CANON INC. | ||||
(Registrant) |
||||
Date....August 5, 2010..... | By...../s/...... Masashiro Kobayashi ........................ | |||
(Signature)* | ||||
Masashiro Kobayashi General Manager Global Finance Management Center Canon Inc. |
||||
Page | ||||||
I |
Corporate Information | |||||
(1) Consolidated Financial Summary | 2 | |||||
(2) Description of Business | 3 | |||||
(3) Group Entities | 3 | |||||
(4) Number of Employees | 3 | |||||
II |
The Business | |||||
(1) Production and Sales | 4 | |||||
(2) Risk Factors | 5 | |||||
(3) Significant Business Contracts Entered into in the Second Quarter of Fiscal 2010 | 5 | |||||
(4) Operating Results | 8 | |||||
III |
Property, Plant and Equipment | |||||
(1) Major Property, Plant and Equipment | 11 | |||||
(2) Prospect of Capital Investment in the Second Quarter of Fiscal 2010 | 11 | |||||
IV |
Company Information | |||||
(1) Shares | 11 | |||||
(2) Stock Price Transition | 16 | |||||
(3) Directors and Executive Officers | 17 | |||||
V |
Financial Statements | |||||
(1) Consolidated Financial Statements | 18 | |||||
(2) Other Information | 48 |
1
(1) | Consolidated Financial Summary |
Millions of yen (except per share amounts) | ||||||||||||||||||||
Six months | Six months | Three months | Three months | Year ended December 31, 2009 |
||||||||||||||||
ended | ended | ended | ended | |||||||||||||||||
June 30, 2010 | June 30, 2009 | June 30, 2010 | June 30, 2009 | |||||||||||||||||
Net sales |
1,725,884 | 1,480,819 | 970,358 | 793,785 | 3,209,201 | |||||||||||||||
Income before
income taxes |
201,503 | 57,886 | 112,651 | 35,492 | 219,355 | |||||||||||||||
Net income
attributable to Canon
Inc. |
124,449 | 33,349 | 67,638 | 15,605 | 131,647 | |||||||||||||||
Canon Inc.
stockholders equity |
- | - | 2,699,378 | 2,683,183 | 2,688,109 | |||||||||||||||
Total equity |
- | - | 2,876,283 | 2,871,761 | 2,879,400 | |||||||||||||||
Total assets |
- | - | 4,016,902 | 3,744,669 | 3,847,557 | |||||||||||||||
Canon Inc.
stockholders equity
per share (yen) |
- | - | 2,176.72 | 2,173.53 | 2,177.53 | |||||||||||||||
Net income
attributable to Canon
Inc. Stockholders per
share: |
||||||||||||||||||||
Basic (yen) |
100.68 | 27.01 | 54.67 | 12.64 | 106.64 | |||||||||||||||
Diluted (yen) |
100.68 | 27.01 | 54.66 | 12.64 | 106.64 | |||||||||||||||
Canon Inc.
stockholders equity to
total assets (%) |
- | - | 67.2 | 71.7 | 69.9 | |||||||||||||||
Cash flows from
operating activities |
348,575 | 188,701 | - | - | 611,235 | |||||||||||||||
Cash flows from
investing activities |
(176,982) | (218,332) | - | - | (370,244) | |||||||||||||||
Cash flows from
financing activities |
(150,605) | (71,360) | - | - | (142,379) | |||||||||||||||
Cash and cash
equivalents at end of
period |
- | - | 771,697 | 603,565 | 795,034 | |||||||||||||||
Number of employees |
- | - | 193,804 | 165,318 | 168,879 |
1. | Canons consolidated financial statements are prepared in accordance with U.S. generally accepted accounting principles. | ||
2. | Consumption tax is excluded from the stated amount of net sales. |
2
(2) | Description of Business |
(3) | Group Entities |
(4) | Number of Employees |
As of June 30, 2010 | ||||
Consolidated |
193,804 | |||
Parent-alone |
26,123 |
3
(1) |
Production and
Sales |
Millions of yen | ||||||||
Three months ended June 30, 2010 | ||||||||
Change from | ||||||||
Production | June 30, 2009(%) | |||||||
Office |
486,779 | +84.9 | ||||||
Consumer |
404,127 | +18.5 | ||||||
Industry and Others |
72,709 | +76.3 | ||||||
Total |
963,615 | +49.3 | ||||||
1. |
Amount of production is calculated by sales price. | |
2. |
Consumption tax is excluded from the stated amount of production.
|
Millions of yen | ||||||||
Three months ended June 30, 2010 | ||||||||
Change from | ||||||||
Sales | June 30, 2009(%) | |||||||
Office |
521,943 | +31.3 | ||||||
Consumer |
364,027 | +9.8 | ||||||
Industry and Others |
108,930 | +27.5 | ||||||
Eliminations |
(24,542) | - | ||||||
Total |
970,358 | +22.2 | ||||||
1. |
Consumption tax is excluded from the stated amount of net sales. | |
2. |
Canons sales to its significant customer are summarized as follows:
|
Millions of yen | ||||||||||||||||
Three months ended June 30, 2010 | Three months ended June 30, 2009 | |||||||||||||||
Sales | Proportion (%) | Sales | Proportion (%) | |||||||||||||
Hewlett-Packard Company |
193,743 | 20.0 | 141,161 | 17.8 |
4
(2) | Risk Factors |
(3) | Significant Business Contracts Entered into in the Second Quarter of 2010 |
5
(1) | Trade Name: Canon Inc. |
(2) | Business Operation: Development, Manufacture and sale of office equipment,
consumer products, and industrial and other equipment |
(3) | Common Stock: ¥174,762 million (As of June 30, 2010) |
6
(1) | Trade Name: Canon Inc. |
(2) | Business Operation: Development, Manufacture and sale of office equipment, consumer products, and industrial and other equipment |
(3) | Common Stock: ¥174,762 million (As of June 30, 2010) |
7
(4) | Operating Results |
8
9
10
(1) | Major Property, Plant and Equipment |
(2) | Prospect of Capital Investment in the Second Quarter of Fiscal 2010 |
(1) | Shares |
As of | ||||
June 30, 2010 | ||||
Total number of issued shares |
1,333,763,464 |
(i) | If the Company effects a share split or a share consolidation after the date of the
allotment of the share options, the Exercise Price will be adjusted by the following
calculation formula, with any fractional amount of less than one yen to be rounded up to
one yen: |
=Exercise Price before adjustment × |
1 | |||
|
||||
|
Ratio of Share Split or Share Consolidation |
(ii) | If, after the date of allotment of share options, the Company issues common shares at
a price lower than the then market price thereof or disposes common shares owned by it,
the Exercise Price will be adjusted by the following calculation formula, with any
fractional amount of less than one yen to be rounded up to one yen; however, the Exercise Price will not be adjusted in the case of
the exercise of share options: |
11
The Number of Issued and Outstanding Shares is the number of shares already issued by the
Company after subtraction of the number of shares owned by the Company. In the case of the
Companys disposal of shares owned by it, the Number of Newly Issued Shares will be
replaced with the Number of Own Shares to Be Disposed. |
|||
(iii) | In the case of a merger, a company split or capital reduction after the date of
allotment of share options, or in any other analogous case requiring the adjustment of the
Exercise Price, the Exercise Price shall be appropriately adjusted within a reasonable
range. |
(i) | One share option may not be exercised partially. |
||
(ii) | Each holder of share options must continue to be a director, executive officer or
employee of the Company until the end of the Companys general meeting of shareholders
regarding the final business term within 2 years from the end of the Ordinary General
Meeting of Shareholders for the 107th Business Term of the Company. |
||
(iii) | Holders of share options will be entitled to exercise their share options for 2 years,
and during the exercisable period, even after they lose their positions as directors,
executive officers or employees. However, if a holder of share options loses such position
due to resignation at his/her initiative, or due to dismissal or discharge by the Company,
his/her share options will immediately be forfeited. |
||
(iv) | No succession by inheritance is authorized for the share options. |
||
(v) | Any other conditions for the exercise of share options may be established by the Board of
Directors. |
(i) | If the Company effects a share split or a share consolidation after the date of the
allotment of the share options, the Exercise Price will be adjusted by the following
calculation formula, with any fractional amount of less than one yen to be rounded up to
one yen: |
=Exercise Price before
adjustment × |
1 | |||
|
||||
|
Ratio of Share Split or Share Consolidation |
12
(ii) | If, after the date of allotment of share options, the Company issues common shares at
a price lower than the then market price thereof or disposes common shares owned by it,
the Exercise Price will be adjusted by the following calculation formula, with any
fractional amount of less than one yen to be rounded up to one yen; however, the Exercise
Price will not be adjusted in the case of the exercise of share options: |
The Number of Issued and Outstanding Shares is the number of shares already issued by the
Company after subtraction of the number of shares owned by the Company. In the case of the
Companys disposal of shares owned by it, the Number of Newly Issued Shares will be
replaced with the Number of Own Shares to Be Disposed. |
|||
(iii) | In the case of a merger, a company split or capital reduction after the date of
