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		……………………………………………… ,		2013

 

		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, 2013				By ……/s/…… Toshihide   Aoki………
						(Signature)*
						Toshihide   Aoki                      General Manager                      Consolidated Accounting Div.                      Canon Inc.

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

The following materials are included.

1. RESULTS FOR THE FOURTH QUARTER AND THE FISCAL YEAR ENDED DECEMBER 31, 2012

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RESULTS FOR THE FOURTH QUARTER

AND THE FISCAL YEAR ENDED DECEMBER 31, 2012

January 30, 2013

CONSOLIDATED RESULTS

 

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

 

					Actual																Projected
				Year ended December 31, 2012				Year ended December 31, 2011				Change(%)				Year ended December 31, 2012				Year ending December 31, 2013				Change(%)
Net sales				¥	3,479,788			¥	3,557,433				-          2.2			$	39,997,563			¥	3,810,000				+          9.5
Operating profit					323,856				378,071				-        14.3				3,722,483				410,000				+        26.6
Income before income taxes					342,557				374,524				-          8.5				3,937,437				400,000				+        16.8
Net income attributable to Canon Inc.				¥	224,564			¥	248,630				-          9.7			$	2,581,195			¥	255,000				+        13.6
Net income attributable to Canon Inc. stockholders per share:
- Basic				¥	191.34			¥	204.49				-          6.4			$	2.20			¥	221.20				+        15.6
- Diluted					191.34				204.48				-          6.4				2.20				-				-
				Actual
				As of December 31, 2012				As of December 31, 2011				Change(%)				As of December 31, 2012
Total assets				¥	3,955,503			¥	3,930,727				+          0.6			$	45,465,552
Canon Inc. stockholders’ equity				¥	2,598,026			¥	2,551,132				+          1.8			$	29,862,368

 

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 87= U.S.$1, the approximate exchange rate on the Tokyo Foreign Exchange Market as of December 28, 2012, 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, 2012				Year ended December 31, 2011				Change(%)				Year ended December 31, 2012
Net sales		¥	2,113,420			¥	2,160,732				-            2.2			$	24,292,184
Operating profit			198,695				246,914				-          19.5				2,283,851
Ordinary profit			235,728				282,052				-          16.4				2,709,517
Net income		¥	157,647			¥	173,201				-            9.0			$	1,812,034
Net income per share:
- Basic		¥	134.32			¥	142.45				-            5.7			$	1.54
- Diluted			134.32				142.45				-            5.7				1.54
Dividend per share			130.00				120.00				+            8.3				1.49
		Actual
		As of December 31, 2012				As of December 31, 2011				Change(%)				As of December 31, 2012
Total assets		¥	2,337,002			¥	2,511,608				-            7.0			$	26,862,092
Net assets		¥	1,594,688			¥	1,729,096				-            7.8			$	18,329,747

 

Note:				U.S. dollar amounts are translated from yen at the rate of JPY 87= U.S.$1, the approximate exchange rate on the Tokyo Foreign Exchange Market as of December 28, 2012, 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

 

- 1 -

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I. Operating Results and Financial Conditions

2012 in Review

Looking back at the global economy in 2012, in the United States there were signs of improvement in employment conditions and housing issues as the economy continued to grow moderately. In Europe, the economic downturn in Southern European countries spread to Germany and other major countries, having a serious impact on the overall European economy. Economic growth in emerging markets such as China and India slowed down somewhat due to lagging exports and the effects of tight monetary policies. In Japan, despite the reconstruction demand seen at the beginning of the year from the previous year’s earthquake in Japan and flooding in Thailand, the economy entered a phase of recession during the latter half of the year due to the slowdown in the global economy and reduced domestic demand. As for the global economy overall, the effects of the European financial crisis were felt worldwide, leading to a widespread slowdown.

As for the markets in which Canon operates amid these conditions, while demand for office color multifunction devices (MFDs) showed growth in Japan and other regions, demand for laser printers remained sluggish mainly in European markets. Demand for interchangeable-lens digital cameras continued to display strong growth across global markets while demand for compact digital cameras shrunk not only in developed countries, but also in China and some emerging nations. Overall demand for inkjet printers also waned due to the weak economy. In the industry and others segment, demand for semiconductor lithography equipment remained restrained due to weak capital investment for memory devices while lithography equipment used in the production of flat panel display (FPDs) encountered sluggish demand for large-size FPD panels despite the healthy market for mid- and small-size FPD panels used mainly in smartphones and tablet PCs.

The average value of the yen during the year was ¥79.96 against the U.S. dollar, a slight depreciation compared with the previous year, and ¥102.80 against the euro, a year-on-year appreciation of approximately ¥8.

Owing to the economic slowdown mainly in Europe and the high valuation of the yen against the euro, combined with the cooling off of demand in China during the latter half of the year, the Canon Group faced increasingly challenging conditions across all of its businesses. Amid this harsh environment, although Canon continued Group-wide efforts to expand sales, mainly for competitively priced products such as interchangeable-lens digital cameras and office equipment, net sales for the year declined 2.2% to ¥3,479.8 billion (U.S.$39,998 million). The gross profit ratio declined by 1.4 points year on year to 47.4% due to the significant impact of the strong yen and product mix. Thanks to Group-wide efforts to thoroughly reduce spending, operating expenses decreased by 2.4% to ¥1,326.1 billion (U.S.$15,243 million). Other income (deductions) achieved a turnaround of ¥22.2 billion (U.S.$256 million) owing to an improvement in foreign currency exchange gain, resulting in income before income taxes of ¥342.6 billion (U.S.$3,937 million), a decrease of 8.5% year on year. Net income attributable to Canon Inc. decreased by 9.7% to ¥224.6 billion (U.S.$2,581 million) from the previous year.

Basic net income attributable to Canon Inc. stockholders per share for the year was ¥191.34 (U.S.$ 2.20), a year-on-year decrease of ¥13.15 (U.S.$ 0.15).

 

- 2 -

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Results by Segment

Looking at Canon’s full-year performance by business sector, within the Office Business Unit, amid the continued hearty demand for color MFDs, such as imageRUNNER ADVANCE C5000/C2000-series models, sales volumes of both monochrome and color MFDs increased from the year-ago period. In addition, sales of imagePRESS C7010VPS-series color MFDs for production printing, machines that were jointly developed by Canon and Océ, contributed to sales growth. As for laser printers, sales volumes declined mainly in Europe due to deterioration in business sentiment. Consequently, sales for the segment totaled ¥1,757.6 billion (U.S.$20,202 million), a decline of 8.4% year on year, while operating profit decreased by 21.5% to ¥203.6 billion (U.S.$2,340 million) for the year.

Within the Imaging System Business Unit, unit sales of interchangeable-lens digital cameras increased thanks to the competitively priced EOS Rebel series along with the EOS 5D Mark III and EOS 60D advanced-amateur models. As for compact digital cameras, despite the significant deterioration of market conditions, sales volume remained at the same level as the previous year thanks to robust sales of the PowerShot ELPH 110 HS and PowerShot A2300. With respect to inkjet printers, sales volume surpassed that for the year-ago period owing to the early restoration of production following the flooding in Thailand. Furthermore, the company successfully entered new markets with the launch of its CINEMA EOS SYSTEM lineup of professional cinematography products, targeting Hollywood and the broader motion picture and television production market, along with the new DreamLabo 5000, targeting the commercial photo printing market. As a result, sales for the segment increased by 7.2% year on year to ¥1,406.0 billion (U.S.$16,161 million) while operating profit decreased by 0.5% to ¥210.3 billion (U.S.$2,417 million).

