Edgar Filing: CANON INC

Form 6-K

FORM 6-K

SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549

Report of Foreign Issuer
Pursuant to Rule 13a-16 or 15d-16 of
the Securities Exchange Act of 1934

For the month of .... April............................................ , 2009

CANON INC.

(Translation of registrant’s name into English)

30-2, Shimomaruko 3-Chome, Ohta-ku, Tokyo 146-8501, Japan

(Address of principal executive offices)

[Indicate by check mark whether the registrant files or will file annual reports under cover Form 20-F or Form 40-F.

Form 20-F X Form 40-F

[Indicate by check mark whether the registrant by furnishing the information contained in this Form is also thereby furnishing the information to the Commission pursuant to Rule 12g3-2(b) under the Securities Exchange Act of 1934.

Yes No X

[If “Yes” is marked, indicate below the file number assigned to the registrant in connection with Rule 12g3-2(b):
82-

SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.


	CANON INC.
	(Registrant)
Date.... April 30, 2009.....	By	........../s/......... Masashiro Kobayashi ............
		(Signature)*
		Masashiro Kobayashi
		General Manager Global Finance Management Center Canon Inc.

*Print the name and title of the signing officer under his signature.

The following materials are included.

CONSOLIDATED RESULTS FOR THE FIRST QUARTER ENDED MARCH 31, 2009

CONSOLIDATED RESULTS FOR
THE FIRST QUARTER ENDED MARCH 31, 2009

April 30, 2009

CONSOLIDATED RESULTS

(Millions of yen, thousands of U.S. dollars, except per share amounts)


	Actual								Projected
	Three months		Three months				Three months		Year ending
	ended		ended		Change(%)		ended		December 31,		Change(%)
	March 31, 2009		March 31, 2008				March 31, 2009		2009

Net sales	¥	687,034	¥	1,007,538		- 31.8	$	7,010,551	¥	3,330,000		- 18.7
Operating profit		20,032		170,830		- 88.3		204,408		180,000		- 63.7
Income before income taxes		22,394		166,642		- 86.6		228,510		180,000		- 62.6
Net income attributable to Canon Inc.	¥	17,744	¥	106,644		- 83.4	$	181,061	¥	110,000		- 64.4


Net income attributable to Canon Inc. stockholders per share:

- Basic	¥	14.37	¥	84.57		- 83.0	$	0.15	¥	89.11		- 63.8
- Diluted		14.37		84.56		- 83.0		0.15		-		-


	Actual
	As of		As of				As of
	March 31,		December 31,		Change(%)		March 31,
	2009		2008				2009

Total assets	¥	3,751,117	¥	3,969,934		- 5.5	$	38,276,704


Canon Inc. stockholders’ equity	¥	2,647,032	¥	2,659,792		- 0.5	$	27,010,531

Notes:	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 JPY98 = U.S.$1, the approximate exchange rate on the Tokyo Foreign Exchange Market as of March 31, 2009, solely for the convenience of the reader.






Canon Inc.		30-2, Shimomaruko 3-chome, Ohta-ku,
Headquarter office		Tokyo 146-8501, Japan
		Phone: +81-3-3758-2111

-1-

I. Operating Results and Financial Conditions

2009 First Quarter in Review

Looking back at the global economy in the first quarter of 2009, the severity of the global recession that struck last year increased among developed and emerging countries. In the United States, deteriorating employment conditions and other factors continued to negatively affect personal consumption, whereas in Europe, exports continued to shrink and consumer spending weakened further. In Japan, reductions in corporate capital spending, coupled with a decrease in exports and declining inventory levels mainly in the manufacturing industry, have clearly had a negative impact on the real economy. Furthermore, growth in Asia and other emerging economies decelerated due to waning exports, thereby depriving the global economy of an engine for growth. As for the foreign exchange market, although the unilateral appreciation of the yen that began in early autumn last year reversed, the yen remained relatively highly valued against other foreign currencies during the quarter.