allotment of share options, or in any other analogous case requiring the adjustment of the
Exercise Price, the Exercise Price shall be appropriately adjusted within a reasonable
range. |
(i) | One share option may not be exercised partially. |
||
(ii) | Each holder of share options must continue to be a director, executive officer or
employee of the Company until the end of the Companys general meeting of shareholders
regarding the final business term within 2 years from the end of the Ordinary General
Meeting of Shareholders for the 108th Business Term of the Company. |
||
(iii) | Holders of share options will be entitled to exercise their share options for 2 years,
and during the exercisable period, even after they lose their positions as directors,
executive officers or employees. However, if a holder of share options loses such position
due to resignation at his/her initiative, or due to dismissal or discharge by the Company,
his/her share options will immediately be forfeited. |
||
(iv) | No succession by inheritance is authorized for the share options. |
||
(v) | Any other conditions for the exercise of share options may be established by the Board of
Directors. |
13
(i) | If the Company effects a share split or a share consolidation after the date of the
allotment of the share options, the Exercise Price will be adjusted by the following
calculation formula, with any fractional amount of less than one yen to be rounded up to
one yen: |
=Exercise Price before adjustment × |
1 | |||
|
||||
|
Ratio of Share Split or Share Consolidation |
(ii) | If, after the date of allotment of share options, the Company issues common shares at
a price lower than the then market price thereof or disposes common shares owned by it,
the Exercise Price will be adjusted by the following calculation formula, with any
fractional amount of less than one yen to be rounded up to one yen; however, the Exercise
Price will not be adjusted in the case of the exercise of share options: |
The Number of Issued and Outstanding Shares is the number of shares already issued by the
Company after subtraction of the number of shares owned by the Company. In the case of the
Companys disposal of shares owned by it, the Number of Newly Issued Shares will be
replaced with the Number of Own Shares to Be Disposed. |
|||
(iii) | In the case of a merger, a company split or capital reduction after the date of
allotment of share options, or in any other analogous case requiring the adjustment of the
Exercise Price, the Exercise Price shall be appropriately adjusted within a reasonable
range. |
(i) | One share option may not be exercised partially. |
||
(ii) | Each holder of share options must continue to be a director, executive officer or
employee of the Company until the end of the Companys general meeting of shareholders
regarding the final business term within 2 years from the end of the Ordinary General
Meeting of Shareholders for the 109th Business Term of the Company. |
||
(iii) | Holders of share options will be entitled to exercise their share options for 2 years,
and during the exercisable period, even after they lose their positions as directors,
executive officers or employees. However, if a holder of share options loses such position
due to resignation at his/her initiative, or due to dismissal or discharge by the Company,
his/her share options will immediately be forfeited. |
14
(iv) | No succession by inheritance is authorized for the share options. |
||
(v) | Any other conditions for the exercise of share options may be established by the Board of
Directors. |
Change during this term | As of June 30, 2010 | |||||||
Issued Shares (share) |
- | 1,333,763,464 | ||||||
Capital Stock (millions of yen) |
- | 174,762 | ||||||
Additional Paid-in Capital
(millions of yen) |
- | 306,288 |
As of June 30, 2010 | ||||||||
Number of shares owned | Number of shares owned / | |||||||
(Number of shares) | Number of shares issued | |||||||
The Dai-ichi Life Insurance Company, Limited |
74,832,380 | 5.61% | ||||||
Japan Trustee Services Bank, Ltd. (Trust Account) |
64,792,200 | 4.86% | ||||||
The Master Trust Bank of Japan, Ltd. (Trust Account) |
60,714,200 | 4.55% | ||||||
Moxley & Co. |
46,472,318 | 3.48% | ||||||
JPMorgan Chase & Co. 380055 |
45,175,827 | 3.39% | ||||||
State Street Bank and Trust Company |
28,852,664 | 2.16% | ||||||
State Street Bank and Trust Company 505223 |
20,412,863 | 1.53% | ||||||
Sompo Japan Insurance Inc. |
19,439,987 | 1.46% | ||||||
State Street Bank and Trust Company 505225 |
19,154,948 | 1.44% | ||||||
Melon bank. N.A. as agent for its client melon
omnibus US pension |
17,330,398 | 1.30% | ||||||
total |
397,177,785 | 29.78% | ||||||
1. | Apart from the above shares, The Dai-Ichi Life Insurance Company, Limited held 6,180,000
shares contributed to a trust fund for its retirement and severance plans. |
|
2. | Moxley & Co. is a nominee of JPMorgan Chase Bank, which is the depositary of Canons ADRs
(American Depositary Receipts.) |
|
3. | Apart from the above shares, the Company owns 93,650,553 shares (7.02% of total issued
shares) of treasury stock. |
|
4. | Mizuho Corporate Bank, Ltd. and its four affiliated companies listed below submitted a report
on large share holdings to the Kanto Local Finance Bureau on July 7, 2010 in their joint names
and reported that they owned 67,096,536 shares (5.03%) of the Company as of June 30, 2010 in
total as detailed below. However, the Company has not confirmed the status of these holdings
as of June 30, 2010. |
15
Number of shares held | Number of shares held / | |||||||
Number of shares issued | ||||||||
Mizuho Corporate Bank, Ltd. |
20,123,736 | 1.51% | ||||||
Mizuho Bank, Ltd. |
11,491,437 | 0.86% | ||||||
Mizuho Securities Co., Ltd. |
6,701,197 | 0.50% | ||||||
Mizuho Trust & Banking Co., Ltd. |
26,620,366 | 2.00% | ||||||
Mizuho Asset Management Co., Ltd. |
2,159,800 | 0.16% | ||||||
total |
67,096,536 | 5.03% | ||||||
As of June 30, 2010 |
||||||||
Number of shares | Number of voting | |||||||
Classification | (shares) | rights (units) | ||||||
Shares without voting rights |
- | - | ||||||
Shares with restricted voting rights (Treasury stock, etc.) |
- | - | ||||||
Shares with restricted voting rights (Others) |
- | - | ||||||
Shares with full voting rights (Treasury stock, etc.) |
(treasury stock) 93,650,500 | - | ||||||
(cross shareholding) 3,700 | ||||||||
Shares with full voting rights (Others) |
1,238,126,200 | 12,381,262 | ||||||
Fractional unit shares |
1,983,064 | - | ||||||
Total number of issued shares |
1,333,763,464 | - | ||||||
Total voting rights held by all shareholders |
- | 12,381,262 |
Number of shares owned | Number of shares owned / | |||||||
(Number of shares) | Number of shares issued | |||||||
Canon Inc. |
93,650,500 | 7.02% | ||||||
Horie Mfg. Co., Ltd. |
3,700 | 0.00% | ||||||
Total |
93,654,200 | 7.02% |
(2) | Stock Price Transition |
January | February | March | April | May | June | |||||||||||||||||||
High |
4,040 | 3,865 | 4,400 | 4,520 | 4,240 | 3,905 | ||||||||||||||||||
Low |
3,525 | 3,425 | 3,685 | 4,165 | 3,530 | 3,260 |
16
(3) | Directors and Executive Officers |
Toshizo Tanaka
|
(Executive Vice President & CFO) | |
Masahiro Osawa
|
(Managing Director: Group Executive of Global Procurement HQ, Group Executive of General Affairs HQ) | |
Haruhisa Honda
|
(Managing Director: Group Executive of Manufacturing HQ) |
Masahiro Haga
|
(Executive Officer: Group Executive of Finance & Accounting HQ) | |
Kengo Uramoto
|
(Executive Officer: Group Executive of Human Resources Management & Organization HQ) | |
Kenichi Nagasawa
|
(Executive Officer: Group Executive of Corporate Intellectual Property & Legal HQ) | |
Shigeyuki Uzawa
|
(Executive Officer: Deputy Chief Executive of Optical Products HQ) |
17
(1) | Consolidated Financial Statements |
Page | ||||
Consolidated Balance Sheets as of June 30, 2010 and December 31, 2009 |
19 | |||
Consolidated Statements of Income for the six months ended June 30, 2010 and 2009 |
21 | |||
Consolidated Statements of Income for the three months ended June 30, 2010 and 2009 |
22 | |||
Consolidated Statements of Cash Flows for the six months ended June 30, 2010 and 2009 |
23 | |||
Notes to Consolidated Financial Statements |
24 |
18
Millions of yen | ||||||||
June 30, 2010 | December 31, 2009 | |||||||
Assets |
||||||||
Current assets: |
||||||||
Cash and cash equivalents (Note 14) |
771,697 | 795,034 | ||||||
Short-term investments (Note 2) |
35,264 | 19,089 | ||||||
Trade receivables, net (Note 3) |
547,961 | 556,572 | ||||||
Inventories (Note 4) |
427,767 | 373,241 | ||||||
Prepaid expenses and other current assets (Note 10) |
295,678 | 273,843 | ||||||
Total current assets |
2,078,367 | 2,017,779 | ||||||
Noncurrent receivables (Note11) |
15,789 | 14,936 | ||||||
Investments (Note 2) |
86,426 | 114,066 | ||||||
