FORM 6-K

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

Report of Foreign Issuer

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

the Securities Exchange Act of 1934

 

For the month of ….		January		……………………    ………………………… ,		2012

 

		CANON INC.
		(Translation of registrant’s name into English)
		30-2, Shimomaruko 3-Chome, Ohta-ku, Tokyo 146-8501, Japan
		(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		X		Form 40-F

[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		X

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

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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.

 

 

Date….		January 30, 2012		.		By ……/s/…… Masashiro   Kobayashi………
						(Signature)*
						Masashiro   Kobayashi                      Deputy Senior General Manager                      Global Finance Accounting Center                      Canon Inc.

*Print the name and title of the signing officer under his signature.

The following materials are included.

1. CONSOLIDATED FINANCIAL RESULTS FOR THE FOURTH QUARTER AND THE FISCAL YEAR ENDED DECEMBER 31, 2011

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RESULTS FOR THE FOURTH QUARTER

AND THE FISCAL YEAR ENDED DECEMBER 31, 2011

January 30, 2012

CONSOLIDATED RESULTS

 

(Millions of yen, thousands of U.S. dollars, except per share amounts)

 

			Actual																Projected
		Year ended December 31, 2011				Year ended December 31, 2010				Change(%)				Year ended December 31, 2011				Year ending December 31, 2012				Change(%)
Net sales		¥	3,557,433			¥	3,706,901			-	4.0			$	45,608,115			¥	3,750,000			+	5.4
Operating profit			378,071				387,552			-	2.4				4,847,064				390,000			+	3.2
Income before income taxes			374,524				392,863			-	4.7				4,801,590				390,000			+	4.1
Net income attributable to Canon Inc.		¥	248,630			¥	246,603			+	0.8			$	3,187,564			¥	250,000			+	0.6
Net income attributable to Canon Inc. stockholders per share:
- Basic		¥	204.49			¥	199.71			+	2.4			$	2.62			¥	208.07			+	1.8
- Diluted			204.48				199.70			+	2.4				2.62				-				-
		Actual
		As of December 31, 2011				As of December 31, 2010				Change(%)				As of December 31, 2011
Total assets		¥	3,930,727			¥	3,983,820			-	1.3			$	50,393,936
Canon Inc. stockholders’ equity		¥	2,551,132			¥	2,645,782			-	3.6			$	32,706,821

 

Notes:		1.		Canon’s consolidated financial statements are prepared in accordance with U.S. generally accepted accounting principles.
		2.		U.S. dollar amounts are translated from yen at the rate of JPY 78= U.S.$1, the approximate exchange rate on the Tokyo Foreign Exchange Market as of December 30, 2011, solely for the convenience of the reader.

NON-CONSOLIDATED RESULTS

(Millions of yen, thousands of U.S. dollars, except per share amounts)

		Actual
		Year ended December 31, 2011				Year ended December 31, 2010				Change(%)				Year ended December 31, 2011
Net sales		¥	2,160,732			¥	2,317,043			-	6.7			$	27,701,692
Operating profit			246,914				240,365			+	2.7				3,165,564
Ordinary profit			282,052				274,742			+	2.7				3,616,051
Net income		¥	173,201			¥	152,498			+	13.6			$	2,220,526
Net income per share:
- Basic		¥	142.45			¥	123.50			+	15.3			$	1.83
- Diluted			142.45				123.49			+	15.4				1.83
Dividend per share			120.00				120.00				-				1.54
		Actual
		As of December 31, 2011				As of December 31, 2010				Change(%)				As of December 31, 2011
Total assets		¥	2,511,608			¥	2,603,429			-	3.5			$	32,200,103
Net assets		¥	1,729,096			¥	1,811,901			-	4.6			$	22,167,897

 

Note:				U.S. dollar amounts are translated from yen at the rate of JPY 78= U.S.$1, the approximate exchange rate on the Tokyo Foreign Exchange Market as of December 30, 2011, solely for the convenience of the reader.

 

Canon Inc.		30-2, Shimomaruko 3-chome, Ohta-ku,
Headquarter office		Tokyo 146-8501, Japan
		Phone: +81-3-3758-2111

 

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I. Operating Results and Financial Conditions

2011 in Review

Looking back at the global economy in 2011, amid increasing uncertainty in the second half of the year as the pace of recovery decelerated due to economic downswings in the United States and Europe, the economy as a whole continued to grow moderately, driven by emerging economies. In the United States, a lack of improvement in employment conditions and housing problems led to a lower rate of growth, while in Europe, the sovereign debt crisis had an impact on the real economy, which led to a noticeable slowdown in recovery. Emerging markets, such as China and India, maintained a high rate of growth amid concerns over the effects of tight monetary policies. In Japan, severe circumstances persisted following the Great East Japan Earthquake in March and, just as production activities began showing signs of recovery, Thailand was hit with massive flooding in October, resulting in a slowdown of the economy.

As for the markets in which Canon operates amid these conditions, within the office equipment market, demand for color network digital multifunction devices (MFDs) showed growth in all regions around the globe. As for laser printers, while robust demand in emerging markets fueled growth, European markets cooled off in the second half of the year. Within the consumer products market, demand for digital single-lens reflex (SLR) cameras continued to display healthy growth across global markets while demand for compact digital cameras grew in emerging nations but remained sluggish in developed countries. Overall demand for inkjet printers remained relatively unchanged owing to the steady growth of emerging economies. In the industry and others market, despite somewhat restrained investment in semiconductor lithography equipment used to manufacture DRAM memory devices, the market recorded robust growth overall. As for liquid crystal display (LCD) lithography equipment, despite solid demand for equipment to manufacture mid- and small-size LCD panels used in smartphones, demand for equipment used to manufacture large-size LCD panels remained sluggish.

The average value of the yen during the year was ¥79.55 against the U.S. dollar, a year-on-year appreciation of approximately ¥8, and ¥110.72 against the euro, a year-on-year appreciation of approximately ¥4.

Owing to the historically high valuation of the yen combined with the effects of the earthquake and floods, all of Canon’s businesses faced extremely demanding conditions throughout the year. Amid this harsh environment, Group-wide efforts to swiftly restore production in the aftermath of the disasters, coupled with efforts to maximize production and boost sales, led to net sales for the year totaling ¥3,557.4 billion (U.S.$45,608 million), a year-on-year decline of just 4.0%. Despite the significant negative impact of the strong yen and the effects of the earthquake and floods, the gross profit ratio rose 0.7 points year on year to 48.8%, thanks to the further acceleration of production innovation activities. Gross profit, however, decreased by 2.6% to ¥1,736.8 billion (U.S.$22,266 million) for the year. Operating expenses totaled ¥1,358.7 billion (U.S.$17,419 million), a decrease of 2.6%, owing to thorough spending cuts across the Canon Group implemented after the earthquake to control expenses more efficiently. Cost-reduction and expense-cutting activities contributed to further reinforcing the company’s financial structure, which helped make up for the significant drop in revenue in the first half of the year mainly triggered by the earthquake, while also absorbing the financial impact of the strong yen and the floods in the second half of the year. As a result, operating profit dipped 2.4% to ¥378.1 billion (U.S.$4,847 million) for the year and other income (deductions) declined ¥8.9 billion (U.S.$114 million), mainly due to foreign currency exchange losses, leading to income before income taxes of ¥374.5 billion (U.S.$4,802 million), a decrease of 4.7% year on year. Net income attributable to Canon Inc., however, grew by 0.8% to ¥248.6 billion (U.S.$3,188 million) for the year owing to the lower effective income tax rate compared with the previous year.

Basic net income attributable to Canon Inc. stockholders per share for the year was ¥204.49 (U.S.$2.62), an increase of ¥4.78 (U.S.$0.06) from the year-ago period.

