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CANON ANNUAL REPORT 2013
Fiscal Year Ended December 31, 2013

Table of contents

  • Page 1
    C ANON ANNUAL REPORT 2013 F i s c a l Ye a r E n d e d D e c e m b e r 3 1 , 2 0 1 3

  • Page 2
    ... 1. Canon's consolidated financial statements are prepared in accordance with U.S. generally accepted accounting principles. 2. U.S. dollar amounts are translated from yen at the rate of JPY105=U.S.$1, the approximate exchange rate on the Tokyo Foreign Exchange Market as of December 30, 2013, solely...

  • Page 3
    ... 12 OFFICE BUSINESS UNIT 14 IMAGING SYSTEM BUSINESS UNIT 16 INDUSTRY AND OTHERS BUSINESS UNIT 18 2013 TOPICS CORPORATE STRUCTURE 20 CORPORATE GOVERNANCE 24 RESEARCH & DEVELOPMENT 26 PRODUCTION 28 SALES & MARKETING 30 CORPORATE SOCIAL RESPONSIBILITY CO R P O R AT E P HIL OS OP HY: Kyosei Canon...

  • Page 4
    02 STRATEGY Business Segment Corporate Structure Financial Section Corporate Data TO OUR STOCKHOLDERS Fujio Mitarai Chairman & CEO Canon Inc.

  • Page 5
    ... lineup of new products. Also, despite the decline in unit sales of compact digital cameras due mainly to the proliferation of smartphones, we were able to maintain our No. 1 global market share in terms of sales volume for both compact digital cameras and interchangeable-lens digital cameras. As...

  • Page 6
    ... of the dramatically changing times along with the achievement of sound business growth through the further expansion of our corporate scale while maintaining high profitability. The Excellent Global Corporation Plan Phase I 1996-2000 Strengthened our financial structure by thoroughly eliminating...

  • Page 7
    ... share worldwide in terms of unit sales on the back of solid performances by new products targeting advanced-amateur users. And within the compact digital camera segment, we also maintained our No. 1 share of global sales volume through the launch of highvalue-added models incorporating large image...

  • Page 8
    ... in Europe, with Océ as a member of the Canon Group, we have designated their facilities as the development base for high-speed printers. Through this allocation, the globally diversified structure that we envision, with new businesses emerging continuously from Japan, North America and Europe, is...

  • Page 9
    ... the automated assembly of cameras and lens bodies. In accordance with our production strategy for the future, in Japan, in addition to manufacturing high-value-added products, we will make use of our automation technologies to maintain and expand production. In the Americas and Europe as well, we...

  • Page 10
    ...plan to increase the number of Canon-brand retail stores we have been rolling out in South and Southeast Asia from the current 108 locations to 300 by 2015, and will continue opening stores in other countries as well. In Brazil, meanwhile, we began local production of compact digital cameras in 2013...

  • Page 11
    ...and return to a path of growth. We look forward to your continued understanding and support. Fujio Mitarai Chairman & CEO Canon Inc. Managers from Group companies worldwide gather at the Canon Global Management Institute in Japan to study corporate strategies and engage in cross-cultural exchanges...

  • Page 12
    10 Strategy BUSINESS SEGMENT Corporate Structure Financial Section Corporate Data AT A G L A N C E Business Units Main Products •Office Multifunction Devices (MFDs) •Laser Multifunction Printers (MFPs) OF F ICE BU SINES S UN IT Office Multifunction Devices (MFDs) Digital Production ...

  • Page 13
    ... Company is aggressively promoting sales of its cuttingedge digital radiography systems and ophthalmic equipment, which employ Canon's highly regarded medical imaging technologies. 500,000 432,958 420,863 400,000 357,998 407,840 374,870 300,000 10.0% 200,000 100,000 0 2009 2010 2011 2012 2013...

