Edgar Filing: KYOCERA CORP

FORM 6-K

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D. C. 20549

FORM 6-K

Report of Foreign Private Issuer

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

the Securities Exchange Act of 1934

For the month of July 2018

Commission File Number: 1-07952

KYOCERA CORPORATION

(Translation of registrant’s name into English)

6 Takeda Tobadono-cho, Fushimi-ku,

Kyoto 612-8501, Japan

(Address of principal executive office)

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 ☒ 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): ☐

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

(Registrant)

/s/ SHOICHI AOKI

(Signature)

Shoichi Aoki

Director,

Managing Executive Officer and

General Manager of

Corporate Management Control Group

Date: July 31, 2018

Information furnished on this form:

EXHIBITS


Exhibit Number
1.		Consolidated Financial Results for the Three Months Ended June 30, 2018 (IFRS)

LOGO

(English summary with full translation of consolidated financial results)

Consolidated Financial Results

for the Three Months Ended June 30, 2018 (IFRS)


		July 31, 2018
Company name: KYOCERA CORPORATION		Stock Listing: Tokyo Stock Exchange
Code number: 6971	URL https://global.kyocera.com/
Representative: Hideo Tanimoto, Director and President
Contact person: Shoichi Aoki, Director, Managing Executive Officer		TEL +81-75-604-3556
Scheduled date of quarterly report filing:	August 10, 2018
Scheduled date of dividend payment:	—
Supplementary documents of the quarterly financial results: Yes
Holding quarterly financial results meeting: Yes (conference call for institutional investors and analysts)

(Amounts less than one million yen are rounded)

1. Consolidated Financial Results for the Three Months Ended June 30, 2018


(1) Consolidated operating results							(% of change from the same period of the previous year)
	Sales revenue				Operating profit			Profit before income taxes				Profit attributable to owners of the parent				Comprehensive income for the period
Three months ended	Million yen		%		Million yen		%	Million yen		%		Million yen		%		Million yen		%
June 30, 2018		387,484		12.3		37,104	18.7		55,488		12.4		42,284		20.7		127,197		121.1
June 30, 2017		345,162		—		31,260	—		49,353		—		35,026		—		57,536		—


	Earnings per share attributable to owners of the parent - Basic		Earnings per share attributable to owners of the parent - Diluted
Three months ended	Yen		Yen
June 30, 2018		116.29		116.26
June 30, 2017		95.25		95.23

(2) Consolidated financial position


	Total assets		Total equity		Equity attributable to owners of the parent		Ratio of equity attributable to owners of the parent to total assets
As of	Million yen		Million yen		Million yen		%
June 30, 2018		3,210,051		2,479,430		2,388,680		74.4
March 31, 2018		3,128,813		2,413,299		2,325,791		74.3

2. Cash Dividends


	Annual dividends
	First quarter-end		Second quarter-end		Third quarter-end		Year-end		Total
	Yen		Yen		Yen		Yen		Yen
Year ended March 31, 2018		—		60.00		—		60.00		120.00
Year ending March 31, 2019		—
Year ending March 31, 2019 (forecast)				—		—		—		120.00

(Note) Revision of previously announced dividend targets during this reporting period: Not Applicable

Dividends per share for the year ending March 31, 2019 are forecasted to be 120.00 yen on an annual basis.

3. Consolidated Financial Forecasts for the Year Ending March 31, 2019


								(% of change from the previous year)
	Sales revenue				Operating profit				Profit before income taxes				Profit attributable to owners of the parent				Earnings per share attributable to owners of the parent - Basic
	Million yen		%		Million yen		%		Million yen		%		Million yen		%		Yen
Full year		1,650,000		4.6		154,000		69.8		190,000		46.2		134,000		69.3		368.54

(Note) Revision of the previously announced financial forecast during this reporting period: Not Applicable

% of change from previous year are calculated by rearranging the consolidated results for the year ended March 31, 2018 to IFRS.

“Earnings per share attributable to owners of the parent - Basic” is calculated using the average number of shares outstanding for the three months ended June 30, 2018.

* Notes

(1) Changes in significant subsidiaries during the period

(Changes in specified subsidiaries that caused a change in the scope of consolidation): Not Applicable

(2) Changes in accounting policies and accounting estimates

(i) Changes in accounting policies required under IFRS: Yes

(ii) Changes in accounting policies due to reasons other than (i): Not Applicable

(iii) Changes in accounting estimates: Yes

Please refer to page 16 “(4) Notes to Condensed Quarterly Consolidated Financial Statements b. Changes in Accounting Policies” and “c. Changes in Accounting Estimates” under “2. Condensed Quarterly Consolidated Financial Statements and Primary Notes” for details.

(3) Number of shares issued (common stock)

(i) Number of shares issued (including treasury stock):


As of June 30, 2018		377,618,580 shares
As of March 31, 2018		377,618,580 shares

(ii) Number of treasury stock:


As of June 30, 2018		15,862,303 shares
As of March 31, 2018		9,910,822 shares

(iii) Average number of shares outstanding:


For the three months ended June 30, 2018		363,599,571 shares
For the three months ended June 30, 2017		367,711,511 shares

* Instruction for Forecasts and Other Notes

1. Adopting IFRS

Kyocera Corporation and its consolidated subsidiaries (“Kyocera”) has adopted IFRS for its consolidated financial statements from the year ending March 31, 2019. Accordingly, the consolidated financial statements for the three months ended June 30, 2017 and those for the year ended March 31, 2018 are also presented in accordance with IFRS.

2. Cautionary statements with respect to forward-looking statements

Certain of the statements made in this document are forward-looking statements, 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 the following:

(1)

General conditions in the Japanese or global economy;

(2)

Unexpected changes in economic, political and legal conditions in countries where we operate;

(3)

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

(4)

The effect of foreign exchange fluctuations on our results of operations;

(5)

Intense competitive pressures to which our products are subject;

(6)

Fluctuations in the price and ability of suppliers to provide the required quantity of raw materials for use in our production activities;

(7)

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

(8)

Shortages and rising costs of electricity affecting our production and sales activities;

(9)

The possibility that future initiatives and in-process research and development may not produce the desired results;

(10)

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

(11)

Inability to secure skilled employees, particularly engineering and technical personnel;

(12)

Damages on our information security systems from cyberattacks, etc. and significant costs in order to recover and maintain the systems;

(13)

Insufficient protection of our trade secrets and intellectual property rights including patents;

(14)

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

(15)

Environmental liability and compliance obligations by tightening of environmental laws and regulations;

(16)

Unintentional conflict with laws and regulations or newly enacted laws and regulations;

(17)

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

(18)

Earthquakes and other natural disasters affecting our headquarters and major facilities as well as our suppliers and customers;

(19)

Credit risk on trade receivables;

(20)

Fluctuations in the value of, and impairment losses on, securities and other assets held by us;

(21)

Impairment losses on property, plant and equipment, goodwill and intangible assets;

(22)

Unrealized deferred tax assets and additional liabilities for unrecognized tax benefits; and

(23)

Changes in accounting principles.

Due to such risks, uncertainties and other factors, our actual results, performance, achievements or financial condition may be substantially different from any future results, performance, achievements or financial condition expressed or implied by these forward-looking statements. We undertake no obligation to publicly update any forward-looking statements included in this document.