 

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Results by Segment

Looking at Canon’s quarterly performance by business sector, within the Office Business Unit, amid the continued hearty demand for color network digital MFDs, such as the imageRUNNER ADVANCE C5000/C2000-series models, efforts to restore production following the earthquake led to increased sales volumes of color and monochrome network digital MFDs compared with the previous year. Sales of imagePRESS C7010VPS-series color MFDs for production printing, the first machines to be jointly developed by Canon and Océ, gained momentum and contributed to increased unit sales of production printing devices. As for laser printers, while booming demand in emerging economies fueled steady unit sales growth of primarily monochrome models in the first half of the year, demand slowed in the second half, mainly in European markets. Additionally, the appreciation of the yen also significantly impacted sales for the segment, which totaled ¥1,917.9 billion (U.S.$24,589 million), a decline of 3.5% year on year, while operating profit decreased by 11.6% to ¥259.3 billion (U.S.$3,324 million) for the year.

Within the Consumer Business Unit, although Canon was affected by supply shortages caused by the quake and flooding, efforts to ramp up production and boost sales in response to robust demand resulted in significant increases in year-on-year sales volumes for such digital SLR cameras as the competitively priced EOS Digital Rebel T3i/T2i/T3, along with the EOS 5D Mark II and the new EOS 60D advanced-amateur models. As for compact digital cameras, while such models as the PowerShot ELPH 100 HS/300 HS, PowerShot SX230 HS and PowerShot ELPH 310 HS recorded healthy sales, unit sales for the year declined due to sluggish markets in developed countries and the impact on production following the earthquake and floods. With respect to inkjet printers, although the floods in Thailand had a negative impact on production, unit sales increased year on year, largely owing to growth in emerging markets. As a result, sales for the segment, which were also negatively affected by the strong yen, dropped 5.7% year on year to ¥1,312.0 billion (U.S.$16,821 million) while operating profit decreased by 11.2% to ¥211.3 billion (U.S.$2,709 million).

In the Industry and Others Business Unit, i-line steppers recorded healthy sales thanks to active investment in semiconductor lithography equipment for the manufacture of digital semiconductor devices, which are used in smartphones and environmentally friendly products. Unit sales of LCD lithography equipment, on the other hand, dropped substantially in the face of shrinking demand for equipment used in the production of large-size panels, an area in which Canon is particularly strong. Additionally, sales of equipment used to manufacture organic LED panels, which apply vacuum technologies, increased owing to active investment by organic LED panel manufacturers. Consequently, sales for the segment totaled ¥420.9 billion (U.S.$5,396 million), down 2.8%, and operating profit totaled ¥24.3 billion (U.S.$312 million), achieving a turnaround from the year-ago period largely owing to the improvement of the gross profit ratio.

Cash Flow

During 2011, efforts to optimize inventory levels in order to avoid losing potential sales opportunities while simultaneously increasing flexibility in response to unexpected risks and events resulted in cash flow from operating activities of ¥469.6 billion (U.S.$6,020 million), a decrease of ¥274.9 billion (U.S.$3,524 million) from the previous year. Cash flow from investing activities decreased ¥85.6 billion (U.S.$1,097 million) year on year, mainly as a result of corporate acquisition conducted in the previous year, totaling ¥256.6 billion (U.S.$3,289 million). Accordingly, free cash flow totaled ¥213.0 billion (U.S.$2,731 million), a decrease of ¥189.3 billion (U.S.$2,426 million) from the previous year.

Cash flow from financing activities recorded an outlay of ¥257.5 billion (U.S.$3,301 million), mainly arising from the dividend payout and the repurchase of treasury stock. Consequently, cash and cash equivalents decreased by ¥67.4 billion (U.S.$863 million) to ¥773.2 billion (U.S.$9,913 million) from the end of the previous year, including negative foreign currency translation adjustments.

Non-consolidated Results

Non-consolidated net sales totaled ¥2,160.7 billion (U.S.$27,702 million), a year-on-year decline of 6.7%, while ordinary profit rose 2.7% to ¥282.1 billion (U.S.$3,616 million) and net income increased by 13.6% to ¥173.2 billion (U.S.$2,221 million), results made possible through the aggressive promotion of cost-reduction and expense-cutting activities.

 

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Outlook

As for the outlook in 2012, the future remains increasingly uncertain amid growing concern over a global economic slowdown due to a lack of progress in resolving the euro debt crisis. In the United States, barring any radical improvement in unemployment conditions and housing problems, the economy is expected to realize only moderate growth. In Europe, the top priority is to contain the debt crisis with the economy expected to be stagnant for the time being. Emerging economies, such as China and India, are expected to maintain high rates of growth although exports and investment will likely decline somewhat. In Japan, forecasts call for rising reconstruction demand in the wake of the Great East Japan Earthquake with the economy expected to gradually move toward recovery amid ongoing challenges.

In the businesses in which Canon is involved, within the office equipment market, despite concerns over negative effects arising from stagnant economies mainly in Europe, demand for such products as network digital MFDs and laser printers is projected to realize solid growth. With respect to the consumer products market, while solid demand for digital SLR cameras is expected in all regions around the globe, demand for compact digital cameras is projected to remain relatively unchanged in developed countries. As for inkjet printer markets, amid concerns over the business sentiment in Europe and other developed countries, demand overall is expected to stay around the same level as the year just ended. In the industry and others market, while solid demand is expected to continue for i-line steppers, a segment in which Canon excels, demand for lithography equipment used to produce large-size LCD panels will likely remain sluggish amid restrained investment among large-size LCD panel manufacturers.

With regard to currency exchange rates for the year, on which Canon’s performance outlook is based, despite the uncertainty over such factors as the euro debt crisis, along with future interest rate policies and the economic environment for major countries, Canon anticipates exchange rates of ¥75 to the U.S. dollar and ¥100 to the euro, representing appreciations of approximately ¥5 against the U.S. dollar, and approximately ¥11 against the euro compared with the previous year. Upon taking into consideration these foreign exchange rate assumptions and current economic forecasts, Canon projects full-year consolidated net sales in 2012 of ¥3,750.0 billion (U.S.$48,077 million), a year-on-year increase of 5.4%; operating profit of ¥390.0 billion (U.S.$5,000 million), a year-on-year increase of 3.2%; income before income taxes of ¥390.0 billion (U.S.$5,000 million), a year-on-year increase of 4.1%; and net income attributable to Canon Inc. of ¥250.0 billion (U.S.$3,205 million), a year-on-year increase of 0.6%.

Basic Policy Regarding Profit Distribution and Dividends for the Current Fiscal Year

Canon is being more proactive in returning profits to shareholders, mainly in the form of a dividend, taking into consideration mid-term profit forecasts, planned future investments, cash flow and other factors.

In 2011, despite the harsh business environment characterized by the historically strong yen combined with the impact of the quake and floods, Canon was able to achieve net income growth. Additionally, thanks to comprehensive cash flow management, the company realized adequate cash on hand. In light of this situation, Canon plans to distribute a full-year dividend totaling ¥120.00 (U.S.$1.54) per share (interim dividend of ¥60.00 [U.S.$0.77] per share [already distributed], and year-end dividend of ¥60.00 [U.S.$0.77] per share), the same amount on an annual basis as was distributed the previous year.

 

 

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II. Management Policy

    (1) Basic Policy

Under the corporate philosophy of kyosei—living and working together for the common good—Canon’s basic management policy is to contribute to the prosperity and well-being of the world while endeavoring to become a truly excellent global corporation targeting continued growth and development.

    (2) Management Goals

Based on this basic management policy, Canon launched the Excellent Global Corporation Plan in 1996. Through Phases I, II and III, Canon worked to build a solid management base.

In 2011, Canon embarked on a new five-year plan, Phase IV of the Excellent Global Corporation Plan, under the slogan “Aiming for the Summit! Speed & Sound Growth.”

The global economy’s engine of growth has largely shifted from developed countries to emerging countries, which is expected to lead to volatility in the business environment. Canon will take advantage of these dramatic changes and will again tackle the challenge of achieving sound growth through timely transformations tailored to the changes of the times.

In particular, the Company is focusing on the following six important management objectives.

 

1)	Achieving the overwhelming No. 1 position in all core businesses and expanding related and peripheral businesses

 

2)	Developing new business through globalized diversification and establishing the Three Regional Headquarters management system

 

3)	Establishing a world-leading globally optimized production system

 

4)	Comprehensively reinforcing global sales capabilities

 

5)	Building the foundations of an environmentally advanced corporation

 

6)	Imparting a corporate culture, and cultivating human resources befitting a truly excellent global company

By realizing these strategies, we aim to achieve net sales of more than ¥5 trillion, an operating profit ratio of more than 20%, a net income ratio of more than 10%, and a shareholders’ equity ratio of more than 75% by 2015, the final year of Phase IV. In this way, we will again aim to realize our goal of joining the ranks of the world’s top 100 companies in terms of all major management indicators.

