Form 6-K

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

Report of Foreign Private Issuer

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

the Securities Exchange Act of 1934

Dated: ~~May~~August ~~4th~~1st, 2006

EPCOS AG

(Translation of registrant’s name into English)

St.-Martin Strasse 53

D-81669 München

Federal Republic of Germany

(Address of principal executive offices)

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

Form 20-F ü Form 40-F

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

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

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

Yes No ü

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

This Report on Form 6-K contains:

- Press release on ~~second~~third quarter fiscal 2006 earnings

LOGO

Contents

		Page
Interim Report on the Consolidated Financial Statements of EPCOS AG at March 31, 2006
Interim Report on the Consolidated Financial Statements of EPCOS AG at June 30, 2006
About EPCOS		3
Accounting principles		3
Business Development
Q2 2006: Sales up, earnings significantly improved		4
Q3 2006: Sustained positive business development		4
Consolidated Financial Statements
Statements of income		89
Balance sheets		910
Statements of shareholders’ equity and comprehensive income		1011
Statements of cash flow		1112
Notes to unaudited interim consolidated financial statements		1213

EPCOS AG

Interim Report on the Consolidated Financial Statements of EPCOS AG at ~~March~~June 3130, 2006

About EPCOS

EPCOS AG, a manufacturer of passive electronic components headquartered in Munich, is market leader in Europe and number two worldwide. With its ~~uniquely~~very broad portfolio EPCOS offers a comprehensive range of products from a single source. The EPCOS Group has design, manufacturing and marketing facilities in Europe, the Americas and Asia.

Passive electronic components are found in every electrical and electronic product – from automotive and industrial electronics through information and communications to consumer electronics. Components from EPCOS store electrical energy, select frequencies, and protect against overvoltage and overcurrent.

In fiscal 2005 (October 1, 2004, to September 30, 2005), EPCOS posted sales of EUR 1.24 billion. At September 30, 2005, the company employed about 16,100 people worldwide.

Accounting Principles

EPCOS AG prepares its consolidated financial statements in accordance with United States Generally Accepted Accounting Principles (US GAAP).

This interim report was compiled in accordance with German Accounting Standard 6 (DRS 6).

We present EBIT because that is the basis on which we evaluate the operating performance of our three reportable segments and of the EPCOS Group as a whole. We believe that EBIT is a better measure of operating performance than operating income since the latter excludes the impact of foreign exchange gains and losses and other income and expense. In some fiscal years, these line items may have a significant impact on the relative performance of our segments. We calculate EBIT as net loss/income plus (minus) minority interest, provision for income tax and the interest result, net.

EPCOS AG

Q2Q3 2006:

~~Sales~~Sustained ~~up,~~positive ~~earnings~~business ~~significantly~~development ~~improved~~

Continuing operations (excluding tantalum capacitors):

Ø ~~Sustained~~ ~~positive~~New ~~development~~orders inand ~~all~~sales ~~industries~~up ~~served~~again sequentially and ~~regions~~year on year

Ø Sales: EUR ~~324~~330 million, up ~~17%~~15 percent year on year, up 6%2 percent sequentially

Ø EBIT: plus EUR 1215 million (Q2Q3 2005: ~~minus~~ plus EUR 234 million; Q1Q2 2006: plus EUR 312 million)

New orders and sales (continuing operations)

InBusiness Q2development ~~2006~~remained ~~(January~~positive 1in –all ~~March 31,~~regions ~~2006),~~and ~~demand~~in ~~continued~~nearly toall ~~develop~~industries ~~strongly~~served in ~~all~~the ~~industries~~third ~~served~~quarter ~~and~~of ~~regions~~fiscal 2006 (April 1 – June 30, 2006). ~~New~~As a whole, new orders and sales again increased both sequentially and year on year. For the third consecutive quarter, the book-to-bill ratio was above one at 1.08 in the period under review.

~~“EPCOS~~Comparison ~~made~~with ~~positive progress in the first half of 2006,” said Gerhard Pegam, President and CEO of EPCOS, at the announcement of the company’s figures for~~ Q2 2006. “Besides increasing the order intake and sales, we also significantly improved our earnings – despite the continued burden of tantalum capacitors. Now that this business has been successfully transferred to KEMET, we are more confident about the future.”

~~Comparison~~New ~~with~~orders Q1and ~~2006~~sales at the EPCOS Group (EUR million)

New orders rose by 4% to EUR 348 million in Q2 2006, up from EUR 335 million in the previous quarter. Most of this growth came from business with products for automotive and industrial electronics, as well as with distributors. Regionally, the bulk of the increase came from Germany.


	Q2 2006	± in %	Q3 2006
New orders	348	+ 2	356
Sales	324	+ 2	330

~~Sales~~New ~~were~~orders uprose 6%by 2 percent to EUR ~~324~~ 356 million in Q3 2006, ~~against~~driven ~~EUR~~mainly by strong growth of more than 30 ~~305 million~~percent in ~~Q1.~~business ~~All~~with ~~regions~~products ~~and~~for –automotive ~~with~~electronics applications. Substantial orders for the ~~exception~~piezo ofactuators ~~mobile~~used ~~communications~~in –diesel ~~all~~injection ~~industries~~systems ~~served~~played ~~contributed~~a tokey part in this growth. Customers generally also placed longer-term orders. Demand from the telecommunications industry increased by 5 percent.

~~Sequentially,~~These ~~sales~~gains ~~improved~~more ~~for~~than ~~all~~offset ~~business~~both ~~segments.~~the ~~Capacitors~~– ~~and~~seasonal ~~Inductors~~– ~~posted~~decline ~~the~~in orders ~~largest~~from ~~gain~~consumer ofelectronics ~~11%.~~customers ~~Sales~~and ofthe ~~this~~slight ~~segment’s~~dip ~~products~~in ~~climbed~~orders ~~to EUR 121 million,~~ from ~~EUR 109 million~~industrial inelectronics ~~the~~customers after a relatively strong previous quarter. ~~Sales~~They ofalso ~~Ceramic~~compensated ~~Components~~for ~~increased~~decreased bydemand 6%from distributors, which fell back to ~~EUR 103 million,~~the ~~from~~level ~~EUR 97 million~~of Q1 after rising sharply in Q1Q2. ~~2006~~The decline in Q3 came because distributors have now filled their stocks with RoHS-compatible components. InThis development was driven by the ~~Surface~~EU ~~Acoustic~~Directive ~~Wave~~on the Restriction of Hazardous Substances (~~SAW~~RoHS), which took ~~Components~~effect ~~segment~~on July 1, ~~sales~~2006. ~~increased~~The ~~about~~directive 1%prohibits tothe ~~EUR 100 million~~use of certain substances (such as lead, ~~from~~mercury ~~EUR 98 million~~and cadmium) in ~~the~~mobile ~~first~~phones ~~quarter~~and ofconsumer ~~the~~electronics ~~current~~devices, ~~fiscal~~for ~~year~~example. In some cases, this required technical changes to components – to adapt them to lead-free soldering processes, for instance.

~~Comparison~~Regionally, ~~with~~the Q2bulk ~~2005~~of the increase in new orders came from Germany. The order intake from the rest of Europe, Asia and the NAFTA region remained more or less stable.

~~Compared~~Business in almost all regions and with almost all industries served contributed to the ~~second~~2 percent ~~quarter~~sequential ofincrease ~~fiscal~~in ~~2005,~~sales ~~both~~to ~~new~~EUR 330 million. ~~orders~~The only exceptions were the consumer electronics industry and the NAFTA region. In the latter region, sales ~~posted~~dropped ~~double-digit~~primarily ~~growth~~because of an unfavorable development of the dollar/euro exchange rate.

New orders surged 29%, from EUR 271 million a year ago to EUR 348 million. Double-digit growth in orders came in from every industry served and from every region. At 40%, growth was strongest in orders from component distributors and, in regional terms, from customers in Asia.

