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 ….		July		……………………………………………………  ,		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….		July 26, 2012		….		By ……/s/…… Toshihide Aoki………
						(Signature)*

 

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

The following materials are included.

1. CONSOLIDATED RESULTS FOR THE SECOND QUARTER AND THE FIRST HALF ENDED JUNE 30, 2012

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CONSOLIDATED RESULTS FOR THE SECOND QUARTER AND THE FIRST HALF ENDED JUNE 30, 2012

July 25, 2012

CONSOLIDATED RESULTS FOR THE SECOND QUARTER

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

 

		Actual
		Three months ended June 30, 2012				Three months ended June 30, 2011				Change(%)				Three months ended June 30, 2012
Net sales		¥	899,205			¥	836,574			+	7.5			$	11,382,342
Operating profit			92,596				78,411			+	18.1				1,172,101
Income before income taxes			85,545				81,627			+	4.8				1,082,848
Net income attributable to Canon Inc.		¥	51,714			¥	53,861			-	4.0			$	654,608
Net income attributable to Canon Inc. stockholders per share:
- Basic		¥	43.71			¥	43.99			-	0.6			$	0.55
- Diluted			43.71				43.99			-	0.6				0.55

CONSOLIDATED RESULTS FOR THE FIRST HALF

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

 

		Actual																Projected
		Six months ended June 30, 2012				Six months ended June 30,  2011				Change(%)				Six months ended June 30, 2012				Year ending December 31, 2012				Change(%)
Net sales		¥	1,728,445			¥	1,675,765			+	3.1			$	21,879,051			¥	3,690,000			+	3.7
Operating profit			175,275				160,913			+	8.9				2,218,671				390,000			+	3.2
Income before income taxes			178,269				163,659			+	8.9				2,256,570				395,000			+	5.5
Net income attributable to Canon Inc.		¥	113,252			¥	109,323			+	3.6			$	1,433,570			¥	250,000			+	0.6
Net income attributable to Canon Inc. stockholders per share:
- Basic		¥	95.26			¥	89.16			+	6.8			$	1.21			¥	213.46			+	4.4
- Diluted			95.25				89.16			+	6.8				1.21				-				-
		Actual
		As of June 30, 2012				As of December 31, 2011				Change(%)				As of June 30, 2012
Total assets		¥	3,861,436			¥	3,930,727			-	1.8			$	48,878,937
Canon Inc. stockholders’ equity		¥	2,499,617			¥	2,551,132			-	2.0			$	31,640,722

 

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 JPY79=U.S.$1, the approximate exchange rate on the Tokyo Foreign Exchange Market as of June 29, 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 Second Quarter in Review

Looking back at the global economy in the second quarter of 2012, in Europe the debt crisis increased in severity while in the United States the pace of recovery remained modest due to such factors as a delay in the improvement of employment conditions. In China, India and other emerging economies, growth in exports and investment slowed somewhat while in Japan domestic demand grew steadily. As for the global economy overall, due to an increasing sense of a slowdown, growth has been moderate.

As for the markets in which Canon operates amid these conditions, within the office equipment market, while demand for color multifunction devices (MFDs) continued to grow, the laser printer market cooled down, mainly in Europe. Demand for interchangeable-lens digital cameras (formerly referred to as digital single-lens reflex (SLR) cameras) grew steadily in all regions while the market for compact digital cameras contracted more than expected, mainly in developed countries. Demand for inkjet printers remained relatively unchanged from the previous year. In the industry and others sector, while sales of semiconductor lithography equipment, used in the production of NAND flash memory chips and digital imaging sensors, recorded solid growth, demand for flat-panel-display lithography equipment (formerly called liquid crystal display (LCD) lithography equipment) for the manufacture of large-size LCD panels remained sluggish.

The average values of the yen during the second quarter and first half of the year were ¥80.09 and ¥79.92 to the U.S. dollar, respectively, year-on-year appreciations of approximately ¥1 and ¥2, and ¥102.34 and ¥103.41 to the euro, respectively, year-on-year appreciations of approximately ¥15 and ¥12.

Despite such negative factors as the global economic slowdown triggered by the situation in Europe and the sharp appreciation of the yen, Canon continued efforts to expand sales mainly for products such as interchangeable-lens digital cameras and office equipment, leading to second-quarter net sales of ¥ 899.2 billion (U.S.$11,382 million), an increase of 7.5% from the year-ago period. Net sales for the six months ended June 30, 2012 totaled ¥1,728.4 billion (U.S.$21,879 million), a year-on-year increase of 3.1%. Despite the positive effects of ongoing cost-cutting efforts, the gross profit ratio for the second quarter declined by 1.1 points to 48.9% from the year-ago period due to the significant impact of the strong yen and product mix. The gross profit ratio for the first half of the year also declined by 1.1 points to 48.1%. Gross profit for the second quarter totaled ¥439.9 billion (U.S.$5,569 million), a year-on-year increase of 5.1%, and ¥830.8 billion (U.S.$10,517 million) for the first six months, a year-on-year increase of 0.7%. Owing to Group-wide efforts to thoroughly reduce spending, operating expenses for the quarter increased by just ¥7.2 billion (U.S.$92 million) from the corresponding period of the previous year while operating expenses for the six months ended June 30, 2012 decreased by ¥8.3 billion (U.S.$105 million). Consequently, second-quarter operating profit rose 18.1% to ¥92.6 billion (U.S.$1,172 million), while operating profit for the first half of the year increased by 8.9% to ¥175.3 billion (U.S.$2,219 million). Other income (deductions) decreased by ¥10.3 billion (U.S.$130 million) for the second-quarter from the year-ago period and increased 0.2 billion (U.S.$3 million) for the six months of the year while income before income taxes increased 4.8% year on year to ¥85.5 billion (U.S.$1,083 million) for the second quarter, and increased 8.9% year on year to ¥178.3 billion (U.S.$2,257 million) for the first half. Net income attributable to Canon Inc. decreased by 4.0% to ¥51.7 billion (U.S.$655 million) for the quarter due to an increase in the effective tax rate and increased by 3.6% to ¥113.3 billion (U.S.$1,434 million) for the first six months of the year.

Basic net income attributable to Canon Inc. stockholders per share for the second quarter was ¥43.71 (U.S.$0.55), a decrease of ¥0.28 (U.S.$0.004) compared with the corresponding quarter of the previous year, and ¥95.26 (U.S.$1.21) for the first half of 2012, a year-on-year increase of ¥6.10 (U.S.$0.08).

