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CANON ANNUAL REPORT 2011
Fiscal Year Ended December 31, 2011

Table of contents

  • Page 1
    C A N O N A N N UA L R E P O R T 2 011 Fiscal Year Ended December 31, 2011

  • Page 2
    ...of U.S. dollars (except per share amounts) 2011 2010 Change (%) 2011 Net sales Operating profit Income before income taxes Net income attributable to Canon Inc. Net income attributable to Canon Inc. stockholders per share: ȄBasic ȄDiluted Total assets Canon Inc. stockholdersǯ equity ¥3,557...

  • Page 3
    ... and bring the world closer to achieving kyosei. FINANCIAL SECTION 24 PRODUCTION 24 SALES & MARKETING 28 CORPORATE SOCIAL RESPONSIBILITY 30 37 32 TRANSFER AND REGISTRAR'S OFFICE 34 STOCKHOLDER INFORMATION 100 100 MAJOR CONSOLIDATED SUBSIDIARIES 101 CORPOR ATE GOAL Canon sees itself growing...

  • Page 4
    02 STRATEGY> TO OUR STOCKHOLDERS TO OUR STOCKHOLDERS FUJIO MITARAI Chairman & CEO Canon Inc.

  • Page 5
    ... the market competitiveness of our products and the Company has made good progress in reducing costs. Canon continues to adopt a proactive approach to steadily returning profits to stockholders while taking into consideration future investments, free cash flow and consolidated business performance...

  • Page 6
    ...an environmentally advanced corporation; 6. Imparting a corporate culture, and cultivating human resources befitting a truly excellent global company. With respect to the first strategy, within the digital commercial printing market, in 2011 Canon launched products developed jointly with Netherlands...

  • Page 7
    02 STRATEGY 13 Business Units Management System Financial Section 05 Company plans to accelerate clinical research into the use of optical ultrasound mammography systems. Under the fourth strategy, Canon further strengthened sales and marketing functions in China, where economic growth ...

  • Page 8
    ... Due to the global financial crisis in 2008, however, the Company's business suffered a contraction in terms of scale. THE EXCELLENT GLOBAL CORPORATION PLAN Phase I 1996-2000 Strengthened our financial structure by thoroughly eliminating wastefulness, with production reforms playing a major role...

  • Page 9
    ...to our manufacturing operations. These include research and development, production, and sales and marketing. Specifically, we will further upgrade our Three Regional Headquarters management system, with headquarter functions undertaken not only in Japan, but also in the United States and Europe for...

  • Page 10
    ...printer incorporating enhanced inkjet-printing technologies. In addition, we are working to upgrade office network multifunction device (MFD)-based Expand Profits through Solutions and Services solutions and services. In 2011, through the lateral development of an existing product, we successfully...

  • Page 11
    .../Canon Joint Research Project Target: 100 Billion Yen by 2015 INDUSTRIAL EQUIPMENT Existing Businesses Semiconductor Lithography Systems Organic LED Panel Manufacturing Equipment (Canon Tokki Corporation) New Businesses Intelligent Robots Regarding industrial equipment, as developed countries...

  • Page 12
    ... of three regional product-business headquarters. Moreover, rather than developing all neces- Develop a Global R&D Structure New Innovation Centers in the U.S. and Europe U.S. Establish Institutes with responsibilities spanning basic research to leading-edge technology application Europe Promote...

  • Page 13
    ... when selecting the countries where manufacturing will be carried out? We will build the most rational globally optimized production system following the comprehensive consideration of various factors in each region, including costs, tax systems and labor force. The criterion we use when selecting...

  • Page 14
    ... established sales networks in developed countries, in order to achieve further growth, we are working to upgrade solutions and services for network MFDs. Specifically, positioning the imageRUNNER ADVANCE at the core with an eye toward cloud applications, our sales companies worldwide are working...

  • Page 15
    ..., we offer a global management training program in coordination with the Institute for International Management Development (IMD), a business school in SwitzerManagers from Group companies worldwide gather at the Canon Global Management Institute in Japan to study corporate strategies and engage...