EPCOS AG

Sales ~~increased~~ by ~~17% from EUR 277 million to EUR 324 million. Sales of products to the automotive electronics industry rose by nearly 30%, which was primarily due to the higher volume of~~ business ~~with~~segment ~~piezo actuators. Sales to component distributors~~ (upEUR ~~26%~~million) and to the consumer electronics industry (up 23%) were also positive. In both industries, inventory adjustments had weighed heavily on EPCOS’ business in fiscal 2005. Sales of products to the industrial electronics industry were 11% higher than a year ago. Sales of components for wireline and mobile communications reached the levels achieved in Q2 2005.

Sales were up in all regions. The strongest growth was posted by the NAFTA region (plus 30%) and Asia (plus 24%). Pronounced growth of 19% also came from Germany.


	Q2 2006	± in %	Q3 2006
Capacitors and Inductors	121	+ 2	124
Ceramic Components	103	+ 3	106
SAW Components	100	+ 1	100

~~All~~Sequentially, ofCapacitors ~~EPCOS’~~and ~~business~~Inductors ~~segments~~and ~~likewise~~the ~~recorded~~Ceramic ~~double-digit~~Components ~~growth~~segments ~~year~~both onposted ~~year~~higher sales. ~~Sales~~The atSurface ~~Capacitors~~Acoustic ~~and~~Wave ~~Inductors~~(SAW) ~~rose~~Components ~~from~~segment ~~EUR 104 million~~ended aQ3 ~~year~~slightly ~~ago~~ahead ~~to EUR 121 million, a gain~~ of ~~16%.~~the ~~Almost~~positive ~~all~~figure ~~product~~for ~~groups~~the ~~contributed~~previous ~~to this growth. In particular~~quarter, ~~capacitors~~despite ~~delivered to~~ a ~~broad~~seasonal ~~range~~drop ofin ~~customers~~business ~~and inductors~~with filters for ~~automotive~~multimedia ~~electronics~~ applications ~~experienced particularly sharp growth~~.

~~Sales~~Comparison atwith ~~Ceramic~~Q3 ~~Components~~2005 rose 19% from EUR 87 million to EUR 103 million. A significant increase in the sales of piezo actuators primarily drove this growth. Moreover, sales of sensors and sensor systems – mostly to the consumer, automotive and industrial electronics industries, but also to distributors – developed well.

~~The~~New ~~SAW~~orders ~~Components~~and ~~segment boosted its~~ sales ~~to EUR 100 million~~at ~~from EUR 86 million in~~ the ~~same~~EPCOS ~~period~~Group ~~last~~(EUR ~~year,~~million) a gain of 17%. This substantial increase was due above all to solid business with SAW products for entertainment electronics applications. Sales of SAW filters for mobile communications applications remained more or less unchanged from the previous year.

Business with multilayer ceramic modules developed positively. EPCOS is constantly expanding its portfolio of products in this field and is now also tapping the fast-growing market for WLAN applications. Modules for WLAN applications thus made a considerable contribution to sales growth in the SAW Components segment in Q2 2006. In the quarter under review, EPCOS won a big-name manufacturer of processors for personal computers as a new key account. Over the next two years, EPCOS expects this new business to generate extra sales in a significant double-digit million euro range.


	Q3 2005	± in %	Q3 2006
New orders	280	+ 27	356
Sales	288	+ 15	330

~~Earnings~~As ~~(continuing~~in ~~operations)~~Q2 2006, both new orders and sales posted double-digit year-on-year growth in the period under review.

~~Earnings~~New ~~before~~orders ~~interest~~increased ~~and~~by ~~tax~~27 percent. ~~(EBIT)~~Orders ~~rose~~from tothe ~~plus~~telecommunications ~~EUR~~industry were more than 40 ~~12 million~~percent up on the very weak figure a year ago. A sharp increase in ~~Q2 2006~~demand ~~(Q1 2006:~~for ~~plus~~piezo ~~EUR~~actuators was the main reason for the also 40 ~~3 million;~~percent Q2growth ~~2005:~~in ~~minus~~orders ~~EUR~~from the automotive electronics industry. At the same time, continued growth in electronic content in vehicles also fueled this positive development. Order volumes from distributors were about 20 ~~23 million)~~percent higher than a year ago. As the general business climate has improved over the previous year, distributors have further increased their stocks. Double-digit growth in orders from the industrial electronics segment reflects both broadly the overall positive business climate and, in particular, Germany’s robust export business. The order intake from consumer electronics customers remained unchanged year on year.

~~After~~Strong double-~~tax~~digit ~~earnings~~order ingrowth ~~the~~also ~~quarter~~came ~~under~~from ~~review~~every ~~came~~region. toThe ~~plus~~increase ~~EUR 8 million~~was ~~(Q1 2006:~~largest ~~plus~~in ~~EUR 1 million;~~the ~~Q2 2005:~~NAFTA ~~minus EUR 46 million).~~region ~~Earnings~~and ~~per~~in ~~share~~Asia, ~~for~~both ~~Q2 2006~~of ~~were~~which ~~plus 13 eurocents~~saw ~~(Q1 2006:~~new ~~plus 1 eurocent;~~orders surge ~~Q2 2005:~~by ~~minus~~more than 30 ~~70 eurocents)~~percent.

~~Earnings~~Year on year, sales rose by 15 percent in Q3 2006. While business ~~segment~~with manufacturers of consumer electronics equipment posted only single-digit growth, EPCOS achieved double-digit growth in sales of its products to all other industries served.

As Regionally, sales ~~improved,~~growth ~~the~~was ~~Capacitors~~strongest ~~and~~– ~~Inductors~~at ~~segment~~around ~~reduced~~25 percent ~~its~~– ~~EBIT~~in ~~loss~~Asia, largely due to ~~minus~~a ~~EUR 2 million~~sharp ~~(Q1 2006:~~year-on-year ~~minus~~improvement ~~EUR 6 million;~~in ~~Q2 2005:~~mobile ~~minus~~communications ~~EUR 22 million,~~business. ~~including~~Two ~~special~~major ~~charges~~handset ~~totaling~~makers in particular are increasing their ~~EUR 17 million)~~production volumes. ~~The~~At ~~persistent~~the ~~strength~~same oftime, ~~the~~EPCOS ~~Brazilian~~has ~~real~~also isimproved ~~one~~its ofown market position. Both in the ~~factors~~NAFTA ~~that~~region, ~~continues~~where topositive ~~burden~~stimulus ~~earnings~~came essentially from automotive electronics and distributors, and also in ~~this~~Germany ~~segment~~third-quarter sales posted double-digit year-on-year growth.

Ceramic Components returned to profitability in the quarter under review. EBIT was EUR 1 million (Q1 2006: minus EUR 3 million; Q2 2005: minus EUR 4 million). In addition to

EPCOS AG

~~the~~Sales ~~higher~~by ~~sales~~business ~~volume,~~segment ~~steps~~(EUR ~~taken~~million) to increase yields for piezo actuators contributed to this improvement in earnings. The adjustment of the portfolio of multilayer ceramic capacitors likewise had a positive impact. EPCOS is currently focusing these products primarily on automotive electronics applications, offering customized products and solutions. “The decision to adapt a new strategic approach for these products is proving to be the right one,” Gerhard Pegam affirms. “Even though we are now concentrating our multilayer ceramic capacitors more strongly on specific market segments, EPCOS as a whole is and remains a broadliner, delivering a very wide range of standard, application-specific and customer-specific products and solutions. EPCOS is not becoming a niche provider!”