As for the Industry and Others Business Unit, among semiconductor lithography equipment, while sales of i-line steppers remained at the same level as the previous year owing to demand for image sensors and LED elements, sales volume overall decreased due to restrained capital expenditure for memory devices. As for flat-panel-display lithography equipment, unit sales 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. Consequently, sales for the segment totaled ¥407.8 billion (U.S.$4,688 million), a decrease of 3.1% year on year, and operating profit totaled ¥5.9 billion (U.S.$68 million), a decrease of 75.7%.

Cash Flow

During 2012, cash flow from operating activities totaled ¥384.1 billion (U.S.$4,415 million), a decrease of ¥85.5 billion (U.S.$983 million) from the previous year as a result of efforts to optimize inventory levels in order to avoid losing potential sales opportunities while increasing flexibility in responding to emergency situations, along with the recovery of production following the previous year’s flooding in Thailand. Cash flow from investing activities totaled ¥212.7 billion (U.S.$2,445 million), a decrease of ¥43.8 billion (U.S.$503 million) year on year, due to the net effect of increased capital investment focused on boosting production and reducing the amounts of time deposits included in short-term investments. Accordingly, free cash flow totaled ¥171.4 billion (U.S.$1,970 million), a decrease of ¥41.7 billion (U.S.$479 million) from the previous year.

Cash flow from financing activities recorded an outlay of ¥319.7 billion (U.S.$3,675 million), mainly arising from the dividend payout and the repurchasing of treasury stock. Consequently, cash and cash equivalents decreased by ¥106.5 billion (U.S.$1,225 million) to ¥666.7 billion (U.S.$7,663 million) from the end of the previous year, including positive foreign currency translation adjustments.

Non-consolidated Results

Non-consolidated net sales totaled ¥2,113.4 billion (U.S.$24,292 million), a year-on-year decrease of 2.2%, ordinary profit declined by 16.4% to ¥235.7 billion (U.S.$2,710 million), and net income decreased by 9.0% to ¥157.6 billion (U.S.$1,812 million).

 

- 3 -

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Outlook

As for the outlook in 2013, while the challenging conditions from the previous year will continue, the global economy is expected to realize a moderate recovery in the latter half of the year. The U.S. economy is expected to achieve moderate growth thanks to improved unemployment conditions and housing issues. In Europe, since a significant amount of time will likely be needed to realize a recovery, the region’s economy will likely remain sluggish throughout the year. Emerging economies such as China and India are expected to recover from the previous year’s temporary slowdown to achieve high rates of growth. Japan, buoyed by aggressive economic policies and the recovery of the global economy, is expected to emerge from recession in the latter half of the year.

In the businesses in which Canon is involved, demand for such products as MFDs is projected to grow steadily while the laser printer market is expected to follow a path of recovery. Demand for interchangeable-lens digital cameras is expected to continue increasing across all regions. While the compact digital camera market is projected to shrink due to economic conditions and the spread of smartphones, the impact on advanced-functionality, high-value-added products will likely be relatively small. As for inkjet printers, demand overall is expected to remain around the same level as that for the year just ended. In the industry and others segment, while demand is expected to remain sluggish for i-line steppers due to restrained capital investment, demand for lithography equipment used to produce large-size flat-panel displays will likely pick up in line with the recovery in demand for large-size panels.

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 and economic conditions in other major countries, Canon anticipates exchange rates of ¥85 to the U.S. dollar and ¥115 to the euro, representing depreciations of approximately ¥5 against the U.S. dollar, and approximately ¥12 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 2013 of ¥3,810.0 billion (U.S.$43,793 million), a year-on-year increase of 9.5%; operating profit of ¥410.0 billion (U.S.$4,713 million), a year-on-year increase of 26.6%; income before income taxes of ¥400.0 billion (U.S.$4,598 million), a year-on-year increase of 16.8%; and net income attributable to Canon Inc. of ¥255.0 billion (U.S.$2,931 million), a year-on-year increase of 13.6%.

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 2012, despite the challenging business environment characterized by the European recession, Canon was able to generate adequate cash on hand thanks to comprehensive cash flow management and subsequent improvements in management efficiency. In light of this situation, Canon plans to distribute a full-year dividend totaling ¥130 (U.S.$1.49) per share (interim dividend of ¥60 [U.S.$0.69] per share [already distributed], and year-end dividend of ¥70 [U.S.$0.80] per share), a regular dividend of ¥120 (U.S.$1.38) and a commemorative dividend of ¥10 (U.S.$0.11) to mark the 75^th anniversary of the company’s establishment.

 

 

- 4 -

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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.

From 2011, Canon embarked on a new five-year plan, Phase IV (2011–2015), under the slogan “Aiming for the Summit – Speed & Sound Growth –.”

The global economy’s engine of growth is undergoing a large shift from developed countries to emerging countries, a shift that is expected to lead to volatility in the business environment. Canon will take advantage of this dramatic change and will again tackle the challenge of achieving sound growth through timely transformation tailored to the changing times.

In particular, Canon 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

Canon began 2012 with the aim of returning to a path of growth, overcoming such trials as the earthquake that struck Japan the previous year. But due to such factors as the prolonged European debt crisis and the yen’s appreciation, the business environment that the Canon Group faced continued to prove exceptionally challenging. Going forward, although prospects for economic recovery in the United States and Europe and growth in emerging markets remain unclear and uncertain, the Canon Group aims to work together, overcoming challenges to firmly achieve sales and profit growth.

(3) Business Challenges and Countermeasures

2013 represents the third year of Phase IV (2011–2015) of the Excellent Global Corporation Plan, a year in which Canon will implement various measures in line with the basic policy Canon has established for the year of decisively implementing reforms and achieving sound business growth in the face of the current turbulent business environment.

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

 

1.	Reinforcing Business by Creating Outstanding Hit Products

Canon aims to develop next-generation products and creates business models that take into account the dramatic changes taking place in the market. It will further reinforce business profitability, launching in a timely manner new products that are of sound quality and are screened through a process of selection and concentration.

 

2.	Securely Launching New Businesses and Achieving Sound Expansion

Canon will work to fundamentally strengthen its business targeting the rapidly growing market for network camera systems. Canon will also work to bolster its CINEMA EOS SYSTEM and its MR System (MREAL). Additionally, Canon will take full advantage of M&A opportunities to further broaden the range of its business.

 

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3.	Thoroughly Strengthening Sales in Accordance with Respective Market Characteristics

In the office products domain, Canon will leverage its integration with Océ to accelerate the securing of large client accounts, while in the consumer products domain, Canon will strengthen its sales network of mass distributors. In emerging markets such as China, Canon will build infrastructure to expand sales in accordance with the unique characteristics in each country.

 

4.	Relentlessly Pursuing Cost Reductions and Accelerating Optimization of Global Production

Canon will accelerate the application of automated and robot-based production. Canon will also expand its application of in-house production, which has focused mainly on key components, to include general parts and molds. Additionally, Canon will review production allocation in order to promote a globally optimized production structure.

 

5.	Concentrating on Cultivation of Technological Themes that Lead the Way to the Future

Canon will accelerate innovation by further filtering down key themes and concentrating resources.