  • Page 16
    ... OFFICE BUSINESS UNIT Ȉ Laser MFDs Office Network MFDs Digital Production Printing Systems Ȉ Solutions Software Ȉ Toner Cartridges Ȉ Digital Production Printing Systems Ȉ Large-Format Inkjet Printers Laser Printers Large-Format Inkjet Printers Ȉ Digital Single Lens Reflex (SLR) Cameras...

  • Page 17
    ... 2009 2010 2011 Applying optical technologies and image-processing technologies amassed over many years, Canon provides high-value-added products to a wide range of industries. The Company is already prominent globally as a manufacturer of LCD lithography and semiconductor lithography systems. In...

  • Page 18
    ... C5000/C2000 series, grew steadily in both value and volume terms. Sales for digital production printing systems increased considerably, centering on color printers in Europe, Asia, and Oceania. In Japan, sales of high-speed monochrome printers, such as the imageRUNNER ADVANCE 8105 PRO, were strong...

  • Page 19
    ...14 Strategy BUSINESS UNITS 23 Management System Financial Section 17 Sales of MFDs (including laser devices) for individual and SOHO use increased in value and volume terms year on year in Europe and Asia. Despite a drop in sales in Japan and the Americas due to falling sales prices, in terms of...

  • Page 20
    ... BUSINESS UNIT CONSUMER BUSINESS UNIT Canon's digital SLR cameras, which use groundbreaking technology such as proprietary lenses, CMOS sensors, and image processors, lead the world with their high image quality and contribute to sales. 2 0 11 R E V I E W In Japan, demand for digital single lens...

  • Page 21
    ...-service business targeting the production of photo prints, photo albums and other high-value-added photo materials. Seeking to capitalize on this growing market opportunities, Canon will concentrate on expanding sales of the DreamLabo 5000. This commercial photo printer, featuring high productivity...

  • Page 22
    ... to weak capital investment in large-scale panels for TVs and the like, overall sales on LCD lithography systems declined year on year, both in value and volume terms. In medical equipment, Canon released in succession new mainstay digital radiography systems, including CXDI-501C. The Company also...

  • Page 23
    ...-20 and other products, combined with the positive effects of mainly the large business deal gained in Australia. With respect to document scanners manufactured by Canon Electronics Inc., weak sales in the United States, due to a stagnating market for check scanners for financial institutions, were...

  • Page 24
    ... both technologies and products. In 2011, Canon and Oc± unveiled a succession of jointly developed products. They include the imagePRESS C7010VPS series of digital production printing systems CONSUMER BUSINESS UNIT AIMING TO CREATE A NEW COMMERCIAL PHOTO PRINTER MARKET, CANON LAUNCHES A NEW BRAND...

  • Page 25
    14 Strategy BUSINESS UNITS 23 Management System Financial Section 23 CONSUMER BUSINESS UNIT FULL-FLEDGED ENTRY INTO MOTION PICTURE PRODUCTION MARKET IN HOLLYWOOD In recent years, the motion picture industry has seen advances in digitization and image resocombination of high-performance ...

  • Page 26
    ... Management Headquarters Directors Yasuhiro Tani Group Executive, Digital Platform Technology Development Headquarters Masahiro Osawa Group Executive, Global Procurement Headquarters Group Executive, General Affairs Headquarters Makoto Araki Group Executive, Information & Communication Systems...

  • Page 27
    ... Unit Subsidiaries & Affiliates Marketing Subsidiaries & Affiliates Manufacturing Subsidiaries & Affiliates R&D Subsidiaries & Affiliates Executive Officers Executive Committee Management Strategy Committee New Business Development Committee Corporate Ethics and Compliance Committee Internal Control...

  • Page 28
    ..., foreign private issuers whose shares have been listed on the NYSE, such as Canon Inc. (the DzCompanydz), are permitted, with certain exceptions, to follow the laws and practices of their home country in place of the corporate governance practices stipulated under the Manual. In such circumstances...

  • Page 29
    ...director, executive officer, manager, or employee of the Company or its subsidiaries. The Companyǯs current corporate auditor system meets these requirements. In addition, pursuant to the regulations of the Japanese stock exchanges, the Company is required to have one or more Dzindependent director...