  • Page 14
    ... production printing systems delivered solid sales performance in Asia and Oceania. The growth in unit sales of the imagePRESS C7010VP series in the Americas, in addition to orders received from large customers in Japan, contributed to the overall sales growth. 1,000,000 500,000 0 2011 2012 2013

  • Page 15
    ... by the data print services (DPS) market. As for Canon's laser multifunction printers (MFPs) and laser printers for small to mid-sized businesses, unit sales of color machines in the Americas and Europe increased, while overall unit sales surpassed the year of 2012. In the area of OEM-brand laser...

  • Page 16
    ...-added-value models incorporating features that differentiate them from smartphones, such as large-size image sensors. In the area of digital camcorders, we focused on the sales expansion of high value added products amid stagnation in global demand. 900,000 600,000 300,000 0 2011 2012 2013

  • Page 17
    ..., we launched new products designed to meet customer needs including PIXMA MG7100 series with improved cloud functions and smartphone compatibility while making sales expansion efforts for each model. As a result, our inkjet printer sales increased, supported also by the increase in sales volume of...

  • Page 18
    16 Strategy BUSINESS SEGMENT Corporate Structure Financial Section Corporate Data INDUSTRY AND OTHERS BUSINESS UNIT Canon contributes to raising the bar for ophthalmic diagnosis precision through imaging technologies we have developed over the years. As we continue to focus on better image ...

  • Page 19
    ... for capital investment by corporate customers. As a result of the above, sales for this business unit decreased by 8.1% on a consolidated basis to ¥374.9 billion. systems, we will emphasize wireless connectivity and dynamic imaging, and in ophthalmic equipment we will focus on high-value-added...

  • Page 20
    ...BUSINESS SEGMENT Corporate Structure Financial Section Corporate Data 2013 TOPICS OFFICE BUSINESS UNIT imageRUNNER ADVANCE Series Receive EPEAT Gold Rating In the new digital imaging equipment category of EPEAT®, eight models in Canon's imageRUNNER ADVANCE series received an EPEAT Gold rating...

  • Page 21
    ... smartphones and tablet devices. New PIXMA Cloud Link enables access to various cloud services for printing from SNS (Social Networking Service) sites and online photo-sharing and storage-service sites, as well as Canon-original print content. Users can easily print out photos and documents stored...

  • Page 22
    ... Corporate Intellectual Property & Legal Headquarters Audit & Supervisory Board Members Senior Managing Directors Naoji Otsuka Chief Executive, Inkjet Products Operations Yoroku Adachi Chairman & CEO, Canon U.S.A., Inc. Masanori Yamada Group Executive, Network Visual Solution Business Promotion...

  • Page 23
    ...the Group's business and assets. Audit & Supervisory Board members also work closely with our independent registered public accounting firm and the Corporate Audit Center. Canon has notified the stock exchanges in Tokyo, Nagoya, Fukuoka and Sapporo of the designation of outside directors and members...

  • Page 24
    ...of Japan (the "Corporation Law") does not require Japanese companies with the Audit & Supervisory Board such as the Company, to appoint independent directors as members of the board of directors. The NYSE Corporate Governance Rules require non-management directors of U.S. listed companies to meet at...

  • Page 25
    ... to have ever been a director, executive officer, manager, or employee of the Company or its subsidiaries. The Company's current Audit & Supervisory Board Member system meets these requirements. In addition, pursuant to the regulations of the Japanese stock exchanges, the Company is required to have...

  • Page 26
    ... and Europe under the Three Regional Headquarters management system. At the same time, Canon will develop the medical and industrial fields into new business pillars. Canon's growth to date has been attributable to employing strong technologies to develop competitive products, mainly in Japan, and...

  • Page 27
    ... research that can take more than ten years. At the same time, the Company is continually bolstering activities centered on key parts and key devices in order to enhance the competitiveness of its products. In 2013, Canon successfully developed a high-sensitivity 35 mm full-frame CMOS sensor...