As for the markets in which Canon operates amid these conditions, within the office imaging products market, sales of monochrome and color network digital multifunction devices (MFDs) remained low due to continued restrained corporate investment in each region. In the computer peripherals market, in addition to a drop in demand for monochrome models, sales of color laser beam printers, which had enjoyed healthy expansion, fell below the year-ago level. With regard to inkjet printers, a significant decrease in demand for single-function models resulted in a contraction of the market compared with the previous year. As for the cameras segment, while demand for digital single-lens reflex (SLR) cameras achieved solid growth, demand for compact digital cameras declined amid further drops in prices. With respect to the optical equipment segment, demand fell for both aligners, used to produce liquid crystal display (LCD) panels, and for steppers, utilized in the production of semiconductors. The average value of the yen during the first-quarter was ¥93.86 to the U.S. dollar, a year-on-year appreciation of about 12%, and ¥121.85 to the euro, a year-on-year appreciation of approximately 29%.

Net sales for the period totaled ¥687.0 billion (U.S.$7,011 million), a year-on-year decline of 31.8%, mainly due to the effects of substantially reduced sales volumes arising from decreased demand for network MFDs and laser beam printers, along with the substantial rise in the value of the yen. Despite the launch of new products and ongoing cost-cutting efforts targeting an improved gross profit ratio, such factors as the appreciation of the yen, reduction in sales volumes and falling product prices led to a 6.1 point decline in the ratio to 43.5%. Consequently, gross profit decreased by 40.2% to ¥298.8 billion (U.S.$3,049 million). Although, operating expenses declined by 15.3% owing to a Group-wide effort to curb expenses, operating profit dropped 88.3% to ¥20.0 billion (U.S.$204 million). Other income (deductions) reversed to positive by ¥6.6 billion (U.S.$67 million), mainly due to an improvement in currency exchange losses. As a result, income before income taxes totaled ¥22.4 billion (U.S.$229 million), a decline of 86.6%, while net income attributable to Canon Inc. also recorded a decrease of 83.4% to ¥17.7 billion (U.S.$181 million).

Basic net income attributable to Canon Inc. stockholders per share was ¥14.37 (U.S.$0.15), a year-on-year decline of ¥70.20 (U.S.$0.72).

-2-

Results by Product Segment

Looking at Canon’s first-quarter performance by business sector, within the business machines segment, demand for office equipment declined significantly amid the rapid deterioration of economic conditions. As for office imaging products, while demand for digital commercial printers increased, flagging sales in major regions for network digital MFDs along with the strong yen resulted in a year-on-year decline in sales of 31.3% for the segment. In the field of computer peripherals, the significant drop in demand for laser beam printers along with the decline in sales due to the need to reduce distribution inventories, combined with the appreciation of the yen, resulted in a sales decrease of 41.9% compared with the year-ago period. As for inkjet printers, amid a shrinking global market, while sales volume displayed solid growth in the Americas which contributed to minimizing the decrease of sales volume for the segment overall, the impact of the yen’s appreciation and falling prices resulted in a decline in sales by 26.6%. Consequently, sales for the computer peripherals segment overall dropped by 38.0%. As for business information products, reduced personal computer sales in the Japanese domestic market resulted in a sales decline of 23.7%. Collectively, sales of business machines overall totaled ¥451.6 billion (U.S.$4,608 million), down 34.7%, while operating profit totaled ¥59.1 billion (U.S.$603 million), falling 63.8% mainly due to the significant decrease in gross profit stemming from the reduction in sales.

Within the cameras segment, the high-resolution, competitively priced EOS Digital Rebel XSi (EOS 450D) and advanced-amateur model EOS 5D Mark II digital SLR cameras continued to enjoy healthy sales during the quarter, contributing to growth in sales volume. As for compact digital cameras, although the introduction of four new ELPH (IXUS)-series models and four PowerShot-series models was well received, sales volume contracted year on year amid stagnant market conditions. Consequently, along with the impact of falling average sales prices and the appreciation of the yen, sales for the cameras segment overall declined by 24.4% to ¥165.5 billion (U.S.$1,689 million). Additionally, operating profit for the sector decreased by 82.9% to ¥7.8 billion (U.S.$80 million) mainly as a result of the drop in sales value coupled with the significant decline in the gross profit ratio.

In the optical and other products segment, sales of steppers remained stagnant due to aggravating market conditions for memory chips. As a result, sales for the segment totaled ¥69.9 billion (U.S.$713 million), a decline of 27.8%. Operating profit dropped to negative ¥11.3 billion (U.S.$116 million) due to the significant drop in sales and other factors.

