Edgar Filing: KYOCERA CORP

Form 6-K

FORM 6-K

SECURITIES AND EXCHANGE COMMISSION

Washington, D. C. 20549

Report of Foreign Private Issuer

Pursuant to Rule 13a-16 or 15d-16 of

the Securities Exchange Act of 1934

For the month of January 2006

Commission File Number: 1-07952

KYOCERA CORPORATION

6 Takeda Tobadono-cho, Fushimi-ku,

Kyoto 612-8501, Japan

Indicate by check mark whether the registrant files or will file annual reports under cover of Form 20-F or Form 40-F:

Form 20-F X Form 40-F

Indicate by check mark if the registrant is submitting the Form 6-K in paper as permitted by Registration S-T Rule 101(b)(1):

Indicate by check mark if the registrant is submitting the Form 6-K in paper as permitted by Registration S-T Rule 101(b)(7):

Indicate by check mark whether by furnishing the information contained in this Form, the registrant is also thereby furnishing the information to the Commission pursuant to Rule 12g3-2(b) under the Securities Exchange Act of 1934.

Yes No X

If “Yes” is marked, indicate below the file number assigned to the registrant in connection with Rule 12g3-2(b); 82-

SIGNATURE

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned, thereto duly authorized.

KYOCERA CORPORATION

/s/ AKIHIKO TOYOTANI

Akihiko Toyotani

General Manager of

Finance Division

Date: January 30, 2006

Information furnished on this form:

EXHIBITS


Exhibit Number
1.		Consolidated Financial Results for the nine Months Ended December 31, 2005

2.		Supplemental Information for Consolidated Financial Results for the nine Months Ended December 31, 2005

LOGO

January 30, 2006

KYOCERA CORPORATION

Consolidated Financial Highlights (Unaudited)

Results for the Nine Months Ended December 31, 2005


	(Yen in millions, except per share amounts and exchange rates)
	Nine months ended December 31,		Increase (Decrease) (%)
	2005	2004	Increase (Decrease) (%)
Net sales	864,490	892,642	(3.2	)
Profit from operations	69,203	81,399	(15.0	)
Income before income taxes	87,977	88,965	(1.1	)
Net income	49,993	57,163	(12.5	)
Average exchange rates :
US$	112	109	—
Euro	137	135	—
Earnings per share :
Net income
Basic	266.66	304.88	—
Diluted	266.64	304.80	—
Capital expenditures	70,723	46,202	53.1
Depreciation	44,809	42,782	4.7
R&D expenses	43,737	41,364	5.7
Total assets	1,917,949	1,770,575	—
Stockholders’ equity	1,283,130	1,186,851	—
Sales of products manufactured outside Japan to net sales (%)	31.4	33.2	—

- 1 -

Consolidated Results of Kyocera Corporation and its Subsidiaries

for the Nine Months Ended December 31, 2005

1. The basic items on preparation for consolidated results for the nine months ended December 31, 2005 :

(1) The consolidated financial statements are prepared in conformity with accounting principles generally accepted in the United States of America.

(2) Change in accounting policies : None

(3) Changes in scope of consolidation and application of the equity method :


	Consolidation	Equity method
Increase	3	0
Decrease	2	3

2. Consolidated financial information for the nine months ended December 31, 2005 :

(1) Consolidated results of operations :

Nine months ended December 31,

Year ended March 31,

2005

2004

2005

Net sales

864,490 million

892,642 million

1,180,655 million

% change from the previous period

(3.2

9.4

3.5

Profit from operations

69,203 million

81,399 million

100,968 million

% change from the previous period

(15.0

67.9

(7.3

Income before income taxes

87,977 million

88,965 million

107,530 million

% change from the previous period

(1.1

65.7

(6.5

Net income

49,993 million

57,163 million

45,908 million

% change from the previous period

(12.5

71.9

(32.6

Earnings per share :

Net income

Basic

266.66

304.88

244.86

Diluted

266.64

304.80

244.81

(2) Consolidated financial condition :

As of December 31,

As of March 31,

2005

2004

2005

Total assets

¥1,917,949 million

¥1,770,575 million

¥1,745,519 million

Stockholders’ equity

1,283,130 million

1,186,851 million

1,174,851 million

Stockholders’ equity to total assets

66.9%

67.0%

67.3%

Stockholders’ equity per share

¥6,844.39

¥6,330.37

¥6,266.50

- 2 -

(3) Consolidated cash flows :


	Nine months ended December 31,				Year ended March 31,
	2005		2004		2005
Cash flows from operating activities	¥	97,313 million	¥	101,564 million	¥	145,523 million

Cash flows from investing activities		(135,081) million		(144,795) million		(132,494) million

Cash flows from financing activities		(24,054) million		(58,019) million		(67,344) million

Cash and cash equivalents at end of period		256,765 million		261,220 million		310,592 million

3. Consolidated financial forecast for the year ending March 31, 2006 :


	Year ending March 31, 2006
Net sales	¥	1,200,000 million
Income before income taxes	¥	125,000 million
Net income	¥	73,000 million

Note 1:

There are no changes in the above forecast for the year ending March 31, 2006 from the forecast, which was shown in the Form 6-K submitted on October 27, 2005.

Note 2:


Forecast of earnings per share :		¥	389.34

Net income per share amounts is computed based on Statement of Financial Accounting Standards No.128. Forecast of earnings per share is computed based on the diluted average number of shares outstanding during the nine months ended December 31, 2005.

With regard to forecasts set forth above, please refer to the accompanying “Forward Looking Statements” on page 18.

- 3 -

Business Results, Financial Condition and Prospects

1. Business Results for the Nine Months Ended December 31, 2005

(1) Economic Situation and Business Environment

The Japanese economy continued to expand steadily, although moderately, during the nine months ended December 31, 2005 (the nine months) on the back of improved corporate earnings, increased capital investment and robust personal consumption. As to the world economy, the U.S. economy continued to grow through healthy expansion in personal consumption, while in Europe an increase in exports helped the economy to continue on a modest recovery track. The Chinese economy maintained high growth as exports increased due to expanded production of electronic equipment and strong capital investment in the private sector. Other economies in Asia also expanded steadily as a whole.

In the three months from April 1, 2005 to June 30, 2005 (the first quarter), the business environment was severe in the electronics industry, which is a key market for Kyocera Corporation and its consolidated subsidiaries (Kyocera). Recovery in demand was moderate, while components prices declined significantly. Nonetheless, the environment has made an about-turn since last summer. Not only has production of core digital consumer products such as mobile phone handsets, PCs and digital home appliances expanded remarkably, but demand for related electronic components has also been on an upward trend.

(2) Operating Highlights

1) In May 2005, Kyocera decided to outsource the manufacture of mobile phone handsets of Kyocera Wireless Corp. (KWC), a U.S. subsidiary, and to sell KWC’s manufacturing equipment and inventories to Flextronics International Ltd., a leading provider of electronics manufacturing services. The production transfer was completed in September 2005. Through this outsourcing, KWC has realized a major reduction in manufacturing costs, thereby driving a significant improvement in profitability in the three months from October 1, 2005 to December 31, 2005 (the third quarter).

- 4 -

2) Since June 2005, Kyocera implemented a new executive officer system to enhance Kyocera’s management organization under a global consolidation system, and accordingly, appointed a Chief Executive Officer (CEO), a Chief Financial Officer (CFO) and a Chief Operating Officer (COO). The CEO will take responsibility for mid and long-term Kyocera’s management policy and strategy formulation and execution, while the CFO will be responsible for constructing and executing a financial strategy for Kyocera that ensures the effective implementation of these management strategies. The COO will be in charge of daily management issues and business execution to achieve yearly management plans. At the same time, Kyocera also introduced a new corporate business group system, headed by newly appointed executive officers. These business group leaders will be responsible for each product line on a global and consolidated basis.

3) In June 2005, Kyocera entered into a purchase agreement with IBM Japan, Ltd. to purchase the land, building and other assets of the Yasu Office (Yasu City, Shiga Prefecture) owned by IBM Japan, Ltd. The transfer took place in August 2005. Kyocera intends to make the most effective use of the acquired assets to provide meaningful enhancement to the future business of Kyocera.