2011 was a year in which Canon was severely tested by successive challenges, such as the Great East Japan Earthquake; a slowdown in the economic recovery, particularly in the U.S. and Europe; the historically high valuation of the yen; and massive flooding in Thailand. Although conditions are expected to continue to make it difficult to be optimistic about the future business environment, the Canon Group remains singularly focused on vigorously working towards achieving its Phase IV goals.

    (3) Business Challenges and Countermeasures

In 2012, the second year of Phase IV (2011–2015) of our Excellent Global Corporation Plan, Canon aims to again return to a path of growth, overcoming such challenges as the earthquake and flooding. The Company’s basic policy for this year is to pursue fundamental reforms, embracing the challenging environment as an opportunity to leap forward. Under this theme, we will construct a solid foundation for growth as a means to accomplish our Phase IV goals.

In order to achieve our targets, Canon has set and will actively pursue the following eight priority goals.

 

1.	Thoroughly Boost the Competitiveness of Current Core Products

Refining and further accelerating development and design capabilities with the aid of information technologies in order to make possible the planning and timely launch of exceptional products and services that are unmatched by the competition. Focusing on the creation of products and services that integrate cloud computing to quickly seize business opportunities in this new era.

 

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2.	Successfully Launch and Expand New Businesses

Carving out new business segments through the launch of strategic products such as DreamLabo and the Cinema EOS System. As for the practical application of promising new technologies, Canon aims to realize their early commercialization and will actively make use of M&A opportunities as needed.

 

3.	Thoroughly Strengthen Sales Capacity in Accordance with Market Characteristics

Expanding market share in developed countries and expanding profits by strengthening direct sales of group companies, solutions, and service businesses. In emerging countries, Canon aims to achieve sales growth that exceeds the pace of market growth by realizing sales methods and systems tailored to the actual market conditions in each country.

 

4.	Relentlessly Pursue Cost Reductions while Accelerating the Optimization of Global Production

Continuing to pursue the strategies we have implemented to date, such as automated production and in-house production, and exploring cost-reduction methods based on new ideas and innovative technologies. In addition, Canon will work to minimize transportation costs while, at the same time, strive to position manufacturing bases and allocate production in ways that minimize costs and risks from a comprehensive perspective, taking into account all possible factors such as exchange rates, tax policies, labor costs, procurement and logistics.

 

5.	Establish an R&D Structure and Cultivate Technologies that will Open Future Possibilities

Establishing R&D centers in the U.S. and Europe with the aim of creating continuous innovation in concert with efforts in Japan. In addition, cultivating basic technologies in the medical and industrial equipment fields, areas positioned as next-generation business domains.

 

6.	Achieve Total Optimization of Company-Wide Business Processes

Thoroughly utilizing Canon’s company-wide integrated IT systems, pursuing total optimization of all business processes, including development, production, sales and service.

 

7.	Further Instill a Commitment to “Quality First”

Targeting the elimination of quality problems by advancing the methods used to manage material defects and working to thoroughly embed quality from the upstream stages of product planning and design.

 

8.	Strengthen Foundation as an Excellent Company

Strengthening global management functions and cultivating human resources to lead these reforms. Promoting thorough compliance and executing the “Canon Environmental Vision” based on the newly drafted “Canon Group CSR Activity Policy.”

 

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CANON INC. AND SUBSIDIARIES

CONSOLIDATED

III. Financial Statements

1.    CONSOLIDATED BALANCE SHEETS

 

		Millions of yen												Thousands of U.S. dollars
		As of    December 31,    2011				As of    December 31,    2010				Change				As of December 31, 2011
ASSETS
Current assets:
Cash and cash equivalents		¥	773,227			¥	840,579			¥	(67,352)			$	9,913,167
Short-term investments			125,517				96,815				28,702				1,609,192
Trade receivables, net			533,208				557,504				(24,296)				6,836,000
Inventories			476,704				384,777				91,927				6,111,590
Prepaid expenses and other current assets			244,649				250,754				(6,105)				3,136,525
Total current assets			2,153,305				2,130,429				22,876				27,606,474
Noncurrent receivables			16,772				16,771				1				215,026
Investments			51,790				81,529				(29,739	)			663,974
Property, plant and equipment, net			1,190,836				1,201,968				(11,132	)			15,267,128
Intangible assets, net			138,030				153,021				(14,991	)			1,769,615
Other assets			379,994				400,102				(20,108	)			4,871,719
Total assets		¥	3,930,727			¥	3,983,820				¥(53,093)			$	50,393,936
LIABILITIES AND EQUITY
Current liabilities:
Short-term loans and current portion of long-term debt		¥	8,343			¥	7,200			¥	1,143			$	106,962
Trade payables			380,532				383,251				(2,719)				4,878,615
Accrued income taxes			45,900				72,482				(26,582)				588,462
Accrued expenses			299,422				299,710				(288)				3,838,744
Other current liabilities			159,651				134,298				25,353				2,046,807
Total current liabilities			893,848				896,941				(3,093)				11,459,590
Long-term debt, excluding current installments			3,368				4,131				(763)				43,179
Accrued pension and severance cost			249,604				197,609				51,995				3,200,051
Other noncurrent liabilities			70,240				75,502				(5,262)				900,513
Total liabilities			1,217,060				1,174,183				42,877				15,603,333
Equity:
Canon Inc. stockholders’ equity:
Common stock			174,762				174,762				-				2,240,538
Additional paid-in capital			401,572				400,425				1,147				5,148,359
Legal reserve			59,004				57,930				1,074				756,462
Retained earnings			3,059,298				2,965,237				94,061				39,221,769
Accumulated other comprehensive income (loss)			(481,773)				(390,459)				(91,314)				(6,176,577)
Treasury stock, at cost			(661,731)				(562,113)				(99,618)				(8,483,730)
Total Canon Inc. stockholders’ equity			2,551,132				2,645,782				(94,650)				32,706,821
Noncontrolling interests			162,535				163,855				(1,320)				2,083,782
Total equity			2,713,667				2,809,637				(95,970)				34,790,603
Total liabilities and equity		¥	3,930,727			¥	3,983,820			¥	(53,093)			$	50,393,936
		Millions of yen												Thousands of U.S. dollars
		As of December 31,    2011				As of December 31,    2010								As of December 31,    2011
Notes:
1. Allowance for doubtful receivables		¥	11,563			¥	14,920							$	148,244
2. Accumulated depreciation			2,038,682				1,909,703								26,136,949
3. Accumulated other comprehensive income (loss):
Foreign currency translation adjustments			(378,863)				(325,612)								(4,857,218)
Net unrealized gains and losses on securities			1,003				3,020								12,859
Net gains and losses on derivative instruments			455				917								5,833
Pension liability adjustments			(104,368)				(68,784)								(1,338,051)

 

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CANON INC. AND SUBSIDIARIES

CONSOLIDATED

2.   CONSOLIDATED STATEMENTS OF INCOME

 

 

 

 

 

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CANON INC. AND SUBSIDIARIES

CONSOLIDATED

3.  DETAILS OF SALES

 

 

 

 

Notes: 1. The primary products included in each of the segments are as follows:

2. The principal countries and regions included in each regional category are as follows:

 