  • Page 28
    ... Business Segment CORPORATE STRUCTURE Financial Section Corporate Data PRODUCTION Canon works to maintain and expand production, using our automation technologies while manufacturing high-value-added products in Japan. (the Utsunomiya Plant, Japan) In addition to establishing a globally...

  • Page 29
    ... interchangeable lenses for digital SLR cameras, which requires a high degree of precision, in 2013. In addition to creating high-value-added products, Canon will expedite efforts to raise productivity in order to strengthen the cost-competitiveness of manufacturing products in Japan. Meanwhile, by...

  • Page 30
    28 Strategy Business Segment CORPORATE STRUCTURE Financial Section Corporate Data SALES & MARKETING Canon (China) Co., Ltd. has held "Canon Grand Fairs," targeting the market of the country's 1.3 billion consumers including general consumers, to further spread and improve the Canon brand. The...

  • Page 31
    ... increased market share in key segments such as cameras, consumer inkjet and production printing. Canon's acquisition of Belgium-based solutions specialist I.R.I.S. Group in 2013 was an important milestone in the strategy to accelerate growth in services and solutions. New Canon-Océ cross-selling...

  • Page 32
    30 Strategy Business Segment CORPORATE STRUCTURE Financial Section Corporate Data C O R P O R AT E S O C I A L R E S P O N S I B I L I T Y Canon Vietnam Co., Ltd. continues the Canon Friendship School Chain Project. A program designed to establish educational environments for children living ...

  • Page 33
    ... Canon's latest digital technology and traditional Japanese crafts, such as gold leaf craftwork. As a result of the project, original cultural assets can be kept in the more favorable environment of museums while copies can be used for educational purposes and public exhibits. Since the program...

  • Page 34
    ...report to the U.S. Securities and Exchange Commission by the end of May 2014 on the progress the Canon Group is making to address the conflict minerals issue and also disclose the information on the Company's website. Cultivating Diverse Human Resources Canon works constantly to foster global human...

  • Page 35
    ...STATEMENTS OF INCOME CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME CONSOLIDATED STATEMENTS OF EQUITY CONSOLIDATED STATEMENTS OF CASH FLOWS NOTES TO CONSOLIDATED FINANCIAL STATEMENTS MANAGEMENT'S REPORT ON INTERNAL CONTROL OVER FINANCIAL REPORTING REPORTS OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING...

  • Page 36
    ... management policy is to contribute to the prosperity and well-being of the world while endeavoring to become a truly excellent global corporate group targeting continued growth and development. Canon divides its businesses into three segments: the Office Business Unit, the Imaging System Business...

  • Page 37
    ... its products. Sales vary depending on such factors as product demand, the number and size of transactions within the reporting period, market acceptance for new products, and changes in sales prices. Other factors involved are market share and market environment. In addition, management considers...

  • Page 38
    ... revised during 2012. By using new additional statistical information and gathering sales and inventory data from customers. Canon was able to revise its estimates. Estimated product warranty costs are recorded at the time revenue is recognized and are included in selling, general and administrative...

  • Page 39
    ... on Canon's Canon has significant employee retirement and severance benefit obligations that are recognized based on actuarial valuations. Inherent in these valuations are key assumptions, including discount rates and expected return on plan assets. Management must consider current market conditions...

  • Page 40
    ...-average expected long-term rate of return on plan assets of 3.1% for Japanese plans and 5.2% for foreign plans. In estimating the discount rate, Canon uses available information about rates of return on high-quality fixed-income government and corporate bonds currently available and expected...

  • Page 41
    ... printers (MFPs) / Laser printers / Digital production printing systems / High speed continuous feed printers / Wide-format printers / Document solutions •The Imaging System Business Unit mainly includes Interchangeable lens digital cameras / Digital compact cameras / Digital camcorders / Digital...