4) Kyocera accepted a tender bid by Square Enix Co., Ltd. for shares of Taito Corporation, an equity-method affiliate engaged in the amusement business, and sold its entire holding of shares of Taito Corporation (133,260 shares, 36.02% of outstanding shares) in September, 2005. The gain on sale of shares of Taito Corporation recorded in the six months ended September 2005 (the first half) was ¥6,931 million.

5) In November 2005, Kyocera established the Corporate Social Responsibility (CSR) Committee to deliberate upon and decide the policy and material matters with regard to CSR, and the Corporate CSR Division to execute these policies and material matters determined by the CSR Committee throughout Kyocera to strengthen its CSR activities across the board. Kyocera aims to generate sustainable growth by contributing to the healthy development of society through coordinated activities in Japan and overseas that take into consideration both Japanese and overseas trends in CSR.

- 5 -

(3) Consolidated Financial Results


	(Yen in millions, except per share amounts and exchange rates)
	Nine months ended December 31,		Increase (Decrease) %
	2005	2004	Increase (Decrease) %
Net sales	864,490	892,642	(3.2	)
Profit from operations	69,203	81,399	(15.0	)
Income before income taxes	87,977	88,965	(1.1	)
Net income	49,993	57,163	(12.5	)
Diluted earnings per share	266.64	304.80	—
Average US$ exchange rate	112	109	—
Average Euro exchange rate	137	135	—

1)	Overview of Performance for the Nine Months Ended December 31, 2005

In the components business, the Applied Ceramic Products Group posted a considerable increase in sales compared with the nine months ended December 31, 2004 (the previous nine months) as sales of solar energy products and cutting tools were strong throughout the nine months amid continued global market expansion. Sales and operating profits in the Fine Ceramic Parts Group and the Electronic Device Group decreased compared with the previous nine months, however, due to the substantial decline in component prices in the first half.

Meanwhile, sales in the equipment business decreased compared with the previous nine months due to that a slowdown in sales at KWC which is in the process of executing structural reforms, and a large downsizing of the camera equipment business outweighed robust sales of mobile phone handsets and PHS handsets in the Japanese market. Operating profit in the equipment business increased as operating losses from the Telecommunications Equipment Group and the Optical Equipment Group were significantly reduced owing to increased sales of new products and the positive effects of structural reforms.

As a result of these business performances, overall Kyocera’s sales and profits for the nine months decreased compared with the previous nine months.

In addition, an average rate of the yen depreciated 3 yen against the U.S. dollar and also depreciated 2 yen against the Euro compared with the previous nine months. Accordingly, net sales and income before income taxes after translation into the yen had a positive impact of approximately, ¥16.7 billion and ¥4.3 billion, respectively.

Furthermore, following the merger of Mitsubishi Tokyo Financial Group, Inc. and UFJ Holdings, Inc., on October 1, 2005, Kyocera’s shares in UFJ Holdings, Inc. were exchanged for shares of the new company, Mitsubishi UFJ Financial Group. As a result of this share exchange, Kyocera recorded a gain in the amount of ¥5,281 million in the third quarter.

- 6 -

2)	Overview of Performance for the three months from October 1, 2005 to December 31, 2005

Sales in the components business increased considerably compared with the three months from October 1, 2004 to December 31, 2004 (the previous third quarter), reflecting sales growth particularly in the Electronic Device Group and the Semiconductor Parts Group due to increased production of digital consumer products. Furthermore, sales in the Applied Ceramic Products Group increased due mainly to expanded sales of solar energy products and cutting tools compared with the previous third quarter. Operating profits in the components business increased considerably due to the positive effects of higher sales and improved productivity.

The equipment business posted a marked increase in sales compared with the previous third quarter, due to increased sales of new mobile phone handsets and PHS handsets in the Japanese market. Increased sales and improved profitability due to the structural reforms at KWC and the Optical Equipment Group resulted in a remarkable growth of operating profit compared with the previous third quarter.

- 7 -

(4)	Consolidated Sales and Operating Profits by Reporting Segment

Consolidated sales and operating profits by reporting segments is as follows.


	(Yen in millions)
	Nine months ended December 31,				Increase (Decrease) %
	2005		2004		Increase (Decrease) %
Fine Ceramic Parts Group	50,839		56,681		(10.3	)
Semiconductor Parts Group	98,887		98,479		0.4
Applied Ceramic Products Group	85,713		69,731		22.9
Electronic Device Group	193,897		202,253		(4.1	)

Total components business	429,336		427,144		0.5
Telecommunications Equipment Group	166,297		193,744		(14.2	)
Information Equipment Group	181,212		177,949		1.8
Optical Equipment Group	11,798		28,531		(58.6	)

Total equipment business	359,307		400,224		(10.2	)
Others	89,584		84,082		6.5
Adjustments and eliminations	(13,737	)	(18,808	)	—

Net sales	864,490		892,642		(3.2	)

Fine Ceramic Parts Group	7,328		8,395		(12.7	)
Semiconductor Parts Group	11,875		13,886		(14.5	)
Applied Ceramic Products Group	15,135		12,508		21.0
Electronic Device Group	18,988		29,053		(34.6	)

Total components business	53,326		63,842		(16.5	)
Telecommunications Equipment Group	(5,683	)	(11,501	)	—
Information Equipment Group	21,061		27,470		(23.3	)
Optical Equipment Group	(4,987	)	(10,123	)	—

Total equipment business	10,391		5,846		77.7
Others	7,720		8,743		(11.7	)

Operating profit	71,437		78,431		(8.9	)
Corporate	17,571		10,651		65.0
Equity in losses of affiliates and unconsolidated subsidiaries	(1,062	)	(213	)	—
Adjustments and eliminations	31		96		(67.7	)

Income before income taxes	87,977		88,965		(1.1	)

Notes:

Kyocera had previously classified its operations into four reporting segments: “Fine Ceramics Group,” “Electronic Device Group,” “Equipment Group” and “Others.” Kyocera changed its segmentation to make clarify the nature of each operations and to make its management structure more efficiently. Kyocera currently has the following eight reporting segments: “Fine Ceramic Parts Group,” “Semiconductor Parts Group,” “Applied Ceramic Products Group,” “Electronic Device Group,” “Telecommunications Equipment Group,” “Information Equipment Group,” “Optical Equipment Group” and “Others.” Consolidated results for the nine months ended December 31, 2004 have been reclassified accordingly.

- 8 -

1)	Fine Ceramic Parts Group

Demand for ceramic parts used in semiconductor fabrication equipment was weaker than the previous nine months, and sapphire products for LCD projectors were negatively impacted by a decline in unit prices caused by intensifying market competition. As a result, sales and operating profit in this segment for the nine months decreased compared with the previous nine months.

While sales in this segment for the third quarter decreased slightly, operating profit increased compared with the previous third quarter.

2)	Semiconductor Parts Group

Although sales of Ceramic package for digital consumer products such as mobile phone handsets and digital cameras declined compared with the previous nine months, sales of organic packages and substrates for servers and digital consumer products increased. As a result, sales in this segment for the nine months slightly increased compared with the previous nine months. Operating profit decreased, however, due to an increase in depreciation costs in the organic package business in line with aggressive capital expenditures to establish a new plant, and to slow demand for ceramic packages in the first half.

Both sales and operating profit of this segment in the third quarter, however, substantially increased compared with the previous third quarter due to expanded demand for ceramic packages for digital consumer products and improved productivity.

3)	Applied Ceramic Products Group

Both sales and operating profit in the nine months and the third quarter grew strongly compared with previous period. The solar system business recorded significant increases in sales and operating profits amid an expanding global market spurred by rising environmental awareness. Sales of cutting tools also grew due to healthy production activity in the automobile industry.

4)	Electronic Device Group

Sales and operating profit in this segment for the nine months were lower than the previous nine months. Despite steady growth in sales of thermal printheads, sales of LCDs for mobile phone handsets decreased. In addition, sales of electronic components such as crystal-related components, ceramic capacitors and connectors were negatively impacted by declines in component prices in the first half. On the other hand, both sales and operating profit in this segment for the third quarter increased compared with the previous third quarter due mainly to increased sales of components for digital consumer products and improved productivity.