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CANON INC. AND SUBSIDIARIES

CONSOLIDATED

4.  CONSOLIDATED STATEMENTS OF EQUITY

Millions of yen

		Common Stock				Additional paid-in capital				Legal reserve				Retained earnings				Accumulated other comprehensive income (loss)				Treasury stock				Total Canon Inc. stockholders’ equity				Noncontrolling interests				Total equity
Balance at December 31, 2009		¥	174,762			¥	404,293			¥	54,687			¥	2,871,437			¥	(260,818	)		¥	(556,252	)		¥	2,688,109			¥	191,291			¥	2,879,400
Acquisition of subsidiaries																															19,168				19,168
Equity transactions with noncontrolling interests and other							(3,787	)							(13,453	)			(680	)			55,250				37,330				(43,214	)			(5,884	)
Dividends paid to Canon Inc. stockholders															(136,103	)											(136,103	)							(136,103	)
Dividends paid to noncontrolling interests																															(2,827	)			(2,827	)
Transfers to legal reserve											3,243				(3,243	)											-								-
Comprehensive income:
Net income															246,603												246,603				6,100				252,703
Other comprehensive income (loss), net of tax
Foreign currency translation adjustments																			(122,667	)							(122,667	)			(4,251	)			(126,918	)
Net unrealized gains and losses on securities																			(222	)							(222	)			76				(146	)
Net gains and losses on derivative instruments																			833								833				(66	)			767
Pension liability adjustments																			(6,905	)							(6,905	)			(2,422	)			(9,327	)
Total comprehensive income (loss)																											117,642				(563	)			117,079
Repurchase of treasury stock, net							(81	)							(4	)							(61,111	)			(61,196	)							(61,196	)
Balance at December 31, 2010		¥	174,762			¥	400,425			¥	57,930			¥	2,965,237			¥	(390,459	)		¥	(562,113	)		¥	2,645,782			¥	163,855			¥	2,809,637
Equity transactions with noncontrolling interests and other							1,193								(609	)											584				(247	)			337
Dividends paid to Canon Inc. stockholders															(152,784	)											(152,784	)							(152,784	)
Dividends paid to noncontrolling interests																															(2,838	)			(2,838	)
Transfers to legal reserve											1,074				(1,074	)											-								-
Comprehensive income:
Net income															248,630												248,630				5,479				254,109
Other comprehensive income (loss), net of tax
Foreign currency translation adjustments																			(53,251	)							(53,251	)			(835	)			(54,086	)
Net unrealized gains and losses on securities																			(2,017	)							(2,017	)			(99	)			(2,116	)
Net gains and losses on derivative instruments																			(462	)							(462	)			13				(449	)
Pension liability adjustments																			(35,584	)							(35,584	)			(2,793	)			(38,377	)
Total comprehensive income																											157,316				1,765				159,081
Repurchase of treasury stock, net							(46	)							(102	)							(99,618	)			(99,766	)							(99,766	)
Balance at December 31, 2011		¥	174,762			¥	401,572			¥	59,004			¥	3,059,298			¥	(481,773	)		¥	(661,731	)		¥	2,551,132			¥	162,535			¥	2,713,667
Thousands of U.S. dollars
Balance at December 31, 2010		$	2,240,538			$	5,133,654			$	742,693			$	38,015,859			$	(5,005,885	)		$	(7,206,577	)		$	33,920,282			$	2,100,705			$	36,020,987
Equity transactions with noncontrolling interests and other							15,295								(7,808	)											7,487				(3,166	)			4,321
Dividends paid to Canon Inc. stockholders															(1,958,769	)											(1,958,769	)							(1,958,769	)
Dividends paid to noncontrolling interests																															(36,385	)			(36,385	)
Transfers to legal reserve											13,769				(13,769	)											-								-
Comprehensive income:
Net income															3,187,564												3,187,564				70,244				3,257,808
Other comprehensive income (loss), net of tax
Foreign currency translation adjustments																			(682,705	)							(682,705	)			(10,705	)			(693,410	)
Net unrealized gains and losses on securities																			(25,859	)							(25,859	)			(1,269	)			(27,128	)
Net gains and losses on derivative instruments																			(5,923	)							(5,923	)			166				(5,757	)
Pension liability adjustments																			(456,205	)							(456,205	)			(35,808	)			(492,013	)
Total comprehensive income																											2,016,872				22,628				2,039,500
Repurchase of treasury stock, net							(590	)							(1,308	)							(1,277,153	)			(1,279,051	)							(1,279,051	)
Balance at December 31, 2011		$	2,240,538			$	5,148,359			$	756,462			$	39,221,769			$	(6,176,577	)		$	(8,483,730	)		$	32,706,821			$	2,083,782			$	34,790,603

 

- 10 -

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CANON INC. AND SUBSIDIARIES

CONSOLIDATED

5.  CONSOLIDATED STATEMENTS OF CASH FLOWS

 

 

- 11 -

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CANON INC. AND SUBSIDIARIES

CONSOLIDATED

6.  NOTE FOR GOING CONCERN ASSUMPTION

      Not applicable.

7.  SEGMENT INFORMATION

(1) SEGMENT INFORMATION BY BUSINESS UNIT

 

 

- 12 -

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CANON INC. AND SUBSIDIARIES

CONSOLIDATED

 

Results for the fiscal year				Millions of yen												Thousands of U.S. dollars
				Year ended December 31, 2011				Year ended December 31, 2010				Change(%)				Year ended December 31, 2011
Office
Net sales:
		External customers		¥	1,912,112			¥	1,978,945			-	3.4			$	24,514,256
		Intersegment			5,831				8,324			-	29.9				74,757
		Total			1,917,943				1,987,269			-	3.5				24,589,013
Operating cost and expenses					1,658,678				1,693,947			-	2.1				21,265,103
Operating profit					259,265				293,322			-	11.6				3,323,910
Total assets					821,782				855,893			-	4.0				10,535,667
Depreciation and amortization					93,196				103,548			-	10.0				1,194,821
Capital expenditures				¥	53,888			¥	53,115			+	1.5			$	690,872
Consumer
Net sales:
		External customers		¥	1,311,023			¥	1,389,622			-	5.7			$	16,807,987
		Intersegment			1,021				1,705			-	40.1				13,090
		Total			1,312,044				1,391,327			-	5.7				16,821,077
Operating cost and expenses					1,100,750				1,153,262			-	4.6				14,112,180
Operating profit					211,294				238,065			-	11.2				2,708,897
Total assets					452,809				414,022			+	9.4				5,805,244
Depreciation and amortization					45,609				41,665			+	9.5				584,731
Capital expenditures				¥	48,192			¥	36,266			+	32.9			$	617,846
Industry and Others
Net sales:
		External customers		¥	334,298			¥	338,334			-	1.2			$	4,285,872
		Intersegment			86,565				94,624			-	8.5				1,109,807
		Total			420,863				432,958			-	2.8				5,395,679
Operating cost and expenses					396,563				442,789			-	10.4				5,084,141
Operating profit (loss)					24,300				(9,831)				-				311,538
Total assets					362,638				307,029			+	18.1				4,649,205
Depreciation and amortization					29,685				37,387			-	20.6				380,577
Capital expenditures				¥	37,648			¥	27,105			+	38.9			$	482,667
Corporate and Eliminations
Net sales:
		External customers		¥	-			¥	-				-			$	-
		Intersegment			(93,417)				(104,653)				-				(1,197,654)
		Total			(93,417)				(104,653)				-				(1,197,654)
Operating cost and expenses					23,371				29,351				-				299,627
Operating profit					(116,788)				(134,004)				-				(1,497,281)
Total assets					2,293,498				2,406,876			-	4.7				29,403,820
Depreciation and amortization					92,853				93,593			-	0.8				1,190,422
Capital expenditures				¥	122,753			¥	77,061			+	59.3			$	1,573,756
Consolidated
Net sales:
		External customers		¥	3,557,433			¥	3,706,901			-	4.0			$	45,608,115
		Intersegment			-				-				-				-
		Total			3,557,433				3,706,901			-	4.0				45,608,115
Operating cost and expenses					3,179,362				3,319,349			-	4.2				40,761,051
Operating profit					378,071				387,552			-	2.4				4,847,064
Total assets					3,930,727				3,983,820			-	1.3				50,393,936
Depreciation and amortization					261,343				276,193			-	5.4				3,350,551
Capital expenditures				¥	262,481			¥	193,547			+	35.6			$	3,365,141

 

- 13 -

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CANON INC. AND SUBSIDIARIES

CONSOLIDATED

(2)  SEGMENT INFORMATION BY GEOGRAPHIC AREA

 