Property, plant and equipment, net (Note 5) |
1,263,422 | 1,269,785 | ||||||
Intangible assets, net |
170,158 | 117,396 | ||||||
Other assets (Note 10) |
402,740 | 313,595 | ||||||
Total assets |
4,016,902 | 3,847,557 | ||||||
19
Millions of yen | ||||||||
June 30, 2010 | December 31, 2009 | |||||||
Liabilities and equity |
||||||||
Current liabilities: |
||||||||
Short-term loans and current portion of long-term debt |
6,834 | 4,869 | ||||||
Trade payables (Note 6) |
385,682 | 339,113 | ||||||
Accrued income taxes |
66,818 | 50,105 | ||||||
Accrued expenses (Note 11) |
280,191 | 274,300 | ||||||
Other current liabilities (Note 10) |
137,368 | 115,303 | ||||||
Total current liabilities |
876,893 | 783,690 | ||||||
Long-term debt, excluding current installments |
5,444 | 4,912 | ||||||
Accrued pension and severance cost |
177,412 | 115,904 | ||||||
Other noncurrent liabilities |
80,870 | 63,651 | ||||||
Total liabilities |
1,140,619 | 968,157 | ||||||
Commitments and contingent liabilities (Note 11) |
||||||||
Equity: |
||||||||
Canon Inc. stockholders equity (Note 8): |
||||||||
Common stock |
174,762 | 174,762 | ||||||
(Number of authorized shares) |
(3,000,000,000) | (3,000,000,000) | ||||||
(Number of issued shares) |
(1,333,763,464) | (1,333,763,464) | ||||||
Additional paid-in capital |
407,031 | 404,293 | ||||||
Legal reserve |
55,291 | 54,687 | ||||||
Retained earnings |
2,918,817 | 2,871,437 | ||||||
Accumulated other comprehensive income (loss) |
(333,405) | (260,818) | ||||||
Treasury stock, at cost |
(523,118) | (556,252) | ||||||
(Number of shares) |
(93,650,553) | (99,288,001) | ||||||
Total Canon Inc. stockholders equity |
2,699,378 | 2,688,109 | ||||||
Noncontrolling interests (Note 8) |
176,905 | 191,291 | ||||||
Total equity (Note 8) |
2,876,283 | 2,879,400 | ||||||
Total liabilities and equity |
4,016,902 | 3,847,557 | ||||||
20
Millions of yen | ||||||||
Six months ended | Six months ended | |||||||
June 30, 2010 | June 30, 2009 | |||||||
Net sales |
1,725,884 | 1,480,819 | ||||||
Cost of sales |
881,953 | 836,540 | ||||||
Gross profit |
843,931 | 644,279 | ||||||
Operating expenses: |
||||||||
Selling, general and administrative expenses (Note 14) |
490,825 | 425,735 | ||||||
Research and development expenses |
152,825 | 153,606 | ||||||
643,650 | 579,341 | |||||||
Operating profit |
200,281 | 64,938 | ||||||
Other income (deductions): |
||||||||
Interest and dividend income |
2,743 | 2,791 | ||||||
Interest expense |
(953) | (221) | ||||||
Other, net (Notes 10, 13 and 14) |
(568) | (9,622) | ||||||
1,222 | (7,052) | |||||||
Income before income taxes |
201,503 | 57,886 | ||||||
Income taxes |
73,975 | 24,105 | ||||||
Consolidated net income |
127,528 | 33,781 | ||||||
Less: Net income attributable to noncontrolling interests |
3,079 | 432 | ||||||
Net income attributable to Canon Inc. |
124,449 | 33,349 | ||||||
Yen | Yen | |||||||
Net income attributable to Canon Inc. stockholders per share (Note 9): |
||||||||
Basic |
100.68 | 27.01 | ||||||
Diluted |
100.68 | 27.01 | ||||||
Cash dividends per share |
55.00 | 55.00 |
21
Millions of yen | ||||||||
Three months ended | Three months ended | |||||||
June 30, 2010 | June 30, 2009 | |||||||
Net sales |
970,358 | 793,785 | ||||||
Cost of sales |
494,995 | 448,320 | ||||||
Gross profit |
475,363 | 345,465 | ||||||
Operating expenses: |
||||||||
Selling, general and administrative expenses (Note 14) |
280,033 | 219,742 | ||||||
Research and development expenses |
81,892 | 80,817 | ||||||
361,925 | 300,559 | |||||||
Operating profit |
113,438 | 44,906 | ||||||
Other income (deductions): |
||||||||
Interest and dividend income |
1,722 | 1,357 | ||||||
Interest expense |
(867) | (137) | ||||||
Other, net (Notes 10, 13 and 14) |
(1,642) | (10,634) | ||||||
(787) | (9,414) | |||||||
Income before income taxes |
112,651 | 35,492 | ||||||
Income taxes |
43,858 | 17,346 | ||||||
Consolidated net income |
68,793 | 18,146 | ||||||
Less: Net income attributable to noncontrolling interests |
1,155 | 2,541 | ||||||
Net income attributable to Canon Inc. |
67,638 | 15,605 | ||||||
Yen | Yen | |||||||
Net income attributable to Canon Inc. stockholders per share (Note 9): |
||||||||
Basic |
54.67 | 12.64 | ||||||
Diluted |
54.66 | 12.64 | ||||||
Cash dividends per share |
55.00 | 55.00 |
22
Millions of yen | ||||||||
Six months ended | Six months ended | |||||||
June 30, 2010 | June 30, 2009 | |||||||
Cash flows from operating activities: |
||||||||
Consolidated net income |
127,528 | 33,781 | ||||||
Adjustments to reconcile net income to net
cash provided by operating activities: |
||||||||
Depreciation and amortization |
125,968 | 155,003 | ||||||
(Gain) loss on disposal of property, plant and equipment |
4,597 | (2,977) | ||||||
Deferred income taxes |
4,911 | 11,367 | ||||||
Decrease in trade receivables |
15,598 | 101,401 | ||||||
(Increase) decrease in inventories |
(49,876) | 98,766 | ||||||
Increase (decrease) in trade payables |
87,995 | (146,775) | ||||||
Increase (decrease) in accrued income taxes |
19,734 | (52,879) | ||||||
Decrease in accrued expenses |
(24,228) | (40,676) | ||||||
Increase in accrued (prepaid) pension and
severance cost |
2,605 | 824 | ||||||
Other, net |
33,743 | 30,866 | ||||||
Net cash provided by operating activities |
348,575 | 188,701 | ||||||
Cash flows from investing activities: |
||||||||
Purchases of fixed assets (Note 5) |
(96,783) | (195,449) | ||||||
Proceeds from sale of fixed assets (Note 5) |
1,306 | 8,450 | ||||||
Purchases of available-for-sale securities |
(9,028) | (50) | ||||||
Proceeds from sale and maturity of available-for-sale
securities |
24 | 241 | ||||||
Decrease in time deposits, net |
(16,840) | (20,153) | ||||||
Acquisitions of subsidiaries, net of cash acquired |
(55,533) | (2,979) | ||||||
Purchases of other investments |
(505) | (10,133) | ||||||
Other, net |
377 | 1,741 | ||||||
Net cash used in investing activities |
(176,982) | (218,332) | ||||||
Cash flows from financing activities: |
||||||||
Proceeds from issuance of long-term debt |
3,107 | 2,228 | ||||||
Repayments of long-term debt |
(2,751) | (3,232) | ||||||
Decrease in short-term loans, net (Note 7) |
(76,661) | (204) | ||||||
Dividends paid |
(67,897) | (67,897) | ||||||
Repurchases of treasury stock, net |
(5,022) | (18) | ||||||
Other, net |
(1,381) | (2,237) | ||||||
Net cash used in financing activities |
(150,605) | (71,360) | ||||||
Effect of exchange rate changes on cash and cash equivalents |
(44,325) | 25,360 | ||||||
Net change in cash and cash equivalents |
(23,337) | (75,631) | ||||||
Cash and cash equivalents at beginning of period |
795,034 | 679,196 | ||||||
Cash and cash equivalents at end of period |
771,697 | 603,565 | ||||||
Supplemental disclosure for cash flow information: |
||||||||
Cash paid during the period for: |
||||||||
Interest |
609 | 227 | ||||||
Income taxes |
49,842 | 62,361 |
23
(1) | Basis of Presentation and Significant Accounting Policies |
(a) | Basis of Presentation |
||
The Company issued convertible debentures in the United States in May 1969 and
established a program in which its American Depositary Receipts (ADRs) were traded in the
U.S. over-the-counter market. Since then, under the U.S. Securities Act of 1933 and the
U.S. Securities Exchange Act of 1934, the Company has prepared its annual consolidated
financial statements in accordance with U.S. generally accepted accounting principles
(U.S. GAAP) and filed them with the U.S. Securities and Exchange Commission on Form
20-F. The Companys ADRs were listed on the NYSE in September 2000 after being quoted on
NASDAQ from February 1972 to September 2000. |
|||
Canons consolidated financial statements are prepared in accordance with the recognition
and measurement criteria of accounting principles generally accepted in the United
States. Certain disclosures have been omitted. |
|||
The number of consolidated subsidiaries and affiliated companies that were accounted for
on the equity method basis as of June 30, 2010 and December 31, 2009 are summarized as
follows: |
June 30, 2010 | December 31, 2009 | |||||||
Consolidated subsidiaries |
308 | 241 | ||||||
Affiliated companies |
15 | 15 | ||||||
Total |
323 | 256 |
(b) | Principles of Consolidation |
||
The consolidated financial statements include the accounts of the Company, its majority
owned subsidiaries and those variable interest entities where the Company or its
consolidated subsidiaries are the primary beneficiaries. All significant intercompany
balances and transactions have been eliminated. |
24
(1) | Basis of Presentation and Significant Accounting Policies (continued) |
(c) | Recently Issued Accounting Guidance |
||
In October 2009, the FASB issued new accounting guidance for revenue recognition
under multiple-deliverable arrangements. This guidance modifies the criteria for
