 5,464
5,232
11,293

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

$123,990$18,647$35,727$3,343$159,717$21,989

At March 31, 2009, Kyocera held available-for-sale securities in unrealized loss positions of ¥2,177 million($21,989 thousand) and considered the impairments were not other-than-temporarily as the extent to which fairvalue was below the cost was minor and the duration of the impairments was mostly within a year.
5. INVENTORIESInventories at March 31, 2008 and 2009 are as follows:
March 31,
2009
2009
(Yen in millions andU.S. dollars in thousands)

2008

Finished goods . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Work in process . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Raw materials and supplies . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

F-24¥101,353
42,444
61,415¥104,379
39,83655,426$1,054,333
402,384
559,859¥205,212¥199,641$2,016,576

Notes to The Consolidated Financial Statements—(Continued)
Kyocera Corporation and Consolidated Subsidiaries
6. VALUATION AND QUALIFYING ACCOUNTS
Changes in valuation and qualifying accounts are as follows:

Description

Additions
ChargedBalance
Charged to (Credited) to
at Beginning of
Costs andother
PeriodExpenses
Accounts(A) Deductions(B)(Yen in millions and U.S. dollars in thousands)

Balanceat End ofPeriodFor the year ended March 31, 2007:
Allowance for doubtful accounts . . . . . . . . . . .
Allowance for sales returns . . . . . . . . . . . . . . .

¥12,184
3,712

¥

804
7,811

¥(4,802)65¥ (3,204)(8,499)¥ 4,982
3,089

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

¥15,896¥ 8,615¥(4,737)¥(11,703)¥ 8,071

For the year ended March 31, 2008:
Allowance for doubtful accounts . . . . . . . . . . .
Allowance for sales returns . . . . . . . . . . . . . . .

¥ 4,982
3,089

¥

628
8,510

¥ (406)(549)¥ (1,324)(8,615)¥ 3,880
2,435

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

¥ 8,071¥ 9,138¥ (955)¥ (9,939)¥ 6,315

For the year ended March 31, 2009:
Allowance for doubtful accounts . . . . . . . . . . .
Allowance for sales returns . . . . . . . . . . . . . . .

¥ 3,880
2,435¥ 1,512
6,178

¥

430
0

¥

(831)
(6,458)¥ 4,991
2,155

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

¥ 6,315¥ 7,690¥430¥ (7,289)¥ 7,146

For the year ended March 31, 2009:
Allowance for doubtful accounts . . . . . . . . . . .
Allowance for sales returns . . . . . . . . . . . . . . .

$39,192
24,596$15,273
62,404$ 4,3430$ (8,394)(65,232)$50,414
21,768

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

$63,788$77,677$ 4,343$(73,626)$72,182(A) Foreign currency translation adjustments, the decrease by the sale of Kyocera Leasing Co., Ltd. and theincrease by business combination.
(B) Charge-offs
7. INVESTMENTS IN AND ADVANCES TO AFFILIATES
Kyocera Corporation owns a 30% interest in WILLCOM, Inc., which operates a Personal Handyphone System(PHS) business, and Kyocera accounted for its investment by the equity method. Kyocera sells mainly PHS handsets
and PHS based stations to WILLCOM, Inc. At March 31, 2009, a director of Kyocera Corporation is a director of
WILLCOM, Inc. and a corporate officer of Kyocera Corporation is a corporate auditor of WILLCOM, Inc.
Kyocera Mita had owned a 30% interest in TAAG and had accounted for its investment by the equity method. As
shown in Note 3 to the Consolidated Financial Statement in this annual report on Form 20F, as a result ofKyocera Mita’s additional acquisition of shares of TAAG, Kyocera Mita discontinued to apply the equity method
and has consolidated TAAG as a subsidiary since January 21, 2009.
The market value of investment in TAAG at March 31, 2008 was ¥4,798 million. The carrying amount ofinvestment in TAAG accounted for by the equity method at March 31, 2008 was ¥3,096 million.

F-25

Notes to The Consolidated Financial Statements—(Continued)
Kyocera Corporation and Consolidated Subsidiaries
Related party transactions with the affiliates, accounted for by the equity method are as follows:
March 31,
2009
2009
(Yen in millions andU.S. dollars in thousands)

2008

Kyocera’s investments in and advances to affiliates . . . . . . . . . . . . . . . . . . . . . . . ¥16,408 ¥19,043 $192,354
Kyocera’s trade receivables from affiliates . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
15,433
16,888
170,586
Years ended March 31,
2007
2008
2009
2009
(Yen in millions and U.S. dollars in thousands)

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

¥ 2,593
39,189¥ 6,080
42,291¥ 6,467
36,791$ 65,323
371,626

8. LEASE RECEIVABLES
Lease receivables represent finance leases which consist of sales-type leases. These receivables typically haveterms ranging from one year to seven years. The lease receivables, which are included in other current assets andother assets in the accompanying consolidated balance sheets, are as follows:
March 31,
2009
2009
(Yen in millions andU.S. dollars in thousands)

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

¥ 35,899 $ 362,616
2,237
22,596(4,128)(41,697)(151)(1,525)Less, allowance for doubtful receivables . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

33,857(541)

341,990(5,465)Less, portion due within one year . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

33,316(10,024)

336,525(101,252)

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

¥ 23,292$ 235,273

Future minimum lease payments to be received under financing leases for future years are as follows:
Years ending March 31,(Yen in millions andU.S. dollars in thousands)

2010 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
2011 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
2012 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
2013 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
2014 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
2015 and thereafter . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

¥10,690
9,576
7,409
4,978
2,545
701

$107,980
96,727
74,83850,28325,707
7,081

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

¥35,899$362,616

F-26

Notes to The Consolidated Financial Statements—(Continued)
Kyocera Corporation and Consolidated Subsidiaries
TAAG transferred the finance lease receivables to a third party in exchange for cash, however, the transfer of thefinance lease receivables did not qualify as a sale for financial reporting purpose because TAAG has the right torepurchase the receivables. Accordingly, Kyocera has accounted for the cash received as a secured borrowing
and it is included in long term debt. The third party lender has recourse only to the related lease receivables. As aresult of the transaction, finance lease receivables in the amount of ¥29,691 million ($299,909 thousand) as ofMarch 31, 2009 have been recorded on the balance sheet.
9. GOODWILL AND OTHER INTANGIBLE ASSETS
Intangible assets are summarized as follows:
March 31,
2009

2008
Gross
Carrying
Amount

2009

Gross
Gross
Accumulated
Carrying
Accumulated
Carrying
Amortization
AmountAmortization
Amount(Yen in millions and U.S. dollars in thousands)

Accumulated
Amortization

Intangible assets subject toamortization:
Software . . . . . . . . . . . . . . . . .
Patent rights . . . . . . . . . . . . . .
Customer relationships . . . . . .
Other . . . . . . . . . . . . . . . . . . . .

¥29,772
27,775
5,596
8,334¥18,825
21,253298
4,674¥ 36,811
29,11730,69812,298¥23,856
24,5882,840
6,160$ 371,828
294,111
310,081
124,222$240,970
248,363
28,68762,222

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

¥71,477¥45,050¥108,924¥57,444$1,100,242$580,242

March 31,
2008
2009
2009
Gross
Gross
Gross
Carrying Carrying Carrying
AmountAmountAmount(Yen in millions andU.S. dollars in thousands)

Intangible assets not subject to amortization:
Trademark . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Other . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

¥3,4002¥8,596
1$86,828
10

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

¥3,402¥8,597$86,838

Intangible assets acquired during the year ended March 31, 2009 are as follows:Year ended March 31
2009
2009
(Yen in millions andU.S. dollars in thousands)

Intangible assets subject to amortization:
Software . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Patent rights . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Customer relationships . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Other . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Intangible assets not subject to amortization:
Trademark . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Total . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
F-27¥ 8,715
1,732
24,215
3,867$ 88,030
17,495244,596
39,061

4,940

49,899¥43,469$439,081

Notes to The Consolidated Financial Statements—(Continued)
Kyocera Corporation and Consolidated Subsidiaries
The weighted average amortization periods for software, patent rights and customer relationships are five years,
five years and 10 years, respectively.
Total amortization of intangible assets during the years ended March 31, 2007, 2008 and 2009 amounted to¥11,666 million, ¥11,132 million and ¥13,532 million ($136,687 thousand), respectively.
The estimated aggregate amortization expenses for intangible assets for the next five years are as follows:
Years ending March 31,(Yen in millions and U.S. dollars in thousands)

2010 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
2011 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
2012 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
2013 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
2014 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

¥11,269
8,119
6,813
5,701
2,894

$113,828
82,01068,81857,58629,232The changes in the carrying amounts of goodwill by reporting segment for the years ended March 31, 2008 and2009 are as follows:
Fine
Applied
Ceramic Semiconductor Ceramic Electronic Telecommunications Information
Parts
Parts
Products
DeviceEquipment
Equipment
Group
Group
Group
Group
Group
Group
Others(Yen in millions and U.S. dollars in thousands)

Balance at March 31,
2007 . . . . . . . . . . . . . . . . ¥ 100
Goodwill acquired during
the year . . . . . . . . . . . . .
—Translation adjustments
and reclassification toother accounts . . . . . . . .
—

¥ 912

¥ 7,106 ¥ 21,410

¥

—

¥

689

Total

¥ 2,677 ¥ 32,894——

10,211—

202—

10,413—(1,083)(2,298)

—

(132)

—

(3,513)

100

912

6,023

29,323

—

759

2,677

39,794

—
—

—
—

276
(2,240)——18,456
—

7,717
—

—
(1,217)

26,449(3,457)

—

—

(233)

35

—

653

(15)

440

Balance at March 31,
2009 . . . . . . . . . . . . . . . . ¥ 100¥ 912¥ 3,826 ¥ 29,358¥ 18,456¥ 9,129¥ 1,445 ¥ 63,226$9,212$ 60,838 $296,192—$ 7,667$ 27,040 $401,959—
267,162(12,293) (34,919)

Balance at March 31,
2008 . . . . . . . . . . . . . . . .
Goodwill acquired during
the year . . . . . . . . . . . . .
Impairment of goodwill . . .
Translation adjustments
and reclassification toother accounts . . . . . . . .

Balance at March 31,
2008 . . . . . . . . . . . . . . . . $1,010
Goodwill acquired during
the year . . . . . . . . . . . . .
—Impairment of goodwill . . .
—Translation adjustments
and reclassification toother accounts . . . . . . . .
—Balance at March 31,
2009 . . . . . . . . . . . . . . . . $1,010

—
—

2,788
(22,626)——

186,424—

77,950——(2,354)

354

—

6,596

$ 38,646 $296,546$186,424$92,213$9,212

F-28

(152)

4,444

$ 14,595 $638,646

Notes to The Consolidated Financial Statements—(Continued)
Kyocera Corporation and Consolidated Subsidiaries
The goodwill of ¥26,449 million ($267,162 thousand) which Kyocera group acquired during fiscal 2009 was
mainly based on the acquisition of the mobile phone related business from SANYO by Kyocera Corporation
included in the “Telecommunications Equipment Group” and based on conversing TAAG consolidated
subsidiary by Kyocera Mita included in the “Information Equipment Group.” For detailed information of thisacquisition, see Note 3 to the Consolidated Financial Statements in this annual report on Form 20-F.
In fiscal 2009, Kyocera recognized impairment losses on goodwill in the amounts of ¥2,240 million ($22,626
thousand) in the Applied Ceramic Products Group and ¥1,217 million ($12,293 thousand) in the Others segment.
The sluggish performances at a U.S. subsidiary in the Applied Ceramic Products Group and at a Japanesesubsidiary in Others segment led to significant decline in their fair values. The fair values of those goodwill were
determined through the use of various methodologies such as discounted cash flows and comparable valuationsof similar companies.
10. SHORT-TERM BORROWINGS AND LONG-TERM DEBT:
Short-term borrowings at March 31, 2008 and 2009 are comprised of the following:
Loans from banks with average interest rates of 3.46% and 1.95% at March 31, 2008 and 2009, respectively.
March 31,
2008
2009
2009
(Yen in millions and U.S. dollars in thousands)

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

¥ —
7,279

¥

281
10,719$2,838
108,273¥7,279¥11,000$111,111

Long-term debt at March 31, 2008 and 2009 are comprised of the following:
Loans from banks and others with interest rates ranging from 0.15% to 5.51% and from 0.15% to 7.43% at
March 31, 2008 and 2009, respectively.
March 31,
2008
2009
2009
(Yen in millions and U.S. dollars in thousands)

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

¥ 2,585
9,145¥ 33,192
9,211$ 335,273
93,041

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

11,730(3,432)

42,403(13,865)

428,314(140,051)¥ 8,298¥ 28,538$ 288,263

F-29

Notes to The Consolidated Financial Statements—(Continued)
Kyocera Corporation and Consolidated Subsidiaries
Aggregate maturities of long-term debt at March 31, 2009 are as follows:
Years ending March 31,(Yen in millions andU.S. dollars in thousands)

2011 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
2012 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
2013 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
2014 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
2015 and thereafter . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

¥10,827
7,304
6,029
2,434
1,944

$109,364
73,77860,89924,586
19,636¥28,538$288,263

Kyocera’s assets pledged as collateral of property, plant and equipment, net of accumulated depreciation for
long-term debt at March 31, 2008 were ¥5,145 million. Kyocera’s assets pledged as collateral of property, plantand equipment, net of accumulated depreciation and intangible assets for long-term debt at March 31, 2009 were
¥5,090 million ($51,414 thousand) and ¥1,950 million ($19,697 thousand), respectively.
11. BENEFIT PLANS
Adoption of SFAS No. 158:
As of March 31, 2007, Kyocera adopted SFAS No. 158, “Employers’ Accounting for Defined Benefit Pension
and Other Postretirement Plans-an amendment of FASB Statements No. 87, 88, 106 and 132 (R),” which requires
an employer to recognize the over funded or under funded status of its defined benefit postretirement plans as an
asset or liability in its consolidated balance sheet and to recognize changes in that funded status in the year inwhich the changes occur through comprehensive income. Kyocera initially recognized the funded status of its
defined benefit plans and to provide the required disclosures in accordance with this standard at March 31, 2007.
The following tables show the incremental effect of the applying SFAS No. 158 at March 31, 2007 on the
consolidated balance sheet line items listed below. These adjustments had no effect on Kyocera’s consolidated
statements of income and cash flows for the year ended March 31, 2007.
BeforeApplication of
SFAS No. 158

Investments in and advances to affiliates and unconsolidated
subsidiaries . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Intangible assets . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Deferred tax assets . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Prepaid benefit cost . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Accrued benefit liability . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Deferred tax liabilities . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Minority interests in subsidiaries . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Accumulated other comprehensive income (loss) . . . . . . . . . . . . . . . . .