  • Page 30
    ... technologies to develop competitive products, mainly in Japan, and then disseminating those offerings around the world. Going forward, the Company will set up innovation centers in Europe and the United States as well, laying the foundation for the Three Regional Headquarters management system...

  • Page 31
    ..., involving research that can take more than ten years. At the same time, the Company is continually bolstering activities centered on key components and key devices in order to enhance the competitiveness of its products. In 2011, a telescope equipped with Canon's world-class ultra-high sensitivity...

  • Page 32
    ... considerations. These factors include cost, taxation, logistics, the ease of parts procurement, and the workforce. An optimized system will lead to additional improvements in productivity for the entire Canon Group. In the United States, for example, Canon has implemented a business model for toner...

  • Page 33
    24 Strategy Business Units MANAGEMENT SYSTEM 36 Financial Section 31 In 2011, Canon Hi-Tech (Thailand) Ltd. commenced operations at its new inkjet printer plant, and Hita Canon Materials Inc. began construction of a toner cartridge parts and toner plant, which is scheduled to start operation ...

  • Page 34
    ... expanding its businesses by taking full advantage of the products and sales network of Oc± N.V. on a global scale. Canon made efforts to market globally a standardized Canon Managed Document Net Sales ¥3,557.4 billion Japan 19.5% ¥694.4 billion Europe 31.3% ¥1,113.1 billion Services (Canon...

  • Page 35
    ...service value and expand its customer base by cultivating previously untapped markets. At Graphispag 2011, an international print media trade fair held in Barcelona, Canon and Océ shared a booth, displaying their lineup of products and solutions. EUROPE (EUROPE, THE MIDDLE EAST AND AFRIC A) Sales...

  • Page 36
    ...becoming a truly excellent global corporation that is admired and respected the world over. Under the Canon-Green Library for Kids program, which is part of the Canon-For a Green Vietnam project, Canon has donated more than 40,000 used books to elementary and junior high schools in Vietnam. C A NO...

  • Page 37
    ... conducts wide-ranging social contribution activities in all parts of the world, as a Dzgood corporate citizen.dz Providing Aid to Areas Hit by the Great East Japan Earthquake Following the Great East Japan Earthquake that occurred in March 2011, Canon has been providing support for restoration and...

  • Page 38
    ... Canon has established a management training program to train executives, and help them to upgrade their skills and strengthen their sense of mission. Given our priority to keep production in-house, it is important for us to cultivate personnel with world-class skills and expertise on a global scale...

  • Page 39
    ... CONSOLIDATED BALANCE SHEETS 38 CONSOLIDATED STATEMENTS OF INCOME 54 CONSOLIDATED STATEMENTS OF EQUITY 56 CONSOLIDATED STATEMENTS OF CASH FLOWS 57 NOTES TO CONSOLIDATED FINANCIAL STATEMENTS 58 MANAGEMENT'S REPORT ON INTERNAL CONTROL OVER FINANCIAL REPORTING 60 REPORTS OF INDEPENDENT REGISTERED...

  • Page 40
    ... truly excellent global corporate group targeting continued growth and development. Canon divides its businesses into three segments: the Office Business Unit, the Consumer Business Unit, and the Industry and Others Business Unit. nations but remained sluggish in developed countries. Overall demand...

  • Page 41
    ... times in order to promptly recover related product expenses by strengthening supply chain management. Canon's management seeks to meet its liquidity and capital requirements primarily with cash flow from operations. Management also seeks debt-free operations. For a manufacturing company like Canon...

  • Page 42
    ... contracts on equipment sold to customers and is measured at the stated amount of the contract and recognized as services are provided. Canon also offers separately priced product maintenance contracts for most office imaging products, for which the customer typically pays a stated base service...

  • Page 43
    ...long-term rate of return on plan assets of 3.6% for Japanese plans and 5.7% for foreign plans. In estimating the discount rate, Canon uses available information about rates of return on high-quality fixed-income governmental and corporate bonds currently available and expected to be available during...

  • Page 44
    ... in the manufacture of its products. A portion of the raw materials used by Canon is imported or includes imported materials. Many of these raw materials are subject to fluctuations in world market prices accompanied by fluctuations in exchange rates that may 3 4.1 0 2007 2008 2009 2010 2011

  • Page 45
    ... Office Business Unit mainly includes 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 / Large format inkjet printers/ Digital production printers The...