- 9 -

5)	Telecommunications Equipment Group

Sales in this segment for the nine months decreased compared with the previous nine months due to a decline in sale of mobile phone handsets at KWC, a U.S. subsidiary, as it is in the process of executing structural reforms. In addition, sales of PHS-related products for overseas market decreased. However, the positive effects of increased sales of mobile phone handsets and PHS handsets in the Japanese market as well as positive results from the structural reform at KWC contributed substantially to a reduction in operating loss as compared with the previous nine months.

Sales in this segment for the third quarter increased due to strong sales of mobile phone handsets and PHS handsets released in the Japanese market. Operating profit also improved substantially compared with the previous third quarter, in which operating loss was recorded. This was due mainly to the effect of increased sales in this segment and of improved profitability at KWC.

6)	Information Equipment Group

Sales in this segment for the nine months increased compared with the previous nine months. Kyocera enjoyed steady growth in sales of page printers and digital multifunctional products, new models which were continuously introduced into the market, despite intensifying global competition and a severe market environment. Operating profit for the nine months declined, however, due to the impact of a drop in unit prices and increasing development costs for color printers and digital multifunctional products equipped with solution functions set for release from the six months ending March 31, 2006 (the second half).

Although sales in the third quarter increased, operating profit declined slightly compared with the previous third quarter.

7)	Optical Equipment Group

Sales in this segment decreased compared with the previous nine months and the previous third quarter owing to declining sales of camera equipment in line with the execution of structural reforms. Operating loss was substantially decreased as a result of the positive effects of the structural reforms.

- 10 -

Others

Kyocera Communication Systems Co., Ltd. (KCCS) posted solid growth due to an increase in the sales of its telecommunications engineering business and to the contribution of a new subsidiary of KCCS, which was consolidated into Kyocera during the six months ended March 2005. Consequently, sales in this segment for the nine months increased compared with the previous nine months. Operating profit decreased, however, due mainly to the impact of a decline in profits at Kyocera Chemical Corporation (KCC).

Sales for the third quarter increased due to increased sales of KCCS, and operating profit for the third quarter increased due to increased profit of KCCS and KCC, compared with the previous third quarter.

- 11 -

(5)	Consolidated Orders and Production


	(Yen in millions)
	Nine months ended December 31,				Increase (Decrease) %
	2005		2004		Increase (Decrease) %
Fine Ceramic Parts Group	51,436		57,895		(11.2	)
Semiconductor Parts Group	105,493		96,606		9.2
Applied Ceramic Products Group	88,418		72,219		22.4
Electronic Device Group	201,750		205,813		(2.0	)
Total components business	447,097		432,533		3.4
Telecommunications Equipment Group	174,333		179,904		(3.1	)
Information Equipment Group	180,698		177,056		2.1
Optical Equipment Group	11,358		27,605		(58.9	)
Total equipment business	366,389		384,565		(4.7	)
Others	94,150		88,503		6.4
Adjustments and eliminations	(15,068	)	(18,329	)	—
Orders	892,568		887,272		0.6

Fine Ceramic Parts Group	50,341		56,941		(11.6	)
Semiconductor Parts Group	99,718		98,890		0.8
Applied Ceramic Products Group	86,093		73,430		17.2
Electronic Device Group	191,617		209,290		(8.4	)
Total components business	427,769		438,551		(2.5	)
Telecommunications Equipment Group	168,647		201,848		(16.4	)
Information Equipment Group	180,548		186,225		(3.0	)
Optical Equipment Group	10,945		24,419		(55.2	)
Total equipment business	360,140		412,492		(12.7	)
Others	61,536		56,869		8.2
Production	849,445		907,912		(6.4	)

- 12 -

(6)	Consolidated Sales by Geographic Area


	(Yen in millions)
	Nine months ended December 31,		Increase (Decrease) %
	2005	2004	Increase (Decrease) %
Japan	344,560	346,163	(0.5	)
United States of America	186,042	192,153	(3.2	)
Asia	148,746	159,994	(7.0	)
Europe	133,535	129,256	3.3
Others	51,607	65,076	(20.7	)
Net Sales	864,490	892,642	(3.2	)

1) Japan

Despite an increase in sales of mobile phone handsets and PHS handsets, sales decreased compared with the previous nine months reflecting the downturn in the components business in the first half.

2) USA

Although sales of the Electronic Device Group and the Information Equipment Group increased, sales of mobile handsets declined. Consequently, sales decreased compared with the previous nine months.

3) Asia

Sales decreased due mainly to decline in sales of PHS-related products in China compared with the previous nine months.

4) Europe

Sales increased compared with the previous nine months due to strong sales of solar energy products.

5) Others

Sales decreased due to lower sales of mobile handsets in Latin America, although sales of information equipment and solar energy products were robust compared with the previous nine months.

- 13 -

2.	Cash Flows

Cash and cash equivalents at December 31, 2005 decreased by ¥53,827 million to ¥256,765 million compared with at March 31, 2005.


	(Yen in millions)
	Nine months ended December 31,
	2005		2004
Cash flows from operating activities	97,313		101,564
Cash flows from investing activities	(135,081	)	(144,795	)
Cash flows from financing activities	(24,054	)	(58,019	)
Effect of exchange rate changes on cash and cash equivalents	7,995		1,338
Net decrease in cash and cash equivalents	(53,827	)	(99,912	)
Cash and cash equivalents at beginning of period	310,592		361,132
Cash and cash equivalents at end of period	256,765		261,220

1)	Cash Flows from Operating Activities

Net cash provided by operating activities for the nine months was ¥97,313 million. Although cash flows from inventories and payables increased compared with the previous nine months, cash flows from receivables decreased. Furthermore, net income for the nine months decreased, and it also included gains on exchange for the shares and on sale of investment on an affiliate, which were not recognized as cash flows from operating activities. As a result, net cash provided by operating activities decreased by ¥4,251 million to ¥101,564 million compared with the previous nine months.

2)	Cash Flows from Investing Activities

Net cash used in investing activities for the nine months decreased by ¥9,714 million to ¥135,081 million from net cash used by for the previous nine months of ¥144,795 million. This was due to that an increase of ¥44,020 million in payments for purchases of securities and payments for purchases of property, plant and equipment, and intangible assets compared with the previous nine months, exceeded an increase of ¥48,658 million in sales and maturities of securities and proceeds from sales of investment in an affiliate compared with the previous nine months.

- 14 -

3)	Cash Flows from Financing Activities

Net cash used in financing activities for the nine months decreased by ¥33,965 million to ¥24,054 million from the previous nine months of ¥58,019 million. This was due to an increase of ¥7,810 million in dividends paid compared with the previous nine months, while a decrease of ¥45,183 million in payments of long-term debt compared with the previous nine months.

3.	Business Risk

Please see “Forward-Looking Statements” on page 18 for details of business risks.

- 15 -

4.	Consolidated Forecast for the Year Ending March 31, 2006

(1)

Consolidated Financial Forecast

There is no revision in the financial forecast for the year ending March 31, 2006 (fiscal 2006) from the forecast announced on October 27, 2005. Forecast for fiscal 2006 is as follows.


	(Yen in millions, except per share amounts and exchange rates)
	Forecast for fiscal 2006 announced on		Result for fiscal 2005	Increase (Decrease) to the result for fiscal 2005 %
	January 30, 2006	October 27, 2005	Result for fiscal 2005	Increase (Decrease) to the result for fiscal 2005 %
Net sales	1,200,000	1,200,000	1,180,655	1.6
Profit from operations	105,000	105,000	100,968	4.0
Income before income taxes	125,000	125,000	107,530	16.2
Net income	73,000	73,000	45,908	59.0
Diluted earnings per share	389.34	389.34	244.81	—
Average US$ exchange rate	112	108	108	—
Average Euro exchange rate	136	132	135	—

Note: The above forecast of exchange rates are revised in January 2006, however, the forecast for the sales and profits was not changed because the impact of the change of the exchange rates was not material.