3. Method of obtaining supplementary materials on the financial results

The supplementary material will be published on our website on July 31, 2018.

4. This consolidated financial report is not subject to quarterly review procedure.

(Attachment)

Table of Contents


1. Qualitative Information related to Consolidated Financial Statements			5

(1) Explanation of Financial Results			5

(2) Explanation of Financial Position			8

(3) Explanation Regarding Future Forecasts of Consolidated Financial Results			9

2. Condensed Quarterly Consolidated Financial Statements and Primary Notes			11

(1) Condensed Quarterly Consolidated Statement of Financial Position			11

(2) Condensed Quarterly Consolidated Statement of Profit or Loss and Comprehensive Income			13

a. Condensed Quarterly Consolidated Statement of Profit or Loss			13

b. Condensed Quarterly Consolidated Statement of Comprehensive Income			14

(3) Condensed Quarterly Consolidated Statement of Changes in Equity			15

(4) Notes to Condensed Quarterly Consolidated Financial Statements			16

a. Notes to Going Concern Assumption			16

b. Changes in Accounting Policies			16

c. Changes in Accounting Estimates			16

d. First-Time Adoption			17

1. Qualitative Information related to Consolidated Financial Statements

Commencing from the beginning of its fiscal year ending March 31, 2019 (“fiscal 2019”), Kyocera has adopted the International Financial Reporting Standards (“IFRS”) in lieu of the Generally Accepted Accounting Principles of the United States of America (“U.S. GAAP”). In addition, financial figures appearing herein for the three months ended June 30, 2017 (“the previous first quarter”) and the year ended March 31, 2018 (“fiscal 2018”) have been reclassified in accordance with IFRS for the purpose of comparative analysis.

(1) Explanation of Financial Results

a. Consolidated Results of Operations

Sales in the three months ended June 30, 2018 (“the first quarter”) increased due to solid demand in the Electronic Devices Group and the Industrial & Automotive Components Group coupled with contributions from merger and acquisition activities conducted in fiscal 2018. Sales in the Document Solutions Group also increased on the back of aggressive sales promotion activities. As a result, sales revenue for the first quarter increased by 42,322 million yen, or 12.3%, to 387,484 million yen, compared with the previous first quarter, marking a record high for first quarter sales.

Profits increased compared with the previous first quarter reflecting the sales growth and efforts to reduce costs. Operating profit increased by 5,844 million yen, or 18.7%, to 37,104 million yen, profit before income taxes increased by 6,135 million yen, or 12.4%, to 55,488 million yen, and profit attributable to owners of the parent increased by 7,258 million yen, or 20.7%, to 42,284 million yen, compared with the previous first quarter.

Average exchange rates for the first quarter were 109 yen to the U.S. dollar, marking appreciation of 2 yen (1.8%), and 130 yen to the Euro, marking depreciation of 8 yen (6.6%), compared with the previous first quarter. As a result, sales revenue and profit before income taxes after translation into yen for the first quarter were pushed up by approximately 2 billion yen, respectively, compared with the previous first quarter.

Consolidated Results of Operations


	For the three months ended June 30, 2017				For the three months ended June 30, 2018				Change
	Amount		%*		Amount		%*		Amount		%
	(Yen in millions)
Sales revenue		345,162		100.0		387,484		100.0		42,322		12.3
Operating profit		31,260		9.1		37,104		9.6		5,844		18.7
Profit before income taxes		49,353		14.3		55,488		14.3		6,135		12.4
Profit attributable to owners of the parent		35,026		10.1		42,284		10.9		7,258		20.7
Average US$ exchange rate (yen)		111		—		109		—		—		—
Average Euro exchange rate (yen)		122		—		130		—		—		—

*	% represents the percentage to sales revenue.

b. Consolidated Results by Reporting Segment

1) Industrial & Automotive Components Group

Sales in this reporting segment increased compared with the previous first quarter due to a significant increase in sales of industrial tools resulting from growing demand and merger and acquisition activities. Sales of fine ceramic parts used in semiconductor processing equipment also increased on the back of a buoyant market. Business profit increased markedly due to the growth in sales and cost reductions.

2) Semiconductor Components Group

Sales in this reporting segment were roughly on par with the previous first quarter. Despite an increase in sales of organic packages mainly for automobile applications, demand for ceramic packages for optical communications was down relative to the previous first quarter, which registered a high level of sales, due mainly to the impact of inventory adjustments. Business profit decreased due to lower sales of ceramic packages.

3) Electronic Devices Group

Sales of ceramic capacitors for smartphones increased. Demand for printing devices for industrial equipment was also strong. Merger and acquisition activities at AVX Corporation, a U.S. subsidiary, also made a contribution. As a result, sales and business profit in this reporting segment increased significantly compared with the previous first quarter.

4) Communications Group

Sales decreased compared with the previous first quarter and a business loss was recorded in this reporting segment due to a decline in sales in the telecommunications equipment business, despite increases in sales and profit in the information and communications services business, which provides engineering services, etc.

5) Document Solutions Group

Sales and business profit increased in this reporting segment compared with the previous first quarter due to an increase in sales volume resulting from aggressive sales promotion activities, contributions from merger and acquisition activities and the impact of foreign exchange rate fluctuations.

6) Life & Environment Group

Sales in this reporting segment decreased compared with the previous first quarter due to a decline in sales in the solar energy business. A business loss was recorded due primarily to this decrease in sales and an increase in R&D expenses.

Sales Revenue by Reporting Segment


	For the three months ended June 30, 2017						For the three months ended June 30, 2018						Change
	Amount			%*			Amount			%*			Amount			%
	(Yen in millions)
Industrial & Automotive Components Group		61,185			17.7			81,956			21.1			20,771			33.9
Semiconductor Components Group		60,786			17.6			60,649			15.7			(137	)		(0.2	)
Electronic Devices Group		63,120			18.3			88,284			22.8			25,164			39.9

Total Components Business		185,091			53.6			230,889			59.6			45,798			24.7
Communications Group		57,071			16.5			51,610			13.3			(5,461	)		(9.6	)
Document Solutions Group		80,973			23.5			88,796			22.9			7,823			9.7
Life & Environment Group		24,606			7.1			18,692			4.8			(5,914	)		(24.0	)

Total Equipment & Systems Business		162,650			47.1			159,098			41.0			(3,552	)		(2.2	)
Others		5,245			1.5			4,932			1.3			(313	)		(6.0	)
Adjustments and eliminations		(7,824	)		(2.2	)		(7,435	)		(1.9	)		389			—

Sales revenue		345,162			100.0			387,484			100.0			42,322			12.3

* % represents the component ratio.