  • Page 46
    44 FINANCIAL SECTION> FINANCIAL OVERVIEW Sales of the Office Business Unit constituting 53.9% of consolidated net sales. Sales volume of color and monochrome network digital MFDs continued to increase. As for laser printers, while booming demand in emerging economies fueled steady unit sales ...

  • Page 47
    ... 31, 2011 compared with ¥4,131 million at December 31, 2010. Canon's long-term debt (excluding the current portion) mainly consists of lease obligations. In order to facilitate access to global capital markets, Canon obtains credit ratings from two rating agencies: Moody's Investors Services, Inc...

  • Page 48
    ...on management's business plans regarding the levels and timing of purchases of fixed assets and investments. The working capital ratio (ratio of current assets to current liabilities) for fiscal 2011 was 2.41 compared to 2.38 for fiscal 2010 and to 2.57 for fiscal 2009. Return on assets (net income...

  • Page 49
    37 Strategy Business Units Management System FINANCIAL SECTION 101 47 CONTRACTUAL OBLIGATIONS AND COMMERCIAL COMMITMENTS The following summarizes Canon's contractual obligations at December 31, 2011. Payments due by period Millions of yen Total Less than 1year 1-3 years 3-5 years More than ...

  • Page 50
    ... and shift to a business that can gain profit through solutions and services. Develop new business through globalized diversification and establish the Three Regional Headquarters management system: Reinforce capability to create innovative products and systems of commercial printing sector, medical...

  • Page 51
    ... rates and prices of marketable securities and investments. In order to hedge the risks of changes in foreign currency exchange rates, Canon uses derivative financial instruments. Equity price risk Canon holds marketable securities included in current assets, which consist generally of highly...

  • Page 52
    ...commercialization and will actively make use of M&A opportunities as needed. Strengthen sales capacity in accordance with market characteristics, by expanding market share in developed countries and expanding profits by strengthening direct sales of Group companies, solutions, and service businesses...

  • Page 53
    ... strategies to establish market share. Canon is promoting technological development in this market in order to provide competitive products in all categories with a focus on introducing new and improved product offerings to market in a well-timed manner. In 2011, the large format inkjet printer...

  • Page 54
    ..., web cameras priced at under $200, has emerged, and sales of such cameras have been increasing. Canon will aim to expand sales in this market with a powerful product lineup including higher added value based around our distinctive high-definition, high-resolution technologies. In the business-use...

  • Page 55
    ... image scanners specialized for scanning bills and checks) to North American financial institutions, which was partially offset by higher sales in Japan, Europe and other regions. Sales of organic EL display manufacturing equipment made by Canon Tokki Corporation recorded significant gains in 2011...

  • Page 56
    ... year Net income attributable to Canon Inc. Percentage of sales Advertising Research and development expenses Depreciation of property, plant and equipment Increase in property, plant and equipment Long-term debt, excluding current installments Canon Inc. stockholders equity Total assets Per share...

  • Page 57
    ....87 41.28 Notes: 1. U.S. dollar amounts are translated from yen at the rate of U.S.$1 = JPY78, the approximate exchange rate on the Tokyo Foreign Exchange Market as of December 30, 2011. 2. The Company made a three-for-two stock split on July 1, 2006. The average number of common shares and the per...

  • Page 58
    ... income (loss) (Note 15) Treasury stock, at cost; 132,231,296 shares in 2011 and 105,295,975 shares in 2010 Total Canon Inc. stockholders' equity Noncontrolling interests Total equity Total liabilities and equity See accompanying Notes to Consolidated Financial Statements. 2011 2010 2011...

  • Page 59
    37 Strategy Business Units Management System FINANCIAL SECTION 101 57 C O N S O L I DA T E D S T A T E M E N T S O F I NC O M E Canon Inc. and Subsidiaries Years ended December 31, 2011, 2010 and 2009 Thousands of U.S. dollars (Note 2) Millions of yen 2011 2010 2009 2011 Net sales Cost of ...