 

- 2 -

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Results by Segment

Looking at Canon’s quarterly performance by business unit, within the Office Business Unit, amid the admirable sales performance of color MFDs led by the imageRUNNER ADVANCE C5000/C2000 series, sales volumes of MFDs increased across the world from the year-ago period. In addition, sales of imagePRESS C6010/C7010VPS-series color MFDs for production printing, machines that were jointly developed by Canon and Océ, contributed to increased sales, particularly in Europe. As for laser printers, sales volumes declined mainly in Europe and in the United States from the corresponding period of the previous year due to worsening business sentiment. Consequently, combined with the appreciation of the yen, second-quarter sales for the segment totaled ¥453.9 billion (U.S.$5,745 million), declining 2.6% year on year. Likewise, operating profit for the quarter decreased by 2.6% to ¥58.3 billion (U.S.$738 million). Sales for the combined first six months of the year totaled ¥891.9 billion (U.S.$11,290 million), decreasing 5.8% year on year, while operating profit declined by 9.5% to ¥111.2 billion (U.S.$1,407 million).

Within the Imaging System Business Unit (formerly the Consumer Business Unit), demand for interchangeable-lens digital cameras continued to display solid growth around the globe as sales volumes grew significantly year on year, led by the competitively priced EOS Digital Rebel T3i (EOS 600D), along with the EOS 5D Mark III and EOS 60D advanced-amateur models. Furthermore, the professional-model EOS 1D X, released in June this year, has proved popular, further contributing to sales. As for compact digital cameras, models launched this spring offering high image quality and networking capabilities have supported healthy sales growth. In addition, the Cinema EOS System lineup of professional cinematography products, targeting Hollywood and the broader motion picture and television production market, has enjoyed a steady increase in sales. With regard to inkjet printers, sales volumes increased from the year-ago period owing to the early restoration of production in the aftermath of the floods in Thailand the previous year. Additionally, the inkjet product lineup has been further enhanced through the introduction of such models as the PIXMA MX890 series of office inkjet all-in-one printers and the PIXMA PRO-1 professional photo inkjet printer. Accordingly, second-quarter sales for the Imaging System Business Unit increased by 22.3% year on year to ¥369.7 billion (U.S.$4,680 million) while quarterly operating profit increased by 23.6% to ¥56.0 billion (U.S.$709 million). Sales for the first six months totaled ¥ 673.2 billion (U.S.$8,522 million), rising 13.7% year on year, while operating profit totaled ¥102.7 billion (U.S.$1,301 million), an increase of 20.6% year on year.

Within the Industry and Others Business Unit, i-line steppers have performed well among semiconductor lithography equipment, fueled by growing demand for smartphones and tablet devices. As for exposure systems used in the production of flat-panel displays, despite sluggish demand for large-scale LCD panels, unit sales have increased compared with the year-ago period. Consequently, second-quarter sales for the segment increased by 7.8% to ¥98.3 billion (U.S.$1,245 million), while operating profit totaled ¥6.3 billion (U.S.$80 million). Sales for the first half of the year totaled ¥208.1 billion (U.S.$2,635 million), a rise of 13.7% year on year, while operating profit was ¥10.3 billion (U.S.$131 million), a decrease of 9.7% from the year-ago period.

Cash Flow

During the first half of 2012, cash flow from operating activities totaled ¥202.0 billion (U.S.$2,557 million), an increase of ¥11.1 billion (U.S.$141 million) compared with the year-ago period, mainly because cash outflow from inventories decreased owing to the effects of optimized of inventory levels facilitated by the recovery following the previous year’s flooding in Thailand. Due to ongoing capital investment focused on boosting production, cash flow from investing activities increased ¥38.5 billion (U.S.$487 million) year on year, totaling ¥111.8 billion (U.S.$1,415 million). Accordingly, free cash flow totaled ¥90.2 billion (U.S.$1,142 million), a slight decrease of ¥27.4 billion (U.S.$346 million) from the previous year.

Cash flow from financing activities recorded an outlay of ¥187.5 billion (U.S.$2,374 million), largely arising from the dividend payout and repurchases of treasury stock. Owing to these factors, as well as the negative impact from foreign currency translation adjustments, cash and cash equivalents decreased by ¥99.2 billion (U.S.$1,255 million) year on year to ¥674.0 billion (U.S.$8,532 million).

 

- 3 -

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Outlook

As for the outlook in the third quarter onward, the global economy is expected to realize only mild growth amid the strong uncertainty over the eurozone sovereign debt crisis. Projections for the U.S. economy point to a moderate recovery while in Europe the economy will likely remain sluggish. Growth in emerging economies, such as China and India, is expected to decline. Although Japan continues to face severe conditions, the economy is expected to follow a path of recovery owing to growing domestic demand.

In the businesses in which Canon is involved, within the office equipment market, demand for MFDs is projected to grow steadily. As for laser printers, forecasts call for challenging conditions amid the negative effects of such factors as the sluggish economy and price competition. Demand for interchangeable-lens digital cameras is expected to continue increasing across all regions while demand for compact digital cameras is anticipated to increase for models offering high functionality and high added value. Despite the impact of the slowdown in Europe, demand for inkjet printers should remain relatively unchanged from the previous year. In the industry and others market, demand for semiconductor lithography equipment will likely fluctuate amid the rising uncertainty over capital investment by electronic device manufacturers, whereas demand for flat-panel-display lithography equipment is expected to remain sluggish compared with the year-ago period.

With regard to currency exchange rates for the third quarter onward, on which Canon’s performance outlook is based, despite uncertain prospects for the global economy, Canon anticipates exchange rates of ¥80 to the U.S. dollar and ¥100 to the euro.

Upon taking into consideration the abovementioned foreign exchange rate assumptions and current economic forecasts, Canon projects full-year consolidated net sales of ¥3,690.0 billion (U.S.$46,709 million), a year-on-year increase of 3.7%; operating profit of ¥390.0 billion (U.S.$4,937 million), a year-on-year increase of 3.2%; income before income taxes of ¥395.0 billion (U.S.$5,000 million), a year-on-year increase of 5.5%; and net income attributable to Canon Inc. of ¥250.0 billion (U.S.$3,165 million), a year-on-year increase of 0.6%.

Consolidated Outlook

 

Fiscal year		Millions of yen
		Year ending December 31, 2012								Change				Year ended December 31, 2011				Change (%)
		Previous Outlook (A)				Revised Outlook (B)				(B - A)				Results (C)				(B - C) / C
Net sales		¥	3,900,000			¥	3,690,000			¥	(210,000	)		¥	3,557,433				+3.7%
Operating profit			450,000				390,000				(60,000	)			378,071				+3.2%
Income before income taxes			460,000				395,000				(65,000	)			374,524				+5.5%
Net income attributable to Canon Inc.		¥	290,000			¥	250,000			¥	(40,000	)		¥	248,630				+0.6%

 

- 4 -

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Basic Policy Regarding Profit Distribution

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

Canon Inc. plans to distribute an interim dividend of ¥60.00 (U.S.$0.76) per share for the first half of fiscal 2012, half the amount of the annual dividend paid out in fiscal 2011, to provide a stable return to shareholders. The year-end dividend, however, has yet to be decided.