 

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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,    2012				As of    December 31,    2011				Change				As of    December 31,    2012
ASSETS
Current assets:
Cash and cash equivalents		¥	666,678			¥	773,227			¥	(106,549)			$	7,662,966
Short-term investments			28,322				125,517				(97,195)				325,540
Trade receivables, net			573,375				533,208				40,167				6,590,517
Inventories			551,623				476,704				74,919				6,340,494
Prepaid expenses and other current assets			262,258				244,649				17,609				3,014,460
Total current assets			2,082,256				2,153,305				(71,049)				23,933,977
Noncurrent receivables			19,702				16,772				2,930				226,460
Investments			56,617				51,790				4,827				650,770
Property, plant and equipment, net			1,260,364				1,190,836				69,528				14,486,943
Intangible assets, net			135,736				138,030				(2,294)				1,560,184
Other assets			400,828				379,994				20,834				4,607,218
Total assets		¥	3,955,503			¥	3,930,727			¥	24,776			$	45,465,552
LIABILITIES AND EQUITY
Current liabilities:
Short-term loans and current portion of long-term debt		¥	1,866			¥	8,343			¥	(6,477)			$	21,448
Trade payables			325,235				380,532				(55,297)				3,738,333
Accrued income taxes			60,057				45,900				14,157				690,310
Accrued expenses			291,348				299,422				(8,074)				3,348,828
Other current liabilities			165,929				159,651				6,278				1,907,230
Total current liabilities			844,435				893,848				(49,413)				9,706,149
Long-term debt, excluding current installments			2,117				3,368				(1,251)				24,333
Accrued pension and severance cost			272,131				249,604				22,527				3,127,943
Other noncurrent liabilities			82,518				70,240				12,278				948,483
Total liabilities			1,201,201				1,217,060				(15,859)				13,806,908
Equity:
Canon Inc. stockholders’ equity:
Common stock			174,762				174,762				-				2,008,759
Additional paid-in capital			401,547				401,572				(25)				4,615,483
Legal reserve			61,663				59,004				2,659				708,770
Retained earnings			3,138,976				3,059,298				79,678				36,080,184
Accumulated other comprehensive income (loss)			(367,249)				(481,773)				114,524				(4,221,253)
Treasury stock, at cost			(811,673)				(661,731)				(149,942)				(9,329,575)
Total Canon Inc. stockholders’ equity			2,598,026				2,551,132				46,894				29,862,368
Noncontrolling interests			156,276				162,535				(6,259)				1,796,276
Total equity			2,754,302				2,713,667				40,635				31,658,644
Total liabilities and equity		¥	3,955,503			¥	3,930,727			¥	24,776			$	45,465,552
		Millions of yen												Thousands of U.S. dollars
		As of    December 31,    2012				As of    December 31,    2011								As of    December 31,    2012
Notes:
1. Allowance for doubtful receivables		¥	12,970			¥	11,563							$	149,080
2. Accumulated depreciation			2,159,453				2,038,682								24,821,299
3. Accumulated other comprehensive income (loss):
Foreign currency translation adjustments			(247,734)				(378,863)								(2,847,517)
Net unrealized gains and losses on securities			4,146				1,003								47,655
Net gains and losses on derivative instruments			(4,462)				455								(51,287)
Pension liability adjustments			(119,199)				(104,368)								(1,370,104)

 

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CANON INC. AND SUBSIDIARIES

CONSOLIDATED

2. CONSOLIDATED STATEMENTS OF INCOME AND CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME

    Consolidated statements of income

 

Results for the fourth quarter		Millions of yen																Thousands of U.S. dollars
		Three months ended     December 31, 2012				Three months ended     December 31, 2011				Change(%)								Three months ended     December 31, 2012
Net sales		¥	951,394			¥	964,757			-					1.4			$	10,935,563
Cost of sales			519,002				505,236												5,965,540
Gross profit			432,392				459,521			-					5.9				4,970,023
Operating expenses:
Selling, general and administrative expenses			280,052				281,269												3,218,989
Research and development expenses			74,636				83,642												857,885
			354,688				364,911												4,076,874
Operating profit			77,704				94,610			-					17.9				893,149
Other income (deductions):
Interest and dividend income			1,703				2,616												19,575
Interest expense			(509)				(161)												(5,851)
Other, net			10,210				(4,465)												117,357
			11,404				(2,010)												131,081
Income before income taxes			89,108				92,600			-					3.8				1,024,230
Income taxes			24,588				28,423												282,621
Consolidated net income			64,520				64,177												741,609
Less: Net income attributable to noncontrolling interests			3,347				2,734												38,471
Net income attributable to Canon Inc.		¥	61,173			¥	61,443			-					0.4			$	703,138
Results for the fiscal year		Millions of yen																Thousands of U.S. dollars
		Year ended     December 31, 2012				Year ended     December 31, 2011				Change(%)								Year ended     December 31, 2012
Net sales		¥	3,479,788			¥	3,557,433			-					2.2			$	39,997,563
Cost of sales			1,829,822				1,820,670												21,032,437
Gross profit			1,649,966				1,736,763			-					5.0				18,965,126
Operating expenses:
Selling, general and administrative expenses			1,029,646				1,050,892												11,835,011
Research and development expenses			296,464				307,800												3,407,632
			1,326,110				1,358,692												15,242,643
Operating profit			323,856				378,071			-					14.3				3,722,483
Other income (deductions):
Interest and dividend income			6,792				8,432												78,069
Interest expense			(1,022)				(988)												(11,747)
Other, net			12,931				(10,991)												148,632
			18,701				(3,547)												214,954
Income before income taxes			342,557				374,524			-					8.5				3,937,437
Income taxes			110,112				120,415												1,265,655
Consolidated net income			232,445				254,109												2,671,782
Less: Net income attributable to noncontrolling interests			7,881				5,479												90,587
Net income attributable to Canon Inc.		¥	224,564			¥	248,630			-					9.7			$	2,581,195

 

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CANON INC. AND SUBSIDIARIES

CONSOLIDATED

Consolidated statements of comprehensive income

 

Results for the fourth quarter		Millions of yen																Thousands of U.S. dollars
		Three months ended December 31, 2012				Three months ended December 31, 2011				Change(%)								Three months ended December 31, 2012
Consolidated net income		¥	64,520			¥	64,177				+				0.5			$	741,609
Other comprehensive income (loss), net of tax
Foreign currency translation adjustments			127,103				4,244												1,460,954
Net unrealized gains and losses on securities			2,337				1,996												26,862
Net gains and losses on derivative instruments			(5,123)				(1,619)												(58,885)
Pension liability adjustments			(13,736)				(39,878)												(157,885)
			110,581				(35,257)												1,271,046
Comprehensive income			175,101				28,920				+				505.5				2,012,655
Less: Comprehensive income (loss) attributable to noncontrolling interests			6,047				(922)												69,506
Comprehensive income attributable to Canon Inc.		¥	169,054			¥	29,842				+				466.5			$	1,943,149
Results for the fiscal year		Millions of yen																Thousands of U.S. dollars
		Year ended December 31, 2012				Year ended December 31, 2011				Change(%)								Year ended December 31, 2012
Consolidated net income		¥	232,445			¥	254,109				-				8.5			$	2,671,782
Other comprehensive income (loss), net of tax
Foreign currency translation adjustments			133,735				(54,086)												1,537,184
Net unrealized gains and losses on securities			3,265				(2,116)												37,529
Net gains and losses on derivative instruments			(4,880)				(449)												(56,092)
Pension liability adjustments			(12,787)				(38,377)												(146,978)
			119,333				(95,028)												1,371,643
Comprehensive income			351,778				159,081				+				121.1				4,043,425
Less: Comprehensive income attributable to noncontrolling interests			10,824				1,765												124,414
Comprehensive income attributable to Canon Inc.		¥	340,954			¥	157,316				+				116.7			$	3,919,011

 

- 9 -

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CANON INC. AND SUBSIDIARIES

CONSOLIDATED

3.  DETAILS OF SALES

 

Results for the fourth quarter		Millions of yen																Thousands of U.S. dollars
Sales by business unit		Three months ended December 31, 2012				Three months ended December 31, 2011				Change(%)								Three months ended December 31, 2012
Office		¥	456,323			¥	498,341				-				8.4				$5,245,092
Imaging System			410,675				372,765				+				10.2				4,720,402
Industry and Others			106,768				114,030				-				6.4				1,227,218
Eliminations			(22,372)				(20,379)								-				(257,149)
Total		¥	951,394			¥	964,757				-				1.4				$10,935,563

 