¥Adjustments(Yen in millions)

After
Application of
SFAS No. 158

—
12
8,354
568

¥ 1,033(12)(2,555)23,614¥ 1,033—
5,799
24,182

17,856
1,466(942)(2,139)(4,931)9,480(27)
17,55812,925
10,946(969)
15,419SFAS No. 158 also requires an employer to measure the funded status of a benefit plan as of the date of its fiscal
year-end statement of financial position for the years ended after December 15, 2008. Kyocera adopted thismeasurement date provision in the year ended March 31, 2009 and measured the funded status of its benefit plansat the date of its fiscal year-end statement of financial position. As a result of applying the transition method of
this provision, retained earnings and other comprehensive income at the beginning of the year decreased by¥522 million ($5,273 thousand) and ¥418 million ($4,222 thousand), respectively.
F-30

Notes to The Consolidated Financial Statements—(Continued)
Kyocera Corporation and Consolidated Subsidiaries
Domestic:a. Defined benefit plans
At March 31, 2009, Kyocera Corporation and its major domestic subsidiaries sponsor funded defined benefit
pension plans or unfunded retirement and severance plans for their employees.
Kyocera Corporation adopted a variable expected interest rate for benefits paid for pensioners, which is linked
with the long- term interest rate prevailing in Japan instead of a fixed expected interest rate, effective April 2004.
Benefits under the plan of Kyocera Corporation were previously calculated based on base salary, employee’s
position, length of service period and conditions at the time of retirement. However, after April 2005, Kyocera
adopted “point system” whereby benefits under the plan are calculated according to (i) accumulated “points” thatare earned based on employee’s 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 receive lifetime
pension payments for the full amount of their retirement payment, while after April 2005, employees areprovided an option to receive lifetime pension payments for 50% of their retirement payment and 50% of pension
payments for 20 years in maximum. These amendments reduced the projected benefit obligation of the pension
plan for Kyocera Corporation. This effect of the reduction in the projected benefit obligation was reflected as aprior service cost.
Major domestic subsidiaries also amended their benefit plans and adopted the “point system” effective April
2006 and April 2007. As a result of this amendment, their projected benefit obligations decreased and suchdecreases were reflected as prior service costs.

F-31

Notes to The Consolidated Financial Statements—(Continued)
Kyocera Corporation and Consolidated Subsidiaries
The funded statuses of the benefit plans at Kyocera Corporation and its major domestic subsidiaries as ofMarch 31, 2008 and 2009 are as follows:
March 31,
2008
2009
2009
(Yen in millions and U.S. dollars in thousands)

Change in projected benefit obligations:
Projected benefit obligation at beginning of year . . . . . . . . . . . . .
Service cost . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Interest cost . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Actuarial (gain) loss . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Benefits paid . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Business combination . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Amendment . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Other . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

¥110,025
7,668
2,166
(275)
(3,615)—110
560¥116,639
9,842
2,887
3,304
(4,845)
6,678
19
(150)

$1,178,172
99,414
29,16133,374(48,939)
67,454
192(1,515)

Projected benefit obligation at end of year . . . . . . . . . . . . . . . . . .
Change in plan assets:
Fair value of plan assets at beginning of year . . . . . . . . . . . . . . . .
Actual loss on plan assets . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Employer contribution . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Benefits paid . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Business combination . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Other . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

116,639

134,374

1,357,313

127,652(799)
8,910(3,538)—206

132,431(5,889)10,698(4,806)
3,140
(102)

1,337,687(59,485)
108,061(48,546)
31,717(1,030)Fair value of plan assets at end of year . . . . . . . . . . . . . . . . . . . . .

132,431

135,472

1,368,404

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

¥ 15,792¥$

Amounts recognized in the consolidated balance sheets consist of:Prepaid benefit cost . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Accrued benefit liability . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

¥ 23,652(7,860)¥ 10,447(9,349)$ 105,525(94,434)

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

¥ 15,792¥$

Amounts recognized in accumulated other comprehensive income(loss) consist of:
Net transition obligation . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Prior service cost . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Actuarial loss . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

¥

(111)
51,204(28,943)—¥ 45,920(40,564)—$ 463,838(409,737)

Accumulated other comprehensive income . . . . . . . . . . . . . . . . . . . . . .

¥ 22,150¥$

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

¥116,133¥133,937$1,352,899¥ 18,514
18,113
10,654¥ 19,334
18,933
9,985$ 195,293
191,242
100,859

F-32

1,098

1,098

5,356

11,091

11,091

54,101

Notes to The Consolidated Financial Statements—(Continued)
Kyocera Corporation and Consolidated Subsidiaries
Net periodic pension costs at Kyocera Corporation and its major domestic subsidiaries in the years ended
March 31, 2007, 2008 and 2009, include the following components:
Years ended March 31,
2007
2008
2009
2009
(Yen in millions and U.S. dollars in thousands)

Service cost . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . ¥ 7,873 ¥ 7,668 ¥ 9,842 $ 99,414
Interest cost . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
2,098
2,166
2,887
29,161
Expected return on plan assets . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . (2,870) (3,193) (3,549) (35,848)
Amortization of transition obligation . . . . . . . . . . . . . . . . . . . . . . . . . . .
185
226
111
1,121
Amortization of prior service cost . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . (4,739) (4,328) (5,265) (53,182)
Recognized actuarial loss . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
1,310
1,030
1,106
11,172
Net periodic pension costs . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

¥ 3,857¥ 3,569¥ 5,132$ 51,838

Net periodic pension costs in the year ended March 31, 2009 included the effect of the adoption of SFAS
No. 158.
Changes in other comprehensive income (loss) at Kyocera Corporation and its major domestic subsidiaries in theyear ended March 31, 2008 and 2009 mainly consist of the following components:
Years ended March 31,
2008
2009
2009
(Yen in millions and U.S. dollars in thousands)

Prior service cost due to plan amendments . . . . . . . . . . . . . . . . . . . . . .
Net actuarial loss incurred during the year . . . . . . . . . . . . . . . . . . . . . .
Amortization of transition obligation . . . . . . . . . . . . . . . . . . . . . . . . . .
Amortization of prior service cost . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Recognized actuarial loss . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

¥ (110)(3,738)226(4,328)
1,030

¥
(19)
(12,742)
111(5,265)
1,106

$
(192)
(128,707)
1,121(53,182)
11,172

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

¥(6,920)¥(16,809)$(169,788)

Amortization of transition obligation, amortization of prior service cost and recognized actuarial loss in the year
ended March 31, 2009 included the effect of the adoption of SFAS No. 158.
Prior service cost and actuarial loss expected to be amortized at Kyocera Corporation and its major domestic
subsidiaries in the year ending March 31, 2010 are as follows:Year ending March 31,
2010
2010
(Yen in millions andU.S. dollars in thousands)

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

¥(4,329)
1,170$(43,727)
11,818Assumptions used to determine projected benefit obligations at Kyocera Corporation and its major domestic
subsidiaries at March 31, 2008 and 2009 are as follows:
March 31,

Discount rate . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
F-33

2008

2009

1.75%-2.00%

1.25%-2.00%

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, 2007, 2008 and 2009 are as follows:

2007

Discount rate . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Expected long-term rate of return on plan assets . . . . . . . . . . . . .

Years ended March 31,
2008

1.75%-2.00%
2.00%-2.50%

1.75%-2.00%
2.50%-3.00%

2009

1.75%-2.00%
1.25%-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, 2007, 2008 and 2009 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 categories at Kyocera Corporation and its major domestic subsidiaries at March 31, 2008 and 2009
are as follows:
March 31,
2008
2009

Life insurance company general account . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Equity securities . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Debt securities . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Cash and cash equivalents . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Other . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

58.5%
22.4%
6.6%
5.5%
7.0%

59.0%
11.7%
1.7%
16.7%
10.9%

100.0%

100.0%The plan assets other than life insurance company general account within the table above are investments incommingled funds which are recorded at fair value based on the net asset value of the fund as provided by thefund manager or general partner.
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. In
terms of the plan assets management, they make appropriate investment choices and optimal portfolios with aconsideration 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 to accomplish Kyocera’s objective. They also make an effort tomaintain their portfolios within reasonable allocations of plan assets. They evaluate their categories of plan assets
allocations and can change their portfolios when it is needed. Their long-term strategy is to allocate
approximately 60% life insurance company general account which assures fixed income, and approximately 30%
equity and debt securities and approximately 10% cash and other for their defined benefit plans.
Kyocera Corporation and its major domestic subsidiaries forecast to contribute ¥8,560 million ($86,465
thousand) to the defined benefit pension plans in the year ending March 31, 2010.
F-34

Notes to The Consolidated Financial Statements—(Continued)
Kyocera Corporation and Consolidated Subsidiaries
Estimated future benefit payments at Kyocera Corporation and its major domestic subsidiaries are as follows:(Yen in millions andU.S. dollars in thousands)

Years ending March 31,

2010 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
2011 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
2012 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
2013 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
2014 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
2015 to 2019 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

¥ 5,249
5,235
5,829
5,861
6,339
38,924$ 53,020
52,87958,87959,20264,030393,172b. Other plan
Kyocera Corporation and its major domestic subsidiaries also provide for lump-sum severance benefits withrespect to directors and corporate auditors. To reserve future payments of lump-sum severance benefits todirectors and corporate auditors, annual provisions are made in the accounts for the estimated cost of thistermination plan, which is not funded.
Foreign:a. 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.
AVX 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 under collective
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.
TAAG, a German subsidiary of Kyocera Mita, maintains a defined benefit pension plan, which covers certain
employees in Germany. TAAG does not maintain an external fund for this benefit pension plan.

F-35

Notes to The Consolidated Financial Statements—(Continued)
Kyocera Corporation and Consolidated Subsidiaries
The following table sets forth the funded statuses of the plans at KII, AVX and TAAG as of March 31, 2008 and2009:
March 31,
2008
2009
2009
(Yen in millions and U.S. dollars in thousands)

Change in benefit obligations:Benefit obligation at beginning of year . . . . . . . . . . . . . . . . . . . . ¥29,481
Service cost . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
556
Interest cost . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
1,514
Plan participants’ contributions . . . . . . . . . . . . . . . . . . . . . . . . . .
—Actuarial gain . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
(2,120)Benefits paid . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
(1,219)Acquisition . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
—Foreign exchange adjustment . . . . . . . . . . . . . . . . . . . . . . . . . . .
(3,795)
Other . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
—¥ 24,417
453
1,768
41
(2,420)(1,466)
16,204(3,845)(30)$ 246,636
4,576
17,859414(24,444)(14,808)
163,676(38,838)(303)

Benefit obligation at end of year . . . . . . . . . . . . . . . . . . . . . . . . .
Change in plan assets:
Fair value of plan assets at beginning of year . . . . . . . . . . . . . . .
Actual return (loss) on plan assets . . . . . . . . . . . . . . . . . . . . . . . .
Employer contribution . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Plan participants’ contributions . . . . . . . . . . . . . . . . . . . . . . . . . .
Benefits paid . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Foreign exchange adjustment . . . . . . . . . . . . . . . . . . . . . . . . . . .
Other expenses . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

24,41735,122354,768

23,109
1,645
1,158
85
(1,219)(3,502)—

21,276(4,885)1,404
41(1,174)(3,369)(30)

214,909(49,343)
14,182414(11,859)(34,030)(303)

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

21,276

13,263

133,970

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

¥ (3,141)¥(21,859)$(220,798)

Amounts recognized in the consolidated balance sheets consist of:
Accrued benefit liability . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

(3,141)(21,859)(220,798)

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

¥ (3,141)¥(21,859)$(220,798)

Amounts recognized in accumulated other comprehensive income(loss) consist of:Prior service cost . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Actuarial loss . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

¥ (129)(2,570)¥$

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

¥ (2,699)¥ (5,845)(114)(5,731)(1,151)(57,889)$ (59,040)

March 31,
2008
2009
2009
(Yen in millions and U.S. dollars in thousands)

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

F-36¥22,957¥33,995$343,384¥16,477
16,21013,845¥35,12233,995
13,263$354,768
343,384
133,970

Notes to The Consolidated Financial Statements—(Continued)
Kyocera Corporation and Consolidated Subsidiaries
Net periodic pension costs at KII, AVX and TAAG in the years ended March 31, 2007, 2008 and 2009 include
the following components:
Years ended March 31,
2007
2008
2009
2009
(Yen in millions and U.S. dollars in thousands)