Business Profit (Loss) by Reporting Segment

	For the three months ended June 30, 2017						For the three months ended June 30, 2018						Change
	Amount			%*			Amount			%*			Amount			%
	(Yen in millions)
Industrial & Automotive Components Group		6,103			10.0			10,416			12.7			4,313			70.7
Semiconductor Components Group		7,651			12.6			5,846			9.6			(1,805	)		(23.6	)
Electronic Devices Group		8,427			13.4			14,397			16.3			5,970			70.8

Total Components Business		22,181			12.0			30,659			13.3			8,478			38.2
Communications Group		1,002			1.8			(2,241	)		—			(3,243	)		—
Document Solutions Group		9,160			11.3			10,348			11.7			1,188			13.0
Life & Environment Group		(1,310	)		—			(3,015	)		—			(1,705	)		—

Total Equipment & Systems Business		8,852			5.4			5,092			3.2			(3,760	)		(42.5	)
Others		412			7.9			617			12.5			205			49.8

Total business profit		31,445			9.1			36,368			9.4			4,923			15.7
Corporate gains and share of net profit of investments accounted for using the equity method		18,196			—			19,465			—			1,269			7.0
Adjustments and eliminations		(288	)		—			(345	)		—			(57	)		—

Profit before income taxes		49,353			14.3			55,488			14.3			6,135			12.4

* % represents the percentage to sales revenue of each corresponding segment.

(2) Explanation of Financial Position

Consolidated Cash Flows

Cash and cash equivalents at June 30, 2018 increased by 8,109 million yen to 433,047 million yen from 424,938 million yen at March 31, 2018.

1) Cash flows from operating activities

Net cash provided by operating activities for the first quarter increased by 10,575 million yen to 70,347 million yen from 59,772 million yen for the previous first quarter. This was due mainly to an increase in profit for the period.

2) Cash flows from investing activities

Net cash used in investing activities for the first quarter decreased by 35,053 million yen to 6,262 million yen from 41,315 million yen for the previous first quarter. This reflected that the withdrawal of time deposit exceeded the acquisition for the first quarter although the acquisition exceeded the withdrawal for the previous first quarter.

3) Cash flows from financing activities

Net cash used in financing activities for the first quarter increased by 38,978 million yen to 61,490 million yen from 22,512 million yen for the previous first quarter. This was due mainly to the purchase of treasury stock.

Consolidated Cash Flows


	For the three months ended June 30, 2017			For the three months ended June 30, 2018			Change
	(Yen in millions)
Cash flows from operating activities		59,772			70,347			10,575
Cash flows from investing activities		(41,315	)		(6,262	)		35,053
Cash flows from financing activities		(22,512	)		(61,490	)		(38,978	)
Effect of exchange rate changes on cash and cash equivalents		2,501			5,514			3,013
Changes in cash and cash equivalents		(1,554	)		8,109			9,663
Cash and cash equivalents at the beginning of the year		376,195			424,938			48,743
Cash and cash equivalents at the end of the period		374,641			433,047			58,406

(3) Explanation Regarding Future Forecasts of Consolidated Financial Results

Results in the first quarter as a whole were in line with initial projections. From the three months ending September 30, 2018 (“the second quarter”) onward, Kyocera forecasts increased sales due to an expected increase in demand for components used in the automotive-related market and the industrial machinery market, and to further sales promotion activities in the Document Solutions Group. In light of this market outlook, Kyocera has not made any changes to its sales revenue and profit forecasts for fiscal 2019 announced on April 26, 2018.

Future Forecasts of Consolidated Financial Results


		Results for the year ended March 31, 2018				Forecasts for the year ending March 31, 2019				Change
		Amount		%*		Amount		%*		Amount		%
		(Yen in millions)
Sales revenue			1,577,039		100.0		1,650,000		100.0		72,961		4.6
Operating profit			90,699		5.8		154,000		9.3		63,301		69.8
Profit before income taxes			129,992		8.2		190,000		11.5		60,008		46.2
Profit attributable to owners of the parent			79,137		5.0		134,000		8.1		54,863		69.3
Average US$ exchange rate	(yen)		111		—		105		—		—		—
Average Euro exchange rate	(yen)		130		—		130		—		—		—

*	% represents the percentage to sales revenue.

Sales Revenue by Reporting Segment


	Results for the year ended March 31, 2018						Forecasts for the year ending March 31, 2019						Change
	Amount			%*			Amount			%*			Amount			%
	(Yen in millions)
Industrial & Automotive Components Group		287,620			18.2			313,000			19.0			25,380			8.8
Semiconductor Components Group		257,237			16.3			259,000			15.7			1,763			0.7
Electronic Devices Group		305,145			19.4			345,000			20.9			39,855			13.1

Total Components Business		850,002			53.9			917,000			55.6			66,998			7.9
Communications Group		255,535			16.2			245,000			14.9			(10,535	)		(4.1	)
Document Solutions Group		371,058			23.5			385,000			23.3			13,942			3.8
Life & Environment Group		112,212			7.1			111,000			6.7			(1,212	)		(1.1	)

Total Equipment & Systems Business		738,805			46.8			741,000			44.9			2,195			0.3
Others		18,827			1.2			17,800			1.1			(1,027	)		(5.5	)
Adjustments and eliminations		(30,595	)		(1.9	)		(25,800	)		(1.6	)		4,795			—

Sales revenue		1,577,039			100.0			1,650,000			100.0			72,961			4.6

*	% represents the component ratio.

Business Profit (Loss) by Reporting Segment


	Results for the year ended March 31, 2018					Forecasts for the year ending March 31, 2019					Change
	Amount			%*		Amount			%*		Amount			%
	(Yen in millions)
Industrial & Automotive Components Group		31,400			10.9		36,000			11.5		4,600			14.6
Semiconductor Components Group		31,049			12.1		35,800			13.8		4,751			15.3
Electronic Devices Group		46,632			15.3		48,000			13.9		1,368			2.9

Total Components Business		109,081			12.8		119,800			13.1		10,719			9.8
Communications Group		4,440			1.7		5,200			2.1		760			17.1
Document Solutions Group		40,851			11.0		41,500			10.8		649			1.6
Life & Environment Group		(55,492	)		—		(3,000	)		—		52,492			—

Total Equipment & Systems Business		(10,201	)		—		43,700			5.9		53,901			—
Others		1,393			7.4		(400	)		—		(1,793	)		—

Total business profit		100,273			6.4		163,100			9.9		62,827			62.7
Corporate and others		29,719			—		26,900			—		(2,819	)		(9.5	)

Profit before income taxes		129,992			8.2		190,000			11.5		60,008			46.2

*	% represents the percentage to sales revenue of each corresponding segment.

2. Condensed Quarterly Consolidated Financial Statements and Primary Notes

(1) Condensed Quarterly Consolidated Statement of Financial Position


	The date of transition to IFRS (April 1, 2017)				As of March 31, 2018				As of June 30, 2018				Change
	Amount		%*		Amount		%*		Amount		%*		Change
	(Yen in millions)
Assets
Current assets
Cash and cash equivalents		376,195				424,938				433,047				8,109
Short-term investments		297,371				196,802				176,493				(20,309	)
Trade and other receivables		337,371				382,659				340,144				(42,515	)
Other financial assets		7,778				12,996				10,403				(2,593	)
Inventories		331,155				364,875				369,548				4,673
Other current assets		79,755				83,629				86,401				2,772

Total current assets		1,429,625		46.3		1,465,899		46.9		1,416,036		44.1		(49,863	)

Non-current assets
Debt and equity instruments		1,146,608				1,071,990				1,181,127				109,137
Investments accounted for using the equity method		5,863				3,874				4,070				196
Other financial assets		13,429				15,681				15,713				32
Property, plant and equipment		254,341				288,898				306,959				18,061
Goodwill		110,470				144,268				147,196				2,928
Intangible assets		61,235				80,186				79,490				(696	)
Deferred tax assets		56,614				41,370				41,800				430
Other non-current assets		6,452				16,647				17,660				1,013

Total non-current assets		1,655,012		53.7		1,662,914		53.1		1,794,015		55.9		131,101

Total assets		3,084,637		100.0		3,128,813		100.0		3,210,051		100.0		81,238

*	% represents the component ratio.