		Millions of yen																Thousands of U.S. dollars
Sales by region		Three months ended December 31, 2012				Three months ended December 31, 2011				Change(%)								Three months ended December 31, 2012
Japan		¥	198,803			¥	201,320				-				1.3			$	2,285,092
Overseas:
Americas			266,352				274,304				-				2.9				3,061,517
Europe			288,909				290,648				-				0.6				3,320,793
Asia and Oceania			197,330				198,485				-				0.6				2,268,161
			752,591				763,437				-				1.4				8,650,471
Total		¥	951,394			¥	964,757				-				1.4			$	10,935,563

 

Results for the fiscal year		Millions of yen																Thousands of U.S. dollars
Sales by business unit		Year ended December  31, 2012				Year ended December 31,  2011				Change(%)								Year ended December  31, 2012
Office		¥	1,757,575			¥	1,917,943				-				8.4			$	20,202,011
Imaging System			1,405,971				1,312,044				+				7.2				16,160,586
Industry and Others			407,840				420,863				-				3.1				4,687,816
Eliminations			(91,598)				(93,417)								-				(1,052,850)
Total		¥	3,479,788			¥	3,557,433				-				2.2			$	39,997,563

 

		Millions of yen																Thousands of U.S. dollars
Sales by region		Year ended December  31, 2012				Year ended December 31, 2011				Change(%)								Year ended December 31, 2012
Japan		¥	720,286			¥	694,450				+				3.7			$	8,279,149
Overseas:
Americas			939,873				961,955				-				2.3				10,803,138
Europe			1,014,038				1,113,065				-				8.9				11,655,609
Asia and Oceania			805,591				787,963				+				2.2				9,259,667
			2,759,502				2,862,983				-				3.6				31,718,414
Total		¥	3,479,788			¥	3,557,433				-				2.2			$	39,997,563

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

*The “Consumer Business Unit” has been renamed the “Imaging System Business Unit”.

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

 

- 10 -

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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, 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
Equity transactions with noncontrolling interests and other							(16	)							152				(1,866	)							(1,730	)			(13,591	)			(15,321	)
Dividends paid to Canon Inc. stockholders															(142,362	)											(142,362	)							(142,362	)
Dividends paid to noncontrolling interests																															(3,492	)			(3,492	)
Transfers to legal reserve											2,659				(2,659	)											-								-
Comprehensive income:
Net income															224,564												224,564				7,881				232,445
Other comprehensive income (loss), net of tax
Foreign currency translation adjustments																			132,704								132,704				1,031				133,735
Net unrealized gains and losses on securities																			3,148								3,148				117				3,265
Net gains and losses on derivative instruments																			(4,882	)							(4,882	)			2				(4,880	)
Pension liability adjustments																			(14,580	)							(14,580	)			1,793				(12,787	)
Total comprehensive income																											340,954				10,824				351,778
Repurchase of treasury stock, net							(9	)							(17	)							(149,942	)			(149,968	)							(149,968	)
Balance at December 31, 2012		¥	174,762			¥	401,547			¥	61,663			¥	3,138,976			¥	(367,249	)		¥	(811,673	)		¥	2,598,026			¥	156,276			¥	2,754,302
																															Thousands of U.S. dollars
Balance at December 31, 2011		$	2,008,759			$	4,615,770			$	678,207			$	35,164,345			$	(5,537,621	)		$	(7,606,104	)		$	29,323,356			$	1,868,219			$	31,191,575
Equity transactions with noncontrolling interests and other							(184	)							1,748				(21,448	)							(19,884	)			(156,219	)			(176,103	)
Dividends paid to Canon Inc. stockholders															(1,636,345	)											(1,636,345	)							(1,636,345	)
Dividends paid to noncontrolling interests																															(40,138	)			(40,138	)
Transfers to legal reserve											30,563				(30,563	)											-								-
Comprehensive income:
Net income															2,581,195												2,581,195				90,587				2,671,782
Other comprehensive income (loss), net of tax
Foreign currency translation adjustments																			1,525,333								1,525,333				11,851				1,537,184
Net unrealized gains and losses on securities																			36,184								36,184				1,345				37,529
Net gains and losses on derivative instruments																			(56,115	)							(56,115	)			23				(56,092	)
Pension liability adjustments																			(167,586	)							(167,586	)			20,608				(146,978	)
Total comprehensive income																											3,919,011				124,414				4,043,425
Repurchase of treasury stock, net							(103	)							(196	)							(1,723,471	)			(1,723,770	)							(1,723,770	)
Balance at December 31, 2012		$	2,008,759			$	4,615,483			$	708,770			$	36,080,184			$	(4,221,253	)		$	(9,329,575	)		$	29,862,368			$	1,796,276			$	31,658,644

 

- 11 -

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CANON INC. AND SUBSIDIARIES

CONSOLIDATED

5.  CONSOLIDATED STATEMENTS OF CASH FLOWS

 

		Millions of yen								Thousands of U.S. dollars
		Year ended December 31, 2012				Year ended December 31, 2011				Year ended December 31, 2012
Cash flows from operating activities:
Consolidated net income		¥	232,445			¥	254,109			$	2,671,782
Adjustments to reconcile consolidated net income to net cash provided by operating activities:
Depreciation and amortization			258,133				261,343				2,967,046
Loss on disposal of fixed assets			11,242				8,937				129,218
Deferred income taxes			7,487				29,129				86,057
Decrease in trade receivables			5,030				9,991				57,816
Increase in inventories			(24,805)				(109,983)				(285,115)
Increase (decrease) in trade payables			(102,293)				35,766				(1,175,782)
Increase (decrease) in accrued income taxes			12,427				(25,653)				142,839
Increase (decrease) in accrued expenses			(30,089)				8,938				(345,851)
Increase (decrease) in accrued (prepaid) pension and severance cost			5,515				(2,315)				63,391
Other, net			8,985				(700)				103,277
Net cash provided by operating activities			384,077				469,562				4,414,678
Cash flows from investing activities:
Purchases of fixed assets			(316,211)				(238,129)				(3,634,609)
Proceeds from sale of fixed assets			4,861				3,273				55,874
Purchases of available-for-sale securities			(417)				(2,160)				(4,793)
Proceeds from sale and maturity of available-for-sale securities			344				1,934				3,954
(Increase) decrease in time deposits, net			103,137				(34,111)				1,185,483
Acquisitions of subsidiaries, net of cash acquired			(704)				29				(8,092)
Purchases of other investments			(796)				(373)				(9,149)
Other, net			(2,954)				12,994				(33,955)
Net cash used in investing activities			(212,740)				(256,543)				(2,445,287)
Cash flows from financing activities:
Proceeds from issuance of long-term debt			614				725				7,057
Repayments of long-term debt			(3,732)				(4,670)				(42,897)
Increase (decrease) in short-term loans, net			(5,055)				2,466				(58,103)
Dividends paid			(142,362)				(152,784)				(1,636,345)
Repurchases of treasury stock, net			(149,968)				(99,766)				(1,723,770)
Other, net			(19,236)				(3,484)				(221,103)
Net cash used in financing activities			(319,739)				(257,513)				(3,675,161)
Effect of exchange rate changes on cash and cash equivalents			41,853				(22,858)				481,069
Net change in cash and cash equivalents			(106,549)				(67,352)				(1,224,701)
Cash and cash equivalents at beginning of year			773,227				840,579				8,887,667
Cash and cash equivalents at end of year		¥	666,678			¥	773,227			$	7,662,966

 

- 12 -

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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

 