 

 

- 5 -

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CANON INC. AND SUBSIDIARIES

CONSOLIDATED

II. Financial Statements

1.  CONSOLIDATED BALANCE SHEETS

 

		Millions of yen												Thousands of U.S. dollars
		As of June 30, 2012				As of December 31, 2011				Change				As of June 30, 2012
ASSETS
Current assets:
Cash and cash equivalents		¥	674,047			¥	773,227			¥	(99,180	)		$	8,532,241
Short-term investments			77,548				125,517				(47,969	)			981,620
Trade receivables, net			501,303				533,208				(31,905	)			6,345,608
Inventories			542,245				476,704				65,541				6,863,861
Prepaid expenses and other current assets			256,138				244,649				11,489				3,242,252
Total current assets			2,051,281				2,153,305				(102,024	)			25,965,582
Noncurrent receivables			16,131				16,772				(641	)			204,190
Investments			52,845				51,790				1,055				668,924
Property, plant and equipment, net			1,225,165				1,190,836				34,329				15,508,418
Intangible assets, net			134,258				138,030				(3,772	)			1,699,468
Other assets			381,756				379,994				1,762				4,832,355
Total assets		¥	3,861,436			¥	3,930,727			¥	(69,291	)		$	48,878,937
LIABILITIES AND EQUITY
Current liabilities:
Short-term loans and current portion of long-term debt		¥	4,780			¥	8,343			¥	(3,563	)		$	60,506
Trade payables			375,617				380,532				(4,915	)			4,754,646
Accrued income taxes			63,061				45,900				17,161				798,241
Accrued expenses			262,394				299,422				(37,028	)			3,321,443
Other current liabilities			172,781				159,651				13,130				2,187,101
Total current liabilities			878,633				893,848				(15,215	)			11,121,937
Long-term debt, excluding current installments			2,553				3,368				(815	)			32,316
Accrued pension and severance cost			249,748				249,604				144				3,161,367
Other noncurrent liabilities			72,308				70,240				2,068				915,292
Total liabilities			1,203,242				1,217,060				(13,818	)			15,230,912
Equity:
Canon Inc. stockholders’ equity:
Common stock			174,762				174,762				-				2,212,177
Additional paid-in capital			399,155				401,572				(2,417	)			5,052,595
Legal reserve			59,982				59,004				978				759,267
Retained earnings			3,099,617				3,059,298				40,319				39,235,658
Accumulated other comprehensive income (loss)			(472,222	)			(481,773	)			9,551				(5,977,494	)
Treasury stock, at cost			(761,677	)			(661,731	)			(99,946	)			(9,641,481	)
Total Canon Inc. stockholders’ equity			2,499,617				2,551,132				(51,515	)			31,640,722
Noncontrolling interests			158,577				162,535				(3,958	)			2,007,303
Total equity			2,658,194				2,713,667				(55,473	)			33,648,025
Total liabilities and equity		¥	3,861,436			¥	3,930,727			¥	(69,291	)		$	48,878,937
		Millions of yen												Thousands of U.S. dollars
		As of June 30, 2012				As of December 31, 2011								As of June 30, 2012
Notes:
1. Allowance for doubtful receivables		¥	11,621			¥	11,563							$	147,101
2. Accumulated depreciation			2,064,046				2,038,682								26,127,165
3. Accumulated other comprehensive income (loss):
Foreign currency translation adjustments			(371,805	)			(378,863	)							(4,706,392	)
Net unrealized gains and losses on securities			2,010				1,003								25,443
Net gains and losses on derivative instruments			1,317				455								16,671
Pension liability adjustments			(103,744	)			(104,368	)							(1,313,216	)

 

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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 second quarter		Millions of yen																Thousands of U.S. dollars
		Three months ended June 30, 2012				Three months ended June 30, 2011				Change(%)								Three months ended June 30, 2012
Net sales		¥	899,205			¥	836,574				+				7.5			$	11,382,342
Cost of sales			459,284				418,075												5,813,722
Gross profit			439,921				418,499				+				5.1				5,568,620
Operating expenses:
Selling, general and administrative expenses			270,003				264,009												3,417,760
Research and development expenses			77,322				76,079												978,759
			347,325				340,088												4,396,519
Operating profit			92,596				78,411				+				18.1				1,172,101
Other income (deductions):
Interest and dividend income			2,012				2,124												25,468
Interest expense			(266	)			(234	)											(3,367	)
Other, net			(8,797	)			1,326												(111,354	)
			(7,051	)			3,216												(89,253	)
Income before income taxes			85,545				81,627				+				4.8				1,082,848
Income taxes			32,389				26,207												409,987
Consolidated net income			53,156				55,420												672,861
Less: Net income attributable to noncontrolling interests			1,442				1,559												18,253
Net income attributable to Canon Inc.		¥	51,714			¥	53,861				-				4.0			$	654,608
Results for the first half		Millions of yen																Thousands of U.S. dollars
		Six months ended June 30, 2012				Six months ended June 30, 2011				Change(%)								Six months ended June 30, 2012
Net sales		¥	1,728,445			¥	1,675,765				+				3.1			$	21,879,051
Cost of sales			897,626				851,029												11,362,355
Gross profit			830,819				824,736				+				0.7				10,516,696
Operating expenses:
Selling, general and administrative expenses			506,191				517,649												6,407,481
Research and development expenses			149,353				146,174												1,890,544
			655,544				663,823												8,298,025
Operating profit			175,275				160,913				+				8.9				2,218,671
Other income (deductions):
Interest and dividend income			3,574				3,760												45,241
Interest expense			(375	)			(672	)											(4,747	)
Other, net			(205	)			(342	)											(2,595	)
			2,994				2,746												37,899
Income before income taxes			178,269				163,659				+				8.9				2,256,570
Income taxes			61,503				52,259												778,519
Consolidated net income			116,766				111,400												1,478,051
Less: Net income attributable to noncontrolling interests			3,514				2,077												44,481
Net income attributable to Canon Inc.		¥	113,252			¥	109,323				+				3.6			$	1,433,570

 

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CANON INC. AND SUBSIDIARIES

CONSOLIDATED

Consolidated statements of comprehensive income

 