separating consideration under multiple-deliverable arrangements and requires allocation
of the overall consideration to each deliverable using the estimated selling price in the
absence of vendor-specific objective evidence or third-party evidence of selling price
for deliverables. As a result, the residual method of allocating arrangement
consideration will no longer be permitted. The guidance also requires additional
disclosures about how a vendor allocates revenue in its arrangements and about the
significant judgments made and their impact on revenue recognition. This guidance is
effective for fiscal years beginning on or after June 15, 2010 and is required to be
adopted by Canon no later than the first quarter beginning January 1, 2011 (with early
adoption permitted). The provisions are effective prospectively for revenue arrangements
entered into or materially modified after the effective date, or retrospectively for all
prior periods. Canon is currently evaluating the effect of the adoption of this guidance,
but does not expect the adoption of this guidance to have a material impact on Canons
consolidated financial statements. |
|||
In October 2009, the FASB issued new accounting guidance for software revenue
recognition. This guidance modifies the scope of the software revenue recognition
guidance to exclude from its requirements non-software components of tangible products
and software components of tangible products that are sold, licensed, or leased with
tangible products when the software components and non-software components of the
tangible product function together to deliver the tangible products essential
functionality. This guidance is effective for fiscal years beginning on or after June 15,
2010 and is required to be adopted by Canon no later than the first quarter beginning
January 1, 2011 (with early adoption permitted) using the same effective date and the
same transition method used to adopt the guidance for revenue recognition under
multiple-deliverable arrangements. Canon is currently evaluating the of the adoption of
this guidance, but does not expect the adoption of this guidance to have a material
impact on Canons consolidated financial statements. |
25
(2) | Investments |
|
The cost, gross unrealized holding gains, gross unrealized holding losses and fair value for
available-for-sale securities by major security types are as follows: |
Millions of yen | ||||||||||||||||
June 30, 2010 | ||||||||||||||||
Gross | Gross | |||||||||||||||
unrealized | unrealized | |||||||||||||||
holding | holding | |||||||||||||||
Cost | gains | losses | Fair value | |||||||||||||
Current: |
||||||||||||||||
Government bonds |
222 | - | - | 222 | ||||||||||||
Corporate bonds |
1,000 | - | - | 1,000 | ||||||||||||
1,222 | - | - | 1,222 | |||||||||||||
Noncurrent: |
||||||||||||||||
Government bonds |
295 | - | 17 | 278 | ||||||||||||
Corporate bonds |
268 | 26 | 55 | 239 | ||||||||||||
Fund trusts |
3,114 | 160 | 1 | 3,273 | ||||||||||||
Equity securities |
20,150 | 6,222 | 2,656 | 23,716 | ||||||||||||
23,827 | 6,408 | 2,729 | 27,506 | |||||||||||||
Millions of yen | ||||||||||||||||
December 31, 2009 | ||||||||||||||||
Gross | Gross | |||||||||||||||
unrealized | unrealized | |||||||||||||||
holding | holding | |||||||||||||||
Cost | gains | losses | Fair value | |||||||||||||
Current: |
||||||||||||||||
Government bonds |
222 | - | - | 222 | ||||||||||||
Noncurrent: |
||||||||||||||||
Government bonds |
225 | - | 21 | 204 | ||||||||||||
Corporate bonds |
1,397 | 27 | 55 | 1,369 | ||||||||||||
Fund trusts |
2,275 | 300 | 7 | 2,568 | ||||||||||||
Equity securities |
11,932 | 7,295 | 1,501 | 17,726 | ||||||||||||
15,829 | 7,622 | 1,584 | 21,867 | |||||||||||||
26
(2) | Investments (continued) |
Millions of yen | ||||||||
Cost | Fair value | |||||||
Due within one year |
1,222 | 1,222 | ||||||
Due after one year through five years |
2,272 | 2,432 | ||||||
Due after five years through ten years |
1,405 | 1,358 | ||||||
4,899 | 5,012 | |||||||
27
(3) | Trade Receivables |
|
Trade receivables are summarized as follows: |
Millions of yen | ||||||||
June 30, 2010 | December 31, 2009 | |||||||
Notes |
37,613 | 13,037 | ||||||
Accounts |
526,598 | 554,878 | ||||||
Less allowance for doubtful receivables |
(16,250) | (11,343) | ||||||
547,961 | 556,572 | |||||||
(4) | Inventories |
|
Inventories are summarized as follows: |
Millions of yen | ||||||||
June 30, 2010 | December 31, 2009 | |||||||
Finished goods |
249,308 | 228,161 | ||||||
Work in process |
143,232 | 129,824 | ||||||
Raw materials |
35,227 | 15,256 | ||||||
427,767 | 373,241 | |||||||
(5) | Property, Plant and Equipment |
|
Property, plant and equipment are stated at cost less accumulated depreciation and are
summarized as follows: |
Millions of yen | ||||||||
June 30, 2010 | December 31, 2009 | |||||||
Land |
268,317 | 258,824 | ||||||
Buildings |
1,310,157 | 1,299,154 | ||||||
Machinery and equipment |
1,459,279 | 1,422,076 | ||||||
Construction in progress |
87,390 | 105,713 | ||||||
3,125,143 | 3,085,767 | |||||||
Less accumulated depreciation |
(1,861,721) | (1,815,982) | ||||||
1,263,422 | 1,269,785 | |||||||
Fixed assets presented in the consolidated statement of cash flows includes property, plant
and equipment and intangible assets. |
||
(6) | Trade Payables |
|
Trade payables are summarized as follows: |
Millions of yen | ||||||||
June 30, 2010 | December 31, 2009 | |||||||
Notes |
11,463 | 7,608 | ||||||
Accounts |
374,219 | 331,505 | ||||||
385,682 | 339,113 | |||||||
28
(7) | Acquisition |
|
In March 2010, Canon acquired 45.2 % of the total outstanding shares of Océ N.V. (Océ), which
is listed on NYSE Euronext Amsterdam, for consideration of ¥ 50,374 million, in addition to the
22.9% interest Canon held before the public cash tender offer. In addition, Canon acquired
Océs convertible cumulative financing preference shares representing 19.1% of the total
outstanding shares of Océ for consideration of ¥ 8,027 million. As a result, Canons aggregate
interest represents 87.2 % of the total outstanding shares of Océ. The fair value of the 12.8%
noncontrolling interest in Océ of ¥ 18,245 million was measured mainly based on Océs common
stock price on the acquisition date. |
||
The acquisition was accounted for using the acquisition method. Prior to the March 2010
acquisition date, Canon accounted for its 22.9% interest in Océ using the equity method. The
acquisition-date fair value of the previous equity interest of ¥ 25,508 million was remeasured
using the quoted price of Océs common stock on the acquisition date and included in the
measurement of the total acquisition consideration. In connection with the acquisition, Canon
repaid ¥ 55,378 million of Océs existing bank debt and ¥ 22,936 million of Océs existing
United States Private Placements notes, which are included in decrease in short-term loans in
the consolidated statement of cash flows. |
||
Océ is engaged in research and development, manufacture and sale of document management
systems, printing systems for professionals and high-speed, wide format digital printing
systems. Canon and Océ have complementary technologies and products and would benefit from this
strong business relationship. Amid the increasingly competitive printing industry, Canon is
further strengthening its business foundation in order to solidify its position as one of the
global leaders. Canon aims to provide diversified solutions to its customers in the printing
industry by making Océ a consolidated subsidiary. |
||
The following table summarizes the estimated fair values of the assets acquired and liabilities
assumed at acquisition date. Although Canon is allocating the amount paid for acquisition to
the acquired assets and assumed liabilities, such allocation is incomplete as of the issuance
date of the consolidated financial statements. |
Millions of yen | ||||
Current assets |
123,572 | |||
Goodwill and other intangible assets |
140,839 | |||
Other noncurrent assets |
91,650 | |||
Non-current assets |
232,489 | |||
Total acquired assets |
356,061 | |||
Total assumed liabilities |
253,907 | |||
Net assets acquired |
102,154 |
The amounts of net sales of Océ included in the Canons consolidated statements of income from
the acquisition date to the period ended June 30, 2010 were ¥ 71,874 million. |
||
The unaudited pro forma net sales as if Océ had been included in Canons consolidated results
of operations from the beginning of fiscal 2010 and 2009 were ¥ 1,810,372 million and ¥
1,650,759 million, respectively. |
||
Pro forma information related to net income was not disclosed because the impact on the Canons
consolidated results of operation was not material. |
29
(8) | Equity |
|
The change in the carrying amount of total equity, equity attributable to Canon Inc.