Cash Flow

In the first quarter of 2009, Canon generated cash flow from operating activities of ¥52.4 billion (U.S.$535 million), a decrease of ¥55.0 billion (U.S.$562 million) compared with the previous year, mainly reflecting the reduction in consolidated net income. As capital investments was focused on items relevant to introducing new products and achieving cost reductions, cash flow from investing activities totaled ¥102.0 billion (U.S.$1,041 million), a year-on-year decrease of ¥87.5 billion (U.S.$892 million). Accordingly, free cash flow totaled negative ¥49.6 billion (U.S.$506 million), a decrease of ¥32.4 billion (U.S.$331 million) from the year-ago period.

Cash flow from financing activities recorded an outlay of ¥71.0 billion (U.S.$724 million), mainly arising from the dividend payout of ¥67.9 billion (U.S.$693 million). Consequently, cash and cash equivalents decreased by ¥102.0 billion (U.S.$1,041 million) to ¥577.2 billion (U.S.$5,890 million) from the end of the previous year.

-3-

Outlook

As for the outlook for the global economy in the second quarter and thereafter, although countries worldwide began launching various economic stimulus packages and financial policies in response to the current global recession, it is still expected to take considerable time before the effects of such measures will be felt and the global economy realizes a turnaround.

In the businesses in which Canon is involved, demand for network digital MFDs and laser beam printers is projected to remain sluggish for both monochrome and color models due to market reluctance in purchasing office equipment. Demand for inkjet printers and compact digital cameras is expected to remain stagnant in the near term due to the drop in consumer sentiment resulting from the weak economy, whereas demand for digital SLR cameras is expected to remain strong. With respect to steppers and aligners, demand is expected to further decline as device makers and LCD panel manufacturers reassess their capital expenditure plans.

With regard to currency exchange rates for the second quarter onward, on which Canon’s performance outlook for the full year is based, despite the continued uncertainty over future interest rate policies, economic prospects and other factors for major countries, Canon anticipates exchange rates for the period of ¥95 to the U.S. dollar and ¥125 to the euro, representing an appreciation of approximately 9% against the U.S. dollar, and about 22% against the euro for the full year. Upon taking into consideration first-quarter business results along with current market conditions based on these foreign exchange rate assumptions, Canon has revised its previously announced projections and now anticipates net sales of ¥3,330.0 billion (U.S.$33,980 million), operating profit of ¥180.0 billion (U.S.$1,837 million), income before income taxes of ¥180.0 billion (U.S.$1,837 million) and net income attributable to Canon Inc. of ¥110.0 billion (U.S.$1,122 million).

Consolidated Outlook


Fiscal year	Millions of yen
	Year ending							Year ended
	December 31, 2009				Change			December 31, 2008		Change (%)
	Previous Outlook (A)		Revised Outlook (B)		(B - A)			Results (C)		(B - C) / C

Net sales	¥	3,500,000	¥	3,330,000	¥	(170,000	)	¥	4,094,161		- 18.7%
Operating profit		160,000		180,000		20,000			496,074		- 63.7%
Income before income taxes		160,000		180,000		20,000			481,147		- 62.6%
Net income attributable to Canon Inc.	¥	98,000	¥	110,000	¥	12,000		¥	309,148		- 64.4%

This document contains forward-looking statements with respect to future results, performance and achievements that are subject to risk and uncertainties and reflect management’s views and assumptions formed by available information. All statements other than statements of historical fact are statements that could be considered forward-looking statements. When used in this document, words such as “anticipate,” “believe,” “estimate,” “expect,” “intend,” “may,” “plan,” “project” or “should” and similar expressions, as they relate to Canon, are intended to identify forward-looking statements. Many factors could cause the actual results, performance or achievements of Canon to be materially different from any future results, performance or achievements that may be expressed or implied by such forward-looking statements, including, among others, changes in general economic and business conditions, changes in currency exchange rates and interest rates, introduction of competing products by other companies, lack of acceptance of new products or services by Canon’s targeted customers, inability to meet efficiency and cost reduction objectives, changes in business strategy and various other factors, both referenced and not referenced in this document. A detailed description of these and other risk factors is included in Canon’s annual report on Form 20-F, which is on file with the United States Securities and Exchange Commission. Should one or more of these risks or uncertainties materialize, or should underlying assumptions prove incorrect, actual results may vary materially from those described herein. Canon does not intend or assume any obligation to update these forward-looking statements.

