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46 F I N A N C I A L S E C T I O N >F I N A N C I A L O V E R V I E W
As of March 15, 2012, Canon’s debt ratings are: Moody’s:
Aa1 (long-term); S&P: AA (long-term), A-1+ (short-term); and
R&I: AA+ (long-term). Canon does not have any rating down-
grade triggers that would accelerate the maturity of a
material amount of its debt. A downgrade in Canon’s credit
ratings or outlook could, however, increase the cost of its bor-
rowings.
Increase in property, plant and equipment
on an accrual
basis in fiscal 2011 amounted to ¥226,869 million (U.S.$2,909
million) compared with ¥158,976 million in fiscal 2010 and
¥216,128 million in fiscal 2009. For fiscal 2012, Canon proj-
ects its increase in property, plant and equipment will be
approximately ¥300,000 million (U.S.$3,846 million).
Employer contributions
to Canon’s worldwide defined ben-
efit pension plans were ¥30,510 million (U.S.$391 million) in
fiscal 2011, ¥21,435 million in fiscal 2010 and ¥18,232 mil-
lion in fiscal 2009. In addition, employer contributions to
Canon’s worldwide defined contribution pension plans were
¥12,511 million (U.S.$160 million) in fiscal 2011, ¥11,780 mil-
lion in fiscal 2010, and ¥9,148 million in fiscal 2009.
Working capital
in fiscal 2011 increased by ¥25,969 million
(U.S.$333 million), to ¥1,259,457 million (U.S.$16,147 mil-
lion), compared with ¥1,233,488 million in fiscal 2010 and
¥1,234,089 million in fiscal 2009. Canon believes its working
capital will be sufficient for its requirements for the foresee-
able future. Canon’s capital requirements are primarily
dependent on management’s business plans regarding the
levels and timing of purchases of fixed assets and invest-
ments. 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 attributable to Canon Inc.
divided by the average of total assets) was 6.3% in fiscal 2011,
compared to 6.3% in fiscal 2010 and 3.4% in fiscal 2009.
Return on Canon Inc. stockholders’ equity
(net income
attributable to Canon Inc. divided by the average of total
Canon Inc. stockholders’ equity) was 9.6% in fiscal 2011 com-
pared with 9.2% in fiscal 2010 and 4.9% in fiscal 2009.
Debt to total assets ratio
was 0.3%, 0.3% and 0.3% as of
December 31, 2011, 2010 and 2009, respectively. Canon had
short-term loans and long-term debt of ¥11,711 million
(U.S.$150 million) as of December 31, 2011, ¥11,331 million
as of December 31, 2010 and ¥9,781 million as of December
31, 2009.
OFF-BALANCE SHEET ARRANGEMENTS
As part of its ongoing business, Canon does not participate in
transactions that generate relationships with unconsolidated
entities or financial partnerships, such as entities often
referred to as structured finance or special purpose entities,
which would have been established for the purpose of facili-
tating off-balance sheet arrangements or other contractually
narrow or limited purposes.
Canon provides guarantees for bank loans of its employ-
ees, affiliates and other companies. Canon would have to
perform under a guarantee if the borrower defaults on a pay-
ment within the contract periods of 1 year to 30 years in the
case of employees with housing loans, and 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 by all borrowers was ¥15,245
million (U.S.$195 million) at December 31, 2011. The carrying
amounts of the liabilities recognized for Canon’s obligations
as a guarantor under those guarantees were insignificant.
WORKING CAPITAL RATIO
3.0
2.5
2.0
1.5
1.0
0
0.5
20112010200920082007
2.08 2.19
2.41
2.38
2.57
RETURN ON CANON INC.
STOCKHOLDERS’ EQUITY
(%)
20
15
10
5
0
20112010200920082007
16.5
11.1
9.6
9.2
4.9