stockholders and equity attributable to noncontrolling interests in the consolidated balance
sheets for the six months ended June 30, 2010 and 2009 are as follows: |
Millions of yen | ||||||||||||
Canon Inc. | ||||||||||||
stockholders | Noncontrolling | |||||||||||
equity | interests | Total equity | ||||||||||
Balance at December 31, 2009 |
2,688,109 | 191,291 | 2,879,400 | |||||||||
Dividends paid to stockholders of Canon Inc. |
(67,897) | - | (67,897) | |||||||||
Dividends paid to noncontrolling interests |
- | (1,381) | (1,381) | |||||||||
Acquisition of subsidiaries |
- | 19,168 | 19,168 | |||||||||
Capital transactions with noncontrolling
interests and other |
32,326 | (33,058) | (732) | |||||||||
Comprehensive income (loss): |
||||||||||||
Net income |
124,449 | 3,079 | 127,528 | |||||||||
Other comprehensive income (loss), net of tax |
||||||||||||
Foreign currency translation adjustments |
(72,743) | (2,300) | (75,043) | |||||||||
Net unrealized gains and losses on securities |
(1,585) | 96 | (1,489) | |||||||||
Net gains and losses on derivative instruments |
1,962 | (29) | 1,933 | |||||||||
Pension liability adjustments |
(221) | 39 | (182) | |||||||||
Total comprehensive income |
51,862 | 885 | 52,747 | |||||||||
Repurchase of treasury stock, net |
(5,022) | - | (5,022) | |||||||||
Balance at June 30, 2010 |
2,699,378 | 176,905 | 2,876,283 | |||||||||
Balance at December 31, 2008 |
2,659,792 | 191,190 | 2,850,982 | |||||||||
Dividends paid to stockholders of Canon Inc. |
(67,897) | - | (67,897) | |||||||||
Dividends paid to noncontrolling interests |
- | (2,223) | (2,223) | |||||||||
Capital transactions by consolidated
subsidiaries and affiliated companies and
other |
118 | (492) | (374) | |||||||||
Comprehensive income (loss): |
||||||||||||
Net income (loss) |
33,349 | 432 | 33,781 | |||||||||
Other comprehensive income (loss), net of tax |
||||||||||||
Foreign currency translation adjustments |
58,981 | (898) | 58,083 | |||||||||
Net unrealized gains and losses on securities |
1,612 | 221 | 1,833 | |||||||||
Net gains and losses on derivative instruments |
(1,676) | 8 | (1,668) | |||||||||
Pension liability adjustments |
(1,096) | 340 | (756) | |||||||||
Total comprehensive income (loss) |
91,170 | 103 | 91,273 | |||||||||
Balance at June 30, 2009 |
2,683,183 | 188,578 | 2,871,761 | |||||||||
30
(9) | Net Income Attributable to Canon Inc. Stockholders per Share |
|
A reconciliation of basic and diluted net income per share computations for the six
months ended June 30, 2010 and 2009 is as follows: |
Millions of yen | ||||||||
Six months ended | Six months ended | |||||||
June 30, 2010 | June 30, 2009 | |||||||
Net income attributable to Canon Inc. |
124,449 | 33,349 | ||||||
Number of shares | ||||||||
six months ended | Six months ended | |||||||
June 30, 2010 | June 30, 2009 | |||||||
Average common shares outstanding |
1,236,091,586 | 1,234,484,960 | ||||||
Effect of dilutive securities: |
||||||||
Stock options |
43,270 | - | ||||||
Diluted common shares outstanding |
1,236,134,856 | 1,234,484,960 | ||||||
Yen | ||||||||
Six months ended | Six months ended | |||||||
June 30, 2010 | June 30, 2009 | |||||||
Net income attributable to Canon
Inc. stockholders per share: |
||||||||
Basic |
100.68 | 27.01 | ||||||
Diluted |
100.68 | 27.01 |
Millions of yen | ||||||||
Three months ended | Three months ended | |||||||
June 30, 2010 | June 30, 2009 | |||||||
Net income attributable to Canon Inc. |
67,638 | 15,605 | ||||||
Number of shares | ||||||||
Three months ended | Three months ended | |||||||
June 30, 2010 | June 30, 2009 | |||||||
Average common shares outstanding |
1,237,304,166 | 1,234,483,059 | ||||||
Effect of dilutive securities: |
||||||||
Stock options |
70,353 | - | ||||||
Diluted common shares outstanding |
1,237,374,519 | 1,234,483,059 | ||||||
Yen | ||||||||
Three months ended | Three months ended | |||||||
June 30, 2010 | June 30, 2009 | |||||||
Net income attributable to
Canon Inc. stockholders per
share: |
||||||||
Basic |
54.67 | 12.64 | ||||||
Diluted |
54.66 | 12.64 |
31
(10) | Derivatives and Hedging Activities |
|
Risk management policy |
||
Canon operates internationally, exposing it to the risk of changes in foreign currency exchange
rates. Derivative financial instruments are comprised principally of foreign exchange contracts
utilized by the Company and certain of its subsidiaries to reduce the risk. Canon assesses
foreign currency exchange rate risk by continually monitoring changes in the exposures and by
evaluating hedging opportunities. Canon does not hold or issue derivative financial instruments
for trading purposes. Canon is also exposed to credit-related losses in the event of
non-performance by counterparties to derivative financial instruments, but it is not expected
that any counterparties will fail to meet their obligations. Most of the counterparties are
internationally recognized financial institutions and selected by Canon taking into account
their financial condition, and contracts are diversified across a number of major financial
institutions. |
||
Foreign currency exchange rate risk management |
||
Canons international operations expose Canon to the risk of changes in foreign currency
exchange rates. Canon uses foreign exchange contracts to manage certain foreign currency
exchange exposures principally from the exchange of U.S. dollars and euros into Japanese yen.
These contracts are primarily used to hedge the foreign currency exposure of forecasted
intercompany sales and intercompany trade receivables that are denominated in foreign
currencies. In accordance with Canons policy, a specific portion of foreign currency exposure
resulting from forecasted intercompany sales are hedged using foreign exchange contracts which
principally mature within three months. |
||
Cash flow hedge |
||
Changes in the fair value of derivative financial instruments designated as cash flow hedges,
including foreign exchange contracts associated with forecasted intercompany sales, are
reported in accumulated other comprehensive income (loss). These amounts are subsequently
reclassified into earnings through other income (deductions) in the same period as the hedged
items affect earnings. Substantially all amounts recorded in accumulated other comprehensive
income (loss) as of June 30, 2010 are expected to be recognized in earnings over the next 12
months. Canon excludes the time value component from the assessment of hedge effectiveness.
Changes in the fair value of a foreign exchange contract for the period between the date that
the forecasted intercompany sales occur and its maturity date are recognized in earnings and
not considered to be an ineffective hedge. |
||
Derivatives not designated as hedges |
||
Canon has entered into certain foreign exchange contracts to primarily offset the earnings
impact related to fluctuations in foreign currency exchange rates associated with certain
assets denominated in foreign currencies. Although these foreign exchange contracts have not
been designated as hedges as required in order to apply hedge accounting, the contracts are
effective from an economic perspective. The changes in the fair value of these contracts are
recorded in earnings immediately. |
||
Contract amounts of the foreign exchange contracts as of June 30, 2010 and December 31, 2009
are set forth below: |
Millions of yen | ||||||||
June 30, 2010 | December 31, 2009 | |||||||
To sell foreign currencies |
441,851 | 494,314 | ||||||
To buy foreign currencies |
58,808 | 30,978 |
32
(10) | Derivatives and Hedging Activities (continued) |
|
Fair value of derivative instruments in the consolidated balance sheets |
||
The following tables present Canons derivative instruments measured at gross fair value as
reflected in the consolidated balance sheets as of June 30, 2010 and December 31, 2009. |
||
Derivatives designated as hedging instruments |
Millions of yen | ||||||||||
Balance sheet | ||||||||||
classification | Fair value | |||||||||
June 30, 2010 | December 31, 2009 | |||||||||
Assets: |
||||||||||
Foreign exchange contracts |
Prepaid expenses and | 3,289 | - | |||||||
other current assets | ||||||||||
Liabilities: |
||||||||||
Foreign exchange contracts |
Other current liabilities | 1,773 | 644 | |||||||
Derivatives not designated as hedging instruments |
Millions of yen | ||||||||||
Balance sheet | ||||||||||
classification | Fair value | |||||||||
June 30, 2010 | December 31, 2009 | |||||||||
Assets: |
||||||||||
Foreign exchange contracts |
Prepaid expenses and | 19,032 | 752 | |||||||
other current assets | ||||||||||
Liabilities: |
||||||||||
Foreign exchange contracts |
Other current liabilities | 518 | 6,566 | |||||||
33
(10) | Derivatives and Hedging Activities (continued) |
|
Effect of derivative instruments on the consolidated statements of income |
||
The following tables present the effect of Canons derivative instruments on the consolidated
statements of income for the six and three months ended June 30, 2010 and 2009. |
||
Derivatives in cash flow hedging relationships |
Millions of yen | ||||||||||||||||||||
Six months ended | Gain (loss) | Gain (loss) recognized in | ||||||||||||||||||
June 30, 2010 | recognized in | Gain (loss) reclassified from | income (ineffective portion and | |||||||||||||||||
OCI (effective | accumulated OCI into income | amount excluded from | ||||||||||||||||||
portion) | (effective portion) | effectiveness testing) | ||||||||||||||||||
Amount | Classification | Amount | Classification | Amount | ||||||||||||||||
Foreign exchange
contracts |
3,284 | Other, net | 3,337 | Other, net | (72 | ) | ||||||||||||||
Millions of yen | ||||||||||||||||||||
Six months ended | Gain (loss) | Gain (loss) recognized in | ||||||||||||||||||
June 30, 2009 | recognized in | Gain (loss) reclassified from | income (ineffective portion and | |||||||||||||||||
OCI (effective | accumulated OCI into income | amount excluded from | ||||||||||||||||||
portion | (effective portion) | effectiveness testing) | ||||||||||||||||||
Amount | Classification | Amount | Classification | Amount | ||||||||||||||||
Foreign exchange
contracts |
(2,793 | ) | Other, net | (1,447 | ) | Other, net | (299 | ) | ||||||||||||
Millions of yen | ||||||||||||||||||||
Three months ended | Gain (loss) | Gain (loss) recognized in | ||||||||||||||||||
June 30, 2010 | recognized in | Gain (loss) reclassified from | income (ineffective portion and | |||||||||||||||||