Results for the second quarter		Millions of yen																Thousands of U.S. dollars
		Three months ended June 30, 2012				Three months ended June 30, 2011				Change(%)								Three months ended June 30, 2012
Consolidated net income		¥	53,156			¥	55,420				-				4.1			$	672,861
Other comprehensive income (loss), net of tax
Foreign currency translation adjustments			(61,992	)			(19,127	)											(784,709	)
Net unrealized gains and losses on securities			(3,008	)			(1,428	)											(38,076	)
Net gains and losses on derivative instruments			5,272				1,082												66,734
Pension liability adjustments			251				1,319												3,177
			(59,477	)			(18,154	)											(752,874	)
Comprehensive income (loss)			(6,321	)			37,266								-				(80,013	)
Less: Comprehensive income attributable to noncontrolling interests			620				1,912												7,848
Comprehensive income (loss) attributable to Canon Inc.		¥	(6,941	)		¥	35,354								-			$	(87,861	)
Results for the first half		Millions of yen																Thousands of U.S. dollars
		Six months ended June 30, 2012				Six months ended June 30, 2011				Change(%)								Six months ended June 30, 2012
Consolidated net income		¥	116,766			¥	111,400				+				4.8			$	1,478,051
Other comprehensive income (loss), net of tax
Foreign currency translation adjustments			8,366				20,517												105,899
Net unrealized gains and losses on securities			989				(1,136	)											12,519
Net gains and losses on derivative instruments			897				(358	)											11,354
Pension liability adjustments			588				1,461												7,443
			10,840				20,484												137,215
Comprehensive income			127,606				131,884				-				3.2				1,615,266
Less: Comprehensive income attributable to noncontrolling interests			3,536				3,205												44,760
Comprehensive income attributable to Canon Inc.		¥	124,070			¥	128,679				-				3.6			$	1,570,506

 

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CANON INC. AND SUBSIDIARIES

CONSOLIDATED

3. DETAILS OF SALES

 

Results for the second quarter		Millions of yen																Thousands of U.S. dollars
Sales by business unit		Three months ended June 30, 2012				Three months ended June 30, 2011				Change(%)								Three months ended June 30, 2012
Office		¥	453,862			¥	465,799				-				2.6			$	5,745,089
Imaging System			369,734				302,216				+				22.3				4,680,177
Industry and Others			98,348				91,256				+				7.8				1,244,911
Eliminations			(22,739	)			(22,697	)							-				(287,835	)
Total		¥	899,205			¥	836,574				+				7.5			$	11,382,342
		Millions of yen																Thousands of U.S. dollars
Sales by region		Three months ended June 30, 2012				Three months ended June 30, 2011				Change(%)								Three months ended June 30, 2012
Japan		¥	178,849			¥	165,556				+				8.0			$	2,263,911
Overseas:
Americas			243,180				230,519				+				5.5				3,078,228
Europe			258,936				268,641				-				3.6				3,277,671
Asia and Oceania			218,240				171,858				+				27.0				2,762,532
			720,356				671,018				+				7.4				9,118,431
Total		¥	899,205			¥	836,574				+				7.5			$	11,382,342
Results for the first half		Millions of yen																Thousands of U.S. dollars
Sales by business unit		Six months ended June 30, 2012				Six months ended June 30, 2011				Change(%)								Six months ended June 30, 2012
Office		¥	891,901			¥	946,661				-				5.8			$	11,289,886
Imaging System			673,210				591,837				+				13.7				8,521,646
Industry and Others			208,130				183,049				+				13.7				2,634,557
Eliminations			(44,796	)			(45,782	)							-				(567,038	)
Total		¥	1,728,445			¥	1,675,765				+				3.1			$	21,879,051
		Millions of yen																Thousands of U.S. dollars
Sales by region		Six months ended June 30, 2012				Six months ended June 30, 2011				Change(%)								Six months ended June 30, 2012
Japan		¥	355,724			¥	323,604				+				9.9			$	4,502,835
Overseas:
Americas			453,528				447,053				+				1.4				5,740,861
Europe			503,389				548,594				-				8.2				6,372,013
Asia and Oceania			415,804				356,514				+				16.6				5,263,342
			1,372,721				1,352,161				+				1.5				17,376,216
Total		¥	1,728,445			¥	1,675,765				+				3.1			$	21,879,051

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

Office Business Unit :		Office multifunction devices (MFDs) / Office copying machines / Personal-use copying machines / Laser MFDs / Laser printers / Digital production printing systems / High speed continuous feed printers / Wide-format printers / Document solution

Imaging System Business Unit * :		Interchangeable-lens digital cameras / Compact digital cameras / Digital camcorders / Digital cinema cameras / Interchangeable lenses / Inkjet printers /Large-format inkjet printers / Commercial photo printers / Image scanners / Broadcast equipment / Calculators

Industry and Others Business Unit :		Semiconductor lithography equipment / Flat-panel-display lithography equipment / Digital radiography systems / Ophthalmic equipment / Vacuum thin-film deposition equipment / Organic LED panel manufacturing equipment / Micromotors / Computers / Handy terminals / Document scanners
*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:

Americas:		United States of America, Canada, Latin America

Europe:		United Kingdom, Germany, France, Netherlands, European countries, Middle East and Africa

Asia and Oceania:		China, Asian countries, Australia

 

- 9 -

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CANON INC. AND SUBSIDIARIES

CONSOLIDATED

4.  CONSOLIDATED STATEMENTS OF CASH FLOWS

 