SAW Components posted EBIT of plus EUR 12 million (Q1 2006: plus EUR 12 million; Q2 2005: plus EUR 4 million). In this segment, EPCOS is benefiting from both the positive trend in sales and from its position as global market leader in SAW products for mobile communications, multimedia and automotive electronics applications. The increased volume of multilayer module business is now also making a positive contribution to earnings.


	Q3 2005	± in %	Q3 2006
Capacitors and Inductors	109	+ 13	124
Ceramic Components	92	+ 16	106
SAW Components	87	+ 15	100

~~Key~~All ~~data~~business ~~for~~segments ~~the~~recorded ~~EPCOS~~double-digit ~~Group~~growth ~~(including~~for ~~discontinued~~year-on-year sales in Q3 ~~operations)~~2006.

~~Total~~Sales ~~after-tax~~at ~~earnings~~Capacitors inand ~~the~~Inductors ~~quarter~~rose ~~under~~by ~~review~~13 percent ~~were~~to ~~plus~~ EUR 4 124 million. ~~(Q1 2006:~~In ~~minus~~particular, ~~EUR 3 million;~~inductors for use in automotive and ~~Q2 2005:~~industrial ~~minus~~electronics ~~EUR 49 million)~~applications contributed to this growth. ~~This~~For ~~figure~~example, ~~includes~~EPCOS was able to gain market share for the transformers that are fitted in parking assistant sensor systems and thus realize a ~~loss~~significant ofincrease ~~EUR 4 million~~in ~~posted~~sales. Demand was also strong for ~~tantalum~~plastic film capacitors and aluminum electrolytic capacitors for industrial drives. More and more of these capacitors are being used to improve energy efficiency and thereby cut energy costs.

InAt ~~Q2 2006~~Ceramic Components, ~~total~~ ~~earnings~~sales ~~per~~were ~~share~~up ~~came~~16 percent toyear ~~plus~~on 6year ~~eurocents~~to ~~(Q1~~EUR ~~2006:~~106 ~~minus 5 eurocents;~~million. ~~Q2 2005:~~All ~~minus 74 eurocents~~product groups contributed to this gain. Business with piezo actuators was especially positive. Strong business development in the quarter under review was driven also by voltage- and temperature-dependent resistors (varistors and thermistors). Demand for these components was especially brisk among industrial electronics customers and distributors. The increase in sales of sensors and sensor systems was due in part to robust business with these products for use in domestic appliances. In particular, EPCOS was able to boost sales to European and North American customers.

~~Net~~SAW ~~cash flow~~Components ~~was~~boosted ~~positive~~its atyear-on-year sales by 15 percent to just over EUR 3 100 million. Business with products for mobile communications applications accounted for the bulk of this growth. In particular, demand is also increasing for duplexers, which are filter components that separate the transmit and receive signals in mobile phones and are thus vital to the quality ~~second~~of ~~quarter~~signal transmission. The volume of ~~fiscal~~these ~~2006~~products is increasing as major mobile phone manufacturers with whom EPCOS has secured a strong position roll out new, high-volume projects. Sales of modules for wireless LAN applications are likewise growing constantly. Sales of SAW filters for multimedia applications remained virtually unchanged year on year.

~~First~~EPCOS ~~half-year~~also ~~2006~~scored a major business success with its innovative bulk acoustic wave (BAW) filters in the quarter under review. Volume production of a BAW duplexer has now begun and the products are being shipped to a leading mobile phone manufacturer.

~~Continuing~~BAW ~~operations~~technology allows RF filters and duplexers to be made for applications where SAW technology reaches its limits. “This technology lets us combine the high power compatibility of microwave ceramic filters with the miniaturization potential of SAW filters in a single component,” says Dr. Werner Faber, member of the Management Board and Chief Technology Officer at EPCOS, explaining the benefits of BAW filters. The new BAW duplexer is suitable for applications in the fast growing market for CDMA and WCDMA handsets, for example.

In the first six months of fiscal 2006 (October 1, 2005 – March 31, 2006), new orders rose 28% to EUR 683 million, from EUR 534 million in the same period a year ago. At EUR 629 million, year-on-year sales were up 16% from EUR 544 million.

EBIT improved to plus EUR 15 million in the first half of 2006 (first half of 2005: minus EUR 20 million, including special charges totaling EUR 17 million).

After-tax earnings stood at plus EUR 9 million (first half of 2005: minus EUR 45 million).

EPCOS Group (including discontinued operations)

EBIT for the EPCOS Group as a whole was EUR 2 million (first half of 2005: minus EUR 26 million, including special charges totaling EUR 17 million).

Total after-tax earnings came to plus EUR 1 million (first half of 2005: minus EUR 49 million), including a loss of EUR 8 million posted for tantalum capacitors. The transfer of EPCOS’ tantalum capacitor business to US American capacitor manufacturer KEMET was successfully completed in April. The company has thus eliminated its biggest loss-maker.

Total earnings per share for the first half of 2006 stood at plus 1 eurocent (first half of 2005: minus 75 eurocents).

EPCOS AG

InEarnings ~~the first half of the current fiscal year, net cash flow was minus EUR 13 million~~ (~~first~~continuing ~~half of 2005: minus EUR 69 million~~operations).

~~“The~~Earnings ~~sale~~at ofthe ~~our~~EPCOS ~~tantalum~~Group ~~activities to KEMET is giving us a cash inflow of about~~ (EUR 70 million,”) ~~says CFO Dr. Wilfried Backes, “the majority of which we received when the deal was closed in April.”~~


	Q3 2005	Q2 2006	Q3 2006
EBIT	+ 3.9	+ 11.7	+ 15.0
Net income	– 4.3	+ 8.3	+ 13.9
Earnings per share (in eurocents)	– 7	+ 13	+ 21

A further substantial improvement in earnings was recorded in Q3 2006, largely on account of the higher sales volume. In Q3 2006, earnings before interest and tax (EBIT) thus rose to plus EUR 15 million. Net income in the period under review was plus EUR 14 million. Earnings per share were plus 21 eurocents.

Earnings by business segment

EBIT by business segment (EUR million)


	Q3 2005	Q2 2006	Q3 2006
Capacitors and Inductors	+ 0.2	– 1.8	– 0.4
Ceramic Components	– 2.2	+ 1.4	+ 3.0
SAW Components	+ 5.9	+ 12.1	+ 12.4

A further gain in sales improved earnings for the Capacitors and Inductors segment in the quarter under review. Relocation of some of the plastic film capacitor production from Brazil and Spain to China and India is now in progress. This move will strengthen the cost position and the competitiveness for these products.

At Ceramic Components, EBIT rose to EUR 3 million. Positive stimulus came from a further improvement in the production yield for piezo actuators, and from a better earnings position in the business with multilayer ceramic products.

In Q3 2006, SAW Components with earnings of approximately EUR 12 million once again made the largest contribution to consolidated EBIT.

EPCOS AG

Key data for the EPCOS Group (including discontinued operations)

Total Group business (EUR million)


	Q3 2005	Q2 2006	Q3 2006
Net income	– 7.6	+ 4.2	+ 9.9
Earnings per share (in eurocents)	– 12	+ 6	+ 15

Total net income in the quarter under review was EUR 10 million. For the last time, this figure also includes a loss of EUR 4 million for the tantalum capacitor business, which was transferred to KEMET effective April 13, 2006.

Net cash flow was plus EUR 98 million in Q3 2006. This figure contains a cash inflow of EUR 68 million from the sale of the tantalum capacitor business. Net cash flow for the first nine months of fiscal 2006 thus totals plus EUR 85 million – a very significant improvement on the figure of minus EUR 105 million posted a year ago.