  • Page 60
    58 FINANCIAL SECTION> CONSOLIDATED STATEMENTS OF EQUITY C O N S O L I DA T E D S T A T E M E N T S O F E Q U I T Y Canon Inc. and Subsidiaries Millions of yen Accumulated other comprehensive income (loss) Common stock Additional paid-in capital Legal reserve Retained earnings Treasury stock ...

  • Page 61
    37 Strategy Business Units Management System FINANCIAL SECTION 101 59 Common stock Additional paid-in capital Legal reserve Thousands of U.S. dollars (Note 2) Accumulated other Retained comprehensive Treasury earnings income (loss) stock Total Canon Inc. stockholders equity Noncontrolling ...

  • Page 62
    ... FINANCIAL STATEMENTS C O N S O L I DA T E D S T A T E M E N T S O F C A S H F L OW S Canon Inc. and Subsidiaries Years ended December 31, 2011, 2010 and 2009 Thousands of U.S. dollars (Note 2) Millions of yen 2011 2010 2009 2011 Cash flows from operating activities: Consolidated net income...

  • Page 63
    .... Canon sells laser printers on an OEM basis to HewlettPackard Company; such sales constituted 19.3%, 20.1% and 20.0% of consolidated net sales for the years ended December 31, 2011, 2010 and 2009, respectively, and are included in the Office Business Unit. Canon's manufacturing operations...

  • Page 64
    ... companies and non-marketable equity securities. Canon reports investments with maturities of less than one year as short-term investments. Canon classifies investments in debt and marketable equity securities as available-for-sale or held-to-maturity securities. Canon does not hold any trading...

  • Page 65
    ... of loss have been transferred to the customer or services have been rendered, the sales price is fixed or determinable, and collectibility is probable. Revenue from sales of office products, such as office network digital MFDs and laser printers, and consumer products, such as digital cameras and...

  • Page 66
    ... non-lease deliverables generally consist of product maintenance contracts and supplies. For all other arrangements with multiple elements, Canon allocates revenue to each element based on its relative selling price if such element meets the criteria for treatment as a separate unit of accounting...

  • Page 67
    ... converted into United States dollars at such rate. 3. INVESTMENTS The cost, gross unrealized holding gains, gross unrealized holding losses and fair value for available-for-sale securities included in short-term investments and investments by major security type at December 31, 2011 and 2010 were...

  • Page 68
    ...Â¥2,482 million for the years ended December 31, 2011, 2010 and 2009, respectively. At December 31, 2011, substantially all of the available-forsale securities with unrealized losses had been in a continuous unrealized loss position for less than twelve months. Time deposits with original maturities...

  • Page 69
    ... statements of cash flows include property, plant and equipment and intangible assets. As a result of continued sluggish demand in the semiconductor manufacturing industry and diminished profitability of the semiconductor lithography equipment business, Canon recognized impairment losses related...

  • Page 70
    ... losses is as follows: Years ended December 31 Millions of yen Thousands of U.S. dollars 2011 2010 2011 Balance at beginning of year Charge-offs Provision Other Balance at end of year Canon has policies in place to ensure that its products are sold to customers with an appropriate credit history...

  • Page 71
    ...-term loans in the consolidated statement of cash flows. Oc 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 Oc have complementary technologies and products...

  • Page 72
    ... ($147,205 thousand) in 2015, and ¥6,134 million ($78,641 thousand) in 2016. Years ended December 31 Millions of yen Intangible assets not subject to amortization other than goodwill at December 31, 2011 and 2010 were not significant. For management reporting purposes, goodwill is not allocated...

  • Page 73
    ... outstanding at December 31, 2011 were as follows: Year ending December 31: Millions of yen Thousands of U.S. dollars 2012 2013 2014 2015 2016 Thereafter ¥3,702 1,528 1,132 457 105 146 ¥7,070 $47,462 19,589 14,513 5,859 1,346 1,872 $90,641 Certain property, plant and equipment with a net book...

  • Page 74
    ... assets are as follows: Years ended December 31 Japanese plans Millions of yen Thousands of U.S. dollars Foreign plans Millions of yen Thousands of U.S. dollars 2011 2010 2011 2011 2010 2011 Change in benefit obligations: Benefit obligations at beginning of year ¥ 593,274 ¥ 551,320 Service...