OCI (effective | accumulated OCI into income | amount excluded from | ||||||||||||||||||
portion) | (effective portion) | effectiveness testing) | ||||||||||||||||||
Amount | Classification | Amount | Classification | Amount | ||||||||||||||||
Foreign exchange
contracts |
2,849 | Other, net | 1,937 | Other, net | (17 | ) | ||||||||||||||
Millions of yen | ||||||||||||||||||||
Three months ended | Gain (loss) | Gain (loss) recognized in | ||||||||||||||||||
June 30, 2009 | recognized in | Gain (loss) reclassified from | income (ineffective portion and | |||||||||||||||||
OCI (effective | accumulated OCI into income | amount excluded from | ||||||||||||||||||
portion | (effective portion) | effectiveness testing) | ||||||||||||||||||
Amount | Classification | Amount | Classification | Amount | ||||||||||||||||
Foreign exchange
contracts |
5,143 | Other, net | (4,681 | ) | Other, net | (148 | ) |
34
(10) | Derivatives and Hedging Activities (continued) |
Effect of derivative instruments on the consolidated statements of income (continued) |
Derivatives not designated as hedging instruments |
Millions of yen | ||||||||
Six months ended June 30, 2010 | Gain (loss) recognized | |||||||
in income on derivative | ||||||||
Classification | Amount | |||||||
Foreign exchange contracts |
Other, net | 35,070 | ||||||
Millions of yen | ||||||||
Six months ended June 30, 2009 | Gain (loss) recognized | |||||||
in income on derivative | ||||||||
Classification | Amount | |||||||
Foreign exchange contracts |
Other, net | (14,004 | ) | |||||
Millions of yen | ||||||||
Three months ended June 30, 2010 | Gain (loss) recognized | |||||||
in income on derivative | ||||||||
Classification | Amount | |||||||
Foreign exchange contracts |
Other, net | 28,953 | ||||||
Millions of yen | ||||||||
Three months ended June 30, 2009 | Gain (loss) recognized | |||||||
in income on derivative | ||||||||
Classification | Amount | |||||||
Foreign exchange contracts |
Other, net | (2,673 | ) |
35
(11) | Commitments and Contingent Liabilities |
|
Commitments |
||
As of June 30, 2010, commitments outstanding for the purchase of property, plant and equipment
approximated ¥17,119 million, and commitments outstanding for the purchase of parts and raw
materials approximated ¥64,397 million. |
||
Canon occupies sales offices and other facilities under lease arrangements accounted for as
operating leases. Deposits made under such arrangements aggregated ¥14,168 million and ¥14,210
million at June 30, 2010 and December 31, 2009, respectively, and are included in noncurrent
receivables in the accompanying consolidated balance sheets. |
||
Future minimum lease payments required under noncancelable operating leases are ¥14,430 million
(within one year) and ¥34,960 million (after one year), at June 30, 2010. |
||
Guarantees |
||
Canon provides guarantees for bank loans of its employees, affiliates and other companies. The
guarantees for the employees are principally made for their housing loans. The guarantees of
loans of its affiliates and other companies are made to ensure that those companies operate
with less financial risk. |
||
For each guarantee provided, Canon would have to perform under a guarantee if the borrower
defaults on a payment within the contract periods of 1 year to 30 years, in the case of
employees with housing loans, and of 1 year to 10 years, in the case of affiliates and other
companies. The maximum amount of undiscounted payments Canon would have had to make in the
event of default is ¥17,223 million at June 30, 2010. The carrying amounts of the liabilities
recognized for Canons obligations as a guarantor under those guarantees at June 30, 2010 were
not significant. |
||
Canon also issues contractual product warranties under which it generally guarantees the
performance of products delivered and services rendered for a certain period or term. Estimated
product warranty costs are recorded at the time revenue is recognized and are included in
selling, general and administrative expenses. Estimates for accrued product warranty costs are
based on historical experience. Changes in accrued product warranty cost for the six months
ended June 30, 2010 and 2009 is summarized as follows: |
Millions of yen | ||||
Balance at December 31, 2009 |
13,944 | |||
Addition |
9,832 | |||
Utilization |
(7,855) | |||
Other |
(2,915) | |||
Balance at June 30, 2010 |
13,006 | |||
Millions of yen | ||||
Balance at December 31, 2008 |
17,372 | |||
Addition |
9,558 | |||
Utilization |
(9,168) | |||
Other |
(3,547) | |||
Balance at June 30, 2009 |
14,215 | |||
36
(11) | Commitments and Contingent Liabilities (continued) |
|
Legal proceedings |
||
In October 2003, a lawsuit was filed by a former employee against the Company at the Tokyo
District Court in Japan. The lawsuit alleges that the former employee is entitled to ¥45,872
million as reasonable remuneration for an invention related to certain technology used by the
Company, and the former employee has sued for a partial payment of ¥1,000 million and interest
thereon. On January 30, 2007, the Tokyo District Court of Japan ordered the Company to pay the
former employee approximately ¥33.5 million and interest thereon. On the same day, the Company
appealed the decision. On February 26, 2009, the Intellectual Property High Court of Japan
issued a judgment in the appellate court review and ordered the Company to pay the former
employee approximately ¥69.6 million, consisting of reasonable remuneration of approximately
¥56.3 million and interest thereon. On March 12, 2009, the Company appealed the decision to the
Supreme Court. |
||
In Germany, Verwertungsgesellschaft Wort (VG Wort), a collecting agency representing certain
copyright holders, has filed a series of lawsuits seeking to impose copyright levies upon
digital products such as PCs and printers, that allegedly enable the reproduction of
copyrighted materials, against the companies importing and distributing these digital products.
VG Wort filed a lawsuit in January 2006 against Canon seeking payment of copyright levies on
single-function printers, and the court of first instance in Düsseldorf ruled in favor of the
claim by VG Wort in November 2006. Canon lodged an appeal against such decision in December
2006 before the court of appeals in Düsseldorf. Following a decision by the same court of
appeals in Düsseldorf on January 23, 2007 in relation to a similar court case seeking copyright
levies on single-function printers of Epson Deutschland GmbH, Xerox GmbH and Kyocera Mita
Deutschland GmbH, whereby the court rejected such alleged levies, in its judgment of November
13, 2007, the court of appeals rejected VG Worts claim against Canon. VG Wort appealed further
against said decision of the court of appeals before the Federal Supreme Court. In December
2007, for a similar Hewlett-Packard GmbH case relating to single-function printers, the Federal
Supreme Court delivered its judgment in favor of Hewlett-Packard GmbH and dismissed VG Worts
claim. VG Wort has already filed a constitutional complaint with the Federal Constitutional
Court against said judgment of the Federal Supreme Court. Likewise, after rejection by the
Federal Supreme Court of an appeal by VG Wort in relation to Canons single-function printers
case in September 2008, VG Wort lodged a claim before the Federal Constitutional Court. Canon
received a brief from the Federal Constitutional Court in September 2009 to enable the Court to
decide on whether to accept the claim, and Canon responded to it in November 2009. In 2007, an
amendment of German copyright law was carried out, and a new law has been effective from
January 1, 2008 for both multi-function printers and single-function printers. The new law sets
forth that the scope and tariff of copyright levies will be agreed between industry and the
collecting society. Industry and the collecting society, based on the requirement under the new
law, reached an agreement in December 2008. This agreement is applicable retroactively from
January 1, 2008 and will remain effective through end of 2010. However, in Canons assessment,
the final outcome of the court case regarding the single-function printers sold in Germany
before January 1, 2008 remains uncertain. |
37
(11) | Commitments and Contingent Liabilities (continued) |
|
Legal proceedings (continued) |
||
Canon is involved in various claims and legal actions, including those noted above, arising in
the ordinary course of business. Canon has recorded provisions for liabilities when it is
probable that liabilities have been incurred and the amount of loss can be reasonably
estimated. Canon reviews these provisions at least quarterly and adjusts these provisions to
reflect the impact of the negotiations, settlements, rulings, advice of legal counsel and
other information and events pertaining to a particular case. Based on its experience, Canon
believes that any damage amounts claimed in the specific matters discussed above are not a
meaningful indicator of Canons potential liability. In the opinion of management, the
ultimate disposition of the above mentioned matters would not have a material adverse effect
on Canons consolidated financial position, results of operations, or cash flows. However,
litigation is inherently unpredictable. While Canon believes that it has valid defenses with
respect to legal matters pending against it, it is possible that Canons consolidated
financial position, results of operations, or cash flows could be materially affected in any
particular period by the unfavorable resolution of one or more of these matters. |
38
(12) | Disclosures about the Fair Value of Financial Instruments and Concentrations of Credit
Risk |
|
Fair value of financial instruments |
||
The estimated fair values of Canons financial instruments as of June 30, 2010 and December 31,
2009 are set forth below. The following summary excludes cash and cash equivalents, trade
receivables, finance receivables, noncurrent receivables, short-term loans, trade payables and
accrued expenses for which fair values approximate their carrying amounts. The summary also
excludes investments disclosed in Note 2. |
Millions of yen | ||||||||||||||||
June 30, 2010 | December 31, 2009 | |||||||||||||||
Carrying | Estimated | Carrying | Estimated | |||||||||||||
amount | fair value | amount | fair value | |||||||||||||
Long-term debt, including current portion |
(10,532 | ) | (10,529 | ) | (9,781 | ) | (9,777 | ) | ||||||||