Outlook (continuing operations)

~~Against~~In ~~the~~light ~~backdrop~~ of ~~the~~another ~~overall~~strong ~~positive~~order ~~economic~~intake ~~development~~in Q3 2006, EPCOS is now ~~more~~expects ~~optimistic~~to ~~about~~post ~~its~~double-digit ~~business~~percentage ~~outlook.~~sales growth ~~For~~for ~~the year~~fiscal 2006 as a whole. ~~EPCOS~~In ~~expects~~Q4, ~~the increase of~~ sales inand ~~its~~EBIT ~~continuing~~should ~~business~~remain toon bea atsimilar ~~least~~level inas ~~the high single-digit percentage range. EBIT will improve further~~ in ~~the~~Q3 ~~second half~~ of fiscal 2006.

N.B. All financial data has been compiled to US GAAP and is not audited except for data at September 30, 2005.

Further dates

Results for the ~~third~~fourth quarter of fiscal 2006 will be ~~published~~ ~~on August 1, 2006. Results for the fourth quarter and for fiscal 2005 as a whole will be~~ published at the Annual Press Conference on November 16, 2006.

This document may contain forward-looking statements with respect to EPCOS’ financial condition, results of operations, business, strategy and plans. In particular, statements using the words “expects”, “anticipates” and similar expressions, and statements with regard to management goals and objectives, expected or targeted revenue and expense data, or trends in results of operations or margins are forward-looking in nature. Such statements are based on a number of assumptions that could ultimately prove inaccurate, and are subject to a number of risk factors, including changes in our customers’ industries, slower growth in significant markets, changes in our relationships with our principal shareholders, the ability to realize cost reductions and operating efficiencies without unduly disrupting business operations, currency fluctuations, unforeseen environmental obligations, and general economic and business conditions. EPCOS does not assume any obligation to update publicly any forward-looking statement, whether as a result of new information, future events or otherwise. Further information on factors which could affect the Company’s financial results is provided in documents filed with the Bundesanstalt für Finanzdienstleistungsaufsicht and the US Securities and Exchange Commission.

EPCOS AG

CONSOLIDATED FINANCIAL STATEMENTS

CONSOLIDATED STATEMENTS OF INCOME, UNAUDITED

for the 3 months and 69 months ended ~~March~~June 3130, 2006 and 2005

(EUR thousand, except per share data)

	3 months ended				69 months ended
	2006		2005		2006		2005
Net sales from continuing operations
Third parties	~~274~~327,~~415~~765		~~231~~240,~~675~~610		~~535~~863,~~265~~030		~~453~~693,~~011~~621
Related parties	492,~~630~~687		4447,~~850~~312		9396,~~567~~254		90138,~~838~~150
Total net sales	~~324~~330,~~045~~452		~~276~~287,~~525~~922		~~628~~959,~~832~~284		~~543~~831,~~849~~771
Cost of goods sold	(~~267~~270,~~952~~136	)	(239,~~774~~873	)	(~~523~~793,~~002~~138	)	(~~459~~699,~~322~~195	)
Gross profit	5660,~~093~~316		3648,~~751~~049		~~105~~166,~~830~~146		84132,~~527~~576
Research and development expenses	(1719,~~134~~077	)	(16,~~339~~727	)	(3554,~~315~~392	)	(2946,~~650~~377	)
Marketing and selling expenses	(2725,~~653~~300	)	(2628,~~280~~256	)	(5479,~~254~~554	)	(5280,~~625~~881	)
General and administrative expenses	(43,~~002~~667	)	(43,~~563~~024	)	(710,~~030~~697	)	(710,~~429~~453	)
	(48,789	)	(47,182	)	(96,599	)	(89,704	)
	(48,044	)	(48,007	)	(144,643	)	(137,711	)
Operating income	712,~~304~~272		~~(10,431~~42	)	921,~~231~~503		(5,~~177~~135	)
Interest income	~~816~~1,472		~~871~~465		12,~~505~~977		1,~~306~~771
Interest expense	(3,~~556~~465	)	(2,~~283~~624	)	(710,~~021~~486	)	(47,~~532~~156	)
Foreign exchange gains (losses), net	~~1,010~~364		~~(1,818~~75	)	~~806~~1,170		(4,~~272~~197	)
Impairment on goodwill	—		~~(11,800~~—	)	—		(11,800	)
Other income, net	21,~~852~~645		13,~~449~~708		35,~~731~~376		15,~~628~~336
Share of net income of unconsolidated affiliates	512		(216	)	1,213		(148	)
Share (loss) of net income of unconsolidated affiliates	732		91		1,945		(57	)
Income (loss) from continuing operations before income taxes and minority interest	813,~~938~~020		~~(24~~1,~~228~~757	)	922,~~465~~485		(2221,~~995~~238	)
Provision for income taxes	~~(562~~986	)	(215,~~442~~967	)	~~(227~~759	)	(2127,~~812~~779	)
Minority interest	(~~110~~87	)	(5875	)	(~~200~~287	)	(99174	)
Income (loss) from continuing operations	813,~~266~~919		(454,~~728~~285	)	922,~~038~~957		(4449,~~906~~191	)
Loss from discontinued operations, net of income taxes	(43,~~097~~997	)	(23,~~942~~265	)	(812,~~100~~097	)	(47,~~212~~477	)
Net income (loss)	49,~~169~~922		(487,~~670~~550	)	~~938~~10,860		(4956,~~118~~668	)
Earnings per share (basic)
Net income (loss) from continuing operations	0.1321		(0.7007	)	0.1435		(0.6975	)
Net loss from discontinued operations	(0.0706	)	(0.0405	)	(0.1318	)	(0.0612	)
Earnings per share (diluted)
Net income (loss) from continuing operations	0.1220		(0.7007	)	0.1434		(0.6975	)
Net loss from discontinued operations	(0.0706	)	(0.0405	)	(0.1318	)	(0.0612	)
Reconciliation of Net income (loss) to EBIT
Net income (loss)	813,~~266~~919		(454,~~728~~285	)	922,~~038~~957		(4449,~~906~~191	)
Minority interest	~~110~~87		5875		~~200~~287		99174
Provision for income taxes	~~562~~(986	)	215,~~442~~967		~~227~~(759	)	2127,~~812~~779
Income (loss) before income taxes and minority interest	813,~~938~~020		~~(24~~1,~~228~~757	)	922,~~465~~485		(2221,~~995~~238	)
Interest result, net	21,~~740~~993		12,~~412~~159		57,~~516~~509		35,~~226~~385
EBIT	1115,~~678~~013		~~(22~~3,~~816~~916	)	1429,~~981~~994		(1915,~~769~~853	)

See accompanying notes to unaudited consolidated interim financial statements. 8 9EPCOS AG

EPCOS AG

CONSOLIDATED FINANCIAL STATEMENTS

CONSOLIDATED BALANCE SHEETS

as of ~~March~~June 3130, 2006 and September 30, 2005

(EUR thousand, except share data)