	The date of transition to IFRS (April 1, 2017)					As of March 31, 2018					As of June 30, 2018					Change
	Amount			%*		Amount			%*		Amount			%*		Change
	(Yen in millions)
Liabilities and Equity
Liabilities
Current liabilities
Trade and other payables		190,292					216,685					210,290					(6,395	)
Other financial liabilities		8,735					5,039					9,689					4,650
Income tax payables		15,707					19,436					17,572					(1,864	)
Accrued expenses		108,367					114,049					98,634					(15,415	)
Provisions		14,225					32,302					31,679					(623	)
Other current liabilities		27,492					31,876					42,135					10,259

Total current liabilities		364,818			11.8		419,387			13.4		409,999			12.8		(9,388	)

Non-current liabilities
Long-term financial liabilities		5,292					7,370					9,462					2,092
Retirement benefit liabilities		28,794					29,112					28,768					(344	)
Deferred tax liabilities		255,281					220,950					242,841					21,891
Provisions		6,488					19,914					20,239					325
Other non-current liabilities		12,286					18,781					19,312					531

Total non-current liabilities		308,141			10.0		296,127			9.5		320,622			10.0		24,495

Total liabilities		672,959			21.8		715,514			22.9		730,621			22.8		15,107

Equity
Common stock		115,703					115,703					115,703					—
Capital surplus		165,172					165,079					164,955					(124	)
Retained earnings		1,532,866					1,577,641					1,600,836					23,195
Other components of equity		545,452					499,710					579,530					79,820
Treasury stock		(32,309	)				(32,342	)				(72,344	)				(40,002	)

Total equity attributable to owners of the parent		2,326,884			75.4		2,325,791			74.3		2,388,680			74.4		62,889
Non-controlling interests		84,794			2.8		87,508			2.8		90,750			2.8		3,242

Total equity		2,411,678			78.2		2,413,299			77.1		2,479,430			77.2		66,131

Total liabilities and equity		3,084,637			100.0		3,128,813			100.0		3,210,051			100.0		81,238

*	% represents the component ratio.

(2) Condensed Quarterly Consolidated Statement of Profit or Loss and Comprehensive Income

a. Condensed Quarterly Consolidated Statement of Profit or Loss


	For the three months ended June 30, 2017						For the three months ended June 30, 2018						Change
	Amount			%*			Amount			%*			Amount			%
	(Yen in millions except per share amounts)
Sales revenue		345,162			100.0			387,484			100.0			42,322			12.3
Cost of sales		247,841			71.8			278,234			71.8			30,393			12.3

Gross profit		97,321			28.2			109,250			28.2			11,929			12.3
Selling, general and administrative expenses		66,061			19.1			72,146			18.6			6,085			9.2

Operating profit		31,260			9.1			37,104			9.6			5,844			18.7
Finance income		18,564			5.4			18,437			4.7			(127	)		(0.7	)
Finance expenses		160			0.1			203			0.1			43			26.9
Foreign exchange gains (losses)		(590	)		(0.2	)		(445	)		(0.1	)		145			—
Share of net profit of investments accounted for using the equity method		25			0.0			367			0.1			342			—
Other, net		254			0.1			228			0.1			(26	)		(10.2	)

Profit before income taxes		49,353			14.3			55,488			14.3			6,135			12.4
Income taxes		12,771			3.7			10,687			2.7			(2,084	)		(16.3	)

Profit for the period		36,582			10.6			44,801			11.6			8,219			22.5


Profit attributable to:
Owners of the parent		35,026			10.1			42,284			10.9			7,258			20.7
Non-controlling interests		1,556			0.5			2,517			0.7			961			61.8

Profit for the period		36,582			10.6			44,801			11.6			8,219			22.5


Per share information:
Earnings per share attributable to owners of the parent
Basic		95.25 yen						116.29 yen
Diluted		95.23 yen						116.26 yen

*	% represents the percentage to sales revenue.

b. Condensed Quarterly Consolidated Statement of Comprehensive Income


	For the three months ended June 30, 2017			For the three months ended June 30, 2018		Change
	Amount			Amount		Change
	(Yen in millions)
Profit for the period		36,582			44,801		8,219
Other comprehensive income, net of taxation
Items that will not be reclassified to profit or loss:
Financial assets measured at fair value through other comprehensive income		—			72,278		72,278
Re-measurement of defined benefit plans		—			—		—

Total items that will not be reclassified to profit or loss		—			72,278		72,278

Items that may be reclassified subsequently to profit or loss:
Net unrealized gains (losses) on securities		14,993			—		(14,993	)
Net changes in fair value of cash flow hedge		(78	)		6		84
Exchange differences on translating foreign operations		6,017			10,023		4,006
Share of other comprehensive income of investments accounted for using the equity method		22			89		67

Total items that may be reclassified subsequently to profit or loss		20,954			10,118		(10,836	)

Total other comprehensive income		20,954			82,396		61,442

Comprehensive income for the period		57,536			127,197		69,661


Comprehensive income attributable to:
Owners of the parent		55,309			122,829		67,520
Non-controlling interests		2,227			4,368		2,141

Comprehensive income for the period		57,536			127,197		69,661

(3) Condensed Quarterly Consolidated Statement of Changes in Equity

For the three months ended June 30, 2017


	Total equity attributable to owners of the parent																	Non- controlling interests			Total equity
	Common Stock		Capital surplus			Retained earnings			Other components of equity			Treasury stock			Total			Non- controlling interests			Total equity
	(Yen in millions)
Balance as of April 1, 2017		115,703		165,172			1,532,866			545,452			(32,309	)		2,326,884			84,794			2,411,678

Profit for the period							35,026									35,026			1,556			36,582
Other comprehensive income										20,283						20,283			671			20,954

Total comprehensive income for the period		—		—			35,026			20,283			—			55,309			2,227			57,536

Cash dividends							(22,063	)								(22,063	)		(1,049	)		(23,112	)
Purchase of treasury stock													(10	)		(10	)					(10	)
Reissuance of treasury stock				0									0			0						0
Transactions with non-controlling interests and other				(4	)					11						7			315			322

Balance as of June 30, 2017		115,703		165,168			1,545,829			565,746			(32,319	)		2,360,127			86,287			2,446,414


For the three months ended June 30, 2018
	Total equity attributable to owners of the parent																	Non- controlling interests			Total equity
	Common Stock		Capital surplus			Retained earnings			Other components of equity			Treasury stock			Total			Non- controlling interests			Total equity
	(Yen in millions)
Balance as of April 1, 2018 (Before applying new accounting standard)		115,703		165,079			1,577,641			499,710			(32,342	)		2,325,791			87,508			2,413,299

Cumulative effects of new accounting standard applied							2,973			(729	)					2,244						2,244