Foreign exchange contracts: |
||||||||||||||||
Assets |
22,321 | 22,321 | 752 | 752 | ||||||||||||
Liabilities |
(2,291 | ) | (2,291 | ) | (7,210 | ) | (7,210 | ) |
The following methods and assumptions are used to estimate the fair value in the above
table. |
||
Long-term debt |
||
The fair values of Canons long-term debt instruments are based on the present value of future
cash flows associated with each instrument discounted using current market borrowing rates for
similar debt instruments of comparable maturity. |
||
Foreign exchange contracts |
||
The fair values of foreign exchange contracts are measured based on the market price obtained
from financial institutions. |
||
Limitations of fair value estimates |
||
Fair value estimates are made at a specific point in time, based on relevant market information
and information about the financial instruments. These estimates are subjective in nature and
involve uncertainties and matters of significant judgment and therefore cannot be determined
with precision. Changes in assumptions could significantly affect the estimates. |
||
Concentrations of credit risk |
||
At June 30, 2010 and December 31, 2009, one customer accounted for approximately 19%
and 22% of consolidated trade receivables, respectively. Although Canon does not expect
that the customer will fail to meet its obligations, Canon is potentially exposed to
concentrations of credit risk if the customer failed to perform according to the terms of
the contracts. |
39
(13) | Fair Value Measurements | |
Fair value is defined as the price that would be received to sell an asset or paid to transfer a liability (an exit price) in the principal or most advantageous market for the asset or liability in an orderly transaction between market participants at the measurement date. The three-level fair value hierarchy that prioritizes the inputs used to measure fair value is described as follows: |
Level 1 | - Inputs are quoted prices in active markets for identical assets or liabilities. |
Level 2 | - Inputs are quoted prices for similar assets or liabilities in active markets, quoted prices for identical or similar assets or liabilities in markets that are not active, inputs other than quoted prices that are observable, and inputs that are derived principally from or corroborated by observable market data by correlation or other means. |
Level 3 | - Inputs are derived from valuation techniques in which one or more significant inputs or value drivers are unobservable, which reflect the reporting entitys own assumptions about the assumptions that market participants would use in establishing a price. |
Assets and liabilities measured at fair value on a recurring basis | ||
The following tables present Canons assets and liabilities that are measured at fair value on a recurring basis consistent with the fair value hierarchy at June 30, 2010 and December 31, 2009. |
Millions of yen | ||||||||||||||||
June 30, 2010 | ||||||||||||||||
Level 1 | Level 2 | Level 3 | Total | |||||||||||||
Assets: |
||||||||||||||||
Cash and cash equivalents |
| 205,585 | | 205,585 | ||||||||||||
Available-for-sale (current): |
||||||||||||||||
Government bonds |
222 | | | 222 | ||||||||||||
Corporate bonds |
| | 1,000 | 1,000 | ||||||||||||
Available-for-sale (noncurrent): |
||||||||||||||||
Government bonds |
278 | | | 278 | ||||||||||||
Corporate bonds |
| 28 | 211 | 239 | ||||||||||||
Fund trusts |
1,475 | 1,798 | | 3,273 | ||||||||||||
Equity securities |
23,716 | | | 23,716 | ||||||||||||
Derivatives |
| 22,321 | | 22,321 | ||||||||||||
Total assets |
25,691 | 229,732 | 1,211 | 256,634 | ||||||||||||
Liabilities: |
||||||||||||||||
Derivatives |
| 2,291 | | 2,291 | ||||||||||||
Total liabilities |
| 2,291 | | 2,291 | ||||||||||||
40
(13) | Fair Value Measurements (continued) |
Millions of yen | ||||||||||||||||
December 31, 2009 | ||||||||||||||||
Level 1 | Level 2 | Level 3 | Total | |||||||||||||
Assets: |
||||||||||||||||
Cash and cash equivalents |
| 184,856 | | 184,856 | ||||||||||||
Available-for-sale (current): |
||||||||||||||||
Government bonds |
222 | | | 222 | ||||||||||||
Available-for-sale (noncurrent): |
||||||||||||||||
Government bonds |
204 | | | 204 | ||||||||||||
Corporate bonds |
| 29 | 1,340 | 1,369 | ||||||||||||
Fund trusts |
1,589 | 979 | | 2,568 | ||||||||||||
Equity securities |
17,726 | | | 17,726 | ||||||||||||
Derivatives |
| 752 | | 752 | ||||||||||||
Total assets |
19,741 | 186,616 | 1,340 | 207,697 | ||||||||||||
Liabilities: |
||||||||||||||||
Derivatives |
| 7,210 | | 7,210 | ||||||||||||
Total liabilities |
| 7,210 | | 7,210 | ||||||||||||
Level 1 investments are comprised principally of Japanese equity securities, which are valued using an unadjusted quoted market price in active markets with sufficient volume and frequency of transactions. Level 2 cash and cash equivalents are valued based on market approach, using quoted prices for identical assets in markets that are not active. Level 3 investments are comprised mainly of corporate bonds, which are valued based on cost approach, using unobservable inputs as the market for the assets was not active at the measurement date. | ||
Derivative financial instruments are comprised of foreign exchange contracts. Level 2 derivatives are valued using quotes obtained from counterparties or third parties, which are periodically validated by pricing models using observable market inputs, such as foreign currency exchange rates and interest rates, based on market approach. | ||
The following table presents the changes in Level 3 assets measured on a recurring basis, consisting primarily of corporate bonds, for the six months ended June 30, 2010 and 2009. | ||
Six months ended June 30, 2010 |
Millions of yen | ||||
Balance at December 31, 2009 |
1,340 | |||
Total gains or losses (realized or unrealized): |
||||
Included in earnings |
(60) | |||
Included in other comprehensive income (loss) |
(20) | |||
Purchases, issuances, and settlements |
(49) | |||
Balance at June 30, 2010 |
1,211 | |||
41
(13) | Fair Value Measurements (continued) | |
Six months ended June 30, 2009 |
Millions of yen | ||||
Balance at December 31, 2008 |
1,516 | |||
Total gains or losses (realized or unrealized): |
||||
Included in earnings |
(144) | |||
Included in other comprehensive income (loss) |
(3) | |||
Purchases, issuances, and settlements |
34 | |||
Balance at June 30, 2009 |
1,403 | |||
The following table presents the changes in Level 3 assets measured on a recurring basis, consisting primarily of corporate bonds, for the three months ended June 30, 2010 and 2009. | ||
Three months ended June 30, 2010 |
Millions of yen | ||||
Balance at March 31, 2010 |
1,250 | |||
Total gains or losses (realized or unrealized): |
||||
Included in earnings |
4 | |||
Included in other comprehensive income (loss) |
(21) | |||
Purchases, issuances, and settlements |
(22) | |||
Balance at June 30, 2010 |
1,211 | |||
Three months ended June 30, 2009 |
Millions of yen | ||||
Balance at March 31, 2009 |
1,464 | |||
Total gains or losses (realized or unrealized): |
||||
Included in earnings |
(50) | |||
Included in other comprehensive income (loss) |
| |||
Purchases, issuances, and settlements |
(11) | |||
Balance at June 30, 2009 |
1,403 | |||
Gains and losses included in earnings are mainly related to corporate bonds still held at June 30, 2010 and 2009, and are reported in Other, net in the consolidated statements of income. |
42
(13) | Fair Value Measurements (continued) | |
Assets and liabilities measured at fair value on a nonrecurring basis | ||
Non-marketable equity securities with a carrying amount of ¥5,000 million were written down to their fair value of ¥2,422 million and equity securities accounted for by the equity method with a carrying amount of ¥33,984 million were written down to their fair value of ¥15,164 million, resulting in an other-than-temporary impairment charge totaling ¥21,398 million, which was included in earnings for the six and three months ended June 30, 2010. Non-marketable equity securities were classified as Level 2 instruments, as Canon uses observable inputs to value these investments. Equity securities accounted for by the equity method were classified as Level 3 instruments, as Canon uses unobservable inputs to value these investments. | ||
Non-marketable equity securities with a carrying amount of ¥1,463 million were written down to their fair value of ¥478 million, resulting in an other-than-temporary impairment charge of ¥985 million, which was included in earnings for the six and three months ended June 30, 2009. All impaired non-marketable equity securities were classified as Level 3 instruments, as Canon uses unobservable inputs to value these investments. | ||
(14) | Supplemental Information | |
Gains and losses resulting from foreign currency transactions, including foreign exchange contracts, and translation of assets and liabilities denominated in foreign currencies are included in other income (deductions) in the consolidated statements of income. Foreign currency exchange gains and losses, net were ¥2,195 million gains and ¥1,953 million losses, for the six months ended June 30, 2010, and 2009, respectively, and were ¥551 million losses and ¥5,708 million losses, for the three months ended June 30, 2010, and 2009, respectively. | ||
Advertising costs are expensed as incurred. Advertising expenses were ¥39,739 million and ¥33,366 million for the six months ended June 30, 2010 and 2009, respectively, and were ¥25,687 million and ¥21,369 million for the three months ended June 30, 2010 and 2009, respectively. | ||
Shipping and handling costs totaled ¥26,188 million and ¥22,042 million for the six months ended June 30, 2010 and 2009, respectively and ¥14,740 million and ¥11,357 million for the three months ended Jun 30, 2010 and 2009, respectively, and are included in selling, general and administrative expenses in the consolidated statements of income. | ||
Consolidated comprehensive income for the six months ended June 30, 2010 and 2009 was ¥52,747 million (increase) and ¥91,273 million (increase), respectively, and for the three months ended June 30, 2010 and 2009 was ¥5,095 million (decrease) and ¥37,400 million (increase), respectively | ||