- 16 -

(2)

Consolidated Forecast of Sales and Operating Profits by Reporting Segment

There are no changes in the forecast of each reporting segment for the fiscal 2006 from the forecast announced on October 27, 2005. Forecast of each reporting segment is as follows.


	(Yen in millions)
	Fiscal 2006 (Forecast)		Fiscal 2005 (Result)		Increase (Decrease) %
Fine Ceramic Parts Group	68,000		73,711		(7.7	)
Semiconductor Parts Group	134,000		127,960		4.7
Applied Ceramic Products Group	115,000		93,879		22.5
Electronic Device Group	258,000		262,997		(1.9	)

Total components business	575,000		558,547		2.9
Telecommunications Equipment Group	245,000		250,918		(2.4	)
Information Equipment Group	251,000		241,145		4.1
Optical Equipment Group	16,000		35,776		(55.3	)

Total equipment business	512,000		527,839		(3.0	)
Others	127,000		118,040		7.6
Adjustments and eliminations	(14,000	)	(23,771	)	—

Net sales	1,200,000		1,180,655		1.6

Fine Ceramic Parts Group	10,500		11,535		(9.0	)
Semiconductor Parts Group	16,500		17,550		(6.0	)
Applied Ceramic Products Group	18,500		17,129		8.0
Electronic Device Group	26,500		35,406		(25.2	)

Total components business	72,000		81,620		(11.8	)
Telecommunications Equipment Group	(1,000	)	(14,918	)	—
Information Equipment Group	30,500		36,186		(15.7	)
Optical Equipment Group	(5,500	)	(15,387	)	—

Total equipment business	24,000		5,881		308.1
Others	12,000		13,019		(7.8	)

Operating profit	108,000		100,520		7.4
Corporate	17,000		7,010		142.5

Income before income taxes	125,000		107,530		16.2

- 17 -

The economic situation in Japan and overseas from the three months from January 1, 2006 to March 31, 2006 (the fourth quarter) onward is expected to improve steadily on the whole. Kyocera also projects strong growth in the electronic equipment market in calendar year 2006 due to expanding demand for mobile phone handsets, PCs and digital consumer product such as digital home appliances.

Kyocera will strive to improve profitability from the fourth quarter and beyond by expanding production of organic packages and large ceramic parts for LCD fabrication equipment via newly constructed lines, enhancing development activities and pursuing swift market launches of new products. In the solar energy market, which is expected to continue expanding, Kyocera aims to increase profitability through active utilization of global production sites and further reduction of manufacturing costs.

In the equipment business, Kyocera seeks to improve profitability by enhancing development of new products for introduction in a timely manner, especially of information equipment such as color printers and digital multifunctional products, and mobile phone handsets.

Kyocera will implement these strategies as a means to achieve the consolidated financial forecast for fiscal 2006 and will continue working to bolster business foundations aimed at capturing future business opportunities and driving growth over the medium to long term through the creation of new businesses.

Note: Forward-Looking Statements

Certain of the statements made in this document are forward-looking statements (within the meaning of Section 21E of the U.S. Securities and Exchange Act of 1934), which are based on our current assumptions and beliefs in light of the information currently available to us. These forward-looking statements involve known and unknown risks, uncertainties and other factors. Such risks, uncertainties and other factors include, but are not limited to: general economic conditions in our markets, which are primarily Japan, North America, Europe, and Asia, including in particular China; changes in exchange rates, particularly between the yen and the U.S. dollar and euro, respectively, in which we make significant sales; our ability to launch innovative products and otherwise meet the advancing technical requirements of our customers, particularly in the highly competitive markets for ceramics, semiconductor parts and electronic components; and the extent and pace of future growth or contraction in information technology-related markets around the world, including those for communications and personal computers; fluctuations in the value of securities and other assets held by us and changes in accounting principles; business performance of other companies with which we maintain business alliances; laws and regulations relating to the taxation, and to manufacturing and trade; events that may impact negatively on our markets or supply chain, including terrorist acts and outbreaks of diseases; and the occurrence of natural disasters, such as earthquakes, in locations where our manufacturing and other key business facilities are located. Such risks, uncertainties and other factors may cause our actual results, performance, achievements or financial position to be materially different from any future results, performance, achievements or financial position expressed or implied by these forward-looking statements. We undertake no obligation to publicly update any forward-looking statements included in this document.

- 18 -

CONSOLIDATED BALANCE SHEETS


	Yen in millions
	(Unaudited) December 31, 2005				March 31, 2005				Increase (Decrease)
	Amount			%	Amount			%	Increase (Decrease)
Current assets :
Cash and cash equivalents	¥	256,765			¥	310,592			¥	(53,827	)
Short-term investments		84,117				34,938				49,179
Trade notes receivable		28,831				29,552				(721	)
Trade accounts receivable		220,509				201,374				19,135
Short-term finance receivables		40,020				40,801				(781	)
Less allowances for doubtful accounts and sales returns		(9,212	)			(7,981	)			(1,231	)
Inventories		197,332				213,411				(16,079	)
Deferred income taxes		38,857				38,659				198
Other current assets		33,276				34,229				(953	)

Total current assets		890,495		46.4		895,575		51.3		(5,080	)

Non-current assets :
Investments and advances :
Investments in and advances to affiliates and unconsolidated subsidiaries		10,979				30,623				(19,644	)
Securities and other investments		569,419				430,437				138,982

Total investments and advances		580,398		30.3		461,060		26.4		119,338

Long-term finance receivables		74,422		3.9		66,427		3.8		7,995

Property, plant and equipment, at cost :
Land		58,819				55,210				3,609
Buildings		249,454				225,964				23,490
Machinery and equipment		698,260				656,780				41,480
Construction in progress		9,913				14,384				(4,471	)
Less accumulated depreciation		(730,256	)			(693,341	)			(36,915	)

		286,190		14.9		258,997		14.9		27,193

Goodwill		31,470		1.6		28,110		1.6		3,360
Intangible assets		34,442		1.8		15,847		0.9		18,595
Other assets		20,532		1.1		19,503		1.1		1,029

Total non-current assets		1,027,454		53.6		849,944		48.7		177,510

Total assets	¥	1,917,949		100.0	¥	1,745,519		100.0	¥	172,430

- 19 -


	Yen in millions
	(Unaudited) December 31, 2005					March 31, 2005					Increase (Decrease)
	Amount			%		Amount			%		Increase (Decrease)
Current liabilities :
Short-term borrowings	¥	64,007				¥	66,556				¥	(2,549	)
Current portion of long-term debt		53,012					44,051					8,961
Trade notes and accounts payable		91,633					86,872					4,761
Other notes and accounts payable		54,059					34,690					19,369
Accrued payroll and bonus		29,167					34,821					(5,654	)
Accrued income taxes		20,364					31,180					(10,816	)
Other accrued liabilities		33,684					28,849					4,835
Other current liabilities		23,927					17,338					6,589

Total current liabilities		369,853		19.3			344,357		19.7			25,496

Non-current liabilities :
Long-term debt		25,709					33,557					(7,848	)
Accrued pension and severance costs		27,300					31,166					(3,866	)
Deferred income taxes		135,475					96,345					39,130
Other non-current liabilities		12,597					4,761					7,836

Total non-current liabilities		201,081		10.5			165,829		9.5			35,252

Total liabilities		570,934		29.8			510,186		29.2			60,748

Minority interests in subsidiaries		63,885		3.3			60,482		3.5			3,403

Stockholders’ equity :
Common stock		115,703					115,703					—
Additional paid-in capital		162,059					162,061					(2	)
Retained earnings		947,873					916,628					31,245
Accumulated other comprehensive income		88,948					11,839					77,109
Treasury stock, at cost		(31,453	)				(31,380	)				(73	)

Total stockholders’ equity		1,283,130		66.9			1,174,851		67.3			108,279

Total liabilities, minority interests and stockholders’ equity	¥	1,917,949		100.0		¥	1,745,519		100.0		¥	172,430


Note : Accumulated other comprehensive income is as follows:

	Yen in millions
	December 31, 2005					March 31, 2005
Net unrealized gains on securities	¥			99,032		¥			42,461
Net unrealized gains (losses) on derivative financial instruments	¥			15		¥			(27	)
Minimum pension liability adjustments	¥			(1,629	)	¥			(1,629	)
Foreign currency translation adjustments	¥			(8,470	)	¥			(28,966	)

- 20 -

CONSOLIDATED STATEMENTS OF INCOME (Unaudited)


	Yen in millions and shares in thousands, except per share amounts
	Nine months ended December 31,										Increase (Decrease)
	2005					2004					Increase (Decrease)
	Amount			%		Amount			%		Amount			%
Net sales	¥	864,490		100.0		¥	892,642		100.0		¥	(28,152	)	(3.2	)
Cost of sales		616,615		71.3			643,445		72.1			(26,830	)	(4.2	)

Gross profit		247,875		28.7			249,197		27.9			(1,322	)	(0.5	)

Selling, general and administrative expenses		178,672		20.7			167,798		18.8			10,874		6.5

Profit from operations		69,203		8.0			81,399		9.1			(12,196	)	(15.0	)

Other income (expenses) :
Interest and dividend income		7,335		0.9			5,430		0.6			1,905		35.1
Interest expense		(964	)	(0.1	)		(927	)	(0.1	)		(37	)	—
Foreign currency transaction gains and losses, net		(650	)	(0.1	)		1,933		0.2			(2,583	)	—
Equity in losses of affiliates and unconsolidated subsidiaries		(1,062	)	(0.1	)		(213	)	(0.0	)		(849	)	—
Gain on sale of investment in an affiliate		6,931		0.8			—		—			6,931		—
Gains on exchange for the shares		5,294		0.6			—		—			5,294		—
Other, net		1,890		0.2			1,343		0.2			547		40.7

Total other income		18,774		2.2			7,566		0.9			11,208		148.1

Income before income taxes and minority interests		87,977		10.2			88,965		10.0			(988	)	(1.1	)

Income taxes		35,381		4.1			29,843		3.4			5,538		18.6

Income before minority interests		52,596		6.1			59,122		6.6			(6,526	)	(11.0	)

Minority interests		(2,603	)	(0.3	)		(1,959	)	(0.2	)		(644	)	—

Net income	¥	49,993		5.8		¥	57,163		6.4		¥	(7,170	)	(12.5	)


Earnings per share :
Net income :
Basic	¥	266.66				¥	304.88
Diluted	¥	266.64				¥	304.80

Weighted average number of shares of common stock outstanding :
Basic		187,476					187,491
Diluted		187,495					187,544

- 21 -

Notes:

Kyocera applies the Statement of Financial Accounting Standards Board (SFAS) No.130, “Financial Reporting of Comprehensive Income.” Based on this standard, comprehensive income for the nine months ended December 31, 2005 and 2004 was an increase of 127,102 million yen and an increase of 47,642 million yen, respectively.

Earnings per share amounts were computed based on SFAS No.128, “Earnings per Share.” Under SFAS No.128, basic earnings per share was computed based on the average number of shares of common stock outstanding during each period and diluted earnings per share assumed the dilution that could occur if securities or other contracts to issue common stock were exercised or converted into common stock or resulted in the issuance of common stock.

- 22 -

CONSOLIDATED STATEMENTS OF STOCKHOLDERS’ EQUITY


	( Yen in millions and shares in thousands)
(Number of shares of common stock)	Common stock		Additional paid-in capital			Retained earnings			Accumulated other comprehensive income			Treasury stock, at cost			Comprehensive income
Balance at March 31, 2004 (187,484) as previously reported	¥	115,703	¥	162,091		¥	885,262		¥	22,046		¥	(31,356	)
Adjustment prior to March 31, 2004							(3,293	)
Balance at March 31, 2004 (187,484) as adjusted		115,703		162,091			881,969			22,046			(31,356	)

Net income for the year							45,908								¥	45,908
Other comprehensive income										(10,207	)					(10,207	)

Total comprehensive income for the year															¥	35,701

Cash dividends							(11,249	)
Purchase of treasury stock (21)													(170	)
Reissuance of treasury stock (18)				(5	)								146
Stock option plan of a subsidiary				(25	)

Balance, March 31, 2005 (187,481)		115,703		162,061			916,628			11,839			(31,380	)

(Unaudit)
Net income for the period							49,993								¥	49,993
Other comprehensive income										77,109						77,109

Total comprehensive income for the period															¥	127,102

Cash dividends							(18,748	)
Purchase of treasury stock (14)													(115	)
Reissuance of treasury stock (5)				(2	)								42

Balance, December 31, 2005 (187,472 )	¥	115,703	¥	162,059		¥	947,873		¥	88,948		¥	(31,453	)


	(Yen in millions and shares in thousands)
(Number of shares of common stock)	Common stock		Additional paid-in capital			Retained earnings			Accumulated other comprehensive income			Treasury stock, at cost			Comprehensive income
Balance at March 31, 2004 (187,484) as previously reported	¥	115,703	¥	162,091		¥	885,262		¥	22,046		¥	(31,356	)
Adjustment prior to March 31, 2004							(3,293	)
Balance at March 31, 2004 (187,484) as adjusted		115,703		162,091			881,969			22,046			(31,356	)

(Unaudit)
Net income for the period							57,163								¥	57,163
Other comprehensive income										(9,521	)					(9,521	)

Total comprehensive income for the period															¥	47,642

Cash dividends							(11,249	)
Purchase of treasury stock (16)													(134	)
Reissuance of treasury stock (17)				(5	)								144

Balance, December 31, 2004 (187,485) as adjusted	¥	115,703	¥	162,086		¥	927,883		¥	12,525		¥	(31,346	)


Note :		As a result of an increase in an affiliated company accounted for by the equity method in the year ended March 31, 2005, the consolidated financial statements at March 31, 2004 and at December 31, 2004 have been adjusted as if the equity method had been applied at inception in accordance with Accounting Principles Board Opinion No.18, “The Equity Method of Accounting for Investments in Common Stock.”

- 23 -

CONSOLIDATED STATEMENTS OF CASH FLOWS (Unaudited)


	Yen in millions
	Nine months ended December 31,
	2005			2004
Cash flows from operating activities:
Net income	¥	49,993		¥	57,163
Adjustments to reconcile net income to net cash provided by operating activities :
Depreciation and amortization		50,440			48,503
Write-down of inventories		6,029			10,397
Gain on sale of investment in an affiliate		(6,931	)		—
Gains on exchange for the shares		(5,294	)		—
Foreign currency adjustments		734			(2,053	)
(Increase) decrease in receivables		(16,236	)		54,834
Decrease (increase) in inventories		16,744			(47,635	)
Increase in other current assets		(3,370	)		(745	)
Increase (decrease) in notes and accounts payable		10,817			(11,896	)
Other, net		(5,613	)		(7,004	)

Net cash provided by operating activities		97,313			101,564

Cash flows from investing activities :
Payments for purchases of securities		(82,934	)		(67,230	)
Payments for purchases of investments and advances		(177	)		(19,524	)
Sales and maturities of securities		48,319			23,794
Proceeds from sales of investment in an affiliate		24,133			—
Payments for purchases of property, plant and equipment, and intangible assets		(76,700	)		(48,384	)
Proceeds from sales of property, plant and equipment, and intangible assets		2,068			3,398
Acquisitions of businesses, net of cash acquired		3			(2,794	)
Acquisitions of minority interests		(3,575	)		(5	)
Deposit of negotiable certificate of deposits and time deposits		(101,101	)		(110,777	)
Withdrawal of negotiable certificate of deposits and time deposits		53,409			76,387
Other, net		1,474			340

Net cash used in investing activities		(135,081	)		(144,795	)

Cash flows from financing activities :
Decrease in short-term debt		(3,546	)		(6,265	)
Proceeds from issuance of long-term debt		4,830			8,959
Payments of long-term debt		(4,452	)		(49,635	)
Dividends paid		(20,143	)		(12,333	)
Other, net		(743	)		1,255

Net cash used in financing activities		(24,054	)		(58,019	)