	March 31,2006		September 30, 2005
	June 30,2006		September 30, 2005
	(unaudited)
ASSETS
Current assets
Cash and cash equivalents	~~170~~266,~~681~~246		193,438
Accounts receivable, net	~~190~~187,~~288~~285		201,991
Inventories, net	~~211~~210,~~331~~718		226,802
Prepaid expenses and other current assets	4843,~~506~~201		46,579
Deferred income taxes	5,~~518~~498		8,708
Assets held for sale	~~106~~56,~~382~~773		—
Total current assets	~~732~~769,~~706~~721		677,518
Property, plant and equipment, net	~~495~~481,~~864~~598		576,284
Intangible assets, net	1716,~~613~~782		19,141
Deferred income taxes	8289,~~015~~823		70,169
Other assets	4143,~~259~~381		33,822
Total assets	1,~~369~~401,~~457~~305		1,376,934
LIABILITIES AND SHAREHOLDERS’ EQUITY
Current liabilities
Accounts payable	~~116~~126,~~966~~733		133,904
Accrued expenses and other current liabilities	~~111~~122,~~761~~698		119,065
Short-term borrowings	~~102~~98,~~011~~268		107,467
Current portion of long-term debt	2321,~~511~~392		24,944
Deferred income taxes	36,~~830~~302		3,629
Liabilities held for sale	2029,~~016~~520		—
Total current liabilities	~~378~~404,~~095~~913		389,009
Long-term debt, excluding current installments	~~200~~201,~~909~~313		206,127
Pension liabilities	~~170~~172,~~228~~664		165,768
Deferred income taxes	17,~~994~~922		18,503
Other liabilities	4042,~~869~~971		40,270
Minority interest	1,~~896~~908		764
Total liabilities	~~809~~841,~~991~~691		820,441
Shareholders’ equity
Share capital, – 96,280,000 shares authorized, 65,300,000 shares issued and outstanding atMarch 31, 2006 and at September 30, 2005	65,300		65,300
Share capital, – 96,280,000 shares authorized, 65,300,000 shares issued and outstanding at June 30, 2006 and at September 30, 2005	65,300		65,300
Additional paid-in capital	254,833		254,833
Retained earnings	~~288~~298,~~186~~108		287,248
Accumulated other comprehensive loss	(4858,~~853~~627	)	(50,888	)
Total shareholders’ equity	559,~~466~~614		556,493
Total liabilities and shareholders’ equity	1,~~369~~401,~~457~~305		1,376,934

See accompanying notes to unaudited consolidated interim financial statements. 9 10EPCOS AG

EPCOS AG

CONSOLIDATED FINANCIAL STATEMENTS

CONSOLIDATED STATEMENTS OF SHAREHOLDERS’

EQUITY AND COMPREHENSIVE INCOME/(LOSS), UNAUDITED

for the 69 months ended ~~March~~June 3130, 2006

(EUR thousand)

	Sharecapital	Additionalpaid-inCapital	Retainedearnings	Accumulatedothercomprehensiveincome/(loss)		Treasuryshares	Totalshareholders’equity
Balances as of September 30, 2005	65,300	254,833	287,248	(50,888	)	—	556,493
Comprehensive Income:
Net Income	—	—	~~938~~10,860	—		—	~~938~~10,860
Currency translation adjustment	—	—	—	(~~573~~7,535	)	—	(~~573~~7,535	)
Cash flow hedges (net of tax of 838)	—	—	—	2,509		—	2,509
Cash flow hedges (net of tax of 132)	—	—	—	(397	)	—	(397	)
Reclassification of gains to net income (net of tax of 43)	—	—	—	(127	)	—	(127	)
Reclassification of gains to net income (net of tax of 78)	—	—	—	(235	)	—	(235	)
Unrealized gains on securities (net of tax of 64)	—	—	—	226		—	226
Unrealized gains on securities (net of tax of 114)	—	—	—	428		—	428
Total comprehensive Income							23,~~973~~121
Balances as of March 31, 2006	65,300	254,833	288,186	(48,853	)	—	559,466
Balances as of June 30, 2006	65,300	254,833	298,108	(58,627	)	—	559,614

CONSOLIDATED STATEMENTS OF SHAREHOLDERS’

EQUITY AND COMPREHENSIVE INCOME/(LOSS), UNAUDITED

for the 69 months ended ~~March~~ June 3130, 2005

(EUR thousand)

	ShareCapital	Additionalpaid-incapital	Retainedearnings		Accumulatedothercomprehensiveincome/(loss)		Treasuryshares	Totalshareholders’equity
Balances as of September 30, 2004	65,300	254,833	406,510		(47,079	)	—	679,564
Comprehensive Loss:
Net Loss	—	—	(4956,~~118~~668	)	—		—	(4956,~~118~~668	)
Currency translation adjustment	—	—	—		(29,~~484~~552	)	—	(29,~~484~~552	)
Cash flow hedges (net of tax of 67)	—	—	—		(200	)	—	(200	)
Cash flow hedges (net of tax of 19)	—	—	—		(58	)	—	(58	)
Reclassification of loss to net income (net of tax of 182)	—	—	—		546		—	546
Reclassification of loss to net income (net of tax of 365)	—	—	—		1,093		—	1,093
Unrealized gains on securities (net of tax of 113)	—	—	—		942		—	942
Unrealized gains on securities (net of tax of 192)	—	—	—		1,317		—	1,317
Total comprehensive Loss								(5044,~~314~~764	)
Balances as of March 31, 2005	65,300	254,833	357,392		(48,275	)	—	629,250
Balances as of June 30, 2005	65,300	254,833	349,842		(35,175	)	—	634,800

See accompanying notes to unaudited consolidated interim financial statements. 10 11EPCOS AG

EPCOS AG

CONSOLIDATED FINANCIAL STATEMENTS

CONSOLIDATED STATEMENTS OF CASH FLOW, UNAUDITED

for the 69 months ended ~~March~~June 3130, 2006 and 2005

(EUR thousand)

	6 months ended
	9 months ended
	2006		2005
Cash flows from operating activities
Net income (loss)	~~938~~10,860		(4956,~~118~~668	)
Adjustment to reconcile net loss/income to net cash provided by operating activities
Depreciation and amortization on intangible and fixed assets	6393,~~727~~970		74123,~~122~~324
Impairment on goodwill	—		11,800
Provision for doubtful accounts	45		111
Provision for doubtful accounts	246		(5	)
Gain on sale of property, plant and equipment and businesses	342		(248	)
Gain on sale of property, plant and equipment	(139	)	(177	)
Deferred income tax	(15,675	)	24,436
Deferred income tax	(12,130	)	21,296
Share of net income (loss) of unconsolidated affiliates	(1,945	)	57
Share of net income (loss) of unconsolidated affiliates	(1,213	)	148
Minority interest	287		174
Minority interest	200		99
Other non cash item	2,662		—
Other non cash item	2,713		—
Changes in assets & liabilities
Increase in inventories	(914,~~846~~616	)	(1213,~~204~~739	)
Decrease in accounts receivable	1,793		27,864
(Increase)/Decrease in accounts receivable	(29,824	)	23,391
Increase in prepaid expenses and other current assets	(14,~~657~~691	)	(1211,~~884~~304	)
Decrease in accounts payable	(5,106	)	(34,661	)
Increase/(Decrease) in accounts payable	34,384		(48,706	)
Increase in other liabilities	563		324
Increase/(Decrease) in other liabilities	2,927		(73	)
Decrease in accrued expenses and other current liabilities	(2,784	)	(17,120	)
Increase/(Decrease) in accrued expenses and other current liabilities	10,504		(27,629	)
Increase in pension liabilities	47,~~577~~271		45,~~702~~813
(Increase)/Decrease in other assets	(35,~~396~~271	)	~~534~~1,168
Net cash provided by operating activities	3891,~~486~~230		1420,~~720~~107
Cash flows from investing activities
Capital expenditures	(4871,~~534~~068	)	(82123,~~491~~735	)
Proceeds from sale of equipment	1,~~146~~219		~~549~~1,079
Investments in associated and unconsolidated companies	(43,~~023~~991	)	(2,~~110~~140	)
Net cash used in investing activities	(51,411	)	(84,052	)
Net proceeds from sale/disposition of businesses	68,038		—
Net cash used in investing activities	(5,802	)	(124,796	)
Cash flows from financing activities
Net decrease in short-term borrowings	(7,414	)	(8,428	)
Net (Decrease)/Increase in short-term borrowings	(7,894	)	2,232
Proceeds from borrowing of long-term debt	79,~~492~~049		726,~~373~~506
Principal payments under capital leasing obligations	(19	)	(828	)
Principal payments on long-term debt	(912,~~949~~303	)	(1320,~~074~~506	)
Net cash used in financing activities	(9,890	)	(14,137	)
Net cash provided by (used in) financing activities	(11,167	)	8,204
Effect of exchange rate changes on cash	58(1,453	)	(1,~~795~~055	)
Decrease in cash and cash equivalents	(22,757	)	(85,264	)
Increase/(Decrease) in cash and cash equivalents	72,808		(95,430	)
Cash and cash equivalents at beginning of fiscal year	193,438		238,386
Cash and cash equivalents at end of period	~~170~~266,~~681~~246		~~153~~142,~~122~~956

See accompanying notes to unaudited consolidated interim financial statements. 11 12EPCOS AG

EPCOS AG

CONSOLIDATED FINANCIAL STATEMENTS

Notes to unaudited interim consolidated financial statements

1. Basis of Presentation

The unaudited interim consolidated financial statements as of and for the three-month and ~~six~~nine-month periods ended ~~March~~June 3130, 2006, and 2005 reflect all adjustments consisting of normal recurring items, which are, in the opinion of management, necessary for a fair statement of the results of the interim periods presented. All intercompany balances and transactions as well as all intra group profits or losses arising on such transactions have been eliminated in the consolidated financial statements.