-4-

CANON INC. AND SUBSIDIARIES

CONSOLIDATED

II. Financial Statements

1. CONSOLIDATED BALANCE SHEETS


	Millions of yen									Thousands of
	Millions of yen									U.S. dollars
	As of			As of						As of
	March 31,			December 31,			Change			March 31,
	2009			2008						2009
ASSETS
Current assets:
Cash and cash equivalents	¥	577,193		¥	679,196		¥	(102,003	)	$	5,889,724
Short-term investments		4,584			7,651			(3,067	)		46,776
Trade receivables, net		485,413			595,422			(110,009	)		4,953,194
Inventories		499,963			506,919			(6,956	)		5,101,663
Prepaid expenses and other current assets		280,631			275,660			4,971			2,863,582

Total current assets		1,847,784			2,064,848			(217,064	)		18,854,939

Noncurrent receivables		14,730			14,752			(22	)		150,306
Investments		81,944			88,825			(6,881	)		836,163
Property, plant and equipment, net		1,357,856			1,357,186			670			13,855,673
Intangible assets, net		120,532			119,140			1,392			1,229,918
Other assets		328,271			325,183			3,088			3,349,705

Total assets	¥	3,751,117		¥	3,969,934		¥	(218,817	)	$	38,276,704


LIABILITIES AND EQUITY
Current liabilities:
Short-term loans and current portion of long-term debt	¥	5,484		¥	5,540		¥	(56	)	$	55,959
Trade payables		295,746			406,746			(111,000	)		3,017,816
Accrued income taxes		15,958			69,961			(54,003	)		162,837
Accrued expenses		274,011			277,117			(3,106	)		2,796,031
Other current liabilities		151,211			184,636			(33,425	)		1,542,969

Total current liabilities		742,410			944,000			(201,590	)		7,575,612
Long-term debt, excluding current installments		7,433			8,423			(990	)		75,847
Accrued pension and severance cost		110,772			110,784			(12	)		1,130,327
Other noncurrent liabilities		57,402			55,745			1,657			585,734

Total liabilities		918,017			1,118,952			(200,935	)		9,367,520


Equity:
Canon Inc. stockholders’ equity:
Common stock		174,762			174,762			-			1,783,286
Additional paid-in capital		403,182			403,790			(608	)		4,114,102
Legal reserve		54,063			53,706			357			551,663
Retained earnings		2,826,061			2,876,576			(50,515	)		28,837,357
Accumulated other comprehensive income (loss)		(254,810	)		(292,820	)		38,010			(2,600,102	)
Treasury stock, at cost		(556,226	)		(556,222	)		(4	)		(5,675,775	)

Total Canon Inc. stockholders’ equity		2,647,032			2,659,792			(12,760	)		27,010,531

Noncontrolling interests		186,068			191,190			(5,122	)		1,898,653

Total equity		2,833,100			2,850,982			(17,882	)		28,909,184

Total liabilities and equity	¥	3,751,117		¥	3,969,934		¥	(218,817	)	$	38,276,704


	Millions of yen									Thousands of
	Millions of yen									U.S. dollars
	As of			As of						As of
	March 31,			December 31,						March 31,
	2009			2008						2009
Notes:
1. Allowance for doubtful receivables	¥	10,596		¥	9,318					$	108,122
2. Accumulated depreciation		1,702,036			1,635,601						17,367,714
3. Accumulated other comprehensive income (loss):
Foreign currency translation adjustments		(192,298	)		(235,968	)					(1,962,225	)
Net unrealized gains and losses on securities		616			1,135						6,286
Net gains and losses on derivative instruments		(3,268	)		1,493						(33,347	)
Pension liability adjustments		(59,860	)		(59,480	)					(610,816	)