Effect of exchange rate changes on cash and cash equivalents		7,995			1,338

Net decrease in cash and cash equivalents		(53,827	)		(99,912	)
Cash and cash equivalents at beginning of period		310,592			361,132

Cash and cash equivalents at end of period	¥	256,765		¥	261,220

- 24 -

SEGMENT INFORMATION (Unaudited)

1. Reporting segments :


	Yen in millions
	Nine months ended December 31,						Increase (Decrease)
	2005			2004			Increase (Decrease)
	Amount			Amount			Amount			%
Net sales :
Fine Ceramic Parts Group	¥	50,839		¥	56,681		¥	(5,842	)	(10.3	)
Semiconductor Parts Group		98,887			98,479			408		0.4
Applied Ceramic Products Group		85,713			69,731			15,982		22.9
Electronic Device Group		193,897			202,253			(8,356	)	(4.1	)
Telecommunications Equipment Group		166,297			193,744			(27,447	)	(14.2	)
Information Equipment Group		181,212			177,949			3,263		1.8
Optical Equipment Group		11,798			28,531			(16,733	)	(58.6	)
Others		89,584			84,082			5,502		6.5
Adjustments and eliminations		(13,737	)		(18,808	)		5,071		—

	¥	864,490		¥	892,642		¥	(28,152	)	(3.2	)

Operating profit :
Fine Ceramic Parts Group	¥	7,328		¥	8,395		¥	(1,067	)	(12.7	)
Semiconductor Parts Group		11,875			13,886			(2,011	)	(14.5	)
Applied Ceramic Products Group		15,135			12,508			2,627		21.0
Electronic Device Group		18,988			29,053			(10,065	)	(34.6	)
Telecommunications Equipment Group		(5,683	)		(11,501	)		5,818		—
Information Equipment Group		21,061			27,470			(6,409	)	(23.3	)
Optical Equipment Group		(4,987	)		(10,123	)		5,136		—
Others		7,720			8,743			(1,023	)	(11.7	)

		71,437			78,431			(6,994	)	(8.9	)

Corporate		17,571			10,651			6,920		65.0
Equity in losses of affiliates and unconsolidated subsidiaries		(1,062	)		(213	)		(849	)	—
Adjustments and eliminations		31			96			(65	)	(67.7	)

Income before income taxes	¥	87,977		¥	88,965		¥	(988	)	(1.1	)

Depreciation and amortization :
Fine Ceramic Parts Group	¥	3,002		¥	3,127		¥	(125	)	(4.0	)
Semiconductor Parts Group		7,238			6,046			1,192		19.7
Applied Ceramic Products Group		4,847			3,164			1,683		53.2
Electronic Device Group		15,390			15,910			(520	)	(3.3	)
Telecommunications Equipment Group		4,530			6,225			(1,695	)	(27.2	)
Information Equipment Group		8,828			6,501			2,327		35.8
Optical Equipment Group		1,446			2,039			(593	)	(29.1	)
Others		2,704			3,585			(881	)	(24.6	)
Corporate		2,455			1,906			549		28.8

Total	¥	50,440		¥	48,503		¥	1,937		4.0

Capital expenditures :
Fine Ceramic Parts Group	¥	3,242		¥	3,448		¥	(206	)	(6.0	)
Semiconductor Parts Group		19,157			5,893			13,264		225.1
Applied Ceramic Products Group		13,300			5,750			7,550		131.3
Electronic Device Group		14,864			14,757			107		0.7
Telecommunications Equipment Group		2,011			4,887			(2,876	)	(58.9	)
Information Equipment Group		8,603			5,751			2,852		49.6
Optical Equipment Group		183			2,237			(2,054	)	(91.8	)
Others		5,845			1,729			4,116		238.1
Corporate		3,518			1,750			1,768		101.0

Total	¥	70,723		¥	46,202		¥	24,521		53.1

- 25 -

2. Geographic segments (Sales and Operating profits by geographic area) :


	Yen in millions
	Nine months ended December 31,						Increase (Decrease)
	2005			2004			Increase (Decrease)
	Amount			Amount			Amount			%
Net sales:
Japan	¥	367,733		¥	389,127		¥	(21,394	)	(5.5	)
Intra-group sales and transfer between geographic areas		239,838			241,985			(2,147	)	(0.9	)

		607,571			631,112			(23,541	)	(3.7	)

United States of America		212,424			243,200			(30,776	)	(12.7	)
Intra-group sales and transfer between geographic areas		18,389			20,071			(1,682	)	(8.4	)

		230,813			263,271			(32,458	)	(12.3	)

Asia		127,503			112,940			14,563		12.9
Intra-group sales and transfer between geographic areas		91,641			91,049			592		0.7

		219,144			203,989			15,155		7.4

Europe		137,328			132,956			4,372		3.3
Intra-group sales and transfer between geographic areas		25,155			22,790			2,365		10.4

		162,483			155,746			6,737		4.3

Others		19,502			14,419			5,083		35.3
Intra-group sales and transfer between geographic areas		5,872			5,805			67		1.2

		25,374			20,224			5,150		25.5

Adjustments and eliminations		(380,895	)		(381,700	)		805		—

	¥	864,490		¥	892,642		¥	(28,152	)	(3.2	)

Operating Profits :
Japan	¥	53,864		¥	70,459		¥	(16,595	)	(23.6	)
United States of America		519			5,482			(4,963	)	(90.5	)
Asia		11,251			11,152			99		0.9
Europe		3,336			(798	)		4,134		—
Others		68			1,017			(949	)	(93.3	)

		69,038			87,312			(18,274	)	(20.9	)
Adjustments and eliminations		2,430			(8,785	)		11,215		—

		71,468			78,527			(7,059	)	(9.0	)
Corporate		17,571			10,651			6,920		65.0
Equity in losses of affiliates and unconsolidated subsidiaries		(1,062	)		(213	)		(849	)	—

Income before income taxes	¥	87,977		¥	88,965		¥	(988	)	(1.1	)

- 26 -

3. Geographic segments (Sales by region) :


	Yen in millions
	Nine months ended December 31,								Increase (Decrease)
	2005				2004				Increase (Decrease)
	Amount			%	Amount			%	Amount			%
Japan	¥	344,560		39.9	¥	346,163		38.8	¥	(1,603	)	(0.5	)
United States of America		186,042		21.5		192,153		21.5		(6,111	)	(3.2	)
Asia		148,746		17.2		159,994		17.9		(11,248	)	(7.0	)
Europe		133,535		15.4		129,256		14.5		4,279		3.3
Others		51,607		6.0		65,076		7.3		(13,469	)	(20.7	)

Net sales	¥	864,490		100.0	¥	892,642		100.0	¥	(28,152	)	(3.2	)

Sales outside Japan	¥	519,930			¥	546,479			¥	(26,549	)	(4.9	)
Sales outside Japan to net sales		60.1	%			61.2	%

- 27 -

CONSOLIDATED BALANCE SHEETS (Unaudited)


	Yen in millions
	December 31, 2005				September 30, 2005				Increase (Decrease)
	Amount			%	Amount			%	Increase (Decrease)
Current assets :
Cash and cash equivalents	¥	256,765			¥	253,885			¥	2,880
Short-term investments		84,117				94,526				(10,409	)
Trade notes receivable		28,831				25,439				3,392
Trade accounts receivable		220,509				196,743				23,766
Short-term finance receivables		40,020				42,194				(2,174	)
Less allowances for doubtful accounts and sales returns		(9,212	)			(7,919	)			(1,293	)
Inventories		197,332				200,607				(3,275	)
Deferred income taxes		38,857				38,985				(128	)
Other current assets		33,276				29,136				4,140

Total current assets		890,495		46.4		873,596		46.9		16,899

Non-current assets :
Investments and advances :
Investments in and advances to affiliates and unconsolidated subsidiaries		10,979				12,037				(1,058	)
Securities and other investments		569,419				539,423				29,996

Total investments and advances		580,398		30.3		551,460		29.6		28,938

Long-term finance receivables		74,422		3.9		74,247		4.0		175

Property, plant and equipment, at cost :
Land		58,819				58,553				266
Buildings		249,454				241,692				7,762
Machinery and equipment		698,260				680,879				17,381
Construction in progress		9,913				13,679				(3,766	)
Less accumulated depreciation		(730,256	)			(713,078	)			(17,178	)