Results for the fourth quarter				Millions of yen												Thousands of U.S.  dollars
				Three months ended December 31, 2012				Three months ended December 31, 2011				Change(%)				Three months ended December 31, 2012
Office
Net sales:
		External customers		¥	454,691			¥	497,458			-	8.6			$	5,226,333
		Intersegment			1,632				883			+	84.8				18,759
		Total			456,323				498,341			-	8.4				5,245,092
Operating cost and expenses					405,051				429,747			-	5.7				4,655,759
Operating profit				¥	51,272			¥	68,594			-	25.3			$	589,333
Imaging System
Net sales:
		External customers		¥	410,292			¥	372,495			+	10.1			$	4,716,000
		Intersegment			383				270			+	41.9				4,402
		Total			410,675				372,765			+	10.2				4,720,402
Operating cost and expenses					355,712				321,867			+	10.5				4,088,643
Operating profit				¥	54,963			¥	50,898			+	8.0			$	631,759
Industry and Others
Net sales:
		External customers		¥	86,411			¥	94,804			-	8.9			$	993,230
		Intersegment			20,357				19,226			+	5.9				233,988
		Total			106,768				114,030			-	6.4				1,227,218
Operating cost and expenses					116,218				110,253			+	5.4				1,335,839
Operating profit (loss)				¥	(9,450	)		¥	3,777				-			$	(108,621	)
Corporate and Eliminations
Net sales:
		External customers		¥	-			¥	-				-			$	-
		Intersegment			(22,372	)			(20,379	)			-				(257,149	)
		Total			(22,372	)			(20,379	)			-				(257,149	)
Operating cost and expenses					(3,291	)			8,280				-				(37,827	)
Operating profit				¥	(19,081	)		¥	(28,659	)			-			$	(219,322	)
Consolidated
Net sales:
		External customers		¥	951,394			¥	964,757			-	1.4			$	10,935,563
		Intersegment			-				-				-				-
		Total			951,394				964,757			-	1.4				10,935,563
Operating cost and expenses					873,690				870,147			+	0.4				10,042,414
Operating profit				¥	77,704			¥	94,610			-	17.9			$	893,149

 

- 13 -

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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, 2012				Year ended December 31, 2011				Change(%)				Year ended December 31, 2012
Office
Net sales:
		External customers		¥	1,751,960			¥	1,912,112			-	8.4			$	20,137,471
		Intersegment			5,615				5,831			-	3.7				64,540
		Total			1,757,575				1,917,943			-	8.4				20,202,011
Operating cost and expenses					1,553,997				1,658,678			-	6.3				17,862,034
Operating profit					203,578				259,265			-	21.5				2,339,977
Total assets					828,222				821,782			+	0.8				9,519,793
Depreciation and amortization					77,660				93,196			-	16.7				892,644
Capital expenditures				¥	58,402			¥	53,888			+	8.4			$	671,287
Imaging System
Net sales:
		External customers		¥	1,404,394			¥	1,311,023			+	7.1			$	16,142,460
		Intersegment			1,577				1,021			+	54.5				18,126
		Total			1,405,971				1,312,044			+	7.2				16,160,586
Operating cost and expenses					1,195,653				1,100,750			+	8.6				13,743,138
Operating profit					210,318				211,294			-	0.5				2,417,448
Total assets					614,328				452,809			+	35.7				7,061,241
Depreciation and amortization					53,664				45,609			+	17.7				616,828
Capital expenditures				¥	58,142			¥	48,192			+	20.6			$	668,299
Industry and Others
Net sales:
		External customers		¥	323,434			¥	334,298			-	3.2			$	3,717,632
		Intersegment			84,406				86,565			-	2.5				970,184
		Total			407,840				420,863			-	3.1				4,687,816
Operating cost and expenses					401,930				396,563			+	1.4				4,619,885
Operating profit					5,910				24,300			-	75.7				67,931
Total assets					337,899				362,638			-	6.8				3,883,897
Depreciation and amortization					34,264				29,685			+	15.4				393,839
Capital expenditures				¥	44,086			¥	37,648			+	17.1			$	506,736
Corporate and Eliminations
Net sales:
		External customers		¥	-			¥	-				-			$	-
		Intersegment			(91,598)				(93,417)				-				(1,052,850)
		Total			(91,598)				(93,417)				-				(1,052,850)
Operating cost and expenses					4,352				23,371				-				50,023
Operating profit					(95,950)				(116,788)				-				(1,102,873)
Total assets					2,175,054				2,293,498			-	5.2				25,000,621
Depreciation and amortization					92,545				92,853			-	0.3				1,063,735
Capital expenditures				¥	146,031			¥	122,753			+	19.0			$	1,678,517
Consolidated
Net sales:
		External customers		¥	3,479,788			¥	3,557,433			-	2.2			$	39,997,563
		Intersegment			-				-				-				-
		Total			3,479,788				3,557,433			-	2.2				39,997,563
Operating cost and expenses					3,155,932				3,179,362			-	0.7				36,275,080
Operating profit					323,856				378,071			-	14.3				3,722,483
Total assets					3,955,503				3,930,727			+	0.6				45,465,552
Depreciation and amortization					258,133				261,343			-	1.2				2,967,046
Capital expenditures				¥	306,661			¥	262,481			+	16.8			$	3,524,839

 

- 14 -

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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, 2012				Three months    ended     December 31, 2011				Change(%)				Three months    ended    December 31, 2012
Japan
Net sales:
		External customers		¥	235,054			¥	235,536				-              0.2			$	2,701,770
		Intersegment			432,284				453,351				-              4.6				4,968,782
		Total			667,338				688,887				-              3.1				7,670,552
Operating cost and expenses					581,197				573,720				+              1.3				6,680,426
Operating profit				¥	86,141			¥	115,167				-            25.2			$	990,126
Americas
Net sales:
		External customers		¥	265,178			¥	270,657				-              2.0			$	3,048,023
		Intersegment			5,610				3,865				+            45.1				64,483
		Total			270,788				274,522				-              1.4				3,112,506
Operating cost and expenses					266,439				270,760				-              1.6				3,062,517
Operating profit				¥	4,349			¥	3,762				+            15.6			$	49,989
Europe
Net sales:
		External customers		¥	287,103			¥	290,453				-              1.2			$	3,300,034
		Intersegment			1,339				1,198				+            11.8				15,391
		Total			288,442				291,651				-              1.1				3,315,425
Operating cost and expenses					271,253				280,512				-              3.3				3,117,850
Operating profit				¥	17,189			¥	11,139				+            54.3			$	197,575
Asia and Oceania
Net sales:
		External customers		¥	164,059			¥	168,111				-              2.4			$	1,885,736
		Intersegment			185,498				183,399				+              1.1				2,132,161
		Total			349,557				351,510				-              0.6				4,017,897
Operating cost and expenses					347,868				351,680				-              1.1				3,998,483
Operating profit (loss)				¥	1,689			¥	(170)				-			$	19,414
Corporate and Eliminations
Net sales:
		External customers		¥	-			¥	-				-			$	-
		Intersegment			(624,731)				(641,813)				-				(7,180,817)
		Total			(624,731)				(641,813)				-				(7,180,817)
Operating cost and expenses					(593,067)				(606,525)				-				(6,816,862)
Operating profit				¥	(31,664)			¥	(35,288)				-			$	(363,955)
Consolidated
Net sales:
		External customers		¥	951,394			¥	964,757				-              1.4			$	10,935,563
		Intersegment			-				-				-				-
		Total			951,394				964,757				-              1.4				10,935,563
Operating cost and expenses					873,690				870,147				+              0.4				10,042,414
Operating profit				¥	77,704			¥	94,610				-            17.9			$	893,149

 

- 15 -

---

CANON INC. AND SUBSIDIARIES

CONSOLIDATED

 