		Millions of yen								Thousands of U.S. dollars
		Six months ended June 30, 2012				Six months ended June 30, 2011				Six months ended June 30, 2012
Cash flows from operating activities:
Consolidated net income		¥	116,766			¥	111,400			$	1,478,051
Adjustments to reconcile consolidated net income to net cash provided by operating activities:
Depreciation and amortization			120,906				127,587				1,530,456
Loss on disposal of fixed assets			7,380				4,914				93,418
Deferred income taxes			(1,428	)			(1,627	)			(18,076	)
Decrease in trade receivables			32,233				91,225				408,013
Increase in inventories			(63,586	)			(83,978	)			(804,886	)
Decrease in trade payables			(1,273	)			(9,859	)			(16,114	)
Increase (decrease) in accrued income taxes			17,231				(14,803	)			218,114
Decrease in accrued expenses			(36,987	)			(32,986	)			(468,190	)
Increase (decrease) in accrued (prepaid) pension and severance cost			1,763				(300	)			22,316
Other, net			8,962				(748	)			113,442
Net cash provided by operating activities			201,967				190,825				2,556,544
Cash flows from investing activities:
Purchases of fixed assets			(162,481	)			(104,307	)			(2,056,722	)
Proceeds from sale of fixed assets			1,287				616				16,291
Purchases of available-for-sale securities			(152	)			(540	)			(1,924	)
Proceeds from sale and maturity of available-for-sale securities			189				1,469				2,392
Decrease in time deposits, net			49,998				17,729				632,886
Acquisitions of subsidiaries, net of cash acquired			(704	)			17				(8,911	)
Purchases of other investments			(259	)			(127	)			(3,278	)
Other, net			345				11,835				4,367
Net cash used in investing activities			(111,777	)			(73,308	)			(1,414,899	)
Cash flows from financing activities:
Proceeds from issuance of long-term debt			389				593				4,924
Repayments of long-term debt			(1,181	)			(2,345	)			(14,949	)
Increase (decrease) in short-term loans, net			(3,616	)			6,582				(45,772	)
Dividends paid			(72,092	)			(79,850	)			(912,557	)
Repurchases of treasury stock, net			(99,970	)			(49,843	)			(1,265,443	)
Other, net			(11,071	)			(1,571	)			(140,140	)
Net cash used in financing activities			(187,541	)			(126,434	)			(2,373,937	)
Effect of exchange rate changes on cash and cash equivalents			(1,829	)			16,957				(23,151	)
Net change in cash and cash equivalents			(99,180	)			8,040				(1,255,443	)
Cash and cash equivalents at beginning of period			773,227				840,579				9,787,684
Cash and cash equivalents at end of period		¥	674,047			¥	848,619			$	8,532,241

 

- 10 -

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CANON INC. AND SUBSIDIARIES

CONSOLIDATED

5. NOTE FOR GOING CONCERN ASSUMPTION

      Not applicable.

6. SEGMENT INFORMATION

(1) SEGMENT INFORMATION BY BUSINESS UNIT

 

Results for the second quarter				Millions of yen												Thousands of U.S. dollars
				Three months ended June 30, 2012				Three months ended June 30, 2011				Change(%)				Three months ended June 30, 2012
Office
Net sales:
		External customers		¥	452,682			¥	464,301			-	2.5			$	5,730,152
		Intersegment			1,180				1,498			-	21.2				14,937
		Total			453,862				465,799			-	2.6				5,745,089
Operating cost and expenses					395,550				405,957			-	2.6				5,006,962
Operating profit				¥	58,312			¥	59,842			-	2.6			$	738,127
Imaging System
Net sales:
		External customers		¥	369,297			¥	301,993			+	22.3			$	4,674,646
		Intersegment			437				223			+	96.0				5,531
		Total			369,734				302,216			+	22.3				4,680,177
Operating cost and expenses					313,721				256,901			+	22.1				3,971,152
Operating profit				¥	56,013			¥	45,315			+	23.6			$	709,025
Industry and Others
Net sales:
		External customers		¥	77,226			¥	70,280			+	9.9			$	977,544
		Intersegment			21,122				20,976			+	0.7				267,367
		Total			98,348				91,256			+	7.8				1,244,911
Operating cost and expenses					92,016				86,422			+	6.5				1,164,759
Operating profit				¥	6,332			¥	4,834			+	31.0			$	80,152
Corporate and Eliminations
Net sales:
		External customers		¥	-			¥	-				-			$	-
		Intersegment			(22,739	)			(22,697	)			-				(287,835	)
		Total			(22,739	)			(22,697	)			-				(287,835	)
Operating cost and expenses					5,322				8,883				-				67,368
Operating profit				¥	(28,061	)		¥	(31,580	)			-			$	(355,203	)
Consolidated
Net sales:
		External customers		¥	899,205			¥	836,574			+	7.5			$	11,382,342
		Intersegment			-				-				-				-
		Total			899,205				836,574			+	7.5				11,382,342
Operating cost and expenses					806,609				758,163			+	6.4				10,210,241
Operating profit				¥	92,596			¥	78,411			+	18.1			$	1,172,101

 

- 11 -

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CANON INC. AND SUBSIDIARIES

CONSOLIDATED

 

Results for the first half				Millions of yen												Thousands of U.S. dollars
				Six months ended June 30, 2012				Six months ended June 30, 2011				Change(%)				Six months ended June 30, 2012
Office
Net sales:
		External customers		¥	889,608			¥	943,352			-	5.7			$	11,260,861
		Intersegment			2,293				3,309			-	30.7				29,025
		Total			891,901				946,661			-	5.8				11,289,886
Operating cost and expenses					780,743				823,767			-	5.2				9,882,823
Operating profit				¥	111,158			¥	122,894			-	9.5			$	1,407,063
Imaging System
Net sales:
		External customers		¥	672,314			¥	591,361			+	13.7			$	8,510,304
		Intersegment			896				476			+	88.2				11,342
		Total			673,210				591,837			+	13.7				8,521,646
Operating cost and expenses					570,463				506,613			+	12.6				7,221,051
Operating profit				¥	102,747			¥	85,224			+	20.6			$	1,300,595
Industry and Others
Net sales:
		External customers		¥	166,523			¥	141,052			+	18.1			$	2,107,886
		Intersegment			41,607				41,997			-	0.9				526,671
		Total			208,130				183,049			+	13.7				2,634,557
Operating cost and expenses					197,805				171,612			+	15.3				2,503,861
Operating profit				¥	10,325			¥	11,437			-	9.7			$	130,696
Corporate and Eliminations
Net sales:
		External customers		¥	-			¥	-				-			$	-
		Intersegment			(44,796	)			(45,782	)			-				(567,038	)
		Total			(44,796	)			(45,782	)			-				(567,038	)
Operating cost and expenses					4,159				12,860				-				52,645
Operating profit				¥	(48,955	)		¥	(58,642	)			-			$	(619,683	)
Consolidated
Net sales:
		External customers		¥	1,728,445			¥	1,675,765			+	3.1			$	21,879,051
		Intersegment			-				-				-				-
		Total			1,728,445				1,675,765			+	3.1				21,879,051
Operating cost and expenses					1,553,170				1,514,852			+	2.5				19,660,380
Operating profit				¥	175,275			¥	160,913			+	8.9			$	2,218,671

 

- 12 -

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CANON INC. AND SUBSIDIARIES

CONSOLIDATED

(2)  SEGMENT INFORMATION BY GEOGRAPHIC AREA

 