		286,190		14.9		281,725		15.1		4,465

Goodwill		31,470		1.6		30,727		1.7		743
Intangible assets		34,442		1.8		30,124		1.6		4,318
Other assets		20,532		1.1		21,049		1.1		(517	)

Total non-current assets		1,027,454		53.6		989,332		53.1		38,122

Total assets	¥	1,917,949		100.0	¥	1,862,928		100.0	¥	55,021

- 28 -


	Yen in millions
	December 31, 2005					September 30, 2005					Increase (Decrease)
	Amount			%		Amount			%		Increase (Decrease)
Current liabilities :
Short-term borrowings	¥	64,007				¥	67,422				¥	(3,415	)
Current portion of long-term debt		53,012					53,123					(111	)
Trade notes and accounts payable		91,633					90,713					920
Other notes and accounts payable		54,059					50,208					3,851
Accrued payroll and bonus		29,167					36,769					(7,602	)
Accrued income taxes		20,364					25,137					(4,773	)
Other accrued liabilities		33,684					31,143					2,541
Other current liabilities		23,927					17,595					6,332

Total current liabilities		369,853		19.3			372,110		20.0			(2,257	)

Non-current liabilities :
Long-term debt		25,709					25,920					(211	)
Accrued pension and severance costs		27,300					27,397					(97	)
Deferred income taxes		135,475					123,151					12,324
Other non-current liabilities		12,597					11,595					1,002

Total non-current liabilities		201,081		10.5			188,063		10.1			13,018

Total liabilities		570,934		29.8			560,173		30.1			10,761

Minority interests in subsidiaries		63,885		3.3			61,060		3.3			2,825

Stockholders’ equity :
Common stock		115,703					115,703					—
Additional paid-in capital		162,059					162,060					(1	)
Retained earnings		947,873					931,468					16,405
Accumulated other comprehensive income		88,948					63,890					25,058
Treasury stock, at cost		(31,453	)				(31,426	)				(27	)

Total stockholders’ equity		1,283,130		66.9			1,241,695		66.6			41,435

Total liabilities, minority interests and stockholders’ equity	¥	1,917,949		100.0		¥	1,862,928		100.0		¥	55,021

Note : Accumulated other comprehensive income is as follows:
	Yen in millions
	December 31, 2005					September 30, 2005
Net unrealized gains on securities	¥			99,032		¥			84,536
Net unrealized gains (losses) on derivative financial instruments	¥			15		¥			(13	)
Minimum pension liability adjustments	¥			(1,629	)	¥			(1,629	)
Foreign currency translation adjustments	¥			(8,470	)	¥			(19,004	)

- 29 -

CONSOLIDATED STATEMENTS OF INCOME (Unaudited)


	Yen in millions and shares in thousands, except per share amounts
	Three months ended December 31,										Increase (Decrease)
	2005					2004					Increase (Decrease)
	Amount			%		Amount			%		Amount			%
Net sales	¥	319,232		100.0		¥	292,080		100.0		¥	27,152		9.3
Cost of sales		224,748		70.4			213,802		73.2			10,946		5.1

Gross profit		94,484		29.6			78,278		26.8			16,206		20.7

Selling, general and administrative expenses		60,630		19.0			58,971		20.2			1,659		2.8

Profit from operations		33,854		10.6			19,307		6.6			14,547		75.3

Other income (expenses) :
Interest and dividend income		3,449		1.1			2,702		0.9			747		27.6
Interest expense		(331	)	(0.1	)		(314	)	(0.1	)		(17	)	—
Foreign currency transaction gains and losses, net		(559	)	(0.2	)		(163	)	(0.0	)		(396	)	—
Equity in losses of affiliates and unconsolidated subsidiaries		(826	)	(0.3	)		(795	)	(0.3	)		(31	)	—
Gains on exchange for the shares		5,281		1.7			—		—			5,281		—
Other, net		974		0.3			975		0.3			(1	)	(0.1	)

Total other income		7,988		2.5			2,405		0.8			5,583		232.1

Income before income taxes and minority interests		41,842		13.1			21,712		7.4			20,130		92.7

Income taxes		14,932		4.7			7,095		2.4			7,837		110.5

Income before minority interests		26,910		8.4			14,617		5.0			12,293		84.1

Minority interests		(1,131	)	(0.3	)		(3	)	(0.0	)		(1,128	)	—

Net income	¥	25,779		8.1		¥	14,614		5.0		¥	11,165		76.4


Earnings per share :
Net income :
Basic	¥	137.51				¥	77.94
Diluted	¥	137.49				¥	77.94

Weighted average number of shares of common stock outstanding :
Basic		187,473					187,488
Diluted		187,492					187,492

- 30 -

Notes:

Kyocera applies the Statement of Financial Accounting Standards Board (SFAS) No.130, “Financial Reporting of Comprehensive Income.” Based on this standard, comprehensive income for the three months ended December 31, 2005 and 2004 was an increase of 50,837 million yen and an increase of 14,877 million yen, respectively.

- 31 -

CONSOLIDATED STATEMENTS OF CASH FLOWS (Unaudited)


	Yen in millions
	Three months ended December 31,
	2005			2004
Cash flows from operating activities:
Net income	¥	25,779		¥	14,614
Adjustments to reconcile net income to net cash provided by operating activities :
Depreciation and amortization		18,677			17,414
Write-down of inventories		1,726			2,904
Gains on exchange for the shares		(5,281	)		—
Foreign currency adjustments		(27	)		(204	)
(Increase) decrease in receivables		(24,007	)		4,562
Decrease (increase) in inventories		6,327			(3,311	)
Increase in other current assets		(2,354	)		(356	)
Increase (decrease) in notes and accounts payable		5,500			(15,118	)
Other, net		(799	)		(7,832	)

Net cash provided by operating activities		25,541			12,673

Cash flows from investing activities :
Payments for purchases of securities		(6,191	)		(6,890	)
Payments for purchases of investments and advances		(50	)		(19,072	)
Sales and maturities of securities		9,780			3,865
Payments for purchases of property, plant and equipment, and intangible assets		(27,045	)		(17,810	)
Proceeds from sales of property, plant and equipment, and intangible assets		135			1,416
Acquisitions of businesses, net of cash acquired		3			—
Deposit of negotiable certificate of deposits and time deposits		(24,045	)		(38,177	)
Withdrawal of negotiable certificate of deposits and time deposits		35,288			75,871
Other, net		135			179

Net cash used in investing activities		(11,990	)		(618	)

Cash flows from financing activities :
(Decrease) increase in short-term debt		(3,913	)		782
Proceeds from issuance of long-term debt		47			297
Payments of long-term debt		(696	)		(788	)
Dividends paid		(9,696	)		(5,924	)
Other, net		(139	)		1,196

Net cash used in financing activities		(14,397	)		(4,437	)

Effect of exchange rate changes on cash and cash equivalents		3,726			(3,363	)

Net increase in cash and cash equivalents		2,880			4,255
Cash and cash equivalents at beginning of period		253,885			256,965

Cash and cash equivalents at end of period	¥	256,765		¥	261,220

- 32 -

SEGMENT INFORMATION (Unaudited)

1. Reporting segments :


	Yen in millions
	Three months ended December 31,						Increase (Decrease)
	2005			2004			Increase (Decrease)
	Amount			Amount			Amount			%
Net sales :
Fine Ceramic Parts Group	¥	17,581		¥	17,761		¥	(180	)	(1.0	)
Semiconductor Parts Group		35,343			30,331			5,012		16.5
Applied Ceramic Products Group		29,961			24,740			5,221		21.1
Electronic Device Group		68,514			62,463			6,051		9.7
Telecommunications Equipment Group		75,213			61,387			13,826		22.5
Information Equipment Group		62,779			61,149			1,630		2.7
Optical Equipment Group		3,542			11,815			(8,273	)	(70.0	)
Others		30,550			27,889			2,661		9.5
Adjustments and eliminations		(4,251	)		(5,455	)		1,204		—