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

¥

538
1,431
(1,482)
17
238

¥

556
1,514
(1,639)
15
205

¥

453
1,768
(1,684)13
102$ 4,576
17,859(17,010)131
1,030

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

¥

¥

¥

$ 6,586

742

651

652

Net periodic pension costs in the year ended March 31, 2009 included the effect of adoption of SFAS No. 158.
Changes in other comprehensive income (loss) at KII, AVX and TAAG in the year ended March 31, 2008 and2009 mainly consist of the following components:
Years ended March 31,
2008
2009
2009
(Yen in millions and U.S. dollars in thousands)

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

¥2,12615
205¥(4,149)
13
102$(41,909)
131
1,030

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

¥2,346¥(4,034)$(40,748)

Amortization of prior service cost and recognized actuarial loss in the year ended March 31, 2009 included theeffect of the adoption of SFAS No. 158.
Prior service cost and actuarial loss expected to be amortized at KII, AVX and TAAG in the year ending
March 31, 2010 are as follows:Year ending March 31,
2010
2010
(Yen in millions and U.S. dollars in thousands)

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

¥ 10
312

$ 101
3,152

Assumptions used to determine projected benefit obligations of the plans at KII, AVX and TAAG as ofMarch 31, 2008 and 2009 are as follows:
March 31,

Discount rate . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Rate of increase in compensation levels . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

F-37

2008

2009

5.50%-6.50%
3.90%-4.50%

5.60%-7.30%
2.50%-4.00%

Notes to The Consolidated Financial Statements—(Continued)
Kyocera Corporation and Consolidated Subsidiaries
Assumptions used to determine net periodic pension costs at KII, AVX and TAAG in the years ended March 31,
2007, 2008 and 2009 are as follows:
2007

Years ended March 31,
2008

Discount rate . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4.25%-5.50%
Rate of increase in compensation levels . . . . . . . . . . . . . . . . . . . . 3.00%-4.50%
Expected long-term rate of return on plan assets . . . . . . . . . . . . . 6.40%-8.50%

4.40%-6.00%
3.40%-4.50%
6.60%-8.50%

2009

5.50%-6.50%
3.90%-4.50%
6.60%-8.50%

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.
KII’s and AVX’s plan assets categories at March 31, 2008 and 2009 are as follows:
March 31,
2008
2009

Equity securities . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Debt securities . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Cash and cash equivalents . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Other . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

56.5%
36.8%
5.1%
1.6%

52.2%
41.6%
5.4%
0.8%

100.0%

100.0%

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 Europe defined benefit plans.
KII and AVX forecast to contribute ¥1,083 million ($10,939 thousand) to the defined benefit pension plans in theyear ending March 31, 2010.
Estimated future benefit payments of the plans at KII, AVX and TAAG are as follows:
Years ending March 31,(Yen in millions andU.S. dollars in thousands)

2010 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
2011 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
2012 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
2013 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
2014 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
2015 to 2019 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

¥ 2,134
2,173
2,187
2,250
2,303
12,584$ 21,556
21,94922,091
22,72723,263
127,111b. 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 for the years ended
March 31, 2007, 2008 and 2009 were ¥1,003 million, ¥979 million, ¥930 million ($9,394 thousand), respectively.
F-38

Notes to The Consolidated Financial Statements—(Continued)
Kyocera Corporation and Consolidated Subsidiaries
12. STOCK OPTION PLANS
Kyocera Corporation:
Kyocera Corporation granted directors, corporate auditors, corporate executive officers and certain key
employees of Kyocera with stock option plans until the year ended March 31, 2006. Under the plans, they were
granted options to purchase Kyocera Corporation’s shares of common stock at a price determined by the higherof (1) multiplying by 1.1 the average market price of Kyocera Corporation’s common stock in previous month ofthe date of the grant or (2) the market price of Kyocera Corporation’s common stock at the date of grant and an
option’s maximum term is five years. All options vested and are exercisable.
At March 31, 2009, there was no outstanding option and no share of its common stock for the plans.
Activity under Kyocera’s stock option plans is summarized as follows:
Weighted
Average
Exercise
Price

Number of
Options(in thousands)

Outstanding at March 31, 2008 . . . . .
Granted . . . . . . . . . . . . . . . . . . . . . . . .
Exercised . . . . . . . . . . . . . . . . . . . . . . .
Expired and cancelled . . . . . . . . . . . . .

1,237
—
(344)
(893)

¥8,584
—
8,584
8,584

$86.71
—
86.71
86.71

Outstanding at March 31, 2009 . . . . .

—

¥ —

$ —

Exercisable at March 31, 2009 . . . . . .

—

¥ —

$ —

Weighted
Average
Contractual
life remaining(years)Aggregated Intrinsic Value(Yen in millions andU.S. dollars in thousands)¥300$3,030

—

¥—

$ —

—

¥—

$ —

The total aggregate intrinsic value of options exercised is ¥2,103 million, ¥3,006 million and ¥300 million($3,030 thousand) for the years ended March 31, 2007, 2008 and 2009, respectively.
At March 31, 2009, there was no outstanding option and no unrecognized compensation cost related to unvested
awards.
Because Kyocera granted no stock option after the year ended March 31, 2007 and requisite service period of
Kyocera’s stock options granted prior to April 1, 2006 did not attribute to the year ended March 31, 2009, nostock based compensation expense was recognized for the year ended March 31, 2009.
Cash received from the exercise of stock options was ¥7,654 million, ¥7,006 million and ¥2,955 million ($29,848
thousand) for the years ended March 31, 2007, 2008 and 2009, respectively.
AVX Corporation:
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 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
F-39

Notes to The Consolidated Financial Statements—(Continued)
Kyocera Corporation and Consolidated Subsidiaries
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. The number of sharesof common stock available for future issuance under all of the plans, consisting of options available to be granted
and options currently outstanding, was 13,903 thousand at March 31, 2009.
Activity under AVX’s stock option plans is summarized as follows:

Number of
Options(in thousands)

Weighted
Average
Exercise
Price

Outstanding at March 31, 2008 . . . . . . . . . . . . .
Granted . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Exercised . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Expired and cancelled . . . . . . . . . . . . . . . . . . . .

4,829
530
(442)
(467)

$15.99
12.97
7.99
17.11

Outstanding at March 31, 2009 . . . . . . . . . . . . .

4,450$16.31

Exercisable at March 31, 2009 . . . . . . . . . . . . . .

3,205$16.91*

Weighted
Averagecontractual
life remaining(years)*Aggregated Intrinsic Value(Yen in millions andU.S. dollars in thousands)

¥ 88

$889

5.15

¥—

$—

3.97

¥—

$—

Options outstanding and exercisable at March 31, 2009 have a negative aggregated intrinsic value.

The total aggregate intrinsic value of options exercised is ¥323 million, ¥375 million and ¥88 million($889 thousand) for the years ended March 31, 2007, 2008 and 2009, respectively.
Unvested share activity under AVX’s stock options plans at March 31, 2009 is summarized as follows:
Number of
Options(in thousands)

Weighted Average
Grant-Dated
Fair Value

Unvested balance at March 31, 2008 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Options granted . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Option forfeited . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Options vested . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

1,331
530
(86)
(531)

$5.51
3.48
4.86
8.82

Unvested balance at March 31, 2009 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

1,245

$4.69

At March 31, 2009, ¥318 million ($3,212 thousand) of total unrecognized compensation costs related to unvested
awards is expected to be recognized over the vesting period, approximately four years. The total aggregate fairvalue of options vested is ¥463 million, ¥352 million and ¥473 million ($4,778 thousand) for the years ended
March 31, 2007, 2008 and 2009, respectively.
The weighted average estimated fair value of AVX’s stock options granted at grant date market prices was $5.44,$5.63 and $3.48 per option for the years ended March 31, 2007, 2008 and 2009, respectively. The consolidated
statement of income includes ¥211 million ($2,131 thousand), net of ¥40 million ($404 thousand) of tax benefit,
in stock based compensation expense for the year ended March 31, 2009.
Cash received from the exercise of stock options was ¥516 million, ¥669 million and ¥356 million ($3,596
thousand) for the years ended March 31, 2007, 2008 and 2009, respectively. Excess tax benefit from stock-based
payment arrangements was ¥78 million, ¥113 million and ¥24 million ($242 thousand) for the year ended
March 31, 2007, 2008 and 2009 respectively.
F-40

Notes to The Consolidated Financial Statements—(Continued)
Kyocera Corporation and Consolidated Subsidiaries
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. In accordance with SFAS No. 123R AVX has estimated forfeitures in determining the weighted
average fair value calculation. The forfeiture rate used for the year ended March 31, 2009 was 6.9%. The
following are significant weighted average assumptions used for estimating the fair value of options issued under
AVX’s stock option plans:
Years ended March 31,
2007
2008
2009

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

4.90%
5 years
35.25%
0.98%

4.53%
5 years
32.51%
0.88%

3.22%
5 years
28.46%
1.24%

Kyocera Wireless Corp. (KWC):
KWC provides key employees with stock options. The options become vested gradually over a four-year period
provided participants remain a KWC employee. The exercise price shall not be less than 85% of the fair value ofthe common stock at the time the option is granted, and the grant has a maximum term of 10 years. Since KWC’ssecurities are not traded on any stock exchange, KWC’s Board of Directors is responsible for determining the fairvalue using reasonable means. KWC may grant options to all key employees for the purchase for up to an
aggregate of 3,800 thousand shares of common stock. The issuance of new options under this plan has beensuspended as of April 1, 2006.
Activity under KWC’s stock option plan is summarized as follows:

Number of
Options(in thousands)

Weighted
Average
Exercise
Price

Outstanding at March 31, 2008 . . . . . . . . . . . .
Granted . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Exercised . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Expired and cancelled . . . . . . . . . . . . . . . . . . .

1,079
—
—
(193)

$2.47
—
—
3.28

Outstanding at March 31, 2009 . . . . . . . . . . . .

886

$2.30

Exercisable at March 31, 2009 . . . . . . . . . . . .

863

$2.32

*

Weighted
Averagecontractual
life remaining(years)*Aggregated Intrinsic Value(Yen in millions andU.S. dollars in thousands)

¥—

$—

3.54

¥—

$—

3.54

¥—

$—

Options outstanding and exercisable at March 31, 2009 have a negative aggregated intrinsic value.

Unvested share activity under KWC’s stock options plan at March 31, 2009 is summarized as follows:
Number of Options(in thousands)

Weighted Average
Grant-Date
Fair Value

Unvested balance at March 31, 2008 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Options granted . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Option forfeited . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Options vested . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

90
—
(8)
(59)

$0.73
—
0.83
0.75

Unvested balance at March 31, 2009 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

23

$0.63

F-41

Notes to The Consolidated Financial Statements—(Continued)
Kyocera Corporation and Consolidated Subsidiaries
At March 31, 2009, ¥3 million ($30 thousand) of total unrecognized compensation costs related to unvested
awards is expected to be recognized over the vesting period, within a year. The total aggregate fair value of
options vested is ¥22 million, ¥13 million and ¥4 million ($40 thousand) for the years ended March 31, 2007,2008 and 2009, respectively.
The consolidated statement of income includes ¥4 million ($40 thousand) in stock based compensation expense
for the year ended March 31, 2009.
13. DERIVATIVE FINANCIAL INSTRUMENTS AND HEDGING ACTIVITIES
Kyocera’s activities are exposed to a variety of market risks, including the effects of changes in foreign currency
exchange rates and interest rates. Approximately 60% of Kyocera’s revenues are generated from overseas
customers, which exposes Kyocera to foreign currency exchange rates fluctuations. These financial exposures aremonitored and managed by Kyocera as an integral part of its overall risk management program. Kyocera’s risk
management program focuses on the unpredictability of financial markets and seeks to reduce the potentiallyadverse 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 may use derivative financial instruments, suchas 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 itself to credit risk. Credit risk is the failure of the counterparty to perform under theterms of the derivative contracts. When the fair value of a derivative contract is positive, the counterparty owes
Kyocera, which creates repayment risk for Kyocera. When the fair value of a derivative contract is negative,
Kyocera owes the counterparty and, therefore, it does not possess repayment risk. Kyocera minimizes the credit(or repayment) risk in derivative financial instruments by (1) entering into transactions with creditworthy
counterparties, (2) limiting the amount of exposure to each counterparty, and (3) monitoring the financial
condition of its counterparties.
Cash Flow Hedges
Kyocera uses certain foreign currency forward contracts designated as cash flow hedges to protect against foreign
currency exchange rate risks inherent in its forecasted transactions related to purchase commitments and sales.
Also, Kyocera uses interest rate swaps and interest rate caps mainly to convert a portion of its variable rate debt
to fixed rates.
Other Derivatives
Kyocera’s main direct foreign export sales and some import purchases are denominated in the customers’ andsuppliers’ local currency, principally the U.S. dollar, Euro and STG. Kyocera purchases foreign currency forward
F-42

Notes to The Consolidated Financial Statements—(Continued)
Kyocera Corporation and Consolidated Subsidiaries
contracts with terms normally lasting less than four months and currency swaps to protect against the adverse
effects that exchange-rate fluctuations may have on foreign-currency-denominated trade receivables andpayables, and borrowings. The gains and losses on both the derivatives and the foreign currency-denominatedtrade receivable and payable, and borrowings are recorded as foreign currency transaction gains (losses), net in
the consolidated statements of income. Kyocera does not adopt hedge accounting for such derivatives.
The location and fair value of derivative financial instruments in the consolidated balance sheets at March 31,
2009 are as follows:
March 31, 2009
Asset Derivatives
Liability Derivatives
Location
Fair Value*
Location
Fair Value*(Yen in millions)
Derivatives designated as hedging instruments:
Foreign currency forward contracts . . . . . . . . . . . . . . .
Interest rate swaps . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Interest rate caps . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Other current assets—
Other current assets

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

¥ 133
—
0

Other current liabilities
Other current liabilities—¥ 133
Other current assets—

Other current liabilities
Other current liabilities

¥

265
49
—

¥

314

¥

95
—

¥ 3,450
10Total . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

¥95¥ 3,460

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

¥ 228¥ 3,774

March 31, 2009
Asset Derivatives
Liability Derivatives
Location
Fair Value*
Location
Fair Value*(U.S. dollars in thousands)
Derivatives designated as hedging instruments:
Foreign currency forward contracts . . . . . . . . . . . . . . .
Interest rate swaps . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Interest rate caps . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Other current assets—
Other current assets

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

*$1,343—0

Other current liabilities
Other current liabilities—$1,343
Other current assets
—

$ 960
—

$ 2,677495—$ 3,172

Other current liabilities
Other current liabilities$34,848
101

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

$ 960$34,949

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

$2,303$38,121For detailed information, see Note 15 to the Consolidated Financial Statements in this annual report on Form 20-F.