Results for the fiscal year				Millions of yen												Thousands of U.S. dollars
				Year ended December  31, 2012				Year ended December 31, 2011				Change(%)				Year ended December 31, 2012
Japan
Net sales:
		External customers		¥	834,406			¥	807,883			+	3.3			$	9,590,874
		Intersegment			1,829,834				1,873,157			-	2.3				21,032,574
		Total			2,664,240				2,681,040			-	0.6				30,623,448
Operating cost and expenses					2,336,536				2,273,336			+	2.8				26,856,735
Operating profit					327,704				407,704			-	19.6				3,766,713
Total assets				¥	1,206,702			¥	1,236,468			-	2.4			$	13,870,138
Americas
Net sales:
		External customers		¥	932,987			¥	952,833			-	2.1			$	10,723,989
		Intersegment			23,767				16,217			+	46.6				273,183
		Total			956,754				969,050			-	1.3				10,997,172
Operating cost and expenses					937,111				948,593			-	1.2				10,771,390
Operating profit					19,643				20,457			-	4.0				225,782
Total assets				¥	339,918			¥	250,131			+	35.9			$	3,907,103
Europe
Net sales:
		External customers		¥	1,010,922			¥	1,109,256			-	8.9			$	11,619,793
		Intersegment			5,650				4,681			+	20.7				64,943
		Total			1,016,572				1,113,937			-	8.7				11,684,736
Operating cost and expenses					972,585				1,069,489			-	9.1				11,179,138
Operating profit					43,987				44,448			-	1.0				505,598
Total assets				¥	457,592			¥	427,030			+	7.2			$	5,259,678
Asia and Oceania
Net sales:
		External customers		¥	701,473			¥	687,461			+	2.0			$	8,062,907
		Intersegment			781,836				744,179			+	5.1				8,986,622
		Total			1,483,309				1,431,640			+	3.6				17,049,529
Operating cost and expenses					1,437,527				1,388,580			+	3.5				16,523,299
Operating profit					45,782				43,060			+	6.3				526,230
Total assets				¥	548,583			¥	442,263			+	24.0			$	6,305,552
Corporate and Eliminations
Net sales:
		External customers		¥	-			¥	-				-			$	-
		Intersegment			(2,641,087)				(2,638,234)				-				(30,357,322)
		Total			(2,641,087)				(2,638,234)				-				(30,357,322)
Operating cost and expenses					(2,527,827)				(2,500,636)				-				(29,055,482)
Operating profit					(113,260)				(137,598)				-				(1,301,840)
Total assets				¥	1,402,708			¥	1,574,835				-			$	16,123,081
Consolidated
Net sales:
		External customers		¥	3,479,788			¥	3,557,433			-	2.2			$	39,997,563
		Intersegment			-				-				-				-
		Total			3,479,788				3,557,433			-	2.2				39,997,563
Operating cost and expenses					3,155,932				3,179,362			-	0.7				36,275,080
Operating profit					323,856				378,071			-	14.3				3,722,483
Total assets				¥	3,955,503			¥	3,930,727			+	0.6			$	45,465,552

 

- 16 -

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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, 2012				December 31, 2011				Change
Subsidiaries			275				277				(2	)
Affiliates			9				11				(2	)
Total			284				288				(4	)

 

2.

Change in Group Entities

 

Subsidiaries
Addition:		21 companies
Removal:		23 companies
Affiliates(Carried at Equity Basis)
Removal:		2 companies

 

3.

Subsidiaries Listed on Domestic Stock Exchange

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

(2) SIGNIFICANT ACCOUNTING POLICIES

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

 

- 17 -

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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

 

Results for the fiscal year		Millions of yen								Thousands of U.S. dollars
		Year ended December 31, 2012				Year ended December 31, 2011				Year ended December 31, 2012
Net income attributable to Canon Inc.
-Basic		¥	224,564			¥	248,630			$	2,581,195
-Diluted			224,564				248,630				2,581,195
		Number of shares
Average common shares outstanding
-Basic			1,173,647,835				1,215,832,419
-Diluted			1,173,668,409				1,215,892,971
		Yen								U.S. dollars
Net income attributable to
Canon Inc. stockholders per share:
-Basic		¥	191.34			¥	204.49			$	2.20
-Diluted			191.34				204.48				2.20

 

(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.

 

- 18 -

---

CANON INC.

NON-CONSOLIDATED

10.  NON-CONSOLIDATED BALANCE SHEETS

          ( Parent company only )

 

 

- 19 -

---

CANON INC.

NON-CONSOLIDATED

11.  NON-CONSOLIDATED STATEMENTS OF INCOME

          ( Parent company only )

 

 

- 20 -

---

CANON INC.

NON-CONSOLIDATED

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

( Parent company only )

 

 

- 21 -

---

CANON INC.

NON-CONSOLIDATED

 

		Millions of yen
		Year ended December 31, 2012				Year ended December 31, 2011
Treasury stock
Balance at the beginning of current period			(661,731)				(562,113)
Changes of items during the period
Purchase of treasury stock			(150,020)				(100,038)
Disposal of treasury stock			78				420
Total changes of items during the period			(149,942)				(99,618)
Balance at the end of current period			(811,673)				(661,731)
Total stockholders’ equity
Balance at the beginning of current period			1,728,672				1,807,975
Changes of items during the period
Dividends paid			(142,362)				(152,784)
Net income			157,647				173,201
Purchase of treasury stock			(150,020)				(100,038)
Disposal of treasury stock			61				318
Total changes of items during the period			(134,674)				(79,303)
Balance at the end of current period			1,593,998				1,728,672
Valuation and translation adjustments
Net unrealized gains (losses) on securities
Balance at the beginning of current period			(2,107)				1,358
Changes of items during the period
Net changes of items other than stockholders’ equity			2,806				(3,465)
Total changes of items during the period			2,806				(3,465)
Balance at the end of current period			699				(2,107)
Net deferred profits (losses) on hedges
Balance at the beginning of current period			388				1,127
Changes of items during the period
Net changes of items other than stockholders’ equity			(2,756)				(739)
Total changes of items during the period			(2,756)				(739)
Balance at the end of current period			(2,368)				388
Subscription rights to shares
Balance at the beginning of current period			2,143				1,441
Changes of items during the period
Net changes of items other than stockholders’ equity			216				702
Total changes of items during the period			216				702
Balance at the end of current period			2,359				2,143
Total net assets
Balance at the beginning of current period			1,729,096				1,811,901
Changes of items during the period
Dividends paid			(142,362)				(152,784)
Net income			157,647				173,201
Purchase of treasury stock			(150,020)				(100,038)
Disposal of treasury stock			61				318
Net changes of items other than stockholders’ equity			266				(3,502)
Total changes of items during the period			(134,408)				(82,805)
Balance at the end of current period		¥	1,594,688			¥	1,729,096

 

- 22 -

---

CANON INC.

NON-CONSOLIDATED

13.  NOTE FOR GOING CONCERN ASSUMPTION

( Parent company only )

Not applicable.

 

- 23 -

---

NON-CONSOLIDATED

Directors

(Current Titles are Shown in the Parentheses)

(1) Candidates for new Directors to be appointed on March 28

 

Masanori Yamada		(Senior Executive Officer, Group Executive of Network Visual Solution Business Promotion Headquarters)
Aitake Wakiya		(Executive Officer, Deputy Group Executive of Finance & Accounting Headquarters)
Kazuto Ono		(Executive Officer, Group Executive of Human Resources Management & Organization Headquarters)

Executive Officers

(1) Candidate for Executive Officer to be promoted on April 1

 

Senior Executive Officer		Seymour Liebman		(Executive Officer, Executive Vice President of Canon U.S.A., Inc.)

(2) Candidates for new Executive Officers to be appointed on April 1

 

Nobutoshi Mizusawa		(Group Executive of R&D Project Group)
Yoichi Iwabuchi		(Senior General Manager of Software Platform Technology Development Center)

(3) Candidate for Executive Officer to be retired on March 31

 

Advisor to be appointed on April 1		Yukiaki Hashimoto		(Executive Officer)

 

- 24 -

---

Canon Inc.