Balance as of April 1, 2018 (After applying new accounting standard)		115,703		165,079			1,580,614			498,981			(32,342	)		2,328,035			87,508			2,415,543

Profit for the period							42,284									42,284			2,517			44,801
Other comprehensive income										80,545						80,545			1,851			82,396

Total comprehensive income for the period		—		—			42,284			80,545			—			122,829			4,368			127,197

Cash dividends							(22,062	)								(22,062	)		(1,219	)		(23,281	)
Purchase of treasury stock													(40,002	)		(40,002	)					(40,002	)
Reissuance of treasury stock				—									—			—						—
Transactions with non-controlling interests and other				(124	)					4						(120	)		93			(27	)

Balance as of June 30, 2018		115,703		164,955			1,600,836			579,530			(72,344	)		2,388,680			90,750			2,479,430

(4) Notes to Condensed Quarterly Consolidated Financial Statements

a. Notes to Going Concern Assumption

Not Applicable

b. Changes in Accounting Policies

Kyocera has adopted IFRS 15 “Revenue from contracts with customers” (issued in May 2014 and amended in April 2016, hereinafter, “IFRS 15”) retrospectively from the year ended March 31, 2018. The effect to our consolidated results of operations, financial conditions and cash flows by adopting IFRS 15 is described in “d. First-time adoption” under “(4) Notes to Condensed Quarterly Consolidated Financial Statements.”

Kyocera has adopted IFRS 9 “Financial instruments” (issued in November 2009 and amended in July 2014, hereinafter, “IFRS 9”) from the year ending March 31, 2019. We have adopted exemptions from retrospective application of IFRS 9 in accordance with IFRS 1 “First-Time Adoption of International Financing Reporting Standards” (hereinafter, “IFRS 1”), and we have adopted U.S. GAAP, the previous accounting standards, at the date of transition to IFRS and the year ended March 31, 2018.

The amounts of financial instruments whose classifications were changed at the beginning of this fiscal year are as follows:


Classification based on U.S. GAAP
	(Yen in millions)
Other long-term investments		19,536


Classification based on IFRS 9
	(Yen in millions)
Financial instruments measured at fair value through other comprehensive income		22,747

As a result of adopting IFRS 9, retained earnings increased by 2,973 million yen, and other components of equity decreased by 729 million yen at the beginning of this fiscal year.

c. Changes in Accounting Estimates

Kyocera changed the depreciation method from the declining-balance method to the straight-line method from the year ending March 31, 2019.

Kyocera implemented capital expenditures in order to double its productivity at manufacturing facilities in Japan and overseas with the introduction of innovative technology to promote streamlining and automation of production processes. As a result, the operation of the property, plant and equipment is expected to be more consistently than before and future utilization of those assets will be consistent.

Accordingly, Kyocera believes that the change to the straight-line method will be preferable as it better reflects the consumption of future economic benefits of those assets.

In accordance with IAS 8 “Accounting Policies, Changes in Accounting Estimates and Errors,” a change in depreciation method is treated as a change in accounting estimate. Therefore, the effect of the change in depreciation method has been reflected on a prospective basis from April 1, 2018 and it was to increase profit before income taxes by 2,999 million yen due mainly to the decrease in depreciation expenses.

d. First-Time Adoption

Kyocera disclosed the condensed quarterly consolidated financial statements under IFRS from the three months ended June 30, 2018. The latest consolidated financial statements under U.S. GAAP were prepared for the year ended March 31, 2018, and the date of transition to IFRS was April 1, 2017.

(a) First-time adoption based on IFRS 1

IFRS 1 requires that a company adopting IFRS for the first-time (hereinafter, the “first-time adopters”) shall apply IFRS retrospectively. However, IFRS 1 provides certain exemptions that allow first-time adopters to choose not to apply certain standards retrospectively. We have adopted the following exemptions:

Business combinations

A first-time adopter may choose not to apply IFRS 3 “Business combinations” (hereinafter, “IFRS 3”) retrospectively to business combinations that occurred before the date of transition to IFRS. We have applied this exemption and chosen not to apply IFRS 3 retrospectively to business combinations that occurred before the date of transition to IFRS. Therefore, the carrying amounts of goodwill prior to the date of transition to IFRS were based on U.S. GAAP. We performed an impairment test on goodwill at the date of transition to IFRS regardless of whether there was any indications that the goodwill may be impaired.

Exchange differences on translating foreign operations

A first-time adopter may choose to deem the cumulative exchange differences on translating foreign operations as zero at the date of transition to IFRS. We have chosen to apply this exemption and deemed all cumulative exchange differences on translating foreign operations as zero at the date of transition to IFRS.

Deemed cost

For property, plant and equipment, a first-time adopter may use fair value as deemed cost at the date of transition to IFRS. We have applied this exemption and used fair value as the deemed cost at the date of transition to IFRS for certain items of property, plant and equipment.

Exemptions from retrospective application of IFRS 9

When a first-time adopter choose to adopt IFRS for the annual periods beginning before January 1, 2019 and apply IFRS 9, it may apply the previous accounting standards without restating comparative information in the first IFRS consolidated financial statements. We have applied this exemption, and recognized and measured target items included in the scope of IFRS 9 under U. S. GAAP, the previous accounting standards, at the date of transition to IFRS and the year ended March 31, 2018.

(b) Reconciliation

The reconciliations required to be disclosed in the first IFRS financial statements are described in the reconciliations as below. “Effect of change in line items” includes items that do not affect retained earnings and comprehensive income, while “Recognition and measurement differences” includes items that affect retained earnings and comprehensive income.

(i) Reconciliation of equity at the date of transition to IFRS (April 1, 2017)


Accounts under U.S. GAAP	U.S. GAAP			Effect of change in line items			Recognition and measurement differences			IFRS		Note	Accounts under IFRS
	(Yen in millions)
Assets													Assets
Current assets													Current assets
Cash and cash equivalents		376,195			—			—			376,195		Cash and cash equivalents
Short-term investments in debt securities		84,703			212,668			—			297,371		Short-term investments
Other short-term investments		212,668			(212,668	)		—			—
Trade notes receivables		28,370			309,001			—			337,371		Trade and other receivables
Trade accounts receivables		291,485			(291,485	)		—			—
Less allowances for doubtful accounts and sales returns		(5,593	)		5,593			—			—	F
		—			7,778			—			7,778		Other financial assets
Inventories		331,155			—			—			331,155		Inventories
Other current assets		119,714			(33,952	)		(6,007	)		79,755		Other current assets

Total current assets		1,438,697			(3,065	)		(6,007	)		1,429,625		Total current assets

Non-current assets													Non-current assets
Long-term investments in debt and equity securities		1,130,756			15,852			—			1,146,608		Debt and equity instruments
		—			5,863			—			5,863	F	Investments accounted for using the equity method
Other long-term investments		22,246			(8,817	)		—			13,429		Other financial assets
Land		59,963			206,641			(12,263	)		254,341	B	Property, plant and equipment
Buildings		351,431			(351,431	)		—			—
Machinery and equipment		841,973			(841,973	)		—			—
Construction in progress		14,097			(14,097	)		—			—
Less accumulated depreciation		(1,000,860	)		1,000,860			—			—
Goodwill		110,470			—			—			110,470		Goodwill
Intangible assets		61,235			—			—			61,235		Intangible assets
		—			46,482			10,132			56,614	D,F	Deferred tax assets
Other assets		80,462			(75,349	)		1,339			6,452		Other non-current assets