-5-

CANON INC. AND SUBSIDIARIES

CONSOLIDATED

2. CONSOLIDATED STATEMENTS OF INCOME

Millions of yen

Thousands of

U.S. dollars

Three months

Three months

Three months

ended

ended

Change(%)

ended

March 31, 2009

March 31, 2008

March 31, 2009

Net sales

687,034

1,007,538

- 31.8

7,010,551

Cost of sales

388,220

507,673

3,961,429

Gross profit

298,814

499,865

- 40.2

3,049,122

Operating expenses:

Selling, general and administrative expenses

205,993

249,480

2,101,969

Research and development expenses

72,789

79,555

742,745

278,782

329,035

2,844,714

Operating profit

20,032

170,830

- 88.3

204,408

Other income (deductions):

Interest and dividend income

1,434

6,193

14,633

Interest expense

(84

)

(412

)

(857

)

Other, net

1,012

(9,969

)

10,326

2,362

(4,188

)

24,102

Income before income taxes

22,394

166,642

- 86.6

228,510

Income taxes

6,759

56,034

68,969

Consolidated net income

15,635

110,608

- 85.9

159,541

Less: Net income (loss) attributable to noncontrolling interests

(2,109

)

3,964

(21,520

)

Net income attributable to Canon Inc.

17,744

106,644

- 83.4

181,061



Note:		Consolidated comprehensive income for the three months ended March 31, 2009 and 2008 was JPY53,873 million (increase) (U.S.$549,724 thousand (increase)) and JPY3,760 million (increase), respectively.

3. DETAILS OF SALES

Sales by product

Millions of yen

Thousands of

U.S. dollars

Three months

Three months

Three months

ended

ended

Change(%)

ended

March 31, 2009

March 31, 2008

March 31, 2009

Business machines:

Office imaging products

197,520

287,524

- 31.3

2,015,510

Computer peripherals

235,208

379,509

- 38.0

2,400,082

Business information products

18,878

24,753

- 23.7

192,632

451,606

691,786

- 34.7

4,608,224

Cameras

165,549

218,995

- 24.4

1,689,276

Optical and other products

69,879

96,757

- 27.8

713,051

Total

687,034

1,007,538

- 31.8

7,010,551

Sales by region

Millions of yen

Thousands of

U.S. dollars

Three months

Three months

Three months

ended

ended

Change(%)

ended

March 31, 2009

March 31, 2008

March 31, 2009

Japan

169,504

227,781

- 25.6

1,729,633

Overseas:

Americas

176,331

270,664

- 34.9

1,799,296

Europe

210,067

337,116

- 37.7

2,143,541

Other areas

131,132

171,977

- 23.8

1,338,081

517,530

779,757

- 33.6

5,280,918

Total

687,034

1,007,538

- 31.8

7,010,551


Notes:	1.	The primary products included in each of the product segments are as follows:

		Business machines:

		Office imaging products : Office network digital multifunction devices (MFDs) / Color network digital MFDs / Office copying machines / Personal-use copying machines / Full-color copying machines Computer peripherals : Laser beam printers / Inkjet multifunction peripherals / Single function inkjet printers / Image scanners Business information products : Computer information systems / Document scanners / Personal information products Cameras : Digital SLR cameras / Compact digital cameras / Interchangeable lenses / Digital video camcorders Optical and other products : Semiconductor production equipment / Mirror projection mask aligners for LCD panels / Broadcasting equipment / Medical equipment / Large format printers / Components

	2.	The principal countries and regions included in each regional category are as follows: Americas: United States of America, Canada, Latin America / Europe: England, Germany, France, Netherlands / Other Areas: Asian regions, China, Oceania

-6-

CANON INC. AND SUBSIDIARIES

CONSOLIDATED

4. CONSOLIDATED STATEMENTS OF CASH FLOWS


	Millions of yen						Thousands of
	Millions of yen						U.S. dollars
	Three months			Three months			Three months
	ended			ended			ended
	March 31, 2009			March 31, 2008			March 31, 2009
Cash flows from operating activities:
Consolidated net income	¥	15,635		¥	110,608		$	159,541
Adjustments to reconcile net income to net cash provided by operating activities:
Depreciation and amortization		75,523			82,201			770,643
Loss on disposal of property, plant and equipment		1,176			3,685			12,000
Deferred income taxes		(6,312	)		(7,591	)		(64,408	)
Decrease in trade receivables		121,931			71,298			1,244,194
(Increase) decrease in inventories		18,290			(24,585	)		186,633
Increase (decrease) in trade payables		(129,424	)		4,732			(1,320,653	)
Decrease in accrued income taxes		(54,352	)		(78,470	)		(554,612	)
Decrease in accrued expenses		(8,687	)		(36,112	)		(88,643	)
Decrease in accrued (prepaid) pension and severance cost		(140	)		(2,783	)		(1,429	)
Other, net		18,806			(15,494	)		191,897