January 30, 2013

CONSOLIDATED FINANCIAL RESULTS FOR THE FOURTH QUARTER

AND THE FISCAL YEAR ENDED DECEMBER 31, 2012

SUPPLEMENTARY REPORT

TABLE OF CONTENTS

 

				PAGE
1.		SALES BY GEOGRAPHIC AREA AND BUSINESS UNIT (2012)			S    1
2.		SALES BY GEOGRAPHIC AREA AND BUSINESS UNIT (2013/Projection)			S    2
3.		SEGMENT INFORMATION BY BUSINESS UNIT (2012)			S    3
4.		OTHER INCOME / DEDUCTIONS (2012)			S    3
5.		SEGMENT INFORMATION BY BUSINESS UNIT (2013/Projection)			S    4
6.		OTHER INCOME / DEDUCTIONS (2013/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

 

---

Canon Inc.

 

1. SALES BY GEOGRAPHIC AREA AND BUSINESS UNIT (2012)

(Millions of yen)

				2012								2011										Change year over year
				4th quarter				Year				4th quarter				Year						4th quarter				Year
Japan
		Office			94,052				368,939				97,192				362,528						-3.2%				+1.8%
		Imaging System			74,403				213,465				61,590				187,397						+20.8%				+13.9%
		Industry and Others			30,348				137,882				42,538				144,525						-28.7%				-4.6%
		Total			198,803				720,286				201,320				694,450						-1.3%				+3.7%
Overseas
		Office			360,639				1,383,021				400,266				1,549,584						-9.9%				-10.7%
		Imaging System			335,889				1,190,929				310,905				1,123,626						+8.0%				+6.0%
		Industry and Others			56,063				185,552				52,266				189,773						+7.3%				-2.2%
		Total			752,591				2,759,502				763,437				2,862,983						-1.4%				-3.6%
Americas
		Office			134,820				530,382				153,937				588,190						-12.4%				-9.8%
		Imaging System			120,383				366,888				109,762				335,158						+9.7%				+9.5%
		Industry and Others			11,149				42,603				10,605				38,607						+5.1%				+10.4%
		Total			266,352				939,873				274,304				961,955						-2.9%				-2.3%
Europe
		Office			165,551				597,341				179,701				696,239						-7.9%				-14.2%
		Imaging System			116,522				394,612				105,012				391,747						+11.0%				+0.7%
		Industry and Others			6,836				22,085				5,935				25,079						+15.2%				-11.9%
		Total			288,909				1,014,038				290,648				1,113,065						-0.6%				-8.9%
Asia and Oceania
		Office			60,268				255,298				66,628				265,155						-9.5%				-3.7%
		Imaging System			98,984				429,429				96,131				396,721						+3.0%				+8.2%
		Industry and Others			38,078				120,864				35,726				126,087						+6.6%				-4.1%
		Total			197,330				805,591				198,485				787,963						-0.6%				+2.2%
Intersegment
		Office			1,632				5,615				883				5,831						+84.8%				-3.7%
		Imaging System			383				1,577				270				1,021						+41.9%				+54.5%
		Industry and Others			20,357				84,406				19,226				86,565						+5.9%				-2.5%
		Eliminations			(22,372	)			(91,598	)			(20,379	)			(93,417	)					-				-
		Total			0				0				0				0						-				-
Total
		Office			456,323				1,757,575				498,341				1,917,943						-8.4%				-8.4%
		Imaging System			410,675				1,405,971				372,765				1,312,044						+10.2%				+7.2%
		Industry and Others			106,768				407,840				114,030				420,863						-6.4%				-3.1%
		Eliminations			(22,372	)			(91,598	)			(20,379	)			(93,417	)					-				-
		Total			951,394				3,479,788				964,757				3,557,433						-1.4%				-2.2%

 

- S1 -

---

Canon Inc.

2. SALES BY GEOGRAPHIC AREA AND BUSINESS UNIT (2013/Projection)

 

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

				2013 (P)				2012						Change year over  year
					Year				Year					Year
		Office			1,893,100				1,757,575					+7.7%
		Imaging System			1,579,100				1,405,971					+12.3%
		Industry and Others			440,800				407,840					+8.1%
		Eliminations			(103,000	)			(91,598	)				-
		Total			3,810,000				3,479,788					+9.5%
														(P)=Projection
(2) Sales by region														(Millions of yen)
				2013 (P)				2012						Change year over  year
					Year				Year					Year
		Japan			748,400				720,286					+3.9%
		Overseas			3,061,600				2,759,502					+10.9%
		Americas			1,023,400				939,873					+8.9%
		Europe			1,146,800				1,014,038					+13.1%
		Asia and Oceania			891,400				805,591					+10.7%
		Total			3,810,000				3,479,788					+9.5%
														(P)=Projection

 

- S2 -

---

Canon Inc.

 

3. SEGMENT INFORMATION BY BUSINESS UNIT (2012)

(Millions of yen)

				2012								2011										Change year  over year
					4th quarter				Year				4th quarter				Year						4th quarter			Year
Office
		External customers			454,691				1,751,960				497,458				1,912,112						-8.6%			-8.4%
		Intersegment			1,632				5,615				883				5,831						+84.8%			-3.7%
		Total sales			456,323				1,757,575				498,341				1,917,943						-8.4%			-8.4%
		Operating profit			51,272				203,578				68,594				259,265						-25.3%			-21.5%
		% of sales			11.2%				11.6%				13.8%				13.5%						-			-
Imaging System
		External customers			410,292				1,404,394				372,495				1,311,023						+10.1%			+7.1%
		Intersegment			383				1,577				270				1,021						+41.9%			+54.5%
		Total sales			410,675				1,405,971				372,765				1,312,044						+10.2%			+7.2%
		Operating profit			54,963				210,318				50,898				211,294						+8.0%			-0.5%
		% of sales			13.4%				15.0%				13.7%				16.1%						-			-
Industry and Others
		External customers			86,411				323,434				94,804				334,298						-8.9%			-3.2%
		Intersegment			20,357				84,406				19,226				86,565						+5.9%			-2.5%
		Total sales			106,768				407,840				114,030				420,863						-6.4%			-3.1%
		Operating profit			(9,450	)			5,910				3,777				24,300						-			-75.7%
		% of sales			-8.9%				1.4%				3.3%				5.8%						-			-
Corporate and Eliminations
		External customers			-				-				-				-						-			-
		Intersegment			(22,372	)			(91,598	)			(20,379	)			(93,417	)					-			-
		Total sales			(22,372	)			(91,598	)			(20,379	)			(93,417	)					-			-
		Operating profit			(19,081	)			(95,950	)			(28,659	)			(116,788	)					-			-
Consolidated
		External customers			951,394				3,479,788				964,757				3,557,433						-1.4%			-2.2%
		Intersegment			-				-				-				-						-			-
		Total sales			951,394				3,479,788				964,757				3,557,433						-1.4%			-2.2%
		Operating profit			77,704				323,856				94,610				378,071						-17.9%			-14.3%
		% of sales			8.2%				9.3%				9.8%				10.6%						-			-
4. OTHER INCOME / DEDUCTIONS (2012)																						(Millions of yen)
				2012								2011										Change year  over year
				4th quarter				Year				4th quarter				Year						4th quarter				Year
		Interest and dividend, net			1,194				5,770				2,455				7,444						(1,261	)		(1,674)
		Forex gain (loss)			10,477				9,130				2,372				(3,287	)					+8,105			+12,417
		Equity earnings (loss) of affiliated companies			(64	)			610				(1,714	)			(7,368	)					+1,650			+7,978
		Other, net			(203	)			3,191				(5,123	)			(336	)					+4,920			+3,527
		Total			11,404				18,701				(2,010	)			(3,547	)					+13,414			+22,248

 

- S3 -

---

Canon Inc.