The results of operations for any interim period are not necessarily indicative of results for the full year. Such financial statements should be read in conjunction with the audited consolidated financial statements for the year ended September 30, 2005 included in the Company’s Annual Report for 2005.

Options granted to employees

As of October 1, 2005, the Company adopted Statement of Financial Accounting Standards (SFAS) No. 123 (revised 2004), Share-Based Payment (SFAS No. 123R), which replaces SFAS No. 123, Accounting for Stock-Based Compensation, and supersedes Accounting Principals Board Opinion (APB) No. 25, Accounting for Stock Issued to Employees, and related Interpretations. SFAS No. 123R requires companies to recognize the cost resulting from all share-based payment ~~transactions~~ transactions in the financial statements. With certain limited exceptions, the new standard establishes a grant date, fair-value-based measurement method in accounting for share-based payment transactions. Equity classified awards are measured at fair value of at the grant date, whereas related compensation cost is recognized based on the estimated number of instruments for which the requisite service is expected to be rendered. For its equity classified awards, the Company applies the modified ~~prospective~~ prospective transition method. Under this method, compensation cost recognized in the 69 months ending ~~March~~June 3130, 2006, includes (i) compensation cost for all share-based payments granted prior to, but not yet vested as of October 1, 2005 based on the grant date fair value estimated in accordance with SFAS No. 123, and (ii) compensation cost for all share-based payments granted subsequent to October 1, 2005, based on grant date fair value estimated in accordance with SFAS No. 123R. In the ~~six~~nine-month periods of fiscal 2006 compensation expense of EUR 01.~~776~~035 million from stock based compensation was recorded. Results for prior ~~periods~~period have not been restated.

Prior to the adoption of SFAS No. 123R, stock options were accounted for under the intrinsic value method of Accounting Principles Board Opinion No. 25, Accounting for Stock Issued to Employees, and related Interpretations.

See note 3 for further information on stock-based compensation.

1213

EPCOS AG

CONSOLIDATED FINANCIAL STATEMENTS

The following table illustrates recorded compensation expense and the effect on net loss/income and loss/earnings per share if the Company had adopted the fair value based accounting method prescribed by SFAS No. 123:

NET INCOME (LOSS) ~~INCOME~~ AND EARNINGS (LOSS) ~~EARNINGS~~ PER SHARE

for the 3 months and 69 months ended ~~March~~June 3130, 2006 and 2005

(EUR thousand, except share data)

	3 months ended				69 months ended
	2006		2005		2006		2005
Net income (loss)
As reported	49,~~169~~922		(487,~~670~~550	)	~~938~~10,860		(4956,~~118~~668	)
Stock-based employee compensation expense determined under fair value based accounting method, net of taxes	—		(~~430~~480	)	—		(1,~~360~~840	)
Pro forma	49,~~169~~922		(498,~~100~~030	)	~~938~~10,860		(5058,~~478~~508	)
Basic earnings (loss) per share
Net income (loss) from continuing operations as reported	0.1321		(0.7007	)	0.1435		(0.6975	)
Net loss from discontinued operations as reported	(0.0706	)	(0.0405	)	(0.1318	)	(0.0612	)
Net income (loss) from continuing operations pro forma	0.1321		(0.7108	)	0.1435		(0.7178	)
Net loss from discontinued operations pro forma	(0.0706	)	(0.05	)	(0.1318	)	(0.0712	)
Diluted (loss) earnings per share
Net income (loss) from continuing operations as reported	0.1220		(0.7007	)	0.1434		(0.6975	)
Net loss from discontinued operations as reported	(0.0706	)	(0.0405	)	(0.1318	)	(0.0612	)
Net income (loss) from continuing operations pro forma	0.1220		(0.7108	)	0.1434		(0.7178	)
Net loss from discontinued operations pro forma	(0.0706	)	(0.05	)	(0.1318	)	(0.0712	)

1314

EPCOS AG

CONSOLIDATED FINANCIAL STATEMENTS

2. Discontinued Operations

On December 12, 2005, EPCOS signed a contract to sell its Tantalum Capacitor Business Unit to KEMET Inc. based in the United States of America. The sale includes the plants in Evora, Portugal and parts of the activities in Munich and Heidenheim, Germany. EPCOS closed the deal partially that transfers its tantalum capacitor ~~business~~ business effective April 13, 2006. The results of the disposal group are shown as discontinued operations for all periods presented.

In the ~~six~~ nine months ended ~~March~~ June 3130, 2006 and 2005, the discontinued operations’ net sales were EUR 4568.~~301~~521 million and EUR 4264.~~368~~404 million, respectively. In the three months ended ~~March~~June 3130, 2006 and 2005, net sales were EUR 22 23.~~479~~220 million and EUR 21 22.~~034~~036 million, respectively. Loss before income taxes and minority interests reported in discontinued operations amounted to EUR -1317.~~830~~832 million and EUR -611.~~129~~161 million, respectively, for the ~~six~~nine months ended ~~March~~June 3130, 2006 and 2005. In the three months ended ~~March~~June 3130, 2006 and 2005 the loss before income taxes and minority interests was EUR -74.~~041~~002 million and EUR -45.~~348~~032 million, respectively.

~~Assets~~As ~~and~~a ~~liabilities~~further ~~related~~component toof the ~~tantalum~~sale ~~business~~a ~~are~~Manufacturing ~~classified~~and asSupply ~~held~~Agreement ~~for~~was ~~sale at March 31, 2006~~signed. NoTherefore ~~impairment~~EPCOS ~~was~~will ~~recognized~~continue ~~relating~~ to ~~the~~produce ~~disposal~~product ~~group~~ in ~~the~~Heidenheim ~~first~~and ~~two~~sell ~~quarters~~to ~~of fiscal 2006~~KEMET. AnThe ~~impairment~~equipment ~~charge~~will ~~relating~~be sold to ~~these~~KEMET ~~assets~~at ~~was~~the ~~recorded~~end inof the ~~three~~contract ~~month~~ period ~~ended September 30, 2005, when the assets were classified as being~~ (held ~~and~~for ~~used, but the Company was in negotiations to dispose of the tantalum business~~sale).

~~Cash~~Assets ~~Flows~~and ~~relating~~liabilities related to the ~~discontinued~~tantalum ~~operations~~business ~~for~~are ~~six-month~~classified as ~~periods~~held ~~ended~~for ~~March~~sale at June 3130, 2006. ~~amounted~~No impairment was recognized relating to ~~EUR~~the ~~-17.4~~disposal ~~million~~group in the first three quarters of fiscal 2006. ~~Cash~~An ~~used~~impairment charge relating to these assets was recorded in ~~operating activities~~the ~~amounted~~three tomonth ~~EUR~~period ~~-9.7~~ended September ~~million~~30, ~~and~~2005, ~~EUR~~when ~~-7.7 million~~the ~~cash~~assets were classified as being held and used, but the Company was in ~~investing~~negotiations ~~activities~~to dispose of the tantalum business.