  • Page 75
    ...Units Management System FINANCIAL SECTION 101 73 Amounts recognized in the consolidated balance sheets at December 31, 2011 and 2010 are as follows: December 31 Japanese plans Millions of yen Thousands of U.S. dollars Foreign plans Millions of yen Thousands of U.S. dollars 2011 2010 2011 2011...

  • Page 76
    ...the following components: Years ended December 31 Japanese plans Millions of yen Thousands of U.S. dollars Foreign plans Millions of yen Thousands of U.S. dollars 2011 2010 2009 2011 2011 2010 2009 2011 Service cost Interest cost Expected return on plan assets Amortization of net transition...

  • Page 77
    ... of investments in life insurance company general accounts. Outside Japan, investment policies vary by country, but the long-term investment objectives and strategies remain consistent. Canon's model portfolio for foreign plans has been developed as follows: approximately 40% is invested in equity...

  • Page 78
    ... FINANCIAL SECTION> NOTES TO CONSOLIDATED FINANCIAL STATEMENTS The three levels of input used to measure fair value are more fully described in Note 21. The fair values of Canon's pension plan assets at December 31, 2011 and 2010, by asset category, are as follows: December 31, 2011 Japanese plans...

  • Page 79
    ... are valued using unadjusted quoted market prices in active markets with sufficient volume and frequency of transactions. Level 2 assets are comprised principally of pooled funds that invest in equity and debt securities, corporate bonds and investments in life insurance company general accounts...

  • Page 80
    ... payments, which reflect expected future service, as appropriate, are expected to be paid: Year ending December 31: Japanese plans Millions of yen Thousands of U.S. dollars Foreign plans Millions of yen Thousands of U.S. dollars 2012 2013 2014 2015 2016 2017-2021 ¥ 15,100 16,137 17,301 19,160...

  • Page 81
    37 Strategy Business Units Management System FINANCIAL SECTION 101 79 The Company and its domestic subsidiaries are subject to a number of income taxes, which, in the aggregate, represent a statutory income tax rate of approximately 40% for the years ended December 31, 2011, 2010 and 2009. ...

  • Page 82
    ... 31 Millions of yen Thousands of U.S. dollars 2011 2010 2011 Deferred tax assets: Inventories Accrued business tax Accrued pension and severance cost Research and development costs capitalized for tax purposes Property, plant and equipment Accrued expenses Net operating losses carried forward...

  • Page 83
    ... 2012. The amount available for dividends under the Corporation Law of Japan is based on the amount recorded in the Company's nonconsolidated books of account in accordance with financial accounting standards of Japan. Such amount was ¥1,223,401 million ($15,684,628 thousand) at December 31, 2011...

  • Page 84
    ... FINANCIAL STATEMENTS 15. OTHER COMPREHENSIVE INCOME (LOSS) Changes in accumulated other comprehensive income (loss) are as follows: Years ended December 31 Millions of yen Thousands of U.S. dollars 2011 2010 2009 2011 Foreign currency translation adjustments: Balance at beginning of year...

  • Page 85
    37 Strategy Business Units Management System FINANCIAL SECTION 101 83 Tax effects allocated to each component of other comprehensive income (loss) and reclassification adjustments, including amounts attributable to noncontrolling interests, are as follows: Years ended December 31 Before-tax ...

  • Page 86
    ... the grant date and have a four year contractual term. The grant-date fair value per share of the stock options granted during the year ended December 31, 2010 was ¥988. On May 1, 2009, based on the approval of the stockholders, the Company granted stock options to its directors, executive officers...

  • Page 87
    ... Units Management System FINANCIAL SECTION 101 85 A summary of option activity under the stock option plans as of and for the years ended December 31, 2011, 2010 and 2009 is presented below: Weighted-average remaining contractual term Year Shares Weighted-average exercise price Yen U.S. dollars...

  • Page 88
    ... share computations is as follows: Years ended December 31 Millions of yen Thousands of U.S. dollars 2011 2010 2009 2011 Net income attributable to Canon Inc. ¥ 248,630 ¥246,603 Number of shares ¥131,647 $3,187,564 Average common shares outstanding Effect of dilutive securities: Stock...