 

5. SEGMENT INFORMATION BY BUSINESS UNIT (2013/Projection)															(Millions of yen	)
				2013 (P)				2012						Change year over year
				Year				Year						Year
Office
		External customers			1,885,900				1,751,960						+7.6%
		Intersegment			7,200				5,615						+28.2%
		Total sales			1,893,100				1,757,575						+7.7%
		Operating profit			227,200				203,578						+11.6%
		% of sales			12.0%				11.6%						-
Imaging System
		External customers			1,578,000				1,404,394						+12.4%
		Intersegment			1,100				1,577						-30.2%
		Total sales			1,579,100				1,405,971						+12.3%
		Operating profit			285,000				210,318						+35.5%
		% of sales			18.0%				15.0%						-
Industry and Others
		External customers			346,100				323,434						+7.0%
		Intersegment			94,700				84,406						+12.2%
		Total sales			440,800				407,840						+8.1%
		Operating profit			(7,600	)			5,910						-
		% of sales			-1.7%				1.4%						-
Corporate and Eliminations
		External customers			-				-						-
		Intersegment			(103,000	)			(91,598	)					-
		Total sales			(103,000	)			(91,598	)					-
		Operating profit			(94,600	)			(95,950	)					-
Consolidated
		External customers			3,810,000				3,479,788						+9.5%
		Intersegment			-				-						-
		Total sales			3,810,000				3,479,788						+9.5%
		Operating profit			410,000				323,856						+26.6%
		% of sales			10.8%				9.3%						-
															(P)=Projection
6. OTHER INCOME / DEDUCTIONS (2013/Projection)														(Millions of yen)
				2013 (P)				2012						Change year over year
					Year				Year						Year
		Interest and dividend, net			4,000				5,770						(1,770	)
		Forex gain (loss)			(11,500	)			9,130						(20,630	)
		Equity earnings (loss) of affiliated companies			1,100				610						+490
		Other, net			(3,600	)			3,191						(6,791	)
		Total			(10,000	)			18,701						(28,701	)
															(P)=Projection

 

- S4 -

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Canon Inc.

7. BREAKDOWN OF PRODUCT SALES WITHIN BUSINESS UNIT

				2013 (P)				2012								2011
					Year				4th quarter				Year				4th quarter				Year
Office
Monochrome copiers					16	%			16	%			16	%			15	%			15	%
Color copiers					19	%			20	%			19	%			19	%			17	%
Printers					43	%			43	%			44	%			46	%			48	%
Others					22	%			21	%			21	%			20	%			20	%
Imaging System
Cameras					72	%			68	%			70	%			71	%			71	%
Inkjet printers					22	%			25	%			22	%			24	%			24	%
Others					6	%			7	%			8	%			5	%			5	%
Industry and Others
Lithography equipment					17	%			8	%			15	%			26	%			19	%
Others					83	%			92	%			85	%			74	%			81	%
												(P)=Projection
8. SALES GROWTH IN LOCAL CURRENCY
				2013 (P)				2012
					Year				4th quarter				Year
Office
		Japan			-				-3.2	%			+1.8	%
		Overseas			-				-13.3	%			-8.6	%
		Total			+2.2	%			-11.2	%			-6.6	%
Imaging System
		Japan			-				+20.8	%			+13.9	%
		Overseas			-				+4.3	%			+8.2	%
		Total			+5.3	%			+7.0	%			+9.0	%
Industry and Others
		Japan			-				-28.7	%			-4.6	%
		Overseas			-				+5.3	%			-1.7	%
		Total			+6.5	%			-7.3	%			-2.9	%
Total
		Japan			+3.9	%			-1.3	%			+3.7	%
		Overseas			+3.6	%			-4.9	%			-1.5	%
		Americas			+3.0	%			-7.5	%			-2.7	%
		Europe			+2.0	%			-2.1	%			-2.8	%
		Asia and Oceania			+6.3	%			-5.4	%			+1.6	%
		Total			+3.7	%			-4.1	%			-0.5	%
				(P)=Projection

 

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Canon Inc.

9. PROFITABILITY

				2013 (P)				2012				2011
				Year				Year				Year
ROE *1					9.7%				8.7%				9.6%
ROA *2					6.4%				5.7%				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	)
				2013 (P)				2012								2011
				Year				4th quarter				Year				4th quarter				Year
		Yen/US$			85.00				81.26				79.96				77.40				79.55
		Yen/Euro			115.00				105.31				102.80				104.22				110.72
																	(P)=Projection
		(2) Impact of foreign exchange rates on sales (Year over year)						(Billions of yen)
				2013 (P)				2012
				Year				4th quarter				Year
		US$			+83.6				+17.3				+9.5
		Euro			+102.2				+2.4				(69.2	)
		Other currencies			+17.1				+5.1				+5.4
		Total			+202.9				+24.8				(54.3	)
													(P)=Projection
		(3) Impact of foreign exchange rates per yen		(Billions of yen)
				2013 (P)
				Year
On sales
		US$			19.7
		Euro			8.6
On operating profit
		US$			7.7
		Euro			4.6
					(P)=Projection
11. STATEMENTS OF CASH FLOWS																	(Millions of yen)
				2013 (P)				2012								2011
				Year				4th quarter				Year				4th quarter				Year
Net cash provided by operating activities					455,000				118,262				384,077				126,979				469,562
Net cash used in investing activities					(325,000	)			(57,707	)			(212,740	)			(54,543	)			(256,543	)
Free cash flow					130,000				60,555				171,337				72,436				213,019
Net cash used in financing activities					(150,000	)			(6,629	)			(319,739	)			(5,944	)			(257,513	)
Effect of exchange rate changes on cash and cash equivalents					(6,700	)			45,142				41,853				(4,896	)			(22,858	)
Net change in cash and cash equivalents					(26,700	)			99,068				(106,549	)			61,596				(67,352	)
Cash and cash equivalents at end of period					640,000				666,678				666,678				773,227				773,227
																					(P)=Projection

 

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Canon Inc.

 

12. R&D EXPENDITURE												(Millions of yen)
				2013 (P)				2012				2011
				Year				Year				Year
Office					-				99,484				103,378
Imaging System					-				83,948				82,731
Industry and Others					-				25,635				27,061
Corporate and Eliminations					-				87,397				94,630
		Total			315,000				296,464				307,800
% of sales					8.3%				8.5%				8.7%
													(P)=Projection
13. INCREASE IN PP&E & DEPRECIATION AND AMORTIZATION
												(Millions of yen)
				2013 (P)				2012				2011
				Year				Year				Year
Increase in PP&E
Office					-				54,932				48,729
Imaging System					-				55,623				46,091
Industry and Others					-				42,288				36,582
Corporate and Eliminations					-				117,614				95,467
		Total			265,000				270,457				226,869
Depreciation and amortization
Office					-				77,660				93,196
Imaging System					-				53,664				45,609
Industry and Others					-				34,264				29,685
Corporate and Eliminations					-				92,545				92,853
		Total			270,000				258,133				261,343
													(P)=Projection
14. INVENTORIES
		(1) Inventories										(Millions of yen)
				2012				2011				Difference
				Dec.31				Dec.31
Office					201,661				207,690				(6,029	)
Imaging System					245,973				148,954				+97,019
Industry and Others					103,989				120,060				(16,071	)
		Total			551,623				476,704				+74,919
		(2) Inventories/Sales*											(Days)
					2012				2011				Difference
					Dec.31				Dec.31
Office					43				39				+4
Imaging System					61				38				+23
Industry and Others					124				115				+9
		Total			57				46				+11
*Index based on the previous six months sales.
15. DEBT RATIO
				2012				2011				Difference
				Dec.31				Dec.31
Total debt / Total assets					0.1	%			0.3	%			-0.2	%
16. OVERSEAS PRODUCTION RATIO
				2012				2011
				Year				Year
Overseas production ratio					52	%			52	%
17. NUMBER OF EMPLOYEES
				2012				2011				Difference
				Dec.31				Dec.31
Japan					70,234				70,346				(112	)
Overseas					126,734				127,961				(1,227	)
		Total			196,968				198,307				(1,339	)

 

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