F-43

Notes to The Consolidated Financial Statements—(Continued)
Kyocera Corporation and Consolidated Subsidiaries
The location and amount of derivative financial instruments in the comprehensive income are as follows:
Three months ended March 31, 2009
Gains (losses)
recognized inothercomprehensive
incomeAmountDerivatives designated as cash flow
hedge:
Foreign currency forward
contracts . . . . . . . . . . . . . . . . . . . .
Interest rate swaps . . . . . . . . . . . . . .

¥(102)(43)

Interest rate swaps . . . . . . . . . . . . . .

32

Interest rate caps . . . . . . . . . . . . . . . .

0Total . . . . . . . . . . . . . . . . . . . . .

¥(113)

Gains (losses) reclassified
from accumulated othercomprehensive income into
income (effective portion)
Location
Amount(Yen in millions)

Net sales and Cost of sales
Interest expense
Equity in earnings ofaffiliates andunconsolidated
subsidiaries
Interest expense¥(449)
0

9
0

Gains (losses) recognized in income(ineffective portion and amountexcluded from effectiveness testing)Location
AmountForeign currencytransaction losses, net
Interest expense
Equity in earnings ofaffiliates andunconsolidated
subsidiaries
Interest expense¥(440)

¥184
—

—
—
¥184

Three months ended March 31, 2009
Gains (losses) recognized in income
Location
Amount(Yen in millions)
Derivatives not designated as hedging instruments:
Foreign currency forward contracts . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Currency swaps . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Foreign currency transaction losses, net
Foreign currency transaction losses, net

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

¥(9,170)(5)¥(9,175)

Three months ended March 31, 2009
Gains (losses)
recognized inothercomprehensive
incomeAmountDerivatives designated as cash flow
hedge:
Foreign currency forward
contracts . . . . . . . . . . . . . . . . . . . .
Interest rate swaps . . . . . . . . . . . . . .
Interest rate swaps . . . . . . . . . . . . . .

$(1,030)(434)
323

Interest rate caps . . . . . . . . . . . . . . .

0Total . . . . . . . . . . . . . . . . . . . . .

$(1,141)

Gains (losses) reclassified
from accumulated othercomprehensive income into
income (effective portion)
Location
Amount(U.S. dollars in thousands)

Net sales and Cost of sales
Interest expense
Equity in earnings ofaffiliates andunconsolidated subsidiaries
Interest expense$ (4,535)0910$ (4,444)

F-44

Gains (losses) recognized in income(ineffective portion and amountexcluded from effectiveness testing)Location
AmountForeign currencytransaction losses, net
Interest expense
Equity in earnings ofaffiliates andunconsolidated subsidiaries
Interest expense$1,859———$1,859

Notes to The Consolidated Financial Statements—(Continued)
Kyocera Corporation and Consolidated Subsidiaries
Three months ended March 31, 2009
Gains (losses) recognized in income
Location
Amount(U.S. dollars in thousands)
Derivatives not designated as hedging instruments:
Foreign currency forward contracts . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Currency swaps . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Foreign currency transaction losses, net
Foreign currency transaction losses, net

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

$(92,626)(51)$(92,677)

Year ended March 31, 2009
Gains (losses)
recognized inothercomprehensive
incomeAmountDerivatives designated as cash flow
hedge:
Foreign currency forward
contracts . . . . . . . . . . . . . . . . . . . .
Interest rate swaps . . . . . . . . . . . . . .

¥(280)(40)

Interest rate swaps . . . . . . . . . . . . . .
Interest rate caps . . . . . . . . . . . . . . . .

(21)
0Total . . . . . . . . . . . . . . . . . . . . .

¥(341)

Gains (losses) reclassified
from accumulated othercomprehensive income into
income (effective portion)
Location
Amount(Yen in millions)

Net sales and Cost of sales
Interest expense
Equity in earnings ofaffiliates andunconsolidated subsidiaries
Interest expense

Gains (losses) recognized in income(ineffective portion and amountexcluded from effectiveness testing)Location
Amount9Foreign currencytransaction losses, net
Interest expense
Equity in earnings ofaffiliates andunconsolidated subsidiaries

0Interest expense¥(417)
0¥(408)

¥184
—

—
—
¥184

Year ended March 31, 2009
Gains (losses) recognized in income
Location
Amount(Yen in millions)
Derivatives not designated as hedging instruments:
Foreign currency forward contracts . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Currency swaps . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Total . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

F-45

Foreign currency transaction losses, net
Foreign currency transaction losses, net¥(6,350)(10)¥(6,360)

Notes to The Consolidated Financial Statements—(Continued)
Kyocera Corporation and Consolidated Subsidiaries
Year ended March 31, 2009
Gains (losses)
recognized inothercomprehensive
incomeAmountGains (losses) reclassified
from accumulated other
Gains (losses) recognized in income
comprehensive income into
(ineffective portion and amountincome (effective portion)
excluded from effectiveness testing)Location
AmountLocation
Amount(U.S. dollars in thousands)

Derivatives designated as cash flow
hedge:
Foreign currency forward
contracts . . . . . . . . . . . . . . . . . . . .
Interest rate swaps . . . . . . . . . . . . . .

$(2,829)(404)

Net sales and Cost of sales
Interest expense$(4,212)0Interest rate swaps . . . . . . . . . . . . . .

(212)

91

Interest rate caps . . . . . . . . . . . . . . . .

0Equity in earnings ofaffiliates andunconsolidated subsidiaries
Interest expense

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

$(3,445)0Foreign currencytransaction losses, net
Interest expense
Equity in earnings ofaffiliates andunconsolidated subsidiaries

Interest expense$1,859———$(4,121)$1,859Year ended March 31, 2009
Gains (losses) recognized in income
Location
Amount(U.S. dollars in thousands)
Derivatives not designated as hedging instruments:
Foreign currency forward contracts . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Currency swaps . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Foreign currency transaction losses, net
Foreign currency transaction losses, net$(64,141)(101)

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

$(64,242)

The aggregate contract amounts of derivative financial instruments are as follows:
March 31,
2008
2009
2009
Aggregate
Aggregate
Aggregate
contract
contract
contract
amounts
amounts
amounts(Yen in millions and U.S. dollars in thousands)

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

¥ 16,448——¥

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

¥ 16,448¥ 12,675$ 128,030¥134,881
417¥101,346
331$1,023,697
3,344

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

¥135,298¥101,677$1,027,041

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

¥151,746¥114,352$1,155,071

F-46

9,750
650
2,275

$

98,485
6,565
22,980Notes to The Consolidated Financial Statements—(Continued)
Kyocera Corporation and Consolidated Subsidiaries
14. FAIR VALUE OF FINANCIAL INSTRUMENTS
The fair values of financial instruments at March 31, 2008 and 2009 and the methods and assumptions used toestimate the fair value are as follows:
2008
Carrying
AmountMarch 31,
2009
2009
Fair
Carrying
Fair
Carrying
Value
AmountValue
Amount(Yen in millions and U.S. dollars in thousands)

Fair
Value

Assets:Cash and cash equivalents(a) . . . . ¥ 447,586 ¥ 447,586 ¥269,247 ¥269,247 $2,719,667 $2,719,667
Short-term investments(b) . . . . . .
147,503
147,526 202,143 202,145 2,041,849 2,041,868
Securities and otherinvestments(b) . . . . . . . . . . . . .
437,369
437,481 351,849 351,778 3,554,031 3,553,313¥1,032,458 ¥1,032,593 ¥823,239 ¥823,170 $8,315,547 $8,314,848
Liabilities:
Short-term borrowings(a) . . . . . . . . . . . ¥Current portion of long-term debt(c) . .
Long-term debt(c) . . . . . . . . . . . . . . . . .

(7,279) ¥(3,432)(8,298)(7,279) ¥ (11,000) ¥ (11,000) $ (111,111) $ (111,111)(3,461) (13,865) (13,990) (140,051) (141,313)(8,274) (28,538) (28,621) (288,263) (289,101)¥ (19,009) ¥ (19,014) ¥ (53,403) ¥ (53,611) $ (539,425) $ (541,525)(a) The carrying amount approximates fair value because of the short maturity of these instruments.
(b) The fair value is based on quoted market prices. It was not practicable to estimate the fair value of costmethod investments in unlisted common stock because of the lack of the market price and difficulty inestimating fair value without incurring excessive cost, and Kyocera did not identify any events or changes incircumstances that may have had a significant adverse effect on these investments. The aggregated carrying
amounts of these investments included in the table at March 31, 2008 and 2009 were ¥5,603 million and¥6,001 million ($60,616 thousand), respectively.
(c) The fair value is estimated by discounting cash flows, using current interest rates for instruments withsimilar terms and remaining maturities.
See Notes 13 and 15 to the Consolidated Financial Statements in this annual report on Form 20-F about fair value
disclosure of derivatives financial instruments.
15. FAIR VALUESFAS No. 157, “Fair Value Measurement” defines fair values as the price that would be received from selling
and asset or paid to transfer a liability in an orderly transaction between market participants at the measurement
date.
SFAS No.157 defines that the fair value hierarchy prioritizes the inputs to valuation techniques used to measurefair value into three levels:
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-47

Notes to The Consolidated Financial Statements—(Continued)
Kyocera Corporation and Consolidated Subsidiaries
Assets and Liabilities Measured at Fair Value on a Recurring Basis

Quoted prices in
active markets(Level 1)

Assets:Securities (current) . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Investment securities (non-current) . . . . . . . . . . . . . . .
Derivatives . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

¥March 31, 2009
Other
observable Unobservable
inputsinputs(Level 2)(Level 3)(Yen in millions)

Total

2,743
294,996—¥1,942
7,339
228

¥ 412
284
—

¥

¥297,739¥9,509¥ 696¥307,944

Liabilities:
Derivatives . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

¥—¥3,774

¥—

¥

3,774

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

¥—¥3,774

¥—

¥

3,774

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

March 31, 2009
Other
Quoted prices in observable Unobservable
active markets
inputsinputs(Level 1)(Level 2)(Level 3)(U.S. dollars in thousands)

Assets:Securities (current) . . . . . . . . . . . . . . . . . . . . . . . . . .
Investment securities (non-current) . . . . . . . . . . . . .
Derivatives . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

5,097
302,619
228

Total

$

27,7072,979,758—$19,616
74,131
2,303$4,162
2,869—$$3,007,465$96,050$7,031$3,110,546

Liabilities:
Derivatives . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

$—$38,121$ —$38,121

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

$—$38,121$ —$38,121

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

51,485
3,056,758
2,303

Level 1 securities and investment securities consist principally of equity securities, corporate debt securities andother debt securities. The fair value is quoted price in active market with sufficient volume and frequency oftransactions.
Level 2 securities and investment securities consist principally of corporate debt securities, convertible bond andother debt securities. The fair value 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.
Level 3 securities and investment securities consist of corporate debt securities and other debt securities. The fairvalue is determined using input that is both unobservable and significant to the values of instruments being
measured.
Level 2 derivatives consist of foreign currency forward contracts, interest rate swaps, interest rate caps andcurrency swaps. The fair value is estimated based on quotes from financial institutions.

F-48

Notes to The Consolidated Financial Statements—(Continued)
Kyocera Corporation and Consolidated Subsidiaries
The following table presents additional information about Level 3 securities and investment securities measured
at fair value on recurring basis for the year ended March 31, 2009.
Years ended March 31, 2009
(Yen in millions)

Balance at March 31, 2008 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Total gains or losses (realized/unrealized)
Included in earnings . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Included in other comprehensive income . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Purchase, issuance, and settlements . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Transfer in and/or out of Level 3 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

¥1,436

Balance at March 31, 2009 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

¥ 696

The amount of total gains (losses) for the year ended March 31, 2009 attribute to thechange in unrealized gains or losses relating to assets held at March 31, 2009 . . . . .

¥ (262)

(262)
(132)
(859)
513

Years ended March 31, 2009
(U.S. dollars in thousands)

Balance at March 31, 2008 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Total gains or losses (realized/unrealized)
Included in earnings . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Included in other comprehensive income . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Purchase, issuance, and settlements . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Transfer in and/or out of Level 3 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

$14,505

Balance at March 31, 2009 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

$ 7,031

The amount of total gains (losses) for the year ended March 31, 2009 attribute to thechange in unrealized gains or losses relating to assets held at March 31, 2009 . . . . .