Results for the second quarter				Millions of yen												Thousands of U.S. dollars
				Three months ended June 30, 2012				Three months ended June 30, 2011				Change(%)				Three months ended June 30, 2012
Japan
Net sales:
		External customers		¥	204,579			¥	181,418			+	12.8			$	2,589,608
		Intersegment			474,836				435,167			+	9.1				6,010,582
		Total			679,415				616,585			+	10.2				8,600,190
Operating cost and expenses					578,793				520,779			+	11.1				7,326,494
Operating profit				¥	100,622			¥	95,806			+	5.0			$	1,273,696
Americas
Net sales:
		External customers		¥	241,097			¥	228,738			+	5.4			$	3,051,861
		Intersegment			6,871				3,948			+	74.0				86,974
		Total			247,968				232,686			+	6.6				3,138,835
Operating cost and expenses					243,642				229,321			+	6.2				3,084,076
Operating profit				¥	4,326			¥	3,365			+	28.6			$	54,759
Europe
Net sales:
		External customers		¥	258,445			¥	267,776			-	3.5			$	3,271,456
		Intersegment			1,527				1,129			+	35.3				19,329
		Total			259,972				268,905			-	3.3				3,290,785
Operating cost and expenses					254,182				261,581			-	2.8				3,217,494
Operating profit				¥	5,790			¥	7,324			-	20.9			$	73,291
Asia and Oceania
Net sales:
		External customers		¥	195,084			¥	158,642			+	23.0			$	2,469,417
		Intersegment			209,021				149,572			+	39.7				2,645,836
		Total			404,105				308,214			+	31.1				5,115,253
Operating cost and expenses					392,890				298,305			+	31.7				4,973,291
Operating profit				¥	11,215			¥	9,909			+	13.2			$	141,962
Corporate and Eliminations
Net sales:
		External customers		¥	-			¥	-				-			$	-
		Intersegment			(692,255	)			(589,816	)			-				(8,762,721	)
		Total			(692,255	)			(589,816	)			-				(8,762,721	)
Operating cost and expenses					(662,898	)			(551,823	)			-				(8,391,114	)
Operating profit				¥	(29,357	)		¥	(37,993	)			-			$	(371,607	)
Consolidated
Net sales:
		External customers		¥	899,205			¥	836,574			+	7.5			$	11,382,342
		Intersegment			-				-				-				-
		Total			899,205				836,574			+	7.5				11,382,342
Operating cost and expenses					806,609				758,163			+	6.4				10,210,241
Operating profit				¥	92,596			¥	78,411			+	18.1			$	1,172,101

 

- 13 -

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CANON INC. AND SUBSIDIARIES

CONSOLIDATED

 

Results for the first half				Millions of yen												Thousands of U.S. dollars
				Six months ended June 30, 2012				Six months ended June 30, 2011				Change(%)				Six months ended June 30, 2012
Japan
Net sales:
		External customers		¥	413,794			¥	358,894			+	15.3			$	5,237,899
		Intersegment			935,009				878,099			+	6.5				11,835,557
		Total			1,348,803				1,236,993			+	9.0				17,073,456
Operating cost and expenses					1,175,625				1,054,653			+	11.5				14,881,329
Operating profit				¥	173,178			¥	182,340			-	5.0			$	2,192,127
Americas
Net sales:
		External customers		¥	448,099			¥	444,415			+	0.8			$	5,672,139
		Intersegment			12,089				7,061			+	71.2				153,026
		Total			460,188				451,476			+	1.9				5,825,165
Operating cost and expenses					451,630				447,066			+	1.0				5,716,836
Operating profit				¥	8,558			¥	4,410			+	94.1			$	108,329
Europe
Net sales:
		External customers		¥	502,481			¥	545,489			-	7.9			$	6,360,519
		Intersegment			3,053				2,011			+	51.8				38,646
		Total			505,534				547,500			-	7.7				6,399,165
Operating cost and expenses					488,851				528,857			-	7.6				6,187,988
Operating profit				¥	16,683			¥	18,643			-	10.5			$	211,177
Asia and Oceania
Net sales:
		External customers		¥	364,071			¥	326,967			+	11.3			$	4,608,494
		Intersegment			406,227				335,430			+	21.1				5,142,114
		Total			770,298				662,397			+	16.3				9,750,608
Operating cost and expenses					738,234				638,212			+	15.7				9,344,735
Operating profit				¥	32,064			¥	24,185			+	32.6			$	405,873
Corporate and Eliminations
Net sales:
		External customers		¥	-			¥	-				-			$	-
		Intersegment			(1,356,378	)			(1,222,601	)			-				(17,169,343	)
		Total			(1,356,378	)			(1,222,601	)			-				(17,169,343	)
Operating cost and expenses					(1,301,170	)			(1,153,936	)			-				(16,470,508	)
Operating profit				¥	(55,208	)		¥	(68,665	)			-			$	(698,835	)
Consolidated
Net sales:
		External customers		¥	1,728,445			¥	1,675,765			+	3.1			$	21,879,051
		Intersegment			-				-				-				-
		Total			1,728,445				1,675,765			+	3.1				21,879,051
Operating cost and expenses					1,553,170				1,514,852			+	2.5				19,660,380
Operating profit				¥	175,275			¥	160,913			+	8.9			$	2,218,671

 

- 14 -

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CANON INC. AND SUBSIDIARIES

CONSOLIDATED

7. SIGNIFICANT CHANGES IN CANON INC. STOCKHOLDERS’ EQUITY

    None.

8. BASIS OF PRESENTATION AND SIGNIFICANT ACCOUNTING POLICIES

(1) GROUP POSITION

 

1.

Number of Group Companies

 

		June 30, 2012				December 31, 2011				Change
Subsidiaries			278				277				1
Affiliates			10				11				(1	)
Total			288				288				-

 

2.

Change in Group Entities

 

Subsidiaries
Addition:		11 companies
Removal:		10 companies
Affiliates(Carried at Equity Basis)
Removal:		1 company

 

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.

 

- 15 -

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Canon Inc.

July 25, 2012

CONSOLIDATED FINANCIAL RESULTS FOR THE SECOND QUARTER

AND THE FIRST HALF ENDED JUNE 30, 2012

SUPPLEMENTARY REPORT

TABLE OF CONTENTS

 

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

 

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Canon Inc.