Total non-current assets		1,671,773			(15,969	)		(792	)		1,655,012		Total non-current assets

Total assets		3,110,470			(19,034	)		(6,799	)		3,084,637		Total assets



Accounts under U.S. GAAP	U.S. GAAP			Effect of change in line items			Recognition and measurement differences			IFRS			Note	Accounts under IFRS
	(Yen in millions)
Liabilities and Equity														Liabilities and Equity
Liabilities														Liabilities
Current liabilities														Current liabilities
Short-term borrowings		191			(191	)		—			—
Current portion of long-term debt		8,235			(8,235	)		—			—
Trade notes and accounts payable		129,460			60,832			—			190,292			Trade and other payables
Other notes and accounts payable		60,881			(60,881	)		—			—
		—			8,735			—			8,735			Other financial liabilities
Accrued payroll and bonus		62,868			(62,868	)		—			—
Accrued income taxes		15,707			—			—			15,707			Income taxes payables
Other accrued liabilities		51,062			53,850			3,455			108,367		E	Accrued expenses
		—			14,225			—			14,225		F	Provisions
Other current liabilities		36,257			(8,765	)		—			27,492		F	Other current liabilities

Total current liabilities		364,661			(3,298	)		3,455			364,818			Total current liabilities

Non-current liabilities														Non-current liabilities
Long-term debt		16,409			(11,117	)		—			5,292			Long-term financial liabilities
Accrued pension and severance liabilities		31,720			—			(2,926	)		28,794		C	Retirement benefit liabilities
Deferred income taxes		258,859			(3,481	)		(97	)		255,281		D	Deferred tax liabilities
		—			6,488			—			6,488		F	Provisions
Other non-current liabilities		19,912			(7,626	)		—			12,286			Other non-current liabilities

Total non-current liabilities		326,900			(15,736	)		(3,023	)		308,141			Total non-current liabilities

Total liabilities		691,561			(19,034	)		432			672,959			Total liabilities

Equity														Equity
Common stock		115,703			—			—			115,703			Common stock
Additional paid-in capital		165,230			—			(58	)		165,172			Capital surplus
Retained earnings		1,638,116			—			(105,250	)		1,532,866		A,B,C D,E	Retained earnings
Accumulated other comprehensive income		447,479			—			97,973			545,452		A,C,D	Other components of equity
Common stock in treasury stock, at cost		(32,309	)		—			—			(32,309	)		Treasury stock

Total Kyocera Corporation’s shareholders’ equity		2,334,219			—			(7,335	)		2,326,884			Total equity attributable to owners of the parent
Noncontrolling interests		84,690			—			104			84,794			Non-controlling interests

Total equity		2,418,909			—			(7,231	)		2,411,678			Total equity

Total liabilities and equity		3,110,470			(19,034	)		(6,799	)		3,084,637			Total liabilities and equity

(ii) Reconciliation of equity as of June 30, 2017


Accounts under U.S. GAAP	U.S. GAAP			Effect of change in line items			Recognition and measurement differences			IFRS		Note	Accounts under IFRS
	(Yen in millions)
Assets													Assets
Current assets													Current assets
Cash and cash equivalents		374,641			—			—			374,641		Cash and cash equivalents
Short-term investments in debt securities		84,584			214,361			—			298,945		Short-term investments
Other short-term investments		214,361			(214,361	)		—			—
Trade notes receivables		26,195			266,471			—			292,666		Trade and other receivables
Trade accounts receivables		255,940			(255,940	)		—			—
Less allowances for doubtful accounts and sales returns		(5,736	)		5,736			—			—	F
		—			6,174			—			6,174		Other financial assets
Inventories		352,890			—			—			352,890		Inventories
Other current assets		114,442			(26,013	)		(6,200	)		82,229		Other current assets

Total current assets		1,417,317			(3,572	)		(6,200	)		1,407,545		Total current assets

Non-current assets													Non-current assets
Long-term investments in debt and equity securities		1,153,296			16,380			—			1,169,676		Debt and equity instruments
		—			5,517			—			5,517	F	Investments accounted for using the equity method
Other long-term investments		40,436			(8,331	)		—			32,105		Other financial assets
Land		59,897			210,367			(12,178	)		258,086	B	Property, plant and equipment
Buildings		355,159			(355,159	)		—			—
Machinery and equipment		845,663			(845,663	)		—			—
Construction in progress		13,811			(13,811	)		—			—
Less accumulated depreciation		(1,004,266	)		1,004,266			—			—
Goodwill		112,532			—			—			112,532		Goodwill
Intangible assets		61,511			—			—			61,511		Intangible assets
		—			39,730			8,943			48,673	D,F	Deferred tax assets
Other assets		74,687			(69,203	)		715			6,199		Other non-current assets

Total non-current assets		1,712,726			(15,907	)		(2,520	)		1,694,299		Total non-current assets

Total assets		3,130,043			(19,479	)		(8,720	)		3,101,844		Total assets


Accounts under U.S. GAAP	U.S. GAAP			Effect of change in line items			Recognition and measurement differences			IFRS			Note	Accounts under IFRS
	(Yen in millions)
Liabilities and Equity														Liabilities and Equity
Liabilities														Liabilities
Current liabilities														Current liabilities
Short-term borrowings		117			(117	)		—			—
Current portion of long-term debt		8,531			(8,531	)		—			—
Trade notes and accounts payable		131,134			56,114			—			187,248			Trade and other payables
Other notes and accounts payable		56,144			(56,144	)		—			—
		—			10,764			—			10,764			Other financial liabilities
Accrued payroll and bonus		51,125			(51,125	)		—			—
Accrued income taxes		8,501			—			(364	)		8,137			Income tax payables
Other accrued liabilities		48,868			41,898			2,089			92,855		E	Accrued expenses
		—			13,747			—			13,747		F	Provisions
Other current liabilities		45,525			(10,241	)		—			35,284		F	Other current liabilities

Total current liabilities		349,945			(3,635	)		1,725			348,035			Total current liabilities

Non-current liabilities														Non-current liabilities
Long-term debt		17,678			(12,258	)		—			5,420			Long-term financial liabilities
Accrued pension and severance liabilities		32,345			—			(2,617	)		29,728		C	Retirement benefit liabilities
Deferred income taxes		256,364			(2,408	)		(23	)		253,933		D	Deferred tax liabilities
		—			6,647			—			6,647		F	Provisions
Other non-current liabilities		19,492			(7,825	)		—			11,667			Other non-current liabilities

Total non-current liabilities		325,879			(15,844	)		(2,640	)		307,395			Total non-current liabilities

Total liabilities		675,824			(19,479	)		(915	)		655,430			Total liabilities

Equity														Equity
Common stock		115,703			—			—			115,703			Common stock
Additional paid-in capital		165,220			—			(52	)		165,168			Capital surplus
Retained earnings		1,651,034			—			(105,205	)		1,545,829		A,B,C D,E	Retained earnings
Accumulated other comprehensive income		468,414			—			97,332			565,746		A,C,D	Other components of equity
Common stock in treasury stock, at cost		(32,319	)		—			—			(32,319	)		Treasury stock