~~The~~Cash ~~carrying~~Flows ~~amounts~~relating ofto the ~~major~~discontinued ~~classes~~operations ~~of assets~~for ~~and~~nine-month ~~liabilities~~periods ~~held~~ended ~~for~~June 30, ~~sale~~2006 asamounted ofto ~~March~~EUR 60.8 million. Cash provided by operating activities amounted to EUR 0.4 ~~31,~~million ~~2006~~and ~~were~~EUR as60.4 million ~~follows:~~cash provided by investing activities.

~~Period~~The ~~ending~~carrying ~~March~~amounts of the major classes of assets and liabilities held for sale as of June 3130, 2006 were as follows:

Period ending June 30, 2006

(EUR thousand)

Inventories, net		2513,~~324~~113
Accounts receivable, net		927,~~927~~409
Property, plant and equipment, net		6610,~~058~~734
Other		5,~~073~~517
Assets held for sale		~~106~~56,~~382~~773
Accounts payable		1229,~~012~~489
Other liabilities		~~8,004~~31
Liabilities held for sale		2029,~~016~~520

1415

EPCOS AG

CONSOLIDATED FINANCIAL STATEMENTS

3. Stock-based Compensation

The following table summarizes stock option activity:

STOCK OPTION ACTIVITY

	Number of options	Weighted averageexercise price per share (in EUR)
Balance as of September 30, 2005	2,486,750	41.40
Granted	339,000	13.05
Exercised	—	—
Forfeited	104,750	33.51
Balance as of March 31, 2006	2,721,000	38.17
Balance as of June 30, 2006	2,721,000	38.17

4. Inventories, net

INVENTORIES, NET

(EUR thousand)

	March 31,2006	September 30,2005
	June 30,2006	September 30,2005
Raw materials and supplies	5657,~~753~~122	59,356
Work in process	6160,~~887~~001	58,028
Finished products	9293,~~691~~595	109,418
Total inventories, net	~~211~~210,~~331~~718	226,802

Total inventories as of ~~March~~June 3130, 2006 and September 30, 2005, are net of valuation allowances of EUR 2123.~~423~~294 million and EUR 32.823 million, respectively.

5. Goodwill and Intangible Assets

The carrying amount of goodwill as of ~~March~~June 3130, 2006, is as follows:

GOODWILL

(EUR thousand)

	March 31,2006	September 30,2005
	June 30,2006	September 30,2005
Capacitors and Inductors	3,~~947~~933	3,935
Ceramic Components	4,~~103~~091	4,104
SAW Components	~~298~~283	299
Consolidated total	8,~~348~~307	8,338

1516

EPCOS AG

CONSOLIDATED FINANCIAL STATEMENTS

Included in the Consolidated Balance Sheets as of ~~March~~June 3130, 2006 and September 30, 2005 are the following categories of acquired intangible assets:

INTANGIBLE ASSETS (FINITE LIVES)

(EUR thousand)

	March 31, 2006		September 30, 2005
	June 30, 2006		September 30, 2005
	Gross	Net	Gross	Net
Patents, licenses and similar rights	43,~~001~~024	76,~~287~~645	42,888	8,670
Customer lists	3,200	1,~~547~~467	3,200	1,707
Other	1,~~172~~175	~~431~~363	1,057	426
Total intangible assets (finite lives)	47,~~373~~399	98,~~265~~475	47,145	10,803

Amortization related to intangible assets (finite lives) amounted to EUR 0.~~891~~904 million for the three-month period ended ~~March~~June 3130, 2006 and EUR 12.~~796~~700 million for the ~~six~~nine-month period ended ~~March~~June 3130, 2006 (EUR 1.580 million for the three-month period ended ~~March~~June 3130, 2005 and EUR 4.823 million for the ~~six~~nine-month period ended ~~March~~June 3130, 2005). In accordance with SFAS No. 142, the Company reassessed the useful lives of all other intangible assets in the first ~~six~~nine months of fiscal year 2006. There were no changes to such lives and there are no expected residual values associated with these intangible assets. Patents are amortized over the term of the patents, or as for the customer lists, over ten years. Licenses are amortized over the term of the licensing agreement.

The development of the intangible assets (finite lives) of the estimated fiscal year amortization expense is as follows:

ESTIMATED AMORTIZATION EXPENSE

fiscal years

(EUR thousand)

2006		24,~~072~~138
2007		23,~~986~~784
2008		12,~~720~~250
2009		1,~~360~~871
2010		1,~~127~~620

1617

EPCOS AG

CONSOLIDATED FINANCIAL STATEMENTS

6. Product warranties

The current and noncurrent accruals for product warranties developed as follows:

PRODUCT WARRANTIES

(EUR thousand)

Balance as of September 30, 2005:	5,146
Increase in accruals related to warranties issued during reporting period (+)	24,~~459~~423
Increase in accruals related to preexisting warranties (+)	~~952~~872
Utilization of accruals/reduction in liabilities (-)	(1,~~308~~930	)
Non-utilization of accruals/liabilities (-)	(~~369~~1,052	)
Reclassification tantalum sale	(320	)
Foreign exchange translation adjustment	(19	)
Foreign exchange translation adjustment	9
Accrual as of June 30, 2006	7,439
Accrual as of March 31, 2006	6,568

7. Earnings per Share

Basic earnings (loss) per share are computed by dividing net loss/income by the weighted average number of common shares outstanding during the period. Diluted earnings (loss) per share reflect the potential dilution that would occur if the potentially dilutive common shares, such as on the exercise of options, had been issued.

The following table sets forth the computation of basic and diluted earnings (loss) per share for the three-~~month~~months and ~~six~~nine-months periods ended ~~March~~June 3130, 2006 and 2005:

EARNINGS (LOSS) PER SHARE FROM CONTINUING OPERATIONS

for the 3 months and 69 months ended ~~March~~June 3130, 2006 and 2005

(EUR thousand, except share data)

	3 months ended					9 months ended	~~6 months ended~~
	2006		2005	~~2005~~		2006	~~2006~~	2005		~~2005~~
Net income (loss) -basic	4,169			(48,670	)		938			(49,118	)
Net income (loss) from continuing operations -basic	13,919		(4,285	)		22,957		(49,191	)
Interest expense on convertible bonds (net of tax)	~~526~~529		—	—		1,590	~~1,061~~	—		—
Net income (loss) -diluted	414,~~695~~448		(4,285	~~(48,670~~)	)	24,547	~~1,999~~	(49,191	)	~~(49,118~~	)
Denominator for basic earnings per share – weighted average shares	65,300,000		65,300,000	~~65,300,000~~		65,300,000	~~65,300,000~~	65,300,000		~~65,300,000~~
Effect of dilutive shares – stock options	—		—	—		—	—	—		—
Effect of dilutive shares – convertible bonds	6,500,000		—	—		6,500,000	—	—		—
Denominator for diluted earnings per share – weighted average shares adjusted for dilutive shares	71,800,000		65,300,000	~~65,300,000~~		71,800,000	~~65,300,000~~	65,300,000		~~65,300,000~~
Basic earnings per common share, EUR
Net income (loss) from continuing operations	0.1321		(0.07	~~(0.70~~)	)	0.35	~~0.14~~	(0.75	)	~~(0.69~~	)
Net loss from discontinued operations	(0.07	)		(0.04	)		(0.13	)		(0.06	)
Diluted earnings per common share, EUR
Diluted earnings per common share, EUR
Net income (loss) from continuing operations	0.20		(0.07	)		0.34		(0.75	)
Net income (loss) from continuing operations	0.12			(0.70	)		0.14			(0.69	)
Net loss from discontinued operations	(0.07	)		(0.04	)		(0.13	)		(0.06	)

