Canon 2015 Annual Report Download - page 46

CANON ANNUAL REPORT 2015
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of the baseline experience, material usage and service delivery
costs incurred in correcting a product failure. As of December
31, 2015, accrued product warranty costs amounted to
¥14,014 million.
At December 31, 2015, commitments outstanding for the
purchase of property, plant and equipment were approxi-
mately ¥43,059 million, and commitments outstanding for
the purchase of parts and raw materials were approximately
¥75,439 million, both for use in the ordinary course of its busi-
ness. Canon anticipates that funds needed to fulfill these com-
mitments will be generated internally through operations.
During 2016, Canon expects to contribute ¥12,015 million
to its Japanese defined benefit pension plans and ¥8,706 mil-
lion to its foreign defined benefit pension plans.
Canon’s management believes that current financial
resources, cash generated from operations and Canon’s poten-
tial 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 2015 marks the last year of the Excellent Global
Corporation Plan, Canon’s 5-year (2011-2015) management
plan. The slogan of the fourth phase (“Phase IV”) is “Aiming
for the Summit - Speed & Sound Growth” and there are three
core strategies related to R&D:
• Achieve the overwhelming No.1 position in all core busi-
nesses and expand related and peripheral businesses;
• Develop new business through globalized diversification
and establish the Three Regional Headquarters manage-
ment system; and
• Build the foundations of an environmentally advanced
corporation.
Canon has been striving to implement the three R&D
related strategies as follows:
• Achieve the overwhelming No.1 position in all core busi-
nesses and expand related and peripheral businesses:
Continue to introduce competitive products through
innovation and aim at gaining profit through solutions
and services.
• Develop new business through globalized diversification
and establish the Three Regional Headquarters manage-
ment system: Reinforce the businesses of medical imaging
sector, industrial equipment sector and network camera
sector to develop into Canon’s new pillars. Seek talents in
Japan, US, and Europe to foster promising technologies
and enhance R&D capabilities in global-scale dimensions
by enabling product development in specialized area of
each region, with actively utilizing M&A.
• Build the foundations of an environmentally advanced cor-
poration: Focus on energy-conserving, resource-saving,
and recycling technologies to create products with the
highest environmental performance.
Canon is pursuing collaboration among government,
industry and academia. Canon’s collaboration effort can be
seen in various activities such as fundamental research and
development of leading-edge technologies with top universi-
ties and research institutes around the world, including Tokyo
University, Kyoto University, Tokyo Institute of Technology,
Tohoku University, Stanford University, and the University of
Arizona, and also participation in the “ImPACT” (Impulsing
Paradigm Change through Disruptive Technologies) program
led by the Japanese government where Canon’s
physically-noninvasive and -nondestructive imaging technol-
ogy is selected as one of the R&D programs. Additionally,
Canon is currently working on collaborative research with
Massachusetts General Hospital (“MGH”) and Brigham and
Women’s Hospital (“BWH”) to develop biomedical optical
imaging and medical robotics technologies at the Healthcare
Optics Research Laboratory in Cambridge, Massachusetts,
founded in 2013.
Canon has developed a comprehensive imaging simula-
tion system covering all image formation processes includ-
ing optics, mechanics, sensor, and image processing, ahead of
its competitors. With the simulation system, Canon has suc-
ceeded in further reducing the need for prototypes, lowering
costs and shortening product development lead times.
Canon’s consolidated R&D expenses were ¥328,500 million
in 2015, ¥308,979 million in 2014 and ¥306,324 million in
2013. The ratios of R&D expenses to the consolidated total net
sales for 2015, 2014 and 2013 were 8.6%, 8.3% and 8.2%,
respectively.
Canon believes that new products protected by the robust
patents portfolio will not easily allow competitors to compete
with them, and will give them an advantage in establishing
standards in the market and industry.
Canon obtained the third greatest number of private sector
patents in 2015, according to the United States patent annual
list, released by IFI CLAIMS® Patent Services.
R&D Expenses (Billions of yen)
400
300
200
100
0
2014 2015201320122011
FINANCIAL OVERVIEW