Results for the fourth quarter				Millions of yen												Thousands of U.S. dollars
				Three months ended December 31, 2011				Three months ended December 31, 2010				Change(%)				Three months ended December 31, 2011
Japan
Net sales:
		External customers		¥	235,536			¥	249,834				-              5.7			$	3,019,692
		Intersegment			453,351				517,387				-            12.4				5,812,193
		Total			688,887				767,221				-            10.2				8,831,885
Operating cost and expenses					573,720				654,934				-            12.4				7,355,385
Operating profit				¥	115,167			¥	112,287				+              2.6			$	1,476,500
Americas
Net sales:
		External customers		¥	270,657			¥	296,872				-              8.8			$	3,469,962
		Intersegment			3,865				2,841				+            36.0				49,551
		Total			274,522				299,713				-              8.4				3,519,513
Operating cost and expenses					270,760				294,476				-              8.1				3,471,282
Operating profit					¥3,762			¥	5,237				-            28.2			$	48,231
Europe
Net sales:
		External customers		¥	290,453			¥	339,566				-            14.5			$	3,723,756
		Intersegment			1,198				839				+            42.8				15,359
		Total			291,651				340,405				-            14.3				3,739,115
Operating cost and expenses					280,512				332,306				-            15.6				3,596,307
Operating profit				¥	11,139			¥	8,099				+            37.5			$	142,808
Asia and Oceania
Net sales:
		External customers		¥	168,111			¥	181,594				-              7.4			$	2,155,269
		Intersegment			183,399				194,786				-              5.8				2,351,269
		Total			351,510				376,380				-              6.6				4,506,538
Operating cost and expenses					351,680				368,997				-              4.7				4,508,717
Operating profit (loss)				¥	(170	)		¥	7,383				-			$	(2,179	)
Corporate and Eliminations
Net sales:
		External customers		¥	-			¥	-				-			$	-
		Intersegment			(641,813	)			(715,853	)			-				(8,228,372	)
		Total			(641,813	)			(715,853	)			-				(8,228,372	)
Operating cost and expenses					(606,525	)			(665,694	)			-				(7,775,961	)
Operating profit				¥	(35,288	)		¥	(50,159	)			-			$	(452,411	)
Consolidated
Net sales:
		External customers		¥	964,757			¥	1,067,866				-              9.7			$	12,368,679
		Intersegment			-				-				-				-
		Total			964,757				1,067,866				-              9.7				12,368,679
Operating cost and expenses					870,147				985,019				-            11.7				11,155,730
Operating profit				¥	94,610			¥	82,847				+            14.2			$	1,212,949

 

- 14 -

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CANON INC. AND SUBSIDIARIES

CONSOLIDATED

 

Results for the fiscal year				Millions of yen												Thousands of U.S. dollars
				Year ended December 31, 2011				Year ended December 31, 2010				Change(%)				Year ended December 31, 2011
Japan
Net sales:
		External customers		¥	807,883			¥	854,208			-	5.4			$	10,357,474
		Intersegment			1,873,157				1,974,591			-	5.1				24,014,834
		Total			2,681,040				2,828,799			-	5.2				34,372,308
Operating cost and expenses					2,273,336				2,398,439			-	5.2				29,145,334
Operating profit					407,704				430,360			-	5.3				5,226,974
Total assets				¥	1,236,468			¥	1,321,572			-	6.4			$	15,852,154
Americas
Net sales:
		External customers		¥	952,833			¥	1,008,200			-	5.5			$	12,215,808
		Intersegment			16,217				7,975			+	103.3				207,910
		Total			969,050				1,016,175			-	4.6				12,423,718
Operating cost and expenses					948,593				993,310			-	4.5				12,161,449
Operating profit					20,457				22,865			-	10.5				262,269
Total assets				¥	250,131			¥	251,587			-	0.6			$	3,206,808
Europe
Net sales:
		External customers		¥	1,109,256			¥	1,163,452			-	4.7			$	14,221,231
		Intersegment			4,681				3,489			+	34.2				60,013
		Total			1,113,937				1,166,941			-	4.5				14,281,244
Operating cost and expenses					1,069,489				1,126,521			-	5.1				13,711,398
Operating profit					44,448				40,420			+	10.0				569,846
Total assets				¥	427,030			¥	472,785			-	9.7			$	5,474,744
Asia and Oceania
Net sales:
		External customers		¥	687,461			¥	681,041			+	0.9			$	8,813,602
		Intersegment			744,179				723,423			+	2.9				9,540,757
		Total			1,431,640				1,404,464			+	1.9				18,354,359
Operating cost and expenses					1,388,580				1,357,663			+	2.3				17,802,308
Operating profit					43,060				46,801			-	8.0				552,051
Total assets				¥	442,263			¥	421,250			+	5.0			$	5,670,038
Corporate and Eliminations
Net sales:
		External customers		¥	-			¥	-				-			$	-
		Intersegment			(2,638,234)				(2,709,478)				-				(33,823,514)
		Total			(2,638,234)				(2,709,478)				-				(33,823,514)
Operating cost and expenses					(2,500,636)				(2,556,584)				-				(32,059,438)
Operating profit					(137,598)				(152,894)				-				(1,764,076)
Total assets				¥	1,574,835			¥	1,516,626			+	3.8			$	20,190,192
Consolidated
Net sales:
		External customers		¥	3,557,433			¥	3,706,901			-	4.0			$	45,608,115
		Intersegment			-				-				-				-
		Total			3,557,433				3,706,901			-	4.0				45,608,115
Operating cost and expenses					3,179,362				3,319,349			-	4.2				40,761,051
Operating profit					378,071				387,552			-	2.4				4,847,064
Total assets				¥	3,930,727			¥	3,983,820			-	1.3			$	50,393,936

 

- 15 -

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CANON INC. AND SUBSIDIARIES

CONSOLIDATED

 

8.  BASIS

OF PRESENTATION AND SIGNIFICANT ACCOUNTING POLICIES

(1) GROUP POSITION

 

1.

Number of Group Companies

 

		December 31, 2011				December 31, 2010				Change
Subsidiaries			277				294				(17	)
Affiliates			11				14				(3	)
Total			288				308				(20	)

 

2.

Change in Group Entities

 

Subsidiaries
Addition:		9 companies
Removal:		26 companies
Affiliates(Carried at Equity Basis)
Removal:		3 companies

 

3.

Subsidiaries Listed on Domestic Stock Exchange

Tokyo Stock Exchange (1st section): Canon Marketing Japan Inc., Canon Electronics Inc.

JASDAQ:  Showa Information Systems Co., Ltd.

(2) SIGNIFICANT ACCOUNTING POLICIES

Canon’s consolidated financial statements are prepared in accordance with U.S. generally accepted accounting principles.

 

- 16 -

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CANON INC. AND SUBSIDIARIES

CONSOLIDATED

9.  NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(1) NET INCOME ATTRIBUTABLE TO CANON INC. STOCKHOLDERS PER SHARE

 

 

(2)	FINANCE RECEIVABLES AND OPERATING LEASES, ACQUISITIONS, MARKETABLE SECURITIES, DEFERRED TAX ACCOUNTING, EMPLOYEE RETIREMENT AND SEVERANCE BENEFITS, STOCK OPTIONS, DERIVATIVE CONTRACTS AND OTHERS

The disclosure is omitted as it is not considered significant in this report.

(3) SUBSEQUENT EVENT

There is no significant subsequent event.

 

- 17 -

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CANON INC.

NON-CONSOLIDATED

10.  NON-CONSOLIDATED BALANCE SHEETS

          ( Parent company only )

 

 

- 18 -

---

CANON INC.

NON-CONSOLIDATED

11.  NON-CONSOLIDATED STATEMENTS OF INCOME

          ( Parent company only )

 

 

- 19 -

---

CANON INC.