1718

EPCOS AG

CONSOLIDATED FINANCIAL STATEMENTS

OnEARNINGS ~~March 31,~~(LOSS) ~~2006,~~PER ~~6,500,000~~SHARE ~~shares~~FROM ~~relating~~DISCONTINUED toOPERATIONS ~~convertible bonds outstanding were not considered because the inclusion would be antidilutive for the six-month period. In the three months ending March 31, 2006 6,500,000 shares were included.~~

for the 3 months and 9 months ended June 30, 2006 and 2005

(EUR thousand, except share data)


	3 months ended				9 months ended
	2006		2005		2006		2005
Net loss from discontinued operations -basic	(3,997	)	(3,265	)	(12,097	)	(7,477	)
Interest expense on convertible bonds (net of tax)	—		—		—		—
Net loss -diluted	(3,997	)	(3,265	)	(12,097	)	(7,477	)
Denominator for basic earnings per share – weighted average shares	65,300,000		65,300,000		65,300,000		65,300,000
Effect of dilutive shares – stock options	—		—		—		—
Effect of dilutive shares – convertible bonds	—		—		—		—
Denominator for diluted earnings per share – weighted average shares adjusted for dilutive shares	65,300,000		65,300,000		65,300,000		65,300,000
Basic earnings per common share, EUR
Net loss from discontinued operations	(0.06	)	(0.05	)	(0.18	)	(0.12	)
Diluted earnings per common share, EUR
Net loss from discontinued operations	(0.06	)	(0.05	)	(0.18	)	(0.12	)

In the discontinued operations 6,500,000 shares relating to convertible bonds outstanding were not considered because the inclusion would be antidilutive.

8. Pension plan

The following table presents the components of net pension cost for the three and ~~six~~nine months ended ~~March~~June 3130, 2006 and 2005:

PENSION COST, NET

for the 3 months and 69 months ended ~~March~~June 3130, 2006 and 2005

(EUR thousand)

3 months ended

69 months ended

2006

2005

2006

2005

Service cost

1,~~905~~822

1,~~194~~252

35,~~679~~501

23,~~471~~723

Interest cost

2,~~262~~194

2,~~141~~197

46,~~446~~640

46,~~280~~477

Expected return on plan assets

(~~452~~390

)

(~~295~~314

)

(~~828~~1,218

)

(~~584~~898

)

Amortization of unrecognized actuarial gains or losses

~~734~~646

8587

1,~~306~~952

~~170~~257

Unrecognized prior service cost

1413

2842

2639

Periodic pension cost, net

4,~~463~~285

3,~~138~~235

812,~~631~~917

69,~~363~~598

1819

EPCOS AG

CONSOLIDATED FINANCIAL STATEMENTS

9. Business Segments

FINANCIAL INFORMATION ON THE BUSINESS SEGMENTS, UNAUDITED

(EUR million)

	CapacitorsandInductors		CeramicComponents		SAWComponents	Eliminations		Consolidated total	~~Consolidated total~~
3 months ended March 31, 2006
3 months ended June 30, 2006
Orders received	~~136~~127.27		~~108~~119.29		~~103~~108.45			356.1	~~347.8~~
Net sales	~~121~~123.08		~~103~~106.23		99100.84			330.5	~~324.0~~
EBIT	(10.84	)	13.40		12.14			15.0	~~11.7~~
Interest result, net								(2.0	~~(2.8~~)	)
Income from continuing operations before income taxes and minority interest								13.0	~~8.9~~
Provision for income taxes								1.0	~~(0.5~~	)
Minority interest								(0.1	~~(0.1~~)	)
Loss from discontinued operations								(4.0	~~(4.1~~)	)
Net income								9.9	~~4.2~~
Depreciation and amortization	412.41		9.76		12.61	0.48		34.6	~~27.1~~
Capital expenditures	45.19		53.14		12.1	0.69		22.3	~~21.9~~
3 months ended March 31, 2005
3 months ended June 30, 2005
Orders received	98104.85		9093.52		8182.36			280.3	~~270.6~~
Net sales	~~104~~109.31		8691.68		8587.61			288.0	~~276.5~~
EBIT	~~(22~~0.32	)	(42.42	)	35.9			3.9	~~22.8~~
Interest result, net								(2.1	~~(1.4~~)	)
Loss from continuing operations before income taxes and minority interest									(24.2	)
Income from continuing operations before income taxes and minority interest								1.8
Provision for income taxes								(6.0	~~(21.5~~)	)
Minority interest								(0.1	~~(0.1~~)	)
Loss from discontinued operations								(3.3	~~(2.9~~)	)
Net loss								(7.6	~~(48.7~~)	)
Depreciation and amortization	197.58		9.13		15.87	0.6		33.4	~~45.0~~
Capital expenditures	97.02		2223.52		6.98	(02.16	)	39.8	~~38.3~~

With effect from October 1, 2005, the business segments “Capacitors” and “Inductors and Ferrites,” were combined to a reportable segment named “Capacitors and Inductors”, based on substantial economic and other similarities between these operating segments after the disposal of the tantalum capacitor business, which was part of the operating segment “Capacitors”.

Balances reported previously have been restated for comparative purposes given the change in the segmentation.

1920

EPCOS AG

CONSOLIDATED FINANCIAL STATEMENTS

FINANCIAL INFORMATION ON THE BUSINESS SEGMENTS, UNAUDITED

(EUR million)

	CapacitorsandInductors		CeramicComponents		SAWComponents	Eliminations	Consolidated total
6 months ended March 31, 2006
9 months ended June 30, 2006
Orders received	~~260~~387.29		~~212~~332.76		~~210~~318.27		~~683.~~1,039.2
Net sales	~~230~~354.31		~~200~~306.36		~~198~~298.26		~~628~~959.83
EBIT	(8.26	)	(1.37	)	2436.59		1530.0
Interest result, net							(57.5	)
Income from continuing operations before income taxes and minority interest							922.5
Provision for income taxes							(0.38	)
Minority interest							(0.3	)
Loss from discontinued operations							(12.1	)
Net income							10.9
Depreciation and amortization	24.8		28.7		38.0	1.7	93.2
Capital expenditures	12.8		16.2		31.8	2.0	62.8
9 months ended June 30, 2005
Orders received	306.3		270.9		237.2		814.4
Net sales	309.9		253.5		268.4		831.8
EBIT	(26.5	)	(9.6	)	20.2		(15.9	)
Interest result, net							(5.4	)
Loss from continuing operations before income taxes and minority interest							(21.3	)
Provision for income taxes							(27.8	)
Minority interest							(0.2	)
Loss from discontinued operations							(87.14	)
Net income							0.9
Net loss							(56.7	)
Depreciation and amortization	1234.75		1926.18		2548.91	01.98	58111.62
Capital expenditures	621.93		1262.85		1921.75	12.17	40108.50
6 months ended March 31, 2005
Orders received	201.8		177.7		154.6		534.1
Net sales	200.8		161.7		181.3		543.8
EBIT	(26.7	)	(7.4	)	14.3		(19.8	)
Interest result, net							(3.2	)
Loss from continuing operations before income taxes and minority interest							(23.0	)
Provision for income taxes							(21.8	)
Minority interest							(0.1	)
Loss from discontinued operations							(4.2	)
Net loss							(49.1	)
Depreciation and amortization	26.7		17.5		32.4	1.2	77.8
Capital expenditures	20.8		39.3		14.7	0.1	74.9

2021

EPCOS AG

SIGNATURES

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, thereunto duly authorized.

	EPCOS AG
Dated: May 4th, 2006	By:	/s/ Peter Knoll
Dated: August 1st, 2006	By:	/s/ Peter Knoll
	Name:	Mr. Peter Knoll
	Title:	General Counsel EPCOS AG

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