  • Page 42
    ... Furthermore, in Japan, the new entry-level EOS Digital Rebel SL1 and T5i cameras proved popular. As for digital compact cameras, although total sales volume declined due to the market slowdown and the increasing popularity of smartphones, sales volume increased from 2012 for high-added-value models...

  • Page 43
    ... current operating structure, appreciation of the yen has a negative impact on net sales and the gross profit ratio. To reduce the financial risks from changes in foreign exchange rates, Canon utilizes derivative financial instruments, which consist principally of forward currency exchange contracts...

  • Page 44
    ... in Property, Plant and Equipment (Millions of yen) 300,000 270,457 226,869 188,826 158,976 1.5 100,000 1.0 2.5 3.0 Working Capital Ratio Return on Canon Inc. Stockholders' Equity (%) 12 2.69 2.57 2.38 2.0 2.41 2.47 9.2 9 9.6 8.7 8.4 216,128 200,000 6 4.9 3 0.5 0 2009 2010 2011 2012 2013...

  • Page 45
    ...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 2013 was 2.69 compared to 2.47 for 2012 and to 2.41 for 2011. Return on assets (net income attributable to Canon...

  • Page 46
    ... Canon's potential capacity for additional debt and/or equity financing will be sufficient to fund current and future capital requirements. RESEARCH AND DEVELOPMENT, PATENTS AND LICENSES Year 2013 marks the third year of the Excellent Global Corporation Plan, its 5-year (2011-2015) management plan...

  • Page 47
    ... 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 48
    ... out in 2013, is also expected to realize a moderate recovery. The year 2014 represents the fourth year of Phase IV (2011- 2015) of the Excellent Global Corporation Plan. The Canon Group will work in unity, taking steps to realize sound business growth and overcome challenges to firmly return to...

  • Page 49
    ... products and to market products that incorporate new technology on a timely basis, are competitively priced, and achieve market acceptance; the possibility of losses resulting from foreign currency transactions designed to reduce financial risks from changes in foreign currency exchange rates...

  • Page 50
    ...Strategy Business Segment Corporate Structure FINANCIAL SECTION Corporate Data TEN-YEAR FINANCIAL SUMMARY Millions of yen (except per share amounts) 2013 2012 2011 2010 Net sales: Domestic Overseas Total Percentage of previous year Net income attributable to Canon Inc. Percentage of sales...

  • Page 51
    ...are translated from yen at the rate of U.S.$1 = JPY105, the approximate exchange rate on the Tokyo Foreign Exchange Market as of December 30, 2013. 2. The Company made a three-for-two stock split on July 1, 2006. The average number of common shares and the per share data for the periods prior to the...

  • Page 52
    50 Strategy Business Segment Corporate Structure FINANCIAL SECTION Corporate Data CONSOLIDATED BALANCE SHEETS Canon Inc. and Subsidiaries December 31, 2013 and 2012 Millions of yen Thousands of U.S. dollars (Note 2) ASSETS Current assets: Cash and cash equivalents (Note 1) Short-term ...

  • Page 53
    ...STATEMENTS OF INCOME Canon Inc. and Subsidiaries Years ended December 31, 2013, 2012 and 2011 Millions of yen Thousands of U.S. dollars (Note 2) 2013 2012 2011 2013 Net sales Cost of sales (Notes 6, 8, 11 and 18) Gross profit Operating expenses (Notes 1, 6, 8, 11, 15 and 18): Selling, general...

  • Page 54
    52 Strategy Business Segment Corporate Structure FINANCIAL SECTION Corporate Data CONSOLIDATED STATEMENTS OF EQUITY Canon Inc. and Subsidiaries Millions of yen Additional paid-in capital Accumulated other comprehensive income (loss) Total Canon Inc. stockholders' equity Common stock Legal ...

  • Page 55
    CONSOLIDATED STATEMENTS OF EQUITY 53 Thousands of U.S. dollars (Note 2) Additional paid-in capital Accumulated other comprehensive income (loss) Total Canon Inc. stockholders' equity Common stock Legal reserve Retained earnings Treasury stock Noncontrolling interests Total equity Balance at...