	¥	319,232		¥	292,080		¥	27,152		9.3

Operating profit :
Fine Ceramic Parts Group	¥	2,523		¥	2,171		¥	352		16.2
Semiconductor Parts Group		4,624			3,274			1,350		41.2
Applied Ceramic Products Group		5,798			4,945			853		17.2
Electronic Device Group		7,817			6,812			1,005		14.8
Telecommunications Equipment Group		3,672			(6,602	)		10,274		—
Information Equipment Group		7,817			8,066			(249	)	(3.1	)
Optical Equipment Group		(938	)		(2,766	)		1,828		—
Others		3,016			2,583			433		16.8

		34,329			18,483			15,846		85.7

Corporate		8,401			3,968			4,433		111.7
Equity in losses of affiliates and unconsolidated subsidiaries		(826	)		(795	)		(31	)	—
Adjustments and eliminations		(62	)		56			(118	)	—

Income before income taxes	¥	41,842		¥	21,712		¥	20,130		92.7

Depreciation and amortization :
Fine Ceramic Parts Group	¥	1,065		¥	1,104		¥	(39	)	(3.5	)
Semiconductor Parts Group		2,889			2,177			712		32.7
Applied Ceramic Products Group		2,017			1,172			845		72.1
Electronic Device Group		5,246			5,776			(530	)	(9.2	)
Telecommunications Equipment Group		1,481			2,206			(725	)	(32.9	)
Information Equipment Group		3,583			2,306			1,277		55.4
Optical Equipment Group		502			794			(292	)	(36.8	)
Others		911			1,222			(311	)	(25.5	)
Corporate		983			657			326		49.6

Total	¥	18,677		¥	17,414		¥	1,263		7.3

Capital expenditures :
Fine Ceramic Parts Group	¥	800		¥	1,597		¥	(797	)	(49.9	)
Semiconductor Parts Group		3,673			2,528			1,145		45.3
Applied Ceramic Products Group		3,602			3,637			(35	)	(1.0	)
Electronic Device Group		5,980			4,437			1,543		34.8
Telecommunications Equipment Group		996			1,267			(271	)	(21.4	)
Information Equipment Group		1,970			2,212			(242	)	(10.9	)
Optical Equipment Group		72			438			(366	)	(83.6	)
Others		107			815			(708	)	(86.9	)
Corporate		1,502			640			862		134.7

Total	¥	18,702		¥	17,571		¥	1,131		6.4

- 33 -

2. Geographic segments (Sales and Operating profits by geographic area) :


	Yen in millions
	Three months ended December 31,						Increase (Decrease)
	2005			2004			Increase (Decrease)
	Amount			Amount			Amount			%
Net sales:
Japan	¥	133,080		¥	129,527		¥	3,553		2.7
Intra-group sales and transfer between geographic areas		86,605			77,765			8,840		11.4

		219,685			207,292			12,393		6.0

United States of America		84,897			76,373			8,524		11.2
Intra-group sales and transfer between geographic areas		7,382			6,360			1,022		16.1

		92,279			82,733			9,546		11.5

Asia		46,359			34,266			12,093		35.3
Intra-group sales and transfer between geographic areas		36,112			31,407			4,705		15.0

		82,471			65,673			16,798		25.6

Europe		47,662			46,668			994		2.1
Intra-group sales and transfer between geographic areas		8,562			7,477			1,085		14.5

		56,224			54,145			2,079		3.8

Others		7,234			5,246			1,988		37.9
Intra-group sales and transfer between geographic areas		2,089			1,884			205		10.9

		9,323			7,130			2,193		30.8

Adjustments and eliminations		(140,750	)		(124,893	)		(15,857	)	—

	¥	319,232		¥	292,080		¥	27,152		9.3

Operating Profits :
Japan	¥	23,541		¥	15,975		¥	7,566		47.4
United States of America		3,573			(311	)		3,884		—
Asia		5,387			2,516			2,871		114.1
Europe		2,803			(100	)		2,903		—
Others		(1	)		277			(278	)	—

		35,303			18,357			16,946		92.3
Adjustments and eliminations		(1,036	)		182			(1,218	)	—

		34,267			18,539			15,728		84.8
Corporate		8,401			3,968			4,433		111.7
Equity in losses of affiliates and unconsolidated subsidiaries		(826	)		(795	)		(31	)	—

Income before income taxes	¥	41,842		¥	21,712		¥	20,130		92.7

- 34 -

3. Geographic segments (Sales by region) :


	Yen in millions
	Three months ended December 31,								Increase (Decrease)
	2005				2004				Increase (Decrease)
	Amount			%	Amount			%	Amount			%
Japan	¥	124,369		39.0	¥	118,391		40.5	¥	5,978		5.0
United States of America		73,400		23.0		61,648		21.1		11,752		19.1
Asia		57,103		17.9		43,637		15.0		13,466		30.9
Europe		45,687		14.3		45,350		15.5		337		0.7
Others		18,673		5.8		23,054		7.9		(4,381	)	(19.0	)

Net sales	¥	319,232		100.0	¥	292,080		100.0	¥	27,152		9.3

Sales outside Japan	¥	194,863			¥	173,689			¥	21,174		12.2
Sales outside Japan to net sales		61.0	%			59.5	%

- 35 -

THE NEW VALUE FRONTIER

Consolidated Financial Results

for nine months ended December 31, 2005

Supplemental Information

KYOCERA Corporation

January 30, 2006

Forward-Looking Statements

1. Consolidated Financial Highlights


	(Yen in Millions except per share amounts and exchange rates)
	1Q			2Q			3Q
	Three months ended Jun. 30, 2005			Three months ended Sep. 30, 2005			Three months ended Dec. 31, 2005
	Amount	% change from the previous period		Amount	% change from the previous period		Amount	% change from the previous period
Net sales	265,073	(9.6	)	280,185	(8.9	)	319,232	9.3
Profit from operations	14,283	(58.9	)	21,066	(23.0	)	33,854	75.3
Pre-tax profit	17,215	(54.8	)	28,920	(0.9	)	41,842	92.7
Net income	8,603	(60.9	)	15,611	(24.1	)	25,779	76.4
EPS (diluted-yen)	45.88	—		83.26	—		137.49	—

Capital expenditures	27,036	128.9		24,985	48.5		18,702	6.4
Depreciation	13,149	(0.6	)	14,933	6.2		16,727	8.0
R&D expenses	14,456	4.2		14,872	9.7		14,409	3.4

US$ exchange rate	108	—		111	—		117	—
Euro exchange rate	136	—		136	—		139	—

2. Net Sales and Pre-tax Profit Trend

LOGO

3. Operating Profit Trend by Segment

LOGO


		(Yen in Millions)
		Fiscal 2005				Fiscal 2006
		3Q		4Q		1Q		2Q		3Q		Full-year forecast		Operating Profit Margin
Net sales	Components Business	135,295		131,403		133,414		144,523		151,399		575,000
	Equipment Business	134,351		127,615		108,061		109,712		141,534		512,000
	Others	27,889		33,958		28,168		30,866		30,550		127,000
	Adjustments and eliminations	(5,455	)	(4,963	)	(4,570	)	(4,916	)	(4,251	)	(14,000	)
	Total	292,080		288,013		265,073		280,185		319,232		1,200,000

Operating profit	Components Business	17,202		17,778		14,627		17,937		20,762		72,000		12.5	%
	Equipment Business	(1,302	)	35		(548	)	388		10,551		24,000		4.7	%
	Others	2,583		4,276		1,348		3,356		3,016		12,000		9.4	%
	Total	18,483		22,089		15,427		21,681		34,329		108,000		9.0	%

“Components Business” consists of Fine Ceramic Parts Group, Semiconductor Parts Group and Applied Ceramic Products Group Electronic Device Group.

“Equipment Business” consists of Telecommunications Equipment Group, Information Equipment Group and Optical Equipment Group.

“Total operating profit” represents the amount excluding corporate gain and loss, equity method gain and loss, and adjustments and eliminations from pre-tax profit.

Please refer to the accompanying note on page 1