$ (2,646)(2,646)(1,333)(8,677)
5,182

Assets and Liabilities Measured at Fair Value on a Nonrecurring Basis

Investment securities . . . . . . . . . . . .

Balance at
March 31, 2009

Quoted prices in
active markets(Level 1)

¥57

¥—

Other
observable Unobservable
inputsinputs(Level 2)(Level 3)(Yen in millions)

¥—

¥57

Total gains (losses)
for the year ended
March 31, 2009¥(266)¥(266)

Balance at
March 31, 2009

Investment securities . . . . . . . . . . . .

Other
Quoted prices in observable Unobservable
active markets
inputsinputs(Level 1)(Level 2)(Level 3)(U.S. dollars in thousands)

$576

$—

$—

$576

Total gains (losses)
for the year ended
March 31, 2009$(2,687)$(2,687)

Cost method investments in unlisted common stock with a carrying amount of ¥323 million ($3,263 thousand)were written down to their fair value of ¥57 million ($576 thousand), resulting in an impairment charge of¥266 million ($2,687 thousand), which were included in losses on impairment of securities in consolidated
statements of income. The fair values of investments were determined through the use of various methodologies
such as discounted cash flows and comparable valuations of similar companies.
F-49

Notes to The Consolidated Financial Statements—(Continued)
Kyocera Corporation and Consolidated Subsidiaries
16. COMMITMENTS AND CONTINGENCIESAs of March 31, 2009, Kyocera had contractual obligations for the acquisition or construction of property, plantand equipment aggregating ¥11,153 million ($112,657 thousand) due within one year.
Kyocera is lessee under long-term operating leases primarily for office space and equipment. Rental expenses for
operating leases were ¥7,681 million, ¥10,577 million and ¥9,298 million ($93,919 thousand) for the years ended
March 31, 2007, 2008 and 2009, respectively.
Future minimum lease commitments under non-cancelable operating leases at March 31, 2009 are as follows:
Years ending March 31,(Yen in millions andU.S. dollars in thousands)

2010 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
2011 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
2012 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
2013 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
2014 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
2015 and thereafter . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

¥ 6,237
4,781
2,535
1,733
1,093
1,075

$ 63,000
48,29325,606
17,505
11,04010,859¥17,454$176,303

Kyocera has entered into material supply agreements for a significant portion of anticipated material used in its
operations. Under those agreements, during the year ended March 31, 2009, Kyocera purchased ¥7,525 million($76,010 thousand) and is obligated to purchase ¥297,467 million ($3,004,717 thousand) in total by the end of
December 2020.
Kyocera guarantees the debt of employees, an investee and an unconsolidated subsidiary. At March 31, 2009, thetotal amount of these guarantees was ¥804 million ($8,121 thousand). The financial guarantees are made in theform of commitments and letters of awareness issued to financial institutions and generally obligate Kyocera to
make payments in the event of default by the borrowers.
AVX has been named as a potentially responsible party (PRP) in state and federal administrative proceedings
seeking contribution for costs associated with the correction and remediation of environmental conditions at
various waste disposal and operating sites. AVX continues to monitor these actions and proceedings and tovigorously defend its interests. AVX currently has reserves for current remediation, compliance and legal cost
related to these matters.
In July 2007, AVX received oral notification from the Environmental Protection Agency (EPA), and in
December 2007, written notification from the U.S. Department of Justice indicating that the United States ispreparing to exercise the reopener provision under a 1991 consent decree relating to the environmental
conditions at, and remediation of, New Bedford Harbor in the Commonwealth of Massachusetts. The EPA has
indicated that remediation costs through December 6, 2007 (which remediation is ongoing) are approximately¥31,213 million ($315,283 thousand). AVX has not yet completed an investigation of the monies spent or its
available defenses in light of the notification. AVX has also not yet determined whether or to what extent otherparties may bear responsibility for these costs.
On April 1, 2008, the U.S. Department of Justice indicated that the future work to be performed at the harbor is
expected to exceed hundreds of millions of dollars under current estimates. AVX anticipates further discussions
with the U.S. Department of Justice, the EPA and the Commonwealth of Massachusetts.
F-50

Notes to The Consolidated Financial Statements—(Continued)
Kyocera Corporation and Consolidated Subsidiaries
The potential impact of this matter on Kyocera’s financial position, results of operations and cash flows cannot
be determined at this time.
Kyocera is subject to various lawsuits and claims, which arise, in the ordinary course of business. Kyocera
consults with legal counsel and assesses the likelihood of adverse outcome of these contingencies. Kyocera
records liabilities for these contingencies when the likelihood of an adverse outcome is probable and the amountis reasonably estimated. However, based on the information available, management believes that damages, ifany, resulting from these actions will not have a significant effect on Kyocera’s consolidated results of operations
and financial position.
17. STOCKHOLDERS’ EQUITY
Under the Corporation Act of Japan (the Corporation 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 Corporation 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 stockholder actions, may be transferred to stated capital or used to reduce a deficit principally.
The appropriated legal reserve at March 31, 2009 included in retained earnings was ¥21,334 million($215,495 thousand).
Based on the resolution at the meeting of the Board of Directors held on November 27, 2008, Kyocera acquired
its own shares in the market as its treasury stock from November 28, 2008 to December 22, 2008. The total
number of shares acquired and the total acquisition price were 6,256,000 shares and ¥38,000 million($383,838 thousand), respectively. Due mainly to this acquisition, the balance of treasury stock at March 31,
2009 increased by ¥(35,279 million), to ¥(50,568 million) ($(510,788 thousand)), compared to that at March 31,
2008.
The Corporation 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 stockholders at March 31, 2009 was ¥657,502 million($6,641,434 thousand).
The accompanying consolidated financial statements do not include any provision for the dividend of¥60 ($0.61) per share aggregating ¥11,012 million ($111,232 thousand) payable on June 26, 2009 which wasapproved by the stockholders at the meeting held on June 25, 2009.
Kyocera’s equity in retained earnings or deficits of affiliates and unconsolidated subsidiaries accounted for by
the equity method of accounting aggregating ¥(140 million) ($(1,414 thousand)) at March 31, 2009 was included
in retained earnings.

F-51

Notes to The Consolidated Financial Statements—(Continued)
Kyocera Corporation and Consolidated Subsidiaries
Changes in accumulated other comprehensive income are as follows:
Foreign
Currency
Translation
Adjustments

PensionAdjustments

Minimum
PensionLiability
Adjustments

Net
Unrealized
Gains onSecurities

Net Unrealized
Gains (Losses) on
Derivative
Financial
Instruments

Total
Accumulated
Comprehensive
Income(Yen in millions and U.S. dollars in thousands)

Balance at March 31, 2006 . . . . . ¥ (7,570) ¥—Net change for the year . . . .
10,474—
Adjustment for SFAS
No. 158 . . . . . . . . . . . . . .
—15,419¥(2,057)(82)¥ 82,649
102,021

2,139

¥

(75)
138

¥ 72,947
112,551——

17,558

Balance at March 31, 2007 . . . . .
Net change for the year . . . .

2,904(36,698)

15,419(2,554)——

184,670(119,871)

63133

203,056(158,990)

Balance at March 31, 2008 . . . . .
Adjustment for SFAS
No. 158 . . . . . . . . . . . . . .
Net change for the year . . . .

(33,794)

12,865—64,799196

44,066—(32,408)(418)(12,394)———(53,178)

—
(341)

(418)
(98,321)

Balance at March 31, 2009 . . . . .

¥ (66,202) ¥

53

¥

—

¥ 11,621¥ (145)¥ (54,673)

Balance at March 31, 2008 . . . . .
Adjustment for SFAS
No. 158 . . . . . . . . . . . . . .
Net change for the year . . . .

$(341,354) $ 129,950$—$ 654,535$ 1,980$ 445,111———(537,151)—(3,445)(4,222)(993,142)

Balance at March 31, 2009 . . . . .

$(668,707) $—$ 117,384$(1,465)$(552,253)—(327,353)(4,222)(125,193)535$

18. IMPAIRMENT OF LONG-LIVED ASSETSAt March 31, 2009, pursuant to SFAS No. 144, “Accounting for the Impairment or Disposal of Long-Lived
Assets,” Kyocera recognized ¥2,309 million ($23,323 thousand) of an impairment loss on long-lived assets
which were used for a production of Organic Light-Emitting Diode (OLED) displays in the Electronic Device
Group and included such loss in selling, general and administrative expenses. Since qualities and characteristicsof OLED displays requested by the users heightened recently and Kyocera changed the target of production inwhich they were used, Kyocera transferred such business from a manufacturing department to a research anddevelopment department. As a result of this transfer, Kyocera reviewed the future plan of OLED displays
business and concluded the expected undiscounted cash flow from the long-lived assets of OLED displays
business less than its carrying value. Consequently, Kyocera recorded a loss on impairment based on the amountby which the carrying value exceeded the fair value of the long-lived assets of OLED displays business. The fairvalue of the long-lived assets of OLED displays business was estimated using the expected present value of
future cash flow.

F-52

Notes to The Consolidated Financial Statements—(Continued)
Kyocera Corporation and Consolidated Subsidiaries
19. INCOME TAXES
Income from continuing operations before income taxes and minority interests and income taxes for the years
ended March 31, 2007, 2008 and 2009 are made up of the following components:
Years ended March 31,
2007
2008
2009
2009
(Yen in millions and U.S. dollars in thousands)

Income from continuing operations before income taxes andminority interests:
Domestic . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Foreign . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

¥102,048
54,492¥121,498
53,344¥31,735
24,247$320,556
244,919

Total income from continuing operations before income
taxes and minority interests . . . . . . . . . . . . . . . . . . . . . .

¥156,540¥174,842¥55,982$565,475

Income taxes:
Current income taxes:
Domestic . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

¥ 41,227¥ 48,941¥11,603$117,202

Foreign . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

12,53812,721

7,324

73,980Total current income taxes . . . . . . . . . . . . . . . . . . . . . . . .
Deferred income taxes:
Domestic . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Foreign . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

53,76561,662

18,927

191,182(4,479)(399)

26(1,453)

4,901(1,049)49,505(10,596)

Total deferred income taxes . . . . . . . . . . . . . . . . . . . . . . .

(4,878)(1,427)

3,852

38,909Total income taxes . . . . . . . . . . . . . . . . . . . . . . . . . .

¥ 48,887¥ 60,235¥22,779$230,091

In Japan, a company is subject to a number of taxes, based on income, which in the aggregate indicate normal
statutory income tax rates for the years ended 2007, 2008 and 2009 of approximately 41.0%.
Reconciliations between the Japanese statutory income tax rate and Kyocera’s effective income tax rate for theyears ended March 31, 2007, 2008 and 2009 are as follows:
Years ended March 31,
2007
2008
2009

Japanese statutory income tax rate . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Difference in statutory tax rates of foreign subsidiaries . . . . . . . . . . . . . . . . . . . . . .
Change in valuation allowance . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Tax credit for research and development expenses . . . . . . . . . . . . . . . . . . . . . . . . .
Tax refunds related to transfer pricing adjustments . . . . . . . . . . . . . . . . . . . . . . . . .
Impact of FIN48 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Tax rate change* . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Other . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

41.0%
(4.6)
0.0
(3.3)
(2.8)
—
—
0.9

41.0%
(4.7)
0.6
(2.5)
(0.2)
1.9
(0.9)
(0.7)

41.0%
(7.9)
10.5
(1.9)
(0.6)
(0.2)
0.0
(0.2)

Effective income tax rate . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

31.2%

34.5%

40.7%

*

On January 1, 2008, income tax rates for companies was changed to 25.0% in China, which decreased theeffective income tax rate in fiscal 2008 by 0.9 points. On April 1, 2009, income tax rates for companies waschanged to 17.0% in Singapore, which had no material impact on the effective income tax rate in fiscal
2009.
F-53

Notes to The Consolidated Financial Statements—(Continued)
Kyocera Corporation and Consolidated Subsidiaries
The components of the deferred tax assets and deferred tax liabilities at March 31, 2008 and 2009 are as follows:
March 31,
2009
2009
(Yen in millions andU.S. dollars in thousands)

2008

Deferred tax assets:
Enterprise tax . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Inventories . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Allowance for doubtful accounts . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Accrued expenses . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Employee benefits . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Depreciation and amortization . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Securities . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Net operating losses and tax credit carry forwards . . . . . . . . . . . . . . . . .
Liquidation of a foreign subsidiary . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Other . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

¥

1,692
19,493
1,668
10,237
19,152
38,134
1,945
29,337
3,931
3,169

¥

473
20,266
1,753
8,788
24,01035,4004,609
32,064
3,506
3,770

$

4,778
204,707
17,70788,768242,525
357,576
46,555323,879
35,41438,081

Total gross deferred tax assets . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Valuation allowance . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

128,758(39,780)

134,639(43,236)

1,359,990(436,727)

Net deferred tax assets . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

¥ 88,978¥ 91,403$ 923,263

Deferred tax liabilities:
Depreciation and amortization . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . ¥ 4,773 ¥ 6,092 $ 61,536
Deduction of foreign branch losses . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
3,862
2,997
30,273
Securities . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
132,493
94,594955,495
Prepaid benefit cost . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
10,794
4,308
43,515
Sale of certain real estate in overseas . . . . . . . . . . . . . . . . . . . . . . . . . . .
—3,161
31,929Other . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
2,273
2,621
26,475
Total deferred tax liabilities . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Net deferred tax liabilities . . . . . . . . . . . . . . . . . . . . . . . . . . . .