  • Page 56
    54 Strategy Business Segment Corporate Structure FINANCIAL SECTION Corporate Data CONSOLIDATED STATEMENTS OF CASH FLOWS Canon Inc. and Subsidiaries Years ended December 31, 2013, 2012 and 2011 Millions of yen Thousands of U.S. dollars (Note 2) 2013 2012 2011 2013 Cash flows from ...

  • Page 57
    ... laser printers, digital production printing systems, high speed continuous feed printers, wide-format printers and document solutions. Imaging system products consist mainly of interchangeable lens digital cameras, digital compact cameras, digital camcorders, digital cinema cameras, interchangeable...

  • Page 58
    56 Strategy Business Segment Corporate Structure FINANCIAL SECTION Corporate Data for the year ended December 31, 2012 and a net loss of ¥3,287 million for the year ended December 31, 2011, respectively. (f) Cash Equivalents All highly liquid investments acquired with original maturities of ...

  • Page 59
    ... risk 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 MFDs and laser printers, and imaging system products, such as digital cameras and inkjet...

  • Page 60
    ... of accounting. Canon records estimated reductions to sales at the time of sale for sales incentive programs including product discounts, customer promotions and volume-based rebates. Estimated reductions to sales are based upon historical trends and other known factors at the time of sale. Canon...

  • Page 61
    ... financial statements presented herein are expressed in Japanese yen and, solely for the convenience of the reader, have been translated into United States dollars at the rate of ¥105 = U.S.$1, the approximate exchange rate prevailing on the Tokyo Foreign Exchange Market on December 30, 2013...

  • Page 62
    ... three months are ¥47,914 million ($456,324 thousand) and ¥28,292 million at December 31, 2013 and 2012, respectively, and are included in short-term investments in the accompanying consolidated balance sheets. Aggregate cost of non-marketable equity securities accounted for under the cost method...

  • Page 63
    ...thousand) and ¥38,893 million at December 31, 2013 and 2012, respectively, and are included in other current liabilities in the accompanying consolidated balance sheets. Fixed assets presented in the consolidated statements of cash flows include property, plant and equipment and intangible assets.

  • Page 64
    ...in the accompanying consolidated balance sheets, are as follows: December 31 Millions of yen Thousands of U.S. dollars 2013 2012 2013 Total minimum lease payments receivable Unguaranteed residual values Executory costs Unearned income Less allowance for credit losses Less current portion ¥ 278...

  • Page 65
    ... for credit losses of finance receivables are evaluated collectively based on historical experience of credit losses. An additional reserve for individual accounts is recorded when Canon becomes aware of a customer's inability to meet its financial obligations, such as in the case of bankruptcy...

  • Page 66
    ... Corporate Structure FINANCIAL SECTION Corporate Data Aggregate amortization expense for the years ended December 31, 2013, 2012 and 2011 was ¥52,015 million ($495,381 thousand), ¥46,160 million and ¥51,164 million, respectively. Estimated amortization expense for intangible assets currently...

  • Page 67
    NOTES TO CONSOLIDATED FINANCIAL STATEMENTS 65 The aggregate annual maturities of long-term debt outstanding at December 31, 2013 were as follows: Year ending December 31: Millions of yen Thousands of U.S. dollars 2014 2015 2016 2017 2018 Thereafter ¥1,245 880 319 171 48 30 ¥2,693 $11,857 8,...

  • Page 68
    ... U.S. dollars 2013 2012 2013 2013 2012 2013 Change in benefit obligations: Benefit obligations at beginning of year Service cost Interest cost Plan participants' contributions Actuarial loss Benefits paid Curtailments and settlements Foreign currency exchange rate changes Benefit obligations...

  • Page 69
    ... CONSOLIDATED FINANCIAL STATEMENTS 67 Amounts recognized in the consolidated balance sheets at December 31, 2013 and 2012 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 2013 2012 2013 2013 2012 2013...