 

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

 

				2012												2011														Change year over year
				2nd quarter				1st half				Year (P)				2nd quarter				1st half				Year						2nd quarter				1st half				Year
Japan
		Office			95,062				187,593				-				88,398				179,457				362,528						+7.5	%			+4.5	%		-
		Imaging System			50,036				92,384				-				41,142				79,774				187,397						+21.6	%			+15.8	%		-
		Industry and Others			33,751				75,747				-				36,016				64,373				144,525						-6.3	%			+17.7	%		-
		Total			178,849				355,724				747,800				165,556				323,604				694,450						+8.0	%			+9.9	%		+7.7%
Overseas
		Office			357,620				702,015				-				375,903				763,895				1,549,584						-4.9	%			-8.1	%		-
		Imaging System			319,261				579,930				-				260,851				511,587				1,123,626						+22.4	%			+13.4	%		-
		Industry and Others			43,475				90,776				-				34,264				76,679				189,773						+26.9	%			+18.4	%		-
		Total			720,356				1,372,721				2,942,200				671,018				1,352,161				2,862,983						+7.4	%			+1.5	%		+2.8%
		Americas
		Office			138,992				264,713				-				143,334				285,744				588,190						-3.0	%			-7.4	%		-
		Imaging System			93,729				167,266				-				77,042				143,178				335,158						+21.7	%			+16.8	%		-
		Industry and Others			10,459				21,549				-				10,143				18,131				38,607						+3.1	%			+18.9	%		-
		Total			243,180				453,528				974,500				230,519				447,053				961,955						+5.5	%			+1.4	%		+1.3%
		Europe
		Office			149,489				301,070				-				169,018				351,198				696,239						-11.6	%			-14.3	%		-
		Imaging System			104,143				191,601				-				93,428				183,179				391,747						+11.5	%			+4.6	%		-
		Industry and Others			5,304				10,718				-				6,195				14,217				25,079						-14.4	%			-24.6	%		-
		Total			258,936				503,389				1,065,100				268,641				548,594				1,113,065						-3.6	%			-8.2	%		-4.3%
		Asia and Oceania
		Office			69,139				136,232				-				63,551				126,953				265,155						+8.8	%			+7.3	%		-
		Imaging System			121,389				221,063				-				90,381				185,230				396,721						+34.3	%			+19.3	%		-
		Industry and Others			27,712				58,509				-				17,926				44,331				126,087						+54.6	%			+32.0	%		-
		Total			218,240				415,804				902,600				171,858				356,514				787,963						+27.0	%			+16.6	%		+14.5%
Intersegment
		Office			1,180				2,293				-				1,498				3,309				5,831						-21.2	%			-30.7	%		-
		Imaging System			437				896				-				223				476				1,021						+96.0	%			+88.2	%		-
		Industry and Others			21,122				41,607				-				20,976				41,997				86,565						+0.7	%			-0.9	%		-
		Eliminations			(22,739	)			(44,796	)			-				(22,697	)			(45,782	)			(93,417	)					-				-			-
		Total			0				0				0				0				0				0						-				-			-
Total
		Office			453,862				891,901				1,818,900				465,799				946,661				1,917,943						-2.6	%			-5.8	%		-5.2%
		Imaging System			369,734				673,210				1,528,100				302,216				591,837				1,312,044						+22.3	%			+13.7	%		+16.5%
		Industry and Others			98,348				208,130				431,800				91,256				183,049				420,863						+7.8	%			+13.7	%		+2.6%
		Eliminations			(22,739	)			(44,796	)			(88,800	)			(22,697	)			(45,782	)			(93,417	)					-				-			-
		Total			899,205				1,728,445				3,690,000				836,574				1,675,765				3,557,433						+7.5	%			+3.1	%		+3.7%

(P)=Projection

 

- S1 -

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Canon Inc.

 

2. SEGMENT INFORMATION BY BUSINESS UNIT																															(Millions of yen)
				2012												2011														Change year over year
				2nd quarter				1st half				Year (P)				2nd quarter				1st half				Year						2nd quarter				1st half				Year
Office
		External customers			452,682				889,608				1,815,400				464,301				943,352				1,912,112						-2.5%				-5.7%			-5.1%
		Intersegment			1,180				2,293				3,500				1,498				3,309				5,831						-21.2%				-30.7%			-40.0%
		Total sales			453,862				891,901				1,818,900				465,799				946,661				1,917,943						-2.6%				-5.8%			-5.2%
		Operating profit			58,312				111,158				208,200				59,842				122,894				259,265						-2.6%				-9.5%			-19.7%
		% of sales			12.8%				12.5%				11.4%				12.8%				13.0%				13.5%						-				-			-
Imaging System
		External customers			369,297				672,314				1,526,700				301,993				591,361				1,311,023						+22.3%				+13.7%			+16.5%
		Intersegment			437				896				1,400				223				476				1,021						+96.0%				+88.2%			+37.1%
		Total sales			369,734				673,210				1,528,100				302,216				591,837				1,312,044						+22.3%				+13.7%			+16.5%
		Operating profit			56,013				102,747				268,000				45,315				85,224				211,294						+23.6%				+20.6%			+26.8%
		% of sales			15.1%				15.3%				17.5%				15.0%				14.4%				16.1%						-				-			-
Industry and Others
		External customers			77,226				166,523				347,900				70,280				141,052				334,298						+9.9%				+18.1%			+4.1%
		Intersegment			21,122				41,607				83,900				20,976				41,997				86,565						+0.7%				-0.9%			-3.1%
		Total sales			98,348				208,130				431,800				91,256				183,049				420,863						+7.8%				+13.7%			+2.6%
		Operating profit			6,332				10,325				12,200				4,834				11,437				24,300						+31.0%				-9.7%			-49.8%
		% of sales			6.4%				5.0%				2.8%				5.3%				6.2%				5.8%						-				-			-
Corporate and Eliminations
		External customers			-				-				-				-				-				-						-				-			-
		Intersegment			(22,739	)			(44,796	)			(88,800	)			(22,697	)			(45,782	)			(93,417	)					-				-			-
		Total sales			(22,739	)			(44,796	)			(88,800	)			(22,697	)			(45,782	)			(93,417	)					-				-			-
		Operating profit			(28,061	)			(48,955	)			(98,400	)			(31,580	)			(58,642	)			(116,788	)					-				-			-
Consolidated
		External customers			899,205				1,728,445				3,690,000				836,574				1,675,765				3,557,433						+7.5%				+3.1%			+3.7%
		Intersegment			-				-				-				-				-				-						-				-			-
		Total sales			899,205				1,728,445				3,690,000				836,574				1,675,765				3,557,433						+7.5%				+3.1%			+3.7%
		Operating profit			92,596				175,275				390,000				78,411				160,913				378,071						+18.1%				+8.9%			+3.2%
		% of sales			10.3%				10.1%				10.6%				9.4%				9.6%				10.6%						-				-			-
		(P)=Projection
3. OTHER INCOME / DEDUCTIONS																															(Millions of yen)
				2012												2011														Change year over year
				2nd quarter				1st half				Year (P)				2nd quarter				1st half				Year						2nd quarter				1st half				Year
		Interest and dividend, net			1,746				3,199				5,000				1,890				3,088				7,444						(144	)			+111			(2,444)
		Forex gain (loss)			(12,640	)			(3,333	)			(3,000	)			(2,056	)			837				(3,287	)					(10,584	)			(4,170	)		+287
		Equity earnings (loss) of affiliated companies			(38	)			427				900				(2,499	)			(5,377	)			(7,368	)					+2,461				+5,804			+8,268
		Other, net			3,881				2,701				2,100				5,881				4,198				(336	)					(2,000	)			(1,497	)		+2,436
		Total			(7,051	)			2,994				5,000				3,216				2,746				(3,547	)					(10,267	)			+248			+8,547
																															(P)=Projection

 

- S2 -

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Canon Inc.