  • Page 89
    ... December 31 Millions of yen Balance sheet location Fair value Thousands of U.S. dollars 2011 2010 2011 Assets: Foreign exchange contracts Liabilities: Foreign exchange contracts Prepaid expenses and other current assets Other current liabilities ¥3,393 1,340 ¥9,463 487 $43,500 17,180

  • Page 90
    ...Other, net $ (5,859) Derivatives not designated as hedging instruments Years ended December 31 Gain (loss) recognized in income on derivative Millions of yen Location Thousands of U.S. dollars 2011 2010 2009 2011 Foreign exchange contracts Other, net ¥11,168 ¥50,794 ¥(8,638) $143,179...

  • Page 91
    ...it generally guarantees the performance of products delivered and services rendered for a certain period or term. Changes in accrued product warranty cost for the years ended December 31, 2011 and 2010 are summarized as follows: Millions of yen Thousands of U.S. dollars 2011 2010 2011 Balance at...

  • Page 92
    ... 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...

  • Page 93
    37 Strategy Business Units Management System FINANCIAL SECTION 101 91 21. FAIR VALUE MEASUREMENTS Fair value is 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 ...

  • Page 94
    92 FINANCIAL SECTION> NOTES TO CONSOLIDATED FINANCIAL STATEMENTS Thousands of U.S. dollars Level 1 Level 2 Level 3 Total 2011: Assets: Cash and cash equivalents Available-for-sale (current): Corporate bonds Available-for-sale (noncurrent): Government bonds Corporate bonds Fund trusts Equity ...

  • Page 95
    ... 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...

  • Page 96
    ... TO CONSOLIDATED FINANCIAL STATEMENTS Information about operating results and assets for each segment as of and for the years ended December 31, 2011, 2010 and 2009 is as follows: Millions of yen Office Consumer Industry and Others Corporate and eliminations Consolidated 2011: Net sales: External...

  • Page 97
    ... assets, goodwill and corporate properties. Capital expenditures represent the additions to property, plant and equipment and intangible assets measured on an accrual basis. Information by major geographic area as of and for the years ended December 31, 2011, 2010 and 2009 is as follows: Millions...

  • Page 98
    ..., Canon discloses this information in order to provide financial statements users with useful information. Europe Asia and Oceania Corporate and eliminations Consolidated Americas 2011: Net sales: External customers Intersegment Total Operating cost and expenses Operating profit Total assets 2010...

  • Page 99
    ...the degree of compliance with the policies or procedures may deteriorate. Canon s management assessed the effectiveness of internal control over financial reporting as of December 31, 2011. In making this assessment, management used the criteria set forth by the Committee of Sponsoring Organizations...

  • Page 100
    ...FIRM REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM The Board of Directors and Stockholders of Canon Inc. We have audited the accompanying consolidated balance sheets of Canon Inc. and subsidiaries as of December 31, 2011 and 2010, and the related consolidated statements of income, equity...

  • Page 101
    37 Strategy Business Units Management System FINANCIAL SECTION 101 99 REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM The Board of Directors and Stockholders of Canon Inc. We have audited Canon Inc. and subsidiaries internal control over financial reporting as of December 31, 2011, based...

  • Page 102
    ...REGISTR AR S OFFICE Canon Inc. 30-2, Shimomaruko 3-chome, Ohta-ku, Tokyo 146-8501, Japan STOCKHOLDER INFORMATION Stock Exchange Listings: Tokyo, Osaka, Nagoya, Fukuoka, Sapporo and New York stock exchanges American Depositary Receipts are traded on the New York Stock Exchange (CAJ). Manager of the...

  • Page 103
    .... Canon Optical Industrial Equipment Service (Shanghai) Inc. Research & Development Canon Research Centre France S.A.S. Canon Information Systems Research Australia Pty. Ltd. Canon Information Technology (Beijing) Co., Ltd. Canon (Suzhou) System Software Inc. Canon i-tech Inc. * Tokki Corporation...

  • Page 104
    CANON INC. 30-2, Shimomaruko 3-chome, Ohta-ku, Tokyo 146-8501, Japan BEP021