Net cash provided by operating activities		52,446			107,489			535,163
Cash flows from investing activities:
Purchases of fixed assets		(105,084	)		(136,165	)		(1,072,286	)
Proceeds from sale of fixed assets		1,339			710			13,663
Purchases of available-for-sale securities		(6	)		(3,833	)		(61	)
Proceeds from sale and maturity of available-for-sale securities		214			4,011			2,184
(Increase) decrease in time deposits		2,885			(204	)		29,439
Acquisitions of subsidiaries, net of cash acquired		(168	)		(209	)		(1,714	)
Purchases of other investments		(54	)		(44,111	)		(551	)
Other, net		(1,152	)		(9,682	)		(11,756	)

Net cash used in investing activities		(102,026	)		(189,483	)		(1,041,082	)
Cash flows from financing activities:
Proceeds from issuance of long-term debt		593			3,400			6,051
Repayments of long-term debt		(1,532	)		(1,175	)		(15,633	)
Increase (decrease) in short-term loans		96			(2,632	)		980
Dividends paid		(67,897	)		(75,663	)		(692,827	)
Purchases of treasury stock, net		(9	)		(3	)		(92	)
Other, net		(2,209	)		(8,804	)		(22,540	)

Net cash used in financing activities		(70,958	)		(84,877	)		(724,061	)
Effect of exchange rate changes on cash and cash equivalents		18,535			(69,923	)		189,133

Net change in cash and cash equivalents		(102,003	)		(236,794	)		(1,040,847	)
Cash and cash equivalents at beginning of period		679,196			944,463			6,930,571

Cash and cash equivalents at end of period	¥	577,193		¥	707,669		$	5,889,724

-7-

CANON INC. AND SUBSIDIARIES

CONSOLIDATED

5. NOTE FOR GOING CONCERN ASSUMPTION

Not applicable.

6. SEGMENT INFORMATION

(1) SEGMENT INFORMATION BY PRODUCT


	Millions of yen								Thousands of
	Millions of yen								U.S. dollars
	Three months			Three months					Three months
	ended			ended			Change(%)		ended
	March 31, 2009			March 31, 2008					March 31, 2009
Business Machines
Net sales:
Unaffiliated customers	¥	451,606		¥	691,786			- 34.7	$	4,608,224
Intersegment		-			-			-		-

Total		451,606			691,786			- 34.7		4,608,224

Operating cost and expenses		392,502			528,607			- 25.7		4,005,122

Operating profit	¥	59,104		¥	163,179			- 63.8	$	603,102


Cameras
Net sales:
Unaffiliated customers	¥	165,549		¥	218,995			- 24.4	$	1,689,276
Intersegment		-			-			-		-

Total		165,549			218,995			- 24.4		1,689,276

Operating cost and expenses		157,719			173,269			- 9.0		1,609,378

Operating profit	¥	7,830		¥	45,726			- 82.9	$	79,898


Optical and other products
Net sales:
Unaffiliated customers	¥	69,879		¥	96,757			- 27.8	$	713,051
Intersegment		41,214			56,215			- 26.7		420,551

Total		111,093			152,972			- 27.4		1,133,602

Operating cost and expenses		122,442			147,642			- 17.1		1,249,408

Operating profit (loss)	¥	(11,349	)	¥	5,330			-	$	(115,806	)


Corporate and Eliminations
Net sales:
Unaffiliated customers	¥	-		¥	-			-	$	-
Intersegment		(41,214	)		(56,215	)		-		(420,551	)

Total		(41,214	)		(56,215	)		-		(420,551	)

Operating cost and expenses		(5,661	)		(12,810	)		-		(57,765	)

Operating profit (loss)	¥	(35,553	)	¥	(43,405	)		-	$	(362,786	)


Consolidated
Net sales:
Unaffiliated customers	¥	687,034		¥	1,007,538			- 31.8	$	7,010,551
Intersegment		-			-			-		-

Total		687,034			1,007,538			- 31.8		7,010,551

Operating cost and expenses		667,002			836,708			- 20.3		6,806,143

Operating profit	¥	20,032		¥	170,830			- 88.3	$	204,408


	Note:		General corporate expenses of JPY35,553 million (U.S.$362,786 thousand) and JPY43,295 million in the three months ended March 31, 2009 and 2008, respectively, are included in “Corporate and Eliminations.”