¥154,195¥113,773$1,149,223¥ (65,217) ¥ (22,370) $ (225,960)

Net deferred tax assets and liabilities at March 31, 2008 and 2009 are reflected in the consolidated balance sheets
under the following captions.
March 31,
2008
2009
2009
(Yen in millions and U.S. dollars in thousands)

Deferred income taxes—current assets . . . . . . . . . . . . . . . . . . . . . . . . .
Other assets . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Other current liabilities . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Deferred income taxes—non-current liabilities . . . . . . . . . . . . . . . . . .

¥ 41,244
11,573(18)(118,016)¥ 35,187
13,992(10)(71,539)$ 355,424
141,333(101)(722,616)

Net deferred tax liabilities . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

¥ (65,217)¥(22,370)$(225,960)

At March 31, 2009, Kyocera had net operating losses carried forward of approximately ¥94,029 million($949,788 thousand), which are available to offset future taxable income. Of these net operating losses carriedforward, the amount of ¥20,089 million ($202,919 thousand) recorded at domestic subsidiaries will expire within
next seven years, and the amount of approximately ¥32,517 million ($328,455 thousand) recorded at U.S.
subsidiaries will expire within next 20 years. Certain other foreign subsidiaries have net operating losses carriedforward totaling approximately ¥41,423 million ($418,414 thousand) of which most have no expiration date.
F-54

Notes to The Consolidated Financial Statements—(Continued)
Kyocera Corporation and Consolidated Subsidiaries
At March 31, 2009, Kyocera had tax credit carried forward of ¥5,523 million ($55,788 thousand), which areavailable to offset future income taxes. Of these tax credit carried forward, the amount of ¥543 million($5,485 thousand) recorded at domestic subsidiaries will expire within next three years and the amount of¥2,564 million ($25,899 thousand) and ¥2,416 million ($24,404 thousand) recorded at U.S. 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 ¥9,705 million ($98,030 thousand) at March 31, 2009. The undistributed earnings of thesesubsidiaries are ¥230,360 million ($2,326,869 thousand) at March 31, 2009.
Total gross deferred tax assets at March 31, 2008 and 2009 were reduced by valuation allowances of¥39,780 million and ¥ 43,236 million ($436,727 thousand), respectively.
A reconciliation of the beginning and ending amount of gross valuation allowance for deferred tax asset is asfollows:
March 31,
2008
2009
2009
(Yen in millions and U.S. dollars in thousand)

Balance at beginning of year . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Increase . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Decrease . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Other* . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

¥ 42,124
12,207(11,047)(3,504)¥39,780
12,874(9,022)(396)$401,818
130,040(91,131)(4,000)

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

¥ 39,780¥43,236$436,727*

Other consists mainly of foreign currency translation adjustments.

In June 2006, the Financial Accounting Standards Board (“FASB”) issued Interpretation No. 48, “Accounting for
Uncertainty in Income Taxes—an interpretation of FASB statement No. 109” (“FIN 48”) which clarifies theaccounting for uncertainty in income taxes recognized in the financial statements in accordance with FASBStatement No. 109, “Accounting for Income Taxes”. FIN 48 was effective for fiscal years beginning after
December 15, 2006. Cumulative effect of applying FIN 48, which was effective April 1, 2007, increased theopening balance of retained earnings by ¥3,968 million.
A reconciliation of the beginning and ending amount of gross unrecognized tax benefits is as follows:
March 31,
2008
2009
2009
(Yen in millions and U.S. dollars in thousand)

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 . . . . . . . . . . . . . . . . . . . . . . . . . . . .

¥3,650
3,356
1,839
(203)
—
—

¥ 8,642
442
2,269
(835)
—
—

$ 87,293
4,464
22,919(8,434)——

Balance at beginning of year . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

¥8,642¥10,518$106,242

F-55

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 are ¥8,642 million and ¥10,518 million ($106,242 thousand), at March 31, 2008 and 2009, respectively.
Kyocera has tax examination based on transfer pricing adjustment with the Osaka Regional Tax Bureau for theyears ending March 31, 2004 and forward. Kyocera expect that significant change in unrecognized tax benefits
might occur within the next 12 months and that such change will not have significant impact on Kyocera’s
consolidated results of operations and financial position.
Kyocera recorded interest and penalties accrued related to unrecognized tax benefits by ¥676 million and¥71 million ($717 thousand) as current income taxes in the consolidated statement of income for the year ended
March 31, 2008 and 2009, respectively, and by ¥755 million and ¥827 million ($8,354 thousand) as othernon-current liabilities in the consolidated balance sheet at March 31, 2008 and 2009, respectively. The abovetable excludes this accrual for estimated interest and penalties.
At March 31, 2009, Kyocera is subject to income tax examinations by tax authorities for the tax years 2002 andforward in Japan, and for the tax year 2003 and for the tax years 2006 and forward in the United States for its
major jurisdictions.
On March 28, 2005, Kyocera Corporation received a notice of tax assessment based on transfer pricing
adjustments from the Osaka Regional Tax Bureau for the five years from the year ended March 31, 1999 throughthe year ended March 31, 2003. The notice indicated that resultant additional taxes, including local taxes, etc.,
amounted to ¥12,748 million.
On May 24, 2005, Kyocera Corporation filed a request for reinvestigation to the tax assessment based on transfer
pricing adjustments with the Osaka Regional Tax Bureau. On September 25, 2006, Kyocera Corporation received
a decision letter from the Osaka Regional Tax Bureau that voided a portion of the original assessment. In
accordance with this decision, ¥4,305 million of tax refunds, including local taxes, was recognized in current
income taxes for the year ended March 31, 2007. Kyocera Corporation also filed a request for reconsideration
with the Osaka National Tax Tribunal and filed applications with the National Tax Agency for mutual agreement
procedures for avoidance of double taxation with the United States, Singapore and Germany, respectively.
Kyocera Corporation received a notice on November 8, 2007 from the National Tax Agency to the effect thatmutual agreements with the United States had been concluded and received a notice on March 9, 2009 from the
National Tax Agency to the effect that mutual agreements with Singapore had been concluded. Also, Kyocera
received tax refunds from Japan and counterparty countries accordingly. Upon the adoption of FIN 48, these tax
refunds met the “more-likely-than not” recognition threshold and were recognized in retained earnings as ofApril 1, 2007 within the cumulative effect of applying FIN 48. These prior year refund claims and related interest
were not recognized as of March 31, 2007 because they were considered gain contingencies under Statement of
Financial Accounting Standards No. 5, “Accounting for Contingencies” and could not be recognized until thecontingency lapsed.
Kyocera continues to cope with transfer pricing adjustments appropriately, which have been incorporated within
the FIN 48 analysis. Kyocera does not anticipate the final resolution of these procedures to have a material
impact on the consolidated statements of income in the future.

F-56

Notes to The Consolidated Financial Statements—(Continued)
Kyocera Corporation and Consolidated Subsidiaries
20. SUPPLEMENTAL EXPENSE INFORMATION
Supplemental expense information is as follows:
Years ended March 31,
2007
2008
2009
2009
(Yen in millions and U.S. dollars in thousands)

Research and development expenses . . . . . . . . . . . . . . . . . . . . . . . . . .
Advertising expenses . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Shipping and handling cost included in selling, general andadministrative expenses . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

¥61,100
11,845¥61,605
11,036¥65,932
9,655$665,980
97,525

15,94517,802

16,411

165,768

During the year ended March 31, 2009, Kyocera recorded ¥8,314 million ($83,980 thousand) of gains on sales ofproperty, plant and equipment, net which includes gains on sales of certain properties. Such gains were included as
deductions of selling, general and administrative expenses.
21. 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. Main
products or businesses of each reporting segment are as follows:(Fine Ceramic Parts Group)
Information & Telecommunication Components
Sapphire Substrates
Components for Semiconductor Processing Equipment
Components for LCD Manufacturing Equipment
Automotive Components
General Industrial Ceramic Components(Semiconductor Parts Group)
Ceramic Packages for Crystal and SAW Devices
CCD / CMOS Sensor Ceramic Packages
LSI Ceramic Packages
Wireless Communication Device Packages
Optical Communication Device Packages and Components
Organic Multilayer Packages and Substrates(Applied Ceramic Products Group)
Residential and Industrial Solar Power Generating Systems
Solar Cells and Modules
Cutting Tools, Micro Drills
Medical and Dental Implants
Jewelry and Application Products(Electronic Device Group)
Ceramic Capacitors, Tantalum Capacitors
Timing Devices such as TCXOs, Crystal Units,
Clock Oscillators and Ceramic Resonators
SAW Devices, RF Modules, EMI Filters
Connectors
Thermal Printheads, Inkjet Printheads
Amorphous Silicon Photoreceptor Drums
Liquid Crystal Displays
F-57

Notes to The Consolidated Financial Statements—(Continued)
Kyocera Corporation and Consolidated Subsidiaries(Telecommunications Equipment Group)
CDMA Mobile Phone Handsets
Personal Handy Phone System (PHS) related Products such as PHS Mobile Phone Handsets
and PHS Base Stations
Wireless Broadband Systems such as iBurst™
(Information Equipment Group)
ECOSYS Printer, Copying Machines
Multifunction Peripherals(Others)
Telecommunication Engineering Business
Integration Business on Information Systems and Network Infrastructures Data Center Business
Management Consulting Business
Chemical Materials for Electronic Components
Electrical Insulators, Molded Products
Hotel Business
Commencing for the year ended March 31, 2008, the “Optical Equipment Group,” previously an independent
reporting segment, has been reclassified into “Others.” Accordingly, reported results of related segments for theyear ended March 31, 2007 have been reclassified.
Inter-segment sales, operating revenue and transfers are made with reference to prevailing market prices.
Transactions between reportable segments are immaterial and not shown separately.
Operating profit for each reporting segment represents net sales, less related costs and operating expenses,
excluding corporate revenue and expenses, equity in earnings, income taxes and minority interest.
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 at the
Telecommunications Equipment group, for the years ended March 31, 2007, 2008 and 2009 was ¥123,163
million, ¥128,330 million and ¥127,225 million ($1,285,101 thousand) and comprised of 9.6%, 9.9% and 11.3%
to consolidated net sales, respectively.

F-58

Notes to The Consolidated Financial Statements—(Continued)
Kyocera Corporation and Consolidated Subsidiaries
Information by reporting segment at and for the years ended March 31, 2007, 2008 and 2009 is summarized on
the following page:
Reporting segments
Years ended March 31,
2007
2008
2009
2009
(Yen in millions and U.S. dollars in thousands)

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 . . . . . . . . . . . . . . . . . .
Operating profit (loss):
Fine Ceramic Parts Group . . . . . . . . . . . . . . . . . . . . .
Semiconductor Parts Group . . . . . . . . . . . . . . . . . . .
Applied Ceramic Products Group . . . . . . . . . . . . . . .
Electronic Device Group . . . . . . . . . . . . . . . . . . . . . .
Telecommunications Equipment Group . . . . . . . . . .
Information Equipment Group . . . . . . . . . . . . . . . . .
Others . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

¥Depreciation and amortization:
Fine Ceramic Parts Group . . . . . . . . . . . . . . . . . . . . .
Semiconductor Parts Group . . . . . . . . . . . . . . . . . . .
Applied Ceramic Products Group . . . . . . . . . . . . . . .
Electronic Device Group . . . . . . . . . . . . . . . . . . . . . .
Telecommunications Equipment Group . . . . . . . . . .
Information Equipment Group . . . . . . . . . . . . . . . . .
Others . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Corporate . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

F-59

81,309 ¥154,538
149,942294,201
220,817
276,746
138,494(25,611)61,730 $ 623,535
135,137
1,365,020
148,917
1,504,212
231,271
2,336,071
218,758
2,209,677
229,297
2,316,131
126,043
1,273,162(22,567)(227,949)¥1,283,897¥1,290,436¥1,128,586

¥

¥

¥

15,67722,21022,334
44,487291
33,9706,881

11,16720,02732,65536,524
6,786
39,538
9,635$11,399,859(240) $
(2,424)
8,671
87,586
27,469277,464(4,070)(41,111)(17,713)(178,919)
13,497
136,333
14,106
142,485

145,850
8,569

156,332
12,497

41,720
7,632

421,414
77,091

2,621
(500)

6,091
(78)

6,460
170

65,2531,717¥ 156,540¥ 174,842¥

55,982$565,475¥

4,500
12,533
8,097
21,537
9,075
16,326
7,419
2,575

¥

7,511
14,647
9,685
24,627
8,753
12,024
6,922
2,876

¥

7,986
13,592
11,10024,32916,946
14,469
6,407
2,748

$

80,667137,293
112,121245,747
171,172
146,151
64,71727,758¥82,062¥87,045¥97,577$

985,626

Corporate . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Equity in earnings of affiliates and unconsolidated
subsidiaries . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Adjustments and eliminations . . . . . . . . . . . . . . . . . . . . . .
Income from continuing operations before income
taxes and minority interests . . . . . . . . . . . . . . . . . . . .