  • Page 70
    ... Strategy Business Segment Corporate Structure FINANCIAL SECTION Corporate Data Components of net periodic benefit cost and other amounts recognized in other comprehensive income (loss) Net periodic benefit cost for Canon's employee retirement and severance defined benefit plans for the years...

  • Page 71
    ... is invested in other investment vehicles, primarily consisting 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...

  • Page 72
    ...Segment Corporate Structure FINANCIAL SECTION Corporate Data The three levels of input used to measure fair value are more fully described in Note 20. The fair values of Canon's pension plan assets at December 31, 2013 and 2012, by asset category, are as follows: December 31, 2013 Japanese plans...

  • Page 73
    ... 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. Pooled funds...

  • Page 74
    ... Business Segment Corporate Structure FINANCIAL SECTION Corporate Data Contributions Canon expects to contribute ¥13,589 million ($129,419 thousand) to its Japanese defined benefit pension plans and ¥7,060 million ($67,238 thousand) to its foreign defined benefit pension plans for the year...

  • Page 75
    ... FINANCIAL STATEMENTS 73 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 38% for the year ended December 31, 2013 and approximately 40% for the years ended December 31, 2012...

  • Page 76
    ...Strategy Business Segment Corporate Structure FINANCIAL SECTION Corporate Data The tax effects of temporary differences that give rise to the deferred tax assets and deferred tax liabilities at December 31, 2013 and 2012 are presented below: December 31 Millions of yen Thousands of U.S. dollars...

  • Page 77
    ... yen Thousands of U.S. dollars 2013 2012 2011 2013 Balance at beginning of year Additions for tax positions of the current year Additions for tax positions of prior years Reductions for tax positions of prior years Settlements with tax authorities Other Balance at end of year ¥ 7,711 312 388...

  • Page 78
    76 Strategy Business Segment Corporate Structure FINANCIAL SECTION Corporate Data 13. LEGAL RESERVE AND RETAINED EARNINGS The Corporation Law of Japan provides that an amount equal to 10% of distributions from retained earnings paid by the Company and its Japanese subsidiaries be appropriated ...

  • Page 79
    ... Total Balance at December 31, 2012 Equity transactions with noncontrolling interests and other Other comprehensive income (loss) before reclassifications Amounts reclassified from accumulated other comprehensive income (loss) Net change during the year Balance at December 31, 2013 $ (2,359...

  • Page 80
    78 Strategy Business Segment Corporate Structure FINANCIAL SECTION Corporate Data 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 ...

  • Page 81
    ...On May 1, 2011, based on the approval of the stockholders, the Company granted stock options to its directors, executive officers and certain employees to acquire 912,000 shares of common stock. These option awards vest after two years of continued service beginning on the grant date and have a four...

  • Page 82
    80 Strategy Business Segment Corporate Structure FINANCIAL SECTION Corporate Data A summary of option activity under the stock option plans as of and for the years ended December 31, 2013, 2012 and 2011 is presented below: Weighted-average remaining contractual term Year Shares Weighted-...

  • Page 83
    ...to Canon Inc. stockholders per share computations is as follows: Years ended December 31 Millions of yen Thousands of U.S. dollars 2013 2012 2011 2013 Net income attributable to Canon Inc. ¥ 230,483 ¥224,564 ¥248,630 $ 2,195,076 Number of shares Average common shares outstanding Effect...

  • Page 84
    82 Strategy Business Segment Corporate Structure FINANCIAL SECTION Corporate Data 17. 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 ...

  • Page 85
    ... instruments December 31 Millions of yen Balance sheet location Fair value Thousands of U.S. dollars 2013 2012 2013 Assets: Foreign exchange contracts Liabilities: Foreign exchange contracts Prepaid expenses and other current assets Other current liabilities ¥ 44 2,267 ¥ 443 4,472 $ 419...