Certain debt securities with original maturities of less than three months classified as available-for-sale securities of ¥205,585 million and ¥184,856 million at June 30, 2010 and December 31, 2009, respectively, are included in cash and cash equivalents in the consolidated balance sheets. Additionally, certain debt securities with original maturities of less than three months classified as held-to-maturity securities of ¥999 million and ¥999 million at June 30, 2010 and December 31, 2009, respectively, are also included in cash and cash equivalents. Fair value for these securities approximates their cost. |
43
(15) | Segment Information | |
Certain foreign private issuers, including Canon, have been exempted from the segment disclosure requirements of U.S. GAAP in filings with the SEC under the Securities Exchange Act of 1934. | ||
However, in September 2008, the SEC issued its Foreign Issuer Reporting Enhancements (FIRE) rule, and Canon adopted the guidance for segment reporting under U.S. GAAP in the year ended December 31, 2009. For the interim period information, Canon discloses segment information under U.S. GAAP for all periods presented. Accordingly, prior period segment information has been adjusted to conform to this guidance under U.S. GAAP. | ||
Segment information | ||
Canon operates its business in three segments: the Office Business Unit, the Consumer Business Unit, and the Industry and Others Business Unit, which are based on the organizational structure and information reviewed by Canons management to evaluate results and allocate resources. | ||
The primary products included in each segment are as follows: |
Office Business Unit:
|
Office network digital MFDs, Color network digital MFDs, Personal-use network digital MFDs, Office copying machines, Full-color copying machines, Personal-use copying machines, Laser printers, and Large format inkjet printers | |
Consumer Business Unit:
|
Digital SLR cameras, Compact digital cameras, Interchangeable lenses, Digital video camcorders, Inkjet multifunction peripherals, Single function inkjet printers, Image scanners, and Broadcasting equipment | |
Industry and Others
Business Unit: |
||
Semiconductor lithography equipment, LCD lithography equipment, Medical image recording equipment, Magnetic heads, Micromotors, Computers, Handy terminals, Document scanners, and Calculators |
The accounting policies of the segments are substantially the same as the accounting policies used in consolidated financial statements of Canon Inc. and Subsidiaries. Canon evaluates performance of, and allocates resources to, each segment based on operating profit. | ||
Océ, which was acquired in the business combination concluded in March 2010 (see Note 7), is included in the Office Business Unit. |
44
(15) | Segment Information (continued) |
|
Segment information (continued) |
||
Information about operating results for each segment for the six months ended June 30, 2010
and 2009 is as follows: |
Corporate | ||||||||||||||||||||
Industry and | and | |||||||||||||||||||
Office | Consumer | Others | eliminations | Consolidated | ||||||||||||||||
(Millions of yen) | ||||||||||||||||||||
2010: |
||||||||||||||||||||
Net sales: |
||||||||||||||||||||
External customers |
¥ | 926,577 | ¥ | 653,291 | ¥ | 146,016 | ¥ | | ¥ | 1,725,884 | ||||||||||
Intersegment |
4,500 | 1,023 | 45,242 | (50,765 | ) | | ||||||||||||||
Total |
931,077 | 654,314 | 191,258 | (50,765 | ) | 1,725,884 | ||||||||||||||
Operating cost and
expenses |
775,206 | 540,048 | 199,637 | 10,712 | 1,525,603 | |||||||||||||||
Operating profit (loss) |
¥ | 155,871 | ¥ | 114,266 | ¥ | (8,379 | ) | ¥ | (61,477 | ) | ¥ | 200,281 | ||||||||
2009: |
||||||||||||||||||||
Net sales: |
||||||||||||||||||||
External customers |
¥ | 771,647 | ¥ | 573,041 | ¥ | 136,131 | ¥ | | ¥ | 1,480,819 | ||||||||||
Intersegment |
4,653 | 893 | 35,187 | (40,733 | ) | | ||||||||||||||
Total |
776,300 | 573,934 | 171,318 | (40,733 | ) | 1,480,819 | ||||||||||||||
Operating cost and
expenses |
686,089 | 517,164 | 195,117 | 17,511 | 1,415,881 | |||||||||||||||
Operating profit (loss) |
¥ | 90,211 | ¥ | 56,770 | ¥ | (23,799 | ) | ¥ | (58,244 | ) | ¥ | 64,938 | ||||||||
Information about operating results for each segment for the three months ended June 30, 2010
and 2009 is as follows: |
Corporate | ||||||||||||||||||||
Industry and | and | |||||||||||||||||||
Office | Consumer | Others | eliminations | Consolidated | ||||||||||||||||
(Millions of yen) | ||||||||||||||||||||
2010: |
||||||||||||||||||||
Net sales: |
||||||||||||||||||||
External customers |
¥ | 521,061 | ¥ | 363,562 | ¥ | 85,735 | ¥ | | ¥ | 970,358 | ||||||||||
Intersegment |
882 | 465 | 23,195 | (24,542 | ) | | ||||||||||||||
Total |
521,943 | 364,027 | 108,930 | (24,542 | ) | 970,358 | ||||||||||||||
Operating cost and
expenses |
438,159 | 297,094 | 114,354 | 7,313 | 856,920 | |||||||||||||||
Operating profit (loss) |
¥ | 83,784 | ¥ | 66,933 | ¥ | (5,424 | ) | ¥ | (31,855 | ) | ¥ | 113,438 | ||||||||
2009: |
||||||||||||||||||||
Net sales: |
||||||||||||||||||||
External customers |
¥ | 395,485 | ¥ | 331,148 | ¥ | 67,152 | ¥ | | ¥ | 793,785 | ||||||||||
Intersegment |
2,145 | 394 | 18,312 | (20,851 | ) | | ||||||||||||||
Total |
397,630 | 331,542 | 85,464 | (20,851 | ) | 793,785 | ||||||||||||||
Operating cost and
expenses |
355,321 | 292,526 | 93,622 | 7,410 | 748,879 | |||||||||||||||
Operating profit (loss) |
¥ | 42,309 | ¥ | 39,016 | ¥ | (8,158 | ) | ¥ | (28,261 | ) | ¥ | 44,906 | ||||||||
Intersegment sales are recorded at the same prices used in transactions with third parties.
Expenses not directly associated with specific segments are allocated based on the most
reasonable measures applicable. Corporate expenses include certain corporate research and
development expenses. |
45
(15) | Segment Information (continued) |
|
Geographic information |
||
Information by major geographic area for the six months ended June 30, 2010 and 2009 is as
follows: |
Japan | Americas | Europe | Other areas | Total | ||||||||||||||||
(Millions of yen) | ||||||||||||||||||||
2010: |
||||||||||||||||||||
Net sales: |
||||||||||||||||||||
¥ | 337,661 | ¥ | 474,494 | ¥ | 541,647 | ¥ | 372,082 | ¥ | 1,725,884 | |||||||||||
2009: |
||||||||||||||||||||
Net sales: |
||||||||||||||||||||
¥ | 342,882 | ¥ | 401,860 | ¥ | 449,175 | ¥ | 286,902 | ¥ | 1,480,819 |
Information by major geographic area for the three months ended June 30, 2010 and 2009 is as
follows: |
Japan | Americas | Europe | Other areas | Total | ||||||||||||||||
(Millions of yen) | ||||||||||||||||||||
2010: |
||||||||||||||||||||
Net sales: |
||||||||||||||||||||
¥ | 170,145 | ¥ | 269,939 | ¥ | 310,969 | ¥ | 219,305 | ¥ | 970,358 | |||||||||||
2009: |
||||||||||||||||||||
Net sales: |
||||||||||||||||||||
¥ | 173,378 | ¥ | 225,529 | ¥ | 239,108 | ¥ | 155,770 | ¥ | 793,785 |
Net sales are attributed to areas based on the location where the product is shipped to the
customers. |
46
(15) | Segment Information (continued) |
|
Geographic information (continued) |
||
The following information is based on the location of the Company and its subsidiaries for
the six months ended June 30, 2010 and 2009. In addition to the disclosure requirements under
U.S. GAAP, Canon discloses this information as supplemental information based on the
disclosure requirements of the Japanese Financial Instruments and Exchange Law. |
Corporate | ||||||||||||||||||||||||
and | ||||||||||||||||||||||||
Japan | Americas | Europe | Other areas | eliminations | Consolidated | |||||||||||||||||||
(Millions of yen) | ||||||||||||||||||||||||
2010: |
||||||||||||||||||||||||
Net sales: |
||||||||||||||||||||||||
External customers |
¥ | 404,462 | ¥ | 466,654 | ¥ | 538,336 | ¥ | 316,432 | ¥ | | ¥ | 1,725,884 | ||||||||||||
Intersegment |
952,682 | 1,112 | 2,188 | 335,783 | (1,291,765 | ) | | |||||||||||||||||
Total |
1,357,144 | 467,766 | 540,524 | 652,215 | (1,291,765 | ) | 1,725,884 | |||||||||||||||||
Operating cost and
expenses |
1,146,939 | 456,262 | 520,566 | 627,262 | (1,225,426 | ) | 1,525,603 | |||||||||||||||||
Operating profit |
¥ | 210,205 | ¥ | 11,504 | ¥ | 19,958 | ¥ | 24,953 | ¥ | (66,339 | ) | ¥ | 200,281 | |||||||||||
2009: |
||||||||||||||||||||||||
Net sales: |
||||||||||||||||||||||||
External customers |
¥ | 416,201 | ¥ | 391,236 | ¥ | 447,612 | ¥ | 225,770 | ¥ | | ¥ | 1,480,819 | ||||||||||||
Intersegment |
719,475 | 965 | 937 | 208,295 | (929,672 | ) | | |||||||||||||||||
Total |
1,135,676 | 392,201 | 448,549 | 434,065 | (929,672 | ) | 1,480,819 | |||||||||||||||||
Operating cost and
expenses |
1,054,986 | 390,432 | 435,064 | 420,583 | (885,184 | ) | 1,415,881 | |||||||||||||||||
Operating profit |
¥ | 80,690 | ¥ | 1,769 | ¥ | 13,485 | ¥ | 13,482 | ¥ | (44,488 | ) | ¥ | 64,938 | |||||||||||
Information by the location of the Company and its subsidiaries for the three months ended
June 30, 2010 and 2009. |
Corporate | ||||||||||||||||||||||||
and | ||||||||||||||||||||||||
Japan | Americas | Europe | Other areas | eliminations | Consolidated | |||||||||||||||||||
(Millions of yen) | ||||||||||||||||||||||||
2010: |
||||||||||||||||||||||||
Net sales: |
||||||||||||||||||||||||
External customers |
¥ | 215,079 | ¥ | 265,607 | ¥ | 309,486 | ¥ | 180,186 | ¥ | | ¥ | 970,358 | ||||||||||||
Intersegment |
518,487 | 788 | 932 | 184,022 | (704,229 | ) | | |||||||||||||||||
Total |
733,566 | 266,395 | 310,418 | 364,208 | (704,229 | ) | 970,358 | |||||||||||||||||
Operating cost and
expenses |
618,506 | 258,837 | 297,294 | 350,070 | (667,787 | ) | 856,920 | |||||||||||||||||
Operating profit |
¥ | 115,060 | ¥ | 7,558 | ¥ | 13,124 | ¥ | 14,138 | ¥ | (36,442 | ) | ¥ | 113,438 | |||||||||||
2009: |
||||||||||||||||||||||||
Net sales: |
||||||||||||||||||||||||
External customers |
¥ | 202,506 | ¥ | 220,095 | ¥ | 238,750 | ¥ | 132,434 | ¥ | | ¥ | 793,785 | ||||||||||||
Intersegment |
415,184 | 187 | 502 | 117,943 | (533,816 | ) | | |||||||||||||||||
Total |
617,690 | 220,282 | 239,252 | 250,377 | (533,816 | ) | 793,785 | |||||||||||||||||
Operating cost and
expenses |
569,314 | 218,374 | 234,078 | 240,985 | (513,872 | ) | 748,879 | |||||||||||||||||
Operating profit |
¥ | 48,376 | ¥ | 1,908 | ¥ | 5,174 | ¥ | 9,392 | ¥ | (19,944 | ) | ¥ | 44,906 | |||||||||||
47
(2) | Other Information |
|
The Board of Directors approved an interim cash dividend at the meeting held on July 27, 2010
as below: |
1. | Total amount of interim cash dividends: 68,206 million yen |
||
2. | Amount of an interim cash dividend per share: 55 yen |
||
3. | Payment date: August 27, 2010 |
||
Note: Interim dividend is paid to the shareholders registered on June 30, 2010. |
48