81,326 ¥152,292
131,103
286,156
251,183
268,781
137,235(24,179)

Notes to The Consolidated Financial Statements—(Continued)
Kyocera Corporation and Consolidated Subsidiaries
Years ended March 31,
2007
2008
2009
2009
(Yen in millions and U.S. dollars in thousands)

Write-down of inventories:
Fine Ceramic Parts Group . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . ¥54 ¥ 153 ¥ 444 $ 4,485
Semiconductor Parts Group . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
1,848
160
544
5,495
Applied Ceramic Products Group . . . . . . . . . . . . . . . . . . . . . . . . .
1,283
899
702
7,091
Electronic Device Group . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
670
512
1,419
14,334
Telecommunications Equipment Group . . . . . . . . . . . . . . . . . . . .
5,208
1,798
4,645
46,919
Information Equipment Group . . . . . . . . . . . . . . . . . . . . . . . . . . .
1,791
1,372
805
8,131
Others . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
474
247
160
1,616
Corporate . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
————Capital expenditures:
Fine Ceramic Parts Group . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Semiconductor Parts Group . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Applied Ceramic Products Group . . . . . . . . . . . . . . . . . . . . . . . . .
Electronic Device Group . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Telecommunications Equipment Group . . . . . . . . . . . . . . . . . . . .
Information Equipment Group . . . . . . . . . . . . . . . . . . . . . . . . . . .
Others . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Corporate . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

¥11,328¥ 5,141¥ 8,719$ 88,071¥ 7,447
11,432
7,330
19,812
3,800
11,962
5,774
2,339¥ 9,253
8,752
10,71425,8552,317
15,475
6,056
6,679¥ 5,405
7,199
14,396
15,056
3,898
11,8652,461
2,775$ 54,596
72,717
145,414152,081
39,374
119,848
24,85928,030¥69,896¥85,101¥63,055$636,919

March 31,
2007
2008
2009
2009
(Yen in millions and U.S. dollars in thousands)

Assets:Fine Ceramic Parts Group . . . . . . . . . . . . . . . . . . . . .
Semiconductor Parts Group . . . . . . . . . . . . . . . . . . .
Applied Ceramic Products Group . . . . . . . . . . . . . . .
Electronic Device Group . . . . . . . . . . . . . . . . . . . . . .
Telecommunications Equipment Group . . . . . . . . . .
Information Equipment Group . . . . . . . . . . . . . . . . .
Others . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

¥54,860106,359
125,266
412,979
92,584
207,862
133,072¥

53,713100,041
149,870
400,851
66,191
203,248
131,946¥

45,861
79,148
164,799
339,616
115,926
251,477
122,474$

463,242
799,475
1,664,636
3,430,465
1,170,970
2,540,172
1,237,111

Corporate . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

1,132,982
1,056,646

1,105,860
906,159

1,119,301
693,505

11,306,071
7,005,101

Investments in and advances to affiliates andunconsolidated subsidiaries . . . . . . . . . . . . . . . . . . . . . .
Adjustments and eliminations . . . . . . . . . . . . . . . . . . . . . .

10,093(69,257)

16,753(52,026)

19,376(58,380)

195,717(589,697)

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

¥2,130,464¥1,976,746¥1,773,802$17,917,192

F-60

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, 2007, 2008 and 2009 are summarized as follows:
Geographic segments
Years ended March 31,
2007
2008
2009
2009
(Yen in millions and U.S. dollars in thousands)

Net sales:
Japan . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
United States of America . . . . . . . . . . . . . . . . . . . . .
Europe . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Asia . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Others . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Long-lived assets:
Japan . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
United States of America . . . . . . . . . . . . . . . . . . . . .
Europe . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Asia . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Others . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

¥ 496,959
274,361
215,672
216,663
80,242¥ 507,837
248,760
229,830
232,425
71,584¥ 473,387
201,502200,483
183,347
69,867$ 4,781,687
2,035,374
2,025,081
1,851,990
705,727¥1,283,897¥1,290,436¥1,128,586$11,399,859¥ 235,325
36,777
24,39842,2044,635¥ 233,569
54,19022,78338,7137,806¥ 252,375
52,576
37,83640,251
7,871$ 2,549,242
531,071
382,182
406,576
79,505¥ 343,339¥ 357,061¥ 390,909$ 3,948,576

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

F-61

Notes to The Consolidated Financial Statements—(Continued)
Kyocera Corporation and Consolidated Subsidiaries
22. 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,
2007
2008
2009
2009
(Yen in millions and U.S. dollars in thousands except per share amounts)

Income from continuing operations . . . .
Income from discontinued operations . .
Net income . . . . . . . . . . . . . . . . . . . . . . .
Basic earnings per share:
Income from continuing
operations . . . . . . . . . . . . . . . . . . . .
Income from discontinued
operations . . . . . . . . . . . . . . . . . . . .
Net income . . . . . . . . . . . . . . . . . . . . .

¥101,329
5,175
106,504¥107,244—
107,244¥ 29,506—
29,506538.52566.58157.271.59

27.51
566.03—566.58—157.27—1.59

537.35565.80157.23

1.59

27.44
564.79—565.80—157.23

—
1.59

2007

Years ended March 31,
2008(shares in thousands)

188,160
413

189,283261

187,618
43

188,573

189,544

187,661

Diluted earnings per share:
Income from continuing
operations . . . . . . . . . . . . . . . . . . . .
Income from discontinued
operations . . . . . . . . . . . . . . . . . . . .
Net income . . . . . . . . . . . . . . . . . . . . .

Basic average number of shares
outstanding . . . . . . . . . . . . . . . . . . . . .
Dilutive effect of stock options . . . . . . .
Diluted average number of shares
outstanding . . . . . . . . . . . . . . . . . . . . .

$298,040—
298,040

2009

23. SUPPLEMENTAL CASH FLOW INFORMATION
Supplemental information related to the Consolidated Statements of Cash Flows is as follows:
Years ended March 31,
2008
2009
(Yen in millions and U.S. dollars in thousands)

2007

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 . . .
Minority Interests . . . . . . . . . . . . . .
Cash acquired . . . . . . . . . . . . . . . . .
Subtotal . . . . . . . . . . . . . . . . . .
Additional payment for an acquisition ofbusiness in the previous year . . . . . . .
Total . . . . . . . . . . . . . . . . . . . .

2009

¥

1,603
52,847¥1,217
66,989¥648
51,927$

6,545
524,515

¥

5,001

¥

1,043

¥

1,676

$

16,929

¥

1,151
(333)
—
(62)
756

¥ 32,959(5,537)—(939)
26,483¥ 180,951(118,694)(32)(14,784)
47,441$ 1,827,787(1,198,929)(323)(149,333)
479,202—756—¥ 26,483

71¥ 47,512717
479,919

¥

F-62

$

Notes to The Consolidated Financial Statements—(Continued)
Kyocera Corporation and Consolidated Subsidiaries
24. DISCONTINUED OPERATIONSOn August 1, 2006, Kyocera sold 100% of the shares of Kyocera Leasing Co., Ltd. (presently Diamond Asset
Finance Company Limited) to Diamond Lease Company Limited (presently Mitsubishi UFJ Lease & Finance
Company Limited) for ¥25,274 million, aimed to concentrate management resources on its core businesses toenhance and improve its corporate value. Kyocera accounted for the results of operations and the sale of Kyocera
Leasing Co., Ltd. less income tax, as discontinued operations in accordance with SFAS No. 144, “Accounting for
the Impairment or Disposal of Long-Lived Assets” in its consolidated statements of income.
The results of operations of discontinued operations for the year ended March 31, 2007 are summarized asfollows:
Year ended March 31, 2007
(Yen in millions)

Net sales . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Income before income taxes . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Income taxes . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Net income . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Gain on sale of discontinued operations—net of taxes of ¥3,534 . . . . . . . . . . . . . . . . . . .
Income from discontinued operations . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

F-63¥1,779
862
381
481
4,694
5,175

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 30, 2009

/S/ SHOICHI AOKI
Shoichi Aoki
Director, Managing Executive Officer
and General Manager ofCorporate Financial & Accounting GroupINDEX OF EXHIBITS
Exhibit
NumberDescription

1.1

Articles of Incorporation (English translation)

1.2

Share Handling Regulations of the Registrant (English translation)

1.3

Regulations of the Board of Directors of the Registrant (English translation) (incorporated byreference to the Registrant’s annual report on Form 20-F filed on June 29, 2006)

1.4

Regulations of the Board of Corporate Auditors of the Registrant (English translation) (incorporated
by reference to the Registrant’s annual report on Form 20-F filed on July 5, 2007)

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))

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

Exhibit 1.1(TRANSLATION)

ARTICLES OF INCORPORATION

June 25, 2009

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) Manufacture and sale of and research on optical machinery and instruments and precision machineryand instruments and parts hereof;(14) Manufacture and sale of and research on machinery and equipment for business use and machinery andequipment for industrial use and parts thereof;(15) Manufacture and sale of and research on photosensitive materials for photographic use;(16) Design, control and contract of construction relating to public works, building, electric equipment andpiping construction;(17) Sale, purchase, lease, maintenance and brokerage of real estate;(18) Lease, maintenance and management of facilities relating to sports, recreation, medical care, hotels andrestaurants, and the travel agency business;(19) Road freight handling and warehousing;(20) Business relating to non-life insurance agency and life insurance canvassing, and general leasing,factoring and finance business;(21) Sale and purchase of various kinds of plants and technology related thereto;(22) Design and sale of software relating to computers;(23) Disposition through sale and the like and acquisition through purchase and the like of patents and otherindustrial property rights and know-how appertaining to the preceding items and acting as intermediaryin such transactions;(24) Businesses relating to import and export of any of the foregoing items; and(25) All commercial activities relating or incidental to any of the foregoing.
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)
(2)
(3)
(4)
Article 5.

Board of Directors
Corporate Auditors
Board of Corporate Auditors
Accounting Auditors
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.

CHAPTER IISHARES
Article 6.

Total Number of Shares Possible to be Issued

The total number of shares possible 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 Corporation 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.
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 Corporation Act;(2) The right to make a request provided for in the provisions of Article 166, Paragraph 1 of the Corporation
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 a resolutionof 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 these 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 Chairman

1. A General Meeting of Shareholders shall be convened by the President, and the President shall take thechair.
2. Should the President be unable to so act, one of the other Directors in the order determined in advance by
the Board of Directors shall convene the General Meeting of Shareholders and take the chair.

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.

Method of Resolutions

1. Unless otherwise provided for by the laws and regulations or these Articles of Incorporation, resolutionsof a General Meeting of Shareholders shall be adopted by a majority of the voting rights of the shareholders whoare entitled to exercise the voting rights, present at the meeting.
2. Resolutions pursuant to Article 309, Paragraph 2 of the Corporation 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 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 proxy right at each General Meeting of Shareholders.
CHAPTER IV
DIRECTORS AND BOARD OF DIRECTORS
Article 19.

Number of Directors

The Company shall have not more than twenty Directors.
Article 20.

Method of Election of Directors

1. Directors shall be elected at a 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.
Article 22.

Representative Director, Executive Directors, Chairman Emeritus, Advisors and Counsellors

1. The Board of Directors shall appoint, by resolution, Representative Directors.

2. The Board of Directors may appoint, by resolution, a Chairman of the Board of Directors and a President
and Director, one or more Vice-Chairmen 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 Chairman Emeritus.
4. The Board of Directors may appoint, by resolution, Advisors and Counsellors.
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 Chairman

1. Unless otherwise provided for by the laws and regulations, the Chairman of Board of Directors shallconvene the meeting of the Board of Directors and take the chair.
2. Should there be a vacancy for the Chairman of Board of Directors or should the Chairman of the Board of
Directors be unable to so act, the President shall, and should the President be unable to so act, one of the other
Directors in the order determined in advance by the Board of Directors shall convene the Board of Directors andtake the chair.
Article 25.

Convocation Notice of Meetings of Board of Directors

1. Convocation notice of meetings of the Board of Directors shall be dispatched to each Director andCorporate Auditor 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. Board of Directors may be held without taking convocation procedures if unanimous consent is obtained
from all Directors and the Corporate Auditors.
Article 26.

Omission of Resolution in Board of Directors

The Company may deem that the resolution at the meeting of Board of Directors to approve the matter that
requires the resolution at the meeting of Board of Directors has been adopted, when all Directors who are able toparticipate in a resolution of such matter have given their consents thereto in writing or through electronic record,
except for the case where any of the Corporate Auditors raise objection against it.
Article 27.

Board of Directors Regulations

Unless otherwise provided for by the laws and regulations or these Articles of Incorporation, mattersconcerning the Board of Directors shall be provided for in the Board of Directors Regulations established by the
Board of Directors.

CHAPTER V
CORPORATE AUDITORS AND BOARD OF CORPORATE AUDITORS
Article 28.

Number of Corporate Auditors

The Company shall have not more than five Corporate Auditors.

Article 29.

Method of Election of Corporate Auditors

1. Corporate Auditors shall be elected at a General Meeting of Shareholders.
2. The election of Corporate Auditors shall be made by a majority of voting rights of shareholders, who areentitled to exercise the voting rights present at the meeting, at which the shareholders holding one-third or moreof the voting rights of all shareholders who are entitled to exercise the voting rights must present.
Article 30.

Term of Office of Corporate Auditors

1. The term of office of a Corporate Auditor shall end at the adjournment of the Ordinary General Meetingof Shareholders for the last business year ending within four years after assumption of office.
2. The term of office of the Corporate Auditor elected to fill a vacancy shall terminate when the term ofoffice of the other Corporate Auditors in office shall expire.
Article 31.

Full-time Corporate Auditor(s)The Board of Corporate Auditors shall elect, by resolution, full-time Corporate Auditor(s).
Article 32.

Remuneration etc. of Corporate Auditors

Remuneration etc. of Corporate Auditors shall be determined by resolution at a General Meeting of
Shareholders.
Article 33.

Convocation Notice of Meetings of Board of Corporate Auditors

1. Convocation notice of meetings of the Board of Corporate Auditors shall be dispatched to each Corporate
Auditor 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. Board of Corporate Auditors may be held without taking the convocation procedures if unanimous
consent is obtained from all Corporate Auditors.
Article 34.