NON-CONSOLIDATED

12. NON-CONSOLIDATED STATEMENTS OF CHANGES IN STOCKHOLDERS’ EQUITY

( Parent company only )

 

		Millions of yen
		Year ended December 31, 2011				Year ended December 31, 2010
Stockholders’ equity
Common stock
Balance at the end of previous period		¥	174,762			¥	174,762
Changes of items during the period
Total changes of items during the period			-				-
Balance at the end of current period			174,762				174,762
Capital surplus
Additional paid-in capital
Balance at the end of previous period			306,288				306,288
Changes of items during the period
Total changes of items during the period			-				-
Balance at the end of current period			306,288				306,288
Other capital surplus
Balance at the end of previous period			-				-
Changes of items during the period
Total changes of items during the period			-				-
Balance at the end of current period			-				-
Retained earnings
Legal reserve
Balance at the end of previous period			22,114				22,114
Changes of items during the period
Total changes of items during the period			-				-
Balance at the end of current period			22,114				22,114
Other retained earnings
Reserve for special depreciation
Balance at the end of previous period			796				1,566
Changes of items during the period
Transfer to reserve for special depreciation			-				83
Reversal of reserve for special depreciation			(425)				(853)
Total changes of items during the period			(425)				(770)
Balance at the end of current period			371				796
Reserve for deferral of capital gain on property
Balance at the end of previous period			2,913				2,701
Changes of items during the period
Transfer to reserve for deferral of capital gain on property			165				304
Reversal of reserve for deferral of capital gain on property			(95)				(92)
Total changes of items during the period			70				212
Balance at the end of current period			2,983				2,913
Special reserves
Balance at the end of previous period			1,249,928				1,249,928
Changes of items during the period
Total changes of items during the period			-				-
Balance at the end of current period			1,249,928				1,249,928
Retained earnings
Balance at the end of previous period			613,287				609,793
Changes of items during the period
Transfer to reserve for special depreciation			-				(83)
Reversal of reserve for special depreciation			425				853
Transfer to reserve for deferral of capital gain on property			(165)				(304)
Reversal of reserve for deferral of capital gain on property			95				92
Dividends paid			(152,784)				(136,103)
Net income			173,201				152,498
Disposal of treasury stock			(102)				(6)
Changes by share exchanges			-				(13,453)
Total changes of items during the period			20,670				3,494
Balance at the end of current period			633,957				613,287

 

- 20 -

---

CANON INC.

NON-CONSOLIDATED

 

		Millions of yen
		Year ended December 31, 2011				Year ended December 31, 2010
Treasury stock
Balance at the end of previous period			(562,113)				(556,252)
Changes of items during the period
Purchase of treasury stock			(100,038)				(61,436)
Disposal of treasury stock			420				18
Changes by share exchanges			-				55,557
Total changes of items during the period			(99,618)				(5,861)
Balance at the end of current period			(661,731)				(562,113)
Total stockholders’ equity
Balance at the end of previous period			1,807,975				1,810,900
Changes of items during the period
Dividends paid			(152,784)				(136,103)
Net income			173,201				152,498
Purchase of treasury stock			(100,038)				(61,436)
Disposal of treasury stock			318				12
Changes by share exchanges			-				42,104
Total changes of items during the period			(79,303)				(2,925)
Balance at the end of current period			1,728,672				1,807,975
Valuation and translation adjustments
Net unrealized gains(losses) on securities
Balance at the end of previous period			1,358				1,384
Changes of items during the period
Net changes of items other than stockholders’ equity			(3,465)				(26)
Total changes of items during the period			(3,465)				(26)
Balance at the end of current period			(2,107)				1,358
Net deferred profits(losses) on hedges
Balance at the end of previous period			1,127				(376)
Changes of items during the period
Net changes of items other than stockholders’ equity			(739)				1,503
Total changes of items during the period			(739)				1,503
Balance at the end of current period			388				1,127
Subscription rights to shares
Balance at the end of previous period			1,441				810
Changes of items during the period
Net changes of items other than stockholders’ equity			702				631
Total changes of items during the period			702				631
Balance at the end of current period			2,143				1,441
Total net assets
Balance at the end of previous period			1,811,901				1,812,718
Changes of items during the period
Dividends paid			(152,784)				(136,103)
Net income			173,201				152,498
Purchase of treasury stock			(100,038)				(61,436)
Disposal of treasury stock			318				12
Changes by share exchanges			-				42,104
Net changes of items other than stockholders’ equity			(3,502)				2,108
Total changes of items during the period			(82,805)				(817)
Balance at the end of current period		¥	1,729,096			¥	1,811,901

 

- 21 -

---

CANON INC.

NON-CONSOLIDATED

13.  NOTE FOR GOING CONCERN ASSUMPTION

(Parent company only)

Not applicable.

 

- 22 -

---

NON-CONSOLIDATED

Directors

(Current Titles are Shown in the Parentheses)

(1) Changes of Representative Directors

Representative Director, Chairman & President & CEO		Fujio Mitarai		(Representative Director, Chairman & CEO)
Senior Adviser		Tsuneji Uchida		(Representative Director, President & COO)

(2) Candidates for Directors to be promoted

Executive Vice President		Kunio Watanabe		(Senior Managing Director, Group Executive of Corporate Planning Development Headquarters)
Senior Managing Director		Toshio Homma		(Managing Director, Chief Executive of L Printer Products Operations)
Senior Managing Director		Masaki Nakaoka		(Managing Director, Chief Executive of Office Imaging Products Operations)
Senior Managing Director		Haruhisa Honda		(Managing Director, Group Executive of Production Engineering Headquarters)

(3) Candidates for new Directors to be appointed

Hiroyuki Suematsu		(Executive Officer, Deputy Chief Executive of Peripheral Products Operations)
Shigeyuki Uzawa		(Executive Officer, Chief Executive of Optical Products Operations)
Kenichi Nagasawa		(Executive Officer, Group Executive of Corporate Intellectual Property & Legal Headquarters)
Naoji Otsuka		(Executive Officer, Deputy Chief Executive of Inkjet Products Operations)

(4) Candidate for new Corporate Auditor to be appointed

Kengo Uramoto		(Group Executive of Human Resources Management & Organization Headquarters)

(5) Directors to be retired

Advisor to be appointed		Tomonori Iwashita		(Managing Director)
Advisor to be appointed		Masahiro Osawa		(Managing Director)
Advisor to be appointed		Katsuichi Shimizu		(Managing Director)
Advisor to be appointed		Ryoichi Bamba		(Managing Director)

(6) Corporate Auditor to be retired

Advisor to be appointed		Keijiro Yamazaki		(Corporate Auditor)

 

- 23 -

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NON-CONSOLIDATED

Executive Officers

(1) Candidates for Executive Officers to be promoted

 

Senior Executive Officer		Sachio Kageyama		(Executive Officer, Group Executive of Global Manufacturing Headquarters)
Senior Executive Officer		Masanori Yamada		(Executive Officer, Deputy Chief Executive of Office Imaging Products Operations)
Senior Executive Officer		Akio Noguchi		(Executive Officer, Deputy Chief Executive of Peripheral Products Operations)

(2) Candidates for new Executive Officers

 

Rokus van Iperen		(Chairman & CEO of Océ N.V.)
Yuichi Ishizuka		(Executive Vice President of Canon U.S.A., Inc.)
Aitake Wakiya		(Deputy Group Executive of Finance & Accounting Headquarters)
Kazuhiko Noguchi		(Group Executive of External Relations Headquarters)
Kazuto Ono		(Senior General Manager of Finance & Accounting Headquarters)
Eiji Osanai		(Senior General Manager of Production Engineering Research Laboratory)
Hiroaki Takeishi		(Senior General Manager of Semiconductor Production Equipment PLM Center 1)

 

- 24 -

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Canon Inc.

January 30, 2012

CONSOLIDATED FINANCIAL RESULTS FOR THE FOURTH QUARTER

AND THE FISCAL YEAR ENDED DECEMBER 31, 2011

SUPPLEMENTARY REPORT

TABLE OF CONTENTS

 

				PAGE
1.		SALES BY GEOGRAPHIC AREA AND BUSINESS UNIT (2011)			S    1
2.		SALES BY GEOGRAPHIC AREA AND BUSINESS UNIT (2012/Projection)			S    2
3.		SEGMENT INFORMATION BY BUSINESS UNIT (2011)			S    3
4.		OTHER INCOME / DEDUCTIONS (2011)			S    3
5.		SEGMENT INFORMATION BY BUSINESS UNIT (2012/Projection)			S    4
6.		OTHER INCOME / DEDUCTIONS (2012/Projection)			S    4
7.		BREAKDOWN OF PRODUCT SALES WITHIN BUSINESS UNIT			S    5
8.		SALES GROWTH IN LOCAL CURRENCY			S    5
9.		PROFITABILITY			S    6
10.		IMPACT OF FOREIGN EXCHANGE RATES			S    6
11.		STATEMENTS OF CASH FLOWS			S    6
12.		R&D EXPENDITURE			S    7
13.		INCREASE IN PP&E & DEPRECIATION AND AMORTIZATION			S    7
14.		INVENTORIES			S    7
15.		DEBT RATIO			S    7
16.		OVERSEAS PRODUCTION RATIO			S    7
17.		NUMBER OF EMPLOYEES			S    7

 

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Canon Inc.