Total Kyocera Corporation’s shareholders’ equity		2,368,052			—			(7,925	)		2,360,127			Total equity attributable to owners of the parent
Noncontrolling interests		86,167			—			120			86,287			Non-controlling interests

Total equity		2,454,219			—			(7,805	)		2,446,414			Total equity

Total liabilities and equity		3,130,043			(19,479	)		(8,720	)		3,101,844			Total liabilities and equity

(iii) Reconciliation of equity as of March 31, 2018


Accounts under U.S. GAAP	U.S. GAAP			Effect of change in line items			Recognition and measurement differences			IFRS		Note		Accounts under IFRS
	(Yen in millions)
Assets														Assets
Current assets														Current assets
Cash and cash equivalents		424,938			—			—			424,938			Cash and cash equivalents
Short-term investments in debt securities		38,023			158,779			—			196,802			Short-term investments
Other short-term investments		158,779			(158,779	)		—			—
Trade notes receivables		26,072			356,587			—			382,659			Trade and other receivables
Trade accounts receivables		331,570			(331,570	)		—			—
Less allowances for doubtful accounts and sales returns		(5,490	)		5,490			—			—		F
		—			12,996			—			12,996			Other financial assets
Inventories		364,875			—			—			364,875			Inventories
Other current assets		137,849			(47,383	)		(6,837	)		83,629			Other current assets

Total current assets		1,476,616			(3,880	)		(6,837	)		1,465,899			Total current assets

Non-current assets														Non-current assets
Long-term investments in debt and equity securities		1,050,537			21,453			—			1,071,990			Debt and equity instruments
		—			3,874			—			3,874		F	Investments accounted for using the equity method
Other long-term investments		25,858			(10,177	)		—			15,681			Other financial assets
Land		62,141			238,783			(12,026	)		288,898		B	Property, plant and equipment
Buildings		363,714			(363,714	)		—			—
Machinery and equipment		880,918			(880,918	)		—			—
Construction in progress		23,996			(23,996	)		—			—
Less accumulated depreciation		(1,029,845	)		1,029,845			—			—
Goodwill		144,268			—			—			144,268			Goodwill
Intangible assets		80,186			—			—			80,186			Intangible assets
		—			32,071			9,299			41,370		D,F	Deferred tax assets
Other assets		78,688			(65,040	)		2,999			16,647			Other non-current assets

Total non-current assets		1,680,461			(17,819	)		272			1,662,914			Total non-current assets

Total assets		3,157,077			(21,699	)		(6,565	)		3,128,813			Total assets


Accounts under U.S. GAAP	U.S. GAAP			Effect of change in line items			Recognition and measurement differences			IFRS			Note	Accounts under IFRS
	(Yen in millions)
Liabilities and Equity														Liabilities and Equity
Liabilities														Liabilities
Current liabilities														Current liabilities
Short-term borrowings		145			(145	)		—			—
Current portion of long-term debt		9,293			(9,293	)		—			—
Trade notes and accounts payable		149,734			66,951			—			216,685			Trade and other payables
Other notes and accounts payable		66,970			(66,970	)		—			—
		—			5,039			—			5,039			Other financial liabilities
Accrued payroll and bonus		68,664			(68,664	)		—			—
Accrued income taxes		19,436			—			—			19,436			Income tax payables
Other accrued liabilities		50,727			59,867			3,455			114,049		E	Accrued expenses
		—			32,302			—			32,302		F	Provisions
Other current liabilities		55,017			(23,141	)		—			31,876		F	Other current liabilities

Total current liabilities		419,986			(4,054	)		3,455			419,387			Total current liabilities

Non-current liabilities														Non-current liabilities
Long-term debt		20,237			(12,867	)		—			7,370			Long-term financial liabilities
Accrued pension and severance liabilities		28,723			—			389			29,112		C	Retirement benefit liabilities
Deferred income taxes		223,530			(3,378	)		798			220,950		D	Deferred tax liabilities
		—			19,914			—			19,914		F	Provisions
Other non-current liabilities		40,095			(21,314	)		—			18,781			Other non-current liabilities

Total non-current liabilities		312,585			(17,645	)		1,187			296,127			Total non-current liabilities

Total liabilities		732,571			(21,699	)		4,642			715,514			Total liabilities

Equity														Equity
Common stock		115,703			—			—			115,703			Common stock
Additional paid-in capital		165,125			—			(46	)		165,079			Capital surplus
Retained earnings		1,675,780			—			(98,139	)		1,577,641		A,B,C D,E	Retained earnings
Accumulated other comprehensive income		411,980			—			87,730			499,710		A,C,D	Other components of equity
Common stock in treasury stock, at cost		(32,342	)		—			—			(32,342	)		Treasury stock

Total Kyocera Corporation’s shareholders’ equity		2,336,246			—			(10,455	)		2,325,791			Total equity attributable to owners of the parent
Noncontrolling interests		88,260			—			(752	)		87,508			Non-controlling interests

Total equity		2,424,506			—			(11,207	)		2,413,299			Total equity

Total liabilities and equity		3,157,077			(21,699	)		(6,565	)		3,128,813			Total liabilities and equity

(iv) Reconciliation of profit or loss and other comprehensive income for three month ended June 30, 2017


Accounts under U.S. GAAP	U.S. GAAP			Effect of change in line items			Recognition and measurement differences			IFRS			Note		Accounts under IFRS
	(Yen in millions)
Net sales		345,162			—			—			345,162				Sales revenue
Cost of sales		248,334			—			(493	)		247,841			C,E	Cost of sales

Gross profit		96,828			—			493			97,321				Gross profit

Selling, general and administrative expenses		65,661			—			400			66,061			C,E	Selling, general and administrative expenses

Profit from operations		31,167			—			93			31,260				Operating profit

Other income (expenses)
Interest and dividend income		18,403			161			—			18,564				Finance income
Interest expense		323			(163	)		—			160				Finance expenses
Foreign currency transaction losses, net		(590	)		—			—			(590	)			Foreign exchange gains (losses)
Gains on sales of securities, net		328			(328	)		—			—
		—			25			—			25			G	Share of net profit of investments accounted for using the equity method
Other, net		275			(21	)		—			254				Other, net

Income before income taxes		49,260			—			93			49,353				Profit before income taxes
Income taxes		12,732			—			39			12,771				Income taxes

Net income		36,528			—			54			36,582				Profit for the period

															Profit attributable to:

Net income attributable to Kyocera Corporation’s shareholders		34,981			—			45			35,026				Owners of the parent
Net income attributable to noncontrolling interests		1,547			—			9			1,556				Non-controlling interests


Accounts under U.S. GAAP	U.S. GAAP			Effect of change in line items			Recognition and measurement differences			IFRS			Note		Accounts under IFRS
	(Yen in millions)
Net income		36,528			—			54			36,582				Profit for the period
Other comprehensive income – net of taxes															Other comprehensive income, net of taxation
Pension liability adjustment		(587	)		—			587			—			C	Re-measurement of defined benefit plans
Net unrealized gains (losses) on securities		15,001			—			(8	)		14,993				Net unrealized gains (losses) on securities
Net unrealized gains (losses) on derivative financial instruments		(52	)		(26	)		—			(78	)			Net changes in fair value of cash flow hedge
Foreign currency translation adjustments		7,221			4			(1,208	)		6,017			A	Exchange differences on translating foreign operations
		—			22			—			22				Share of other comprehensive income of investments accounted for using the equity method