  • Page 86
    ... Strategy Business Segment Corporate Structure FINANCIAL SECTION Corporate Data 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 2013 2012 2011 2013 Foreign exchange...

  • Page 87
    ... 31, 2013 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. Changes in accrued product warranty cost for the years ended December 31, 2013 and 2012 are...

  • Page 88
    ... discounted using current market borrowing rates for similar debt instruments of comparable maturity. The levels are more fully described in Note 20. Foreign exchange contracts The fair values of foreign exchange contracts are measured based on the market price obtained from financial institutions...

  • Page 89
    ...fair value hierarchy at December 31, 2013 and 2012. December 31 Millions of yen Level 1 Level 2 Level 3 Total 2013: Assets: Cash and cash equivalents Available-for-sale (noncurrent): Government bonds Corporate bonds Fund trusts Equity securities Derivatives Total assets Liabilities: Derivatives...

  • Page 90
    ... printers (MFPs) / Laser printers / Digital production printing systems / High speed continuous feed printers / Wideformat printers / Document solutions Imaging System Business Unit: Interchangeable lens digital cameras / Digital compact cameras / Digital camcorders / Digital cinema cameras...

  • Page 91
    ...,478 Thousands of U.S. dollars Office Imaging System Industry and Others Corporate and eliminations Consolidated 2013: Net sales: External customers Intersegment Total Operating cost and expenses Operating profit (loss) Total assets Depreciation and amortization Capital expenditures $ 18,989...

  • Page 92
    ... structure, certain financial assets have been transferred from Corporate to the Office Business Unit. Corresponding amounts of total assets as of December 31, 2012 and 2011 have been reclassified to conform with the current year presentation. Information about product sales to external customers...

  • Page 93
    ... FINANCIAL STATEMENTS 91 Information by major geographic area as of and for the years ended December 31, 2013, 2012 and 2011 is as follows: Thousands of U.S. dollars Millions of yen 2013 2012 2011 2013 Net sales: Japan Americas Europe Asia and Oceania Total Long-lived assets: Japan Americas...

  • Page 94
    ...Canon discloses this information in order to provide financial statements users with useful information. Millions of yen Japan Americas Europe Asia and Oceania Corporate and eliminations Consolidated 2013: Net sales: External customers Intersegment Total Operating cost and expenses Operating profit...

  • Page 95
    ... inadequate because of changes in conditions, or that 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, 2013. In making this assessment, management used the criteria...

  • Page 96
    ...Business Segment Corporate Structure FINANCIAL SECTION Corporate Data 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, 2013...

  • Page 97
    ... of the Public Company Accounting Oversight Board (United States), the consolidated balance sheets of Canon Inc. and subsidiaries as of December 31, 2013 and 2012, and the related consolidated statements of income, comprehensive income, equity, and cash flows for each of the three years in the...

  • Page 98
    ... Strategy Business Segment Corporate Structure Financial Section CORPORATE DATA TRANSFER AND REGISTRAR'S OFFICE STOCKHOLDER INFORMATION Canon Inc. 30-2, Shimomaruko 3-chome, Ohta-ku, Tokyo 146-8501, Japan Stock Exchange Listings: Tokyo, Nagoya, Fukuoka, Sapporo and New York stock exchanges...

  • Page 99
    ... Canon Opto (Malaysia) Sdn. Bhd. Marketing & Other Canon Marketing Japan Inc. Canon System and Support Inc. Canon Software Inc. Canon IT Solutions Inc. Canon U.S.A., Inc. Canon Canada Inc. Canon Solutions America, Inc. Canon Latin America, Inc. Canon Europa N.V. Canon Europe Ltd. Canon Ru LLC Canon...

  • Page 100
    CANON INC. 30-2, Shimomaruko 3-chome, Ohta-ku, Tokyo 146-8501, Japan ©Canon Inc. 2014 PUB.BEP023-01 0414