 

1. SALES BY GEOGRAPHIC AREA AND BUSINESS UNIT (2011)		(Millions of yen)

				2011								2010										Change year over year
				4th quarter				Year				4th quarter				Year						4th quarter				Year
Japan
		Office			97,192				362,528				96,233				376,928						+1.0	%			-3.8	%
		Consumer			61,590				187,397				70,798				216,509						-13.0	%			-13.4	%
		Industry and Others			42,538				144,525				31,138				102,312						+36.6	%			+41.3	%
		Total			201,320				694,450				198,169				695,749						+1.6	%			-0.2	%
Overseas
		Office			400,266				1,549,584				451,086				1,602,017						-11.3	%			-3.3	%
		Consumer			310,905				1,123,626				341,083				1,173,113						-8.8	%			-4.2	%
		Industry and Others			52,266				189,773				77,528				236,022						-32.6	%			-19.6	%
		Total			763,437				2,862,983				869,697				3,011,152						-12.2	%			-4.9	%
Americas
		Office			153,937				588,190				169,823				601,090						-9.4	%			-2.1	%
		Consumer			109,762				335,158				118,812				379,522						-7.6	%			-11.7	%
		Industry and Others			10,605				38,607				13,475				42,687						-21.3	%			-9.6	%
		Total			274,304				961,955				302,110				1,023,299						-9.2	%			-6.0	%
Europe
		Office			179,701				696,239				208,654				733,216						-13.9	%			-5.0	%
		Consumer			105,012				391,747				123,921				407,994						-15.3	%			-4.0	%
		Industry and Others			5,935				25,079				10,240				31,264						-42.0	%			-19.8	%
		Total			290,648				1,113,065				342,815				1,172,474						-15.2	%			-5.1	%
Asia and Oceania
		Office			66,628				265,155				72,609				267,711						-8.2	%			-1.0	%
		Consumer			96,131				396,721				98,350				385,597						-2.3	%			+2.9	%
		Industry and Others			35,726				126,087				53,813				162,071						-33.6	%			-22.2	%
		Total			198,485				787,963				224,772				815,379						-11.7	%			-3.4	%
Intersegment
		Office			883				5,831				1,958				8,324						-54.9	%			-29.9	%
		Consumer			270				1,021				359				1,705						-24.8	%			-40.1	%
		Industry and Others			19,226				86,565				23,260				94,624						-17.3	%			-8.5	%
		Eliminations			(20,379	)			(93,417	)			(25,577	)			(104,653	)					-				-
		Total			0				0				0				0						-				-
Total
		Office			498,341				1,917,943				549,277				1,987,269						-9.3	%			-3.5	%
		Consumer			372,765				1,312,044				412,240				1,391,327						-9.6	%			-5.7	%
		Industry and Others			114,030				420,863				131,926				432,958						-13.6	%			-2.8	%
		Eliminations			(20,379	)			(93,417	)			(25,577	)			(104,653	)					-				-
		Total			964,757				3,557,433				1,067,866				3,706,901						-9.7	%			-4.0	%

 

- S1 -

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Canon Inc.

2. SALES BY GEOGRAPHIC AREA AND BUSINESS UNIT (2012/Projection)

 

(1) Sales by business unit		(Millions of yen)

				2012 (P)				2011						Change year over  year
					Year				Year					Year
		Office			1,923,000				1,917,943					+0.3%
		Consumer			1,454,800				1,312,044					+10.9%
		Industry and Others			456,800				420,863					+8.5%
		Eliminations			(84,600	)			(93,417	)				-
		Total			3,750,000				3,557,433					+5.4%
														(P)=Projection
(2) Sales by region														(Millions of yen)
				2012 (P)				2011						Change year over  year
					Year				Year					Year
		Japan			801,100				694,450					+15.4%
		Overseas			2,948,900				2,862,983					+3.0%
		Americas			963,000				961,955					+0.1%
		Europe			1,098,200				1,113,065					-1.3%
		Asia and Oceania			887,700				787,963					+12.7%
		Total			3,750,000				3,557,433					+5.4%
														(P)=Projection

 

- S2 -

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Canon Inc.

 

3. SEGMENT INFORMATION BY BUSINESS UNIT (2011)

(Millions of yen)

				2011								2010										Change year over year
					4th quarter				Year				4th quarter				Year						4th quarter				Year
Office
		External customers			497,458				1,912,112				547,319				1,978,945						-9.1%				-3.4%
		Intersegment			883				5,831				1,958				8,324						-54.9%				-29.9%
		Total sales			498,341				1,917,943				549,277				1,987,269						-9.3%				-3.5%
		Operating profit			68,594				259,265				61,151				293,322						+12.2%				-11.6%
		% of sales			13.8%				13.5%				11.1%				14.8%						-				-
Consumer
		External customers			372,495				1,311,023				411,881				1,389,622						-9.6%				-5.7%
		Intersegment			270				1,021				359				1,705						-24.8%				-40.1%
		Total sales			372,765				1,312,044				412,240				1,391,327						-9.6%				-5.7%
		Operating profit			50,898				211,294				65,022				238,065						-21.7%				-11.2%
		% of sales			13.7%				16.1%				15.8%				17.1%						-				-
Industry and Others
		External customers			94,804				334,298				108,666				338,334						-12.8%				-1.2%
		Intersegment			19,226				86,565				23,260				94,624						-17.3%				-8.5%
		Total sales			114,030				420,863				131,926				432,958						-13.6%				-2.8%
		Operating profit			3,777				24,300				(5,844	)			(9,831	)					-				-
		% of sales			3.3%				5.8%				-4.4%				-2.3%						-				-
Corporate and Eliminations
		External customers			-				-				-				-						-				-
		Intersegment			(20,379	)			(93,417	)			(25,577	)			(104,653	)					-				-
		Total sales			(20,379	)			(93,417	)			(25,577	)			(104,653	)					-				-
		Operating profit			(28,659	)			(116,788	)			(37,482	)			(134,004	)					-				-
Consolidated
		External customers			964,757				3,557,433				1,067,866				3,706,901						-9.7%				-4.0%
		Intersegment			-				-				-				-						-				-
		Total sales			964,757				3,557,433				1,067,866				3,706,901						-9.7%				-4.0%
		Operating profit			94,610				378,071				82,847				387,552						+14.2%				-2.4%
		% of sales			9.8%				10.6%				7.8%				10.5%						-				-
4. OTHER INCOME/DEDUCTIONS (2011)																										(Millions of yen)
				2011								2010										Change year over year
				4th quarter				Year				4th quarter				Year						4th quarter				Year
		Interest and dividend, net			2,455				7,444				964				4,091						+1,491				+3,353
		Forex gain / loss			2,372				(3,287	)			(446	)			3,089						+2,818				(6,376	)
		Equity earnings / loss of affiliated companies			(1,714	)			(7,368	)			(551	)			10,471						(1,163	)			(17,839	)
		Other, net			(5,123	)			(336	)			(280	)			(12,340	)					(4,843	)			+12,004
		Total			(2,010	)			(3,547	)			(313	)			5,311						(1,697	)			(8,858	)

 

- S3 -

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Canon Inc.