-8-

CANON INC. AND SUBSIDIARIES

CONSOLIDATED

(2) SEGMENT INFORMATION BY GEOGRAPHIC AREA


	Millions of yen								Thousands of
	Millions of yen								U.S. dollars
	Three months			Three months					Three months
	ended			ended			Change(%)		ended
	March 31, 2009			March 31, 2008					March 31, 2009
Japan
Net sales:
Unaffiliated customers	¥	213,695		¥	249,294			- 14.3	$	2,180,561
Intersegment		304,291			586,930			- 48.2		3,105,010

Total		517,986			836,224			- 38.1		5,285,571

Operating cost and expenses		483,938			658,811			- 26.5		4,938,142

Operating profit	¥	34,048		¥	177,413			- 80.8	$	347,429


Americas
Net sales:
Unaffiliated customers	¥	171,141		¥	269,509			- 36.5	$	1,746,337
Intersegment		778			338			+ 130.2		7,939

Total		171,919			269,847			- 36.3		1,754,276

Operating cost and expenses		172,058			264,977			- 35.1		1,755,694

Operating profit (loss)	¥	(139	)	¥	4,870			-	$	(1,418	)


Europe
Net sales:
Unaffiliated customers	¥	208,862		¥	336,505			- 37.9	$	2,131,245
Intersegment		435			833			- 47.8		4,439

Total		209,297			337,338			- 38.0		2,135,684

Operating cost and expenses		200,986			324,670			- 38.1		2,050,878

Operating profit	¥	8,311		¥	12,668			- 34.4	$	84,806


Others
Net sales:
Unaffiliated customers	¥	93,336		¥	152,230			- 38.7	$	952,408
Intersegment		90,352			164,433			- 45.1		921,959

Total		183,688			316,663			- 42.0		1,874,367

Operating cost and expenses		179,598			299,151			- 40.0		1,832,633

Operating profit	¥	4,090		¥	17,512			- 76.6	$	41,734


Corporate and Eliminations
Net sales:
Unaffiliated customers	¥	-		¥	-			-	$	-
Intersegment		(395,856	)		(752,534	)		-		(4,039,347	)

Total		(395,856	)		(752,534	)		-		(4,039,347	)

Operating cost and expenses		(369,578	)		(710,901	)		-		(3,771,204	)

Operating profit (loss)	¥	(26,278	)	¥	(41,633	)		-	$	(268,143	)


Consolidated
Net sales:
Unaffiliated customers	¥	687,034		¥	1,007,538			- 31.8	$	7,010,551
Intersegment		-			-			-		-

Total		687,034			1,007,538			- 31.8		7,010,551

Operating cost and expenses		667,002			836,708			- 20.3		6,806,143

Operating profit	¥	20,032		¥	170,830			- 88.3	$	204,408


Note:		General corporate expenses of JPY35,553 million (U.S.$362,786 thousand) and JPY43,295 million in the three months ended March 31, 2009 and 2008, respectively, are included in “Corporate and Eliminations.”

-9-

CANON INC. AND SUBSIDIARIES

CONSOLIDATED

7. SIGNIFICANT CHANGES IN CANON INC. STOCKHOLDERS’ EQUITY

None.