Total other comprehensive income		21,583			—			(629	)		20,954				Total other comprehensive income

Comprehensive income		58,111			—			(575	)		57,536				Comprehensive income for the period

															Comprehensive income attributable to:

Comprehensive income attributable to Kyocera Corporation’s shareholders		55,900			—			(591	)		55,309				Owners of the parent
Comprehensive income attributable to noncontrolling interests		2,211			—			16			2,227				Non-controlling interests

(v) Reconciliation of profit or loss and other comprehensive income for the year ended March 31, 2018


Accounts under U.S. GAAP	U.S. GAAP			Effect of change in line items			Recognition and measurement differences			IFRS			Note		Accounts under IFRS
	(Yen in millions)
Net sales		1,577,039			—			—			1,577,039				Sales revenue
Cost of sales		1,200,911			—			3,300			1,204,211			C,E	Cost of sales

Gross profit		376,128			—			(3,300	)		372,828				Gross profit

Selling, general and administrative expenses		280,553			—			1,576			282,129			C,E	Selling, general and administrative expenses

Profit from operations		95,575			—			(4,876	)		90,699				Operating profit

Other income (expenses)
Interest and dividend income		40,498			985			—			41,483				Finance income
Interest expense		1,395			165			—			1,560				Finance expenses
Foreign currency transaction losses, net		(827	)		—			—			(827	)			Foreign exchange gains (losses)
Gains on sales of securities, net		1,629			(1,629	)		—			—
		—			(1,564	)		—			(1,564	)		G	Share of net loss of investments accounted for using the equity method
Other, net		(3,614	)		2,373			3,002			1,761				Other, net

Income before income taxes		131,866			—			(1,874	)		129,992				Profit before income taxes
Income taxes		46,881			—			885			47,766				Income taxes

Net income		84,985			—			(2,759	)		82,226				Profit for the year

															Profit attributable to:

Net income attributable to Kyocera Corporation’s shareholders		81,789			—			(2,652	)		79,137				Owners of the parent
Net income attributable to noncontrolling interests		3,196			—			(107	)		3,089				Non-controlling interests


Accounts under U.S. GAAP	U.S. GAAP			Effect of change in line items			Recognition and measurement differences			IFRS			Note		Accounts under IFRS
	(Yen in millions)
Net income		84,985			—			(2,759	)		82,226				Profit for the year
Other comprehensive income – net of taxes															Other comprehensive income, net of taxation
Pension liability adjustment		6,428			—			2,924			9,352			C	Re-measurement of defined benefit plans
Net unrealized gains (losses) on securities		(40,087	)		—			(51	)		(40,138	)			Net unrealized gains (losses) on securities
Net unrealized gains (losses) on derivative financial instruments		27			(82	)		—			(55	)			Net changes in fair value of cash flow hedge
Foreign currency translation adjustments		(2,703	)		125			(4,092	)		(6,670	)		A	Exchange differences on translating foreign operations
		—			(43	)		—			(43	)			Share of other comprehensive income of investments accounted for using the equity method

Total other comprehensive income		(36,335	)		—			(1,219	)		(37,554	)			Total other comprehensive income

Comprehensive income		48,650			—			(3,978	)		44,672				Comprehensive income for the year

															Comprehensive income attributable to:
Comprehensive income attributable to Kyocera Corporation’s shareholders		46,252			—			(3,121	)		43,131				Owners of the parent
Comprehensive income attributable to noncontrolling interests		2,398			—			(857	)		1,541				Non-controlling interests

Notes to reconciliation of equity, profit or loss and other comprehensive income

A. Exchange differences on translating of foreign operations

Under IFRS 1, a first-time adopter may choose to deem the cumulative exchange differences on translating foreign operations as zero at the date of transition to IFRS. We have chosen to apply this exemption and transferred all cumulative exchange differences on translating foreign operations into retained earnings at the date of transition to IFRS.

B. Deemed cost

Under IFRS 1, for property, plant and equipment, a first-time adopter may use fair value as deemed cost at the date of transition to IFRS. We have applied this exemption and used fair value as the deemed cost at the date of transition to IFRS for certain item of property, plant and equipment.

C. Retirement benefit

Under U.S. GAAP, the prior service costs and the actuarial gain and loss, resulted from defined benefit plan or unfunded retirement and severance plans which were incurred during the period but not recognized as the same periodic pension costs are recognized as accumulated other comprehensive income by the amount after tax. The amounts recognized in accumulated other comprehensive income are subsequently recognized in profit or loss as a component of retirement benefit expenses over a period of time in the future.

Under IFRS, the prior service costs are expensed as incurred. The actuarial gain and loss are recognized in other comprehensive income by the amount after tax and they are transferred from other components of equity to retained earnings directly without recording through profit or loss.

D. Income taxes

Under U.S. GAAP, all subsequent changes of deferred tax asset and liability due to a change in the tax rate, reassessment of recoverability are recognized in profit or loss. Under IFRS, changes of deferred tax assets and liabilities on other comprehensive income are recognized in other comprehensive income.

In addition, under U.S. GAAP, the temporary differences arising from the elimination of intercompany transaction are deferred as prepaid taxes using the sellers’ tax expenses. Under IFRS, above temporary differences are recognized as deferred tax assets using the purchasers’ tax rates considering its recoverability.

E. Levies

Under U.S. GAAP, items qualified as levies such as property tax were recognized at the time of payment. Under IFRS, they were recognized on the date when an obligation to pay arises.

F. Reclassification on the consolidated statement of financial position

Under the presentation requirement on IFRS15, refund liabilities included in “Less allowances for doubtful accounts and sales returns” was reclassified into “Other current liabilities” on the consolidated statement of financial position. Under the presentation requirement on IAS 1 “Presentation of financial statements” (hereinafter, “IAS 1”), “Investments accounted for using the equity method”, “Deferred tax assets” and “Provisions” were presented separately.

G. Reclassifications on the consolidated statement of profit or loss

Under the presentation requirement on IAS1, “Share of net profit of investments accounted for using the equity method” was presented separately on the consolidated statement of profit or loss.

Effects of items of these differences in recognition and measurement on retained earnings at the date of transition to IFRS, as of June 30, 2017 and March 31, 2018 are as follows:


	The date of transition to IFRS (April 1, 2017)			As of June 30, 2017			As of March 31, 2018
	(Yen in millions)
Exchange differences on translating foreign operations		(16,360	)		(16,360	)		(14,124	)
Deemed cost		(7,648	)		(7,648	)		(7,618	)
Retirement benefit		(31,723	)		(32,624	)		(25,547	)
Income taxes		(46,247	)		(46,300	)		(47,685	)
Levies		(2,370	)		(1,430	)		(2,398	)
Other		(902	)		(843	)		(767	)

Total effect on retained earnings		(105,250	)		(105,205	)		(98,139	)