 

5. SEGMENT INFORMATION BY BUSINESS UNIT (2012/Projection)															(Millions of yen	)
				2012 (P)				2011						Change year over year
				Year				Year						Year
Office
		External customers			1,920,900				1,912,112						+0.5%
		Intersegment			2,100				5,831						-64.0%
		Total sales			1,923,000				1,917,943						+0.3%
		Operating profit			226,500				259,265						-12.6%
		% of sales			11.8%				13.5%						-
Consumer
		External customers			1,453,800				1,311,023						+10.9%
		Intersegment			1,000				1,021						-2.1%
		Total sales			1,454,800				1,312,044						+10.9%
		Operating profit			260,900				211,294						+23.5%
		% of sales			17.9%				16.1%						-
Industry and Others
		External customers			375,300				334,298						+12.3%
		Intersegment			81,500				86,565						-5.9%
		Total sales			456,800				420,863						+8.5%
		Operating profit			22,500				24,300						-7.4%
		% of sales			4.9%				5.8%						-
Corporate and Eliminations
		External customers			-				-						-
		Intersegment			(84,600)				(93,417)						-
		Total sales			(84,600)				(93,417)						-
		Operating profit			(119,900)				(116,788)						-
Consolidated
		External customers			3,750,000				3,557,433						+5.4%
		Intersegment			-				-						-
		Total sales			3,750,000				3,557,433						+5.4%
		Operating profit			390,000				378,071						+3.2%
		% of sales			10.4%				10.6%						-
															(P)=Projection
6. OTHER INCOME / DEDUCTIONS (2012/Projection)														(Millions of yen)
				2012 (P)				2011						Change year over year
					Year				Year						Year
		Interest and dividend, net			4,900				7,444						(2,544	)
		Forex gain / loss			(2,600	)			(3,287	)					+687
		Equity earnings / loss of affiliated companies			1,100				(7,368	)					+8,468
		Other, net			(3,400	)			(336	)					(3,064	)
		Total			0				(3,547	)					+3,547
															(P)=Projection

 

- S4 -

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Canon Inc.

7. BREAKDOWN OF PRODUCT SALES WITHIN BUSINESS UNIT

				2012 (P)				2011								2010
					Year				4th quarter				Year				4th quarter				Year
Office
Monochrome copiers					15	%			15	%			15	%			14	%			15	%
Color copiers					18	%			19	%			17	%			16	%			17	%
Other printing devices					46	%			46	%			48	%			46	%			50	%
Others					21	%			20	%			20	%			24	%			18	%
Consumer
Cameras					75	%			71	%			71	%			70	%			70	%
Inkjet printers					21	%			24	%			24	%			25	%			24	%
Others					4	%			5	%			5	%			5	%			6	%
Industry and Others
Lithography equipment					20	%			26	%			19	%			25	%			23	%
Others					80	%			74	%			81	%			75	%			77	%
												(P)=Projection
8. SALES GROWTH IN LOCAL CURRENCY
				2012 (P)				2011
					Year				4th quarter				Year
Office
		Japan			-				+1.0	%			-3.8	%
		Overseas			-				-5.0	%			+3.6	%
		Total			+6.5	%			-4.1	%			+2.1	%
Consumer
		Japan			-				-13.0	%			-13.4	%
		Overseas			-				-3.2	%			+2.0	%
		Total			+17.5	%			-4.9	%			-0.5	%
Industry and Others
		Japan			-				+36.6	%			+41.3	%
		Overseas			-				-31.0	%			-17.4	%
		Total			+9.9	%			-12.6	%			-1.6	%
Total
		Japan			+15.4	%			+1.6	%			-0.2	%
		Overseas			+10.4	%			-6.6	%			+1.3	%
		Americas			+6.5	%			-3.0	%			+2.5	%
		Europe			+8.2	%			-8.8	%			0.0	%
		Asia and Oceania			+18.2	%			-8.1	%			+1.9	%
		Total			+11.4	%			-5.1	%			+1.0	%
				(P)=Projection

 

- S5 -

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Canon Inc.

9. PROFITABILITY

				2012 (P)				2011				2010
				Year				Year				Year
ROE					9.6%				9.6%				9.2%
ROA					6.3%				6.3%				6.3%
													(P)=Projection
*1 Based on Net Income attributable to Canon Inc. and Total Canon Inc. Stockholders’ Equity *2 Based on Net Income attributable to Canon Inc.   10. IMPACT OF FOREIGN EXCHANGE RATES
(1) Exchange rates																					(Yen	)
				2012 (P)				2011								2010
				Year				4th quarter				Year				4th quarter				Year
		Yen/US$			75.00				77.40				79.55				82.68				87.40
		Yen/Euro			100.00				104.22				110.72				111.99				114.97
																					(P)=Projection
(2) Impact of foreign exchange rates on sales (Year over year)												(Billions of yen)
				2012 (P)				2011
				Year				4th quarter				Year
		US$			(60.8	)			(19.9	)			(111.6	)
		Euro			(118.8	)			(21.1	)			(40.6	)
		Other currencies			(20.2	)			(2.2	)			(9.7	)
		Total			(199.8	)			(43.2	)			(161.9	)
													(P)=Projection
(3) Impact of foreign exchange rates per yen				(Billions of yen)
				2012 (P)
				Year
On sales
		US$			19.3
		Euro			10.1
On operating profit
		US$			9.2
		Euro			5.4
					(P)=Projection
11. STATEMENTS OF CASH FLOWS																					(Millions of yen	)
				2012 (P)				2011								2010
				Year				4th quarter				Year				4th quarter				Year
Net cash provided by operating activities					540,000				126,979				469,562				224,986				744,413
Net cash used in investing activities					(380,000	)			(54,543	)			(256,543)				(98,931	)			(342,133	)
Free cash flow					160,000				72,436				213,019				126,055				402,280
Net cash used in financing activities					(150,000	)			(5,944	)			(257,513	)			(11,939	)			(279,897	)
Effect of exchange rate changes on cash and cash equivalents					(13,200	)			(4,896	)			(22,858	)			(32,936	)			(76,838	)
Net change in cash and cash equivalents					(3,200	)			61,596				(67,352	)			81,180				45,545
Cash and cash equivalents at end of period					770,000				773,227				773,227				840,579				840,579
																					(P)=Projection

 

-S6-

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Canon Inc.

 

12. R&D EXPENDITURE												(Millions of yen)
				2012 (P)				2011				2010
				Year				Year				Year
Office					-				103,378				96,156
Consumer					-				82,731				82,843
Industry and Others					-				27,061				21,062
Corporate and Eliminations					-				94,630				115,756
		Total			320,000				307,800				315,817
% of sales					8.5%				8.7%				8.5%
													(P)=Projection
13. INCREASE IN PP&E & DEPRECIATION AND AMORTIZATION
												(Millions of yen)
				2012 (P)				2011				2010
				Year				Year				Year
		Increase in PP&E
		Office			-				48,729				48,969
		Consumer			-				46,091				35,017
		Industry and Others			-				36,582				26,109
		Corporate and Eliminations			-				95,467				48,881
		Total			300,000				226,869				158,976
		Depreciation and amortization
		Office			-				93,196				103,548
		Consumer			-				45,609				41,665
		Industry and Others			-				29,685				37,387
		Corporate and Eliminations			-				92,853				93,593
		Total			270,000				261,343				276,193
													(P)=Projection
14. INVENTORIES
(1) Inventories												(Millions of yen)
				2011				2010				Difference
				Dec.31				Dec.31
		Office			207,690				186,817				+20,873
		Consumer			148,954				107,261				+41,693
		Industry and Others			120,060				90,699				+29,361
		Total			476,704				384,777				+91,927
(2) Inventories/Sales*					(Days)
					2011				2010				Difference
					Dec.31				Dec.31
		Office			39				32				+7
		Consumer			38				27				+11
		Industry and Others			115				88				+27
		Total			46				35				+11
		*Index based on the previous six months sales.
15. DEBT RATIO
				2011				2010				Difference
				Dec.31				Dec.31
		Total debt / Total assets			0.3	%			0.3	%			0.0	%
16. OVERSEAS PRODUCTION RATIO
				2011				2010
				Year				Year
		Overseas production ratio			52	%			49	%
17. NUMBER OF EMPLOYEES
				2011				2010				Difference
				Dec.31				Dec.31
		Japan			70,346				71,954				(1,608)
		Overseas			127,961				125,432				+2,529
		Total			198,307				197,386				+921

 

- S7 -