Regulations of Board of Corporate Auditors

Unless otherwise provided for by the laws and regulations or these Articles of Incorporation, mattersconcerning the Board of Corporate Auditors shall be provided for in the Regulations of the Board of Corporate
Auditors established by the Board of Corporate Auditors.
Article 35.

Exemption from Liability of Outside Corporate Auditor

The Company may, under the provisions of Article 427, Paragraph 1 of the Corporation Act, enter into acontract with the Outside Corporate Auditor, to limit the liability for damages caused by his dereliction of duty,
provided, that the maximum amount of liability pursuant to such contract shall not exceed the minimum amountof liability provided for in the Article 425, Paragraph 1 of the Corporation Act.

CHAPTER VI
ACCOUNTS
Article 36.

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 37.

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 38.

Interim Dividends

The Company may distribute interim dividends, by a resolution of the Board of Directors by setting a record
date as of September 30 in each year.
Article 39.

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.

SUPPLEMENTARY PROVISIONS
Article 1
The preparation and keeping of the Register of Lost Share Certificates of the Company and other mattersrelating to the Register of Lost Share Certificates shall be entrusted to the Manager of the Shareholders Register,and the Company shall not handle them.
Article 2
The immediately preceding Article and this Article shall be effective until January 5, 2010, and shall bedeleted as of January 6, 2010.

Exhibit 1.2(TRANSLATION)SHARE HANDLING REGULATIONS

Amended: November 27, 2008
Enforced: January 5, 2009

KYOCERA CORPORATIONSHARE HANDLING REGULATIONSOFKYOCERA CORPORATIONCHAPTER I
GENERAL PROVISIONS
Article 1.

PurposeMatters concerning the handling of shares in the Company (including, without limitation, procedures forexercising shareholders’ rights) shall be governed by these Regulations in accordance with the Articles ofIncorporation, as well as the rules established by the Japan Securities Depositary Center, Inc. (hereinafterreferred to as “JASDEC”) and securities firms and other account management institutions at which shareholders
open their transfer accounts (hereinafter referred to as the “Securities Firm”).
Article 2.

Manager of the Shareholders’ Register

The manager of the shareholders’ register of the Company and its handling office shall be as follows:
Manager of theshareholders’ register:

Daiko Clearing Services Corporation
4-6, Kitahama 2-chome, Chuo-ku, Osaka

Handling office:

Daiko Clearing Services Corporation
Head Office, Stock Transfer Department
4-6, Kitahama 2-chome, Chuo-ku, Osaka
CHAPTER IIRECORDING IN THE SHAREHOLDERS’ REGISTER, ETC.

Article 3.

Recording in the Shareholders’ Register

1. Any changes to the matters entered in the shareholders’ register shall be made by a general shareholders
notice (sou kabunushi tsuchi) or any other notice given by JASDEC (excluding a notice provided for in Article
154, Paragraph 3 of the Law Concerning Book-Entry Transfer of Corporate Bonds and Shares, Etc. (the “BookEntry Transfer Law”) (hereinafter referred to as the “Individual Shareholder Notice (kobetsu kabunushi
tsuchi)”)).
2. In addition to the preceding paragraph, in the issue of new shares and any other cases provided for in laws
and regulations, the relevant matters entered in the shareholders’ register shall be changed without JASDEC’s
notice.
3. The shareholders’ register shall be recorded using letters and signs designated by JASDEC.
Article 4.

Notification as to Matters Entered in the Shareholders’ RegisterA shareholder shall notify his/her name and address through the Securities Firm and JASDEC, as prescribedby JASDEC. If changed, the same shall apply.
Article 5.

Representative of a Corporate Shareholder

A corporate shareholder shall notify its representative through the Securities Firm and JASDEC, asprescribed by JASDEC. If changed, the same shall apply.
Article 6.

Representative of Joint Shareholders

Shareholders who jointly hold shares shall determine their representative, and notify the name and addressof the representative through the Securities Firm and JASDEC, as prescribed by JASDEC. If changed, the same
shall apply.

Article 7.

Statutory Agent

A shareholder’s statutory agent, such as parent (shinken sha) and guardian (kouken nin), shall notify his/hername and address through the Securities Firm and JASDEC, as prescribed by JASDEC. If changed or removed,
the same shall apply.
Article 8.

Notification of the Place where Shareholders Residing Abroad, Etc. Should Receive Notices

A shareholder residing abroad and a registered pledgee of shares or their statutory agent shall appoint astanding agent in Japan or determine a place to receive notices in Japan, and notify the name and address of thestanding agent or the place to receive notices through the Securities Firm and JASDEC, as prescribed by
JASDEC. If changed or removed, the same shall apply.
Article 9.

Method of Confirmation through JASDEC

If a shareholder’s notification to the Company is submitted through the Securities Firm and JASDEC, it
shall be deemed as a notification given by the shareholder himself/herself.

CHAPTER III
IDENTIFICATION OF SHAREHOLDERS
Article 10.

Identification of Shareholders

1. If a shareholder (including a shareholder who applied for an Individual Shareholder Notice) makes any
claim or exercises any other shareholders’ right (hereinafter referred to as the “Claim”), he/she shall attach orprovide the item which evidences that the Claim has been made by himself/herself (the “Material for Evidence”).
Provided, however, that this shall not apply if the Company may confirm that it is a Claim made by theshareholder himself/herself.
2. If a shareholder’s Claim against the Company has been made through the Securities Firm and JASDEC, it
shall be deemed as a Claim made by the shareholder himself/herself, and no Material for Evidence shall be
required.
3. In addition to the procedures in the preceding paragraphs, if a Claim is made by an agent, a power ofattorney signed or sealed by the shareholder shall be attached. The name and address of the agent shall need to beentered in the power of attorney.
4. Paragraphs 1 and 2 shall apply mutatis mutandis to an agent.
CHAPTER IV
PROCEDURES FOR EXERCISING SHAREHOLDERS’ RIGHTS
Article 11.

Minority Shareholders’ Rights

If a shareholder directly exercises any of his/her Minority Shareholders’ Rights provided for in Article 147,
Paragraph 4 of the Book-Entry Transfer Law against the Company, he/she shall exercise the same by a signed orsealed document, together with the receipt for the Individual Shareholder Notice.
Article 12.

Method of Requesting the Purchase of Shares Less Than One (1) Unit (tangen miman
kabushiki)

Any shareholder requesting a purchase of shares less than one (1) unit shall request the same through the
Securities Firm and JASDEC, as prescribed by JASDEC.

Article 13.

Determination of the Purchase Price

1. The purchase price per share applicable to a purchase request in the preceding article shall be the closing
price on the market managed by the Tokyo Stock Exchange on the day when the purchase request arrives at thehandling office of the manager of the shareholders’ register. Provided, however, that if the shares in the
Company are not traded on the market on such day, the purchase price per share shall be the closing price onsuch day on the market managed by the Osaka Securities Exchange.
2. If the shares in the Company are not traded on any of the stock/securities exchanges in the preceding
paragraph, or if the relevant day falls on a non-business day, the purchase price per share shall be the priceagreed upon in the first trade of the shares in the Company on the next day on the market managed by the Tokyo
Stock Exchange. If the shares in the Company are not traded on the market on such day, the purchase price pershare shall be the price agreed upon in the first trade of the shares in the Company on such day on the market
managed by the Osaka Securities Exchange.
3. The same shall apply on and after the next day, if the shares in the Company are not traded on any of thestock/securities exchanges in the preceding paragraph.
4. The purchase price shall be the amount calculated by multiplying the purchase price per share according
to the preceding paragraphs by the number of shares for which a purchase request is made.
Article 14.

Payment of the Purchase Price

1. Except as otherwise determined by the Company, the Company shall pay the purchase price on the fourth(4th) business day from the day immediately following the day when the purchase price per share is determined,
as prescribed by JASDEC. Provided, however, that if the purchase price is a price with rights such as distributionof a surplus and stock split, the Company shall pay the purchase price by the record date.
2. A person who requests a purchase may request the payment of a purchase price by remittance to the bankdeposit account designated by him/her, or by cash payment at the Japan Post Bank.
Article 15.

Transfer of Shares Purchased

The shares less than one (1) unit for which a purchase request has been made shall be transferred to theCompany’s transfer account on the day when the payment or payment procedures of the purchase price inaccordance with the preceding article is completed.
Article 16.

Method of Requesting the Purchase of Additional Shares Less Than One (1) Unit

If a shareholder holding shares less than one (1) unit requests a sale of the number of shares which, whenaggregated with the number of his/her shares less than one (1) unit, constitutes a unit share (tangen kabushiki)(hereinafter referred to as the “Request for Purchasing Additional Shares”), he/she shall make such request
through the Securities Firm and JASDEC, as prescribed by JASDEC.
Article 17.

Request for Purchasing Additional Shares in Excess of the Balance of Treasury Stock

If the total number of shares for which a Request for Purchasing Additional Shares is made on the same day
exceeds the number of the Company’s treasury stock to be transferred, all the Requests for Purchasing Additional
Shares on such day shall not become effective.
Article 18.

Effective Date of the Request for Purchasing Additional Shares

A Request for Purchasing Additional Shares shall become effective when it arrives at the handling office ofthe manager of the shareholders’ register.

Article 19.

Determination of the Price for Purchasing Additional Shares

1. The purchase price per additional share shall be the closing price on the market managed by the Tokyo
Stock Exchange on the effective date of the Request for Purchasing Additional Shares. Provided, however, that if
the shares in the Company are not traded on the market on such day, the purchase price per additional share shallbe the closing price on such day on the market managed by the Osaka Securities Exchange.
2. If the shares in the Company are not traded on any of the stock/securities exchanges in the preceding
paragraph, or if the relevant day falls on a non-business day, the purchase price per additional share shall be theprice agreed upon in the first trade of the shares in the Company on the next day on the market managed by the
Tokyo Stock Exchange. If the shares in the Company are not traded on the market on such day, the purchaseprice per additional share shall be the price agreed upon in the first trade of the shares in the Company on suchday on the market managed by the Osaka Securities Exchange.
3. The same shall apply on and after the next day, if the shares in the Company are not traded on any of thestock/securities exchanges in the preceding paragraph.
4. The price for additional shares shall be the amount calculated by multiplying the purchase price per
additional share according to the preceding paragraphs by the number of shares for which a Request for
Purchasing Additional Shares is made.
Article 20.

Transfer of Additional Shares Purchased

As prescribed by JASDEC, the Company shall apply for the transfer of the treasury stock equal to thenumber of shares for which a Request for Purchasing Additional Shares has been made to the transfer account of
the shareholder who has made the Request for Purchasing Additional Shares, on the day when the shareholder
who has made the Request for Purchasing Additional Shares remits the price for additional shares through the
Securities Firm, and the Company confirms the remittance of the price for additional shares to the bank deposit
account designated by the Company.
Article 21.

Period when the Acceptance of the Requests for Purchasing Additional Shares is Suspended

1. The Company shall suspend the acceptance of the Requests for Purchasing Additional Shares each year
for a period from the ten (10) business days prior to the days set forth below to such days:(1) March 31;(2) September 30; and(3) Any other days designated by JASDEC, such as a day to determine shareholders.
2. Notwithstanding the preceding paragraph, the Company may, if it deems necessary, set another period
when the acceptance of the Requests for Purchasing Additional Shares will be suspended.

CHAPTER V
SPECIAL TREATMENT FOR SPECIAL ACCOUNTS
Article 22.

Special Treatment for Special Accounts

Matters concerning the handling of special accounts, including the personal identification of shareholders
with respect to whom special accounts has been opened, shall be governed by the rules established by JASDEC
and the account management institutions for special accounts.

SUPPLEMENTARY PROVISIONS
Article 1.

Amendment to the Share Handling Regulations

Any amendments to these Regulations shall be subject to the resolution of the board of directors.
Article 2.

Application for Cancellation by a Person who has Registered the Loss of Share Certificates

If a person who has registered the loss of share certificates applies for the cancellation of the registration of
the loss of share certificates, he/she shall submit a prescribed application form.
Article 3.

Application for Cancellation by a Person who Holds Share Certificates

If a person who holds share certificates for which the loss of share certificates has been registered applies
for the cancellation of the registration of the loss of share certificates, he/she shall submit a prescribed
application form, together with the share certificates and the personal identification documents.
Article 4.

Notifications

1. If a person who has registered the loss of share certificates intends to change a description or record in theregister of the loss of share certificates, he/she shall submit a prescribed notification in writing.
2. In case of the preceding paragraph, the material evidencing the facts shall be attached, if the Company
deems necessary to do so.
Article 5.

Transitional Measure

The provisions of Articles 2 to 5 of the Supplementary Provisions shall be deleted on January 6, 2010.

Exhibit 12.1
CERTIFICATION
I, Tetsuo Kuba, 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 30, 2009

/S/ TETSUO KUBA
Name: Tetsuo Kuba
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 30, 2009

/S/ SHOICHI AOKIName: Shoichi Aoki
Title: Director, Managing Executive Officer
and General Manager ofCorporate Financial & 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, 2009 (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 30, 2009

/S/ TETSUO KUBA
Name: Tetsuo Kuba
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, 2009 (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 30, 2009

/S/ SHOICHI AOKIName: Shoichi Aoki
Title: Director, Managing Executive Officer
and General Manager ofCorporate Financial & 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 (File Nos.3384904, 33-98132, 33-99134, 33-99140, 33-99150, 33-99154 and 333-138316) of Kyocera Corporation of ourreport dated June 26, 2009 relating to the financial statements and the effectiveness of internal control overfinancial reporting, which appears in this Form 20-F.
/s/ Kyoto Audit Corporation
Kyoto, Japan
June 26, 2009