4. BREAKDOWN OF PRODUCT SALES WITHIN BUSINESS UNIT

		2012												2011
		2nd quarter				1st half				Year (P)				2nd quarter				1st half				Year
Office
Monochrome copiers			16	%			16	%			16	%			15	%			15	%		15%
Color copiers			19	%			19	%			19	%			17	%			17	%		17%
Printers			44	%			44	%			44	%			47	%			47	%		48%
Others			21	%			21	%			21	%			21	%			21	%		20%
Imaging System
Cameras			73	%			72	%			72	%			69	%			69	%		71%
Inkjet printers			20	%			21	%			21	%			26	%			26	%		24%
Others			7	%			7	%			7	%			5	%			5	%		5%
Industry and Others
Lithography equipment			22	%			20	%			15	%			15	%			17	%		19%
Others			78	%			80	%			85	%			85	%			83	%		81%

(P)=Projection

5. SALES GROWTH IN LOCAL CURRENCY (Year over year)

				2012
				2nd quarter				1st half				Year (P)
Office
		Japan			+7.5	%			+4.5	%		-
		Overseas			+1.8	%			-2.6	%		-
		Total			+2.8	%			-1.3	%		-2.6%
Imaging System
		Japan			+21.6	%			+15.8	%		-
		Overseas			+29.3	%			+18.9	%		-
		Total			+28.3	%			+18.5	%		+18.8%
Industry and Others
		Japan			-6.3	%			+17.7	%		-
		Overseas			+29.9	%			+20.7	%		-
		Total			+8.9	%			+14.7	%		+2.9%
Total
		Japan			+8.0	%			+9.9	%		+7.7%
		Overseas			+13.9	%			+6.9	%		+5.6%
		Americas			+9.0	%			+5.0	%		+1.9%
		Europe			+8.4	%			+0.8	%		+2.8%
		Asia and Oceania			+29.0	%			+18.4	%		+14.2%
		Total			+12.7	%			+7.5	%		+6.0%

(P

)=Projection

 

- S3 -

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Canon Inc.

6. PROFITABILITY

		2012								2011
		1st half				Year (P)				1st half				Year
ROE *1			9.0	%			9.7	%			8.3	%			9.6	%
ROA *2			5.8	%			6.3	%			5.5	%			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.

7. IMPACT OF FOREIGN EXCHANGE RATES

(1) Exchange rates															(Yen)
		2012												2011
		1st half				2nd half (P)				Year (P)				1st half				Year
Yen/US$			79.92				80.00				79.96				81.92				79.55
Yen/Euro			103.41				100.00				101.59				114.95				110.72

(P)=Projection

 

(2) Impact of foreign exchange rates on sales (Year over year)				(Billions of yen)
				2012
				1st half				Year (P)
US$					(11.4	)			+11.1
Euro					(54.7	)			(90.8	)
Other currencies					(0.6	)			+4.2
		Total			(66.7	)			(75.5	)

(P)=Projection                                                                  

 

(3) Impact of foreign exchange rates per yen				(Billions of yen)
				2012
				2nd half (P)
On sales
		US$			10.4
		Euro			5.3
On operating profit
		US$			5.3
		Euro			2.9
					(P)=Projection

 

8. STATEMENTS OF CASH FLOWS

(Millions of yen)

		2012								2011
		1st half				Year (P)				1st half				Year
Net cash provided by operating activities			201,967				505,000				190,825				469,562
Net cash used in investing activities			(111,777	)			(328,000	)			(73,308	)			(256,543	)
Free cash flow			90,190				177,000				117,517				213,019
Net cash used in financing activities			(187,541	)			(253,200	)			(126,434	)			(257,513	)
Effect of exchange rate changes on cash and cash equivalents			(1,829	)			3,000				16,957				(22,858	)
Net change in cash and cash equivalents			(99,180	)			(73,200	)			8,040				(67,352	)
Cash and cash equivalents at end of period			674,047				700,000				848,619				773,227

(P)=Projection                         

 

- S4 -

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Canon Inc.

 

9. R&D EXPENDITURE		(Millions of yen)

				2012								2011
				1st half				Year (P)				1st half				Year
Office					49,010				-				50,580				103,378
Imaging System					43,241				-				38,943				82,731
Industry and Others					12,751				-				10,767				27,061
Corporate and Eliminations					44,351				-				45,884				94,630
		Total			149,353				300,000				146,174				307,800
		% of sales			8.6%				8.1%				8.7%				8.7%
													(P)=Projection
10. INCREASE IN PP&E & DEPRECIATION AND AMORTIZATION												(Millions of yen)
				2012								2011
				1st half				Year (P)				1st half				Year
		Increase in PP&E			144,609				280,000				99,750				226,869
		Depreciation and amortization			120,906				260,000				127,587				261,343
													(P)=Projection
11. INVENTORIES
(1) Inventories				(Millions of yen)
				2012				2011				Difference
				Jun.30				Dec.31
		Office			209,299				207,690				+1,609
		Imaging System			209,743				148,954				+60,789
		Industry and Others			123,203				120,060				+3,143
		Total			542,245				476,704				+65,541
(2) Inventories / Sales*												(Days)
				2012				2011				Difference
				Jun.30				Dec.31
		Office			43				39				+4
		Imaging System			57				38				+19
		Industry and Others			138				115				+23
		Total			57				46				+11
		*Index based on the previous six months sales.
12. DEBT RATIO
				2012				2011				Difference
				Jun.30				Dec.31
		Total debt / Total assets			0.2	%			0.3	%			-0.1	%
13. OVERSEAS PRODUCTION RATIO
				2012				2011
				1st half				Year
		Overseas production ratio			53	%			52	%
14. NUMBER OF EMPLOYEES
				2012				2011				Difference
				Jun.30				Dec.31
		Japan			70,969				70,346				+623
		Overseas			132,680				127,961				+4,719
		Total			203,649				198,307				+5,342

 

- S5 -