8. BASIS OF PRESENTATION AND SIGNIFICANT ACCOUNTING POLICIES

(1) GROUP POSITION

Number of Group Companies


	March 31, 2009		December 31, 2008		Change

Subsidiaries		242		245		(3	)
Affiliates		18		18		-

Total		260		263		(3	)

	2.		Change in Group Entities

			Subsidiaries
			Addition: 3 companies
			Removal: 6 companies

			Affiliates (Carried at Equity Basis)
			Addition: 1 company
			Removal: 1 company

	3.		Subsidiaries Listed on Domestic Stock Exchange

			Tokyo Stock Exchange (1st section): Canon Marketing Japan Inc., Canon Electronics Inc., Canon Finetech Inc. Tokyo Stock Exchange (2nd section): Canon Software Inc. Osaka Securities Exchange (2nd section): Canon Machinery Inc. JASDAQ: Tokki Corporation, Asia Pacific System Research Co., Ltd. Osaka Securities Exchange (Hercules): e-System Corporation

(2) SIGNIFICANT ACCOUNTING POLICIES

The accompanying consolidated financial statements reflect the adjustments which management believes are necessary to conform them with U.S. generally accepted accounting principles, except for the segment information, as required by Statement of Financial Accounting Standards No.131, “Disclosures about Segments of an Enterprise and Related Information.”

			New Accounting Standard
			Canon adopted SFAS 160 “Noncontrolling Interests in Consolidated Financial Statements, an amendment of ARB No.51” in the first quarter beginning January 1, 2009. Upon the adoption of SFAS 160, noncontrolling interests, which were previously referred to as minority interests and classified between total liabilities and stockholders’ equity on the consolidated balance sheets, are now included as a separate component of total equity. In addition, consolidated net income on the consolidated statements of income now includes the net income (loss) attributable to noncontrolling interests. These financial statement presentation requirements have been adopted retrospectively and prior year amounts in the consolidated financial statements including the consolidated statements of cash flows have been reclassified or adjusted to conform to SFAS 160.

-10-

Canon Inc.

April 30, 2009

CONSOLIDATED FINANCIAL RESULTS FOR

THE FIRST QUARTER ENDED MARCH 31, 2009

SUPPLEMENTARY REPORT

TABLE OF CONTENTS


		PAGE
1.	SALES BY REGION AND PRODUCT		S 1
2.	SEGMENT INFORMATION BY PRODUCT		S 2
3.	OTHER INCOME / DEDUCTIONS		S 2
4.	SALES COMPOSITION BY PRODUCT		S 3
5.	SALES GROWTH IN LOCAL CURRENCY (Year over year)		S 3
6.	PROFITABILITY		S 4
7.	IMPACT OF FOREIGN EXCHANGE RATES		S 4
8.	STATEMENTS OF CASH FLOWS		S 4
9.	R&D EXPENDITURE		S 5
10.	CAPITAL EXPENDITURE & DEPRECIATION AND AMORTIZATION		S 5
11.	INVENTORIES		S 5
12.	DEBT RATIO		S 5
13.	OVERSEAS PRODUCTION RATIO		S 5
14.	NUMBER OF EMPLOYEES		S 5

Canon Inc.



1. SALES BY REGION AND PRODUCT		(Millions of yen)


		2009				2008				Change year over year
		1st quarter		Year		1st quarter		Year		1st quarter	Year
		1st quarter		(P)		1st quarter		Year		1st quarter	Year

Japan
	Business machines		122,660		-		155,500		607,015	-21.1%	-

	Office imaging products		74,631		-		98,403		370,901	-24.2%	-
	Computer peripherals		35,622		-		41,410		184,945	-14.0%	-
	Business information products		12,407		-		15,687		51,169	-20.9%	-

	Cameras		23,341		-		33,348		136,791	-30.0%	-

	Optical and other products		23,503		-		38,933		124,474	-39.6%	-

	Total		169,504		769,400		227,781		868,280	-25.6%	-11.4%

Overseas
	Business machines		328,946		-		536,286		2,053,004	-38.7%	-

	Office imaging products		122,889		-		189,121		748,622	-35.0%	-
	Computer peripherals		199,586		-		338,099		1,269,823	-41.0%	-
	Business information products		6,471		-		9,066		34,559	-28.6%	-

	Cameras		142,208		-		185,647		905,156	-23.4%	-

	Optical and other products		46,376		-		57,824		267,721	-19.8%	-

	Total		517,530		2,560,600		779,757		3,225,881	-33.6%	-20.6%

	Americas
	Business machines		119,479		-		193,781		759,864	-38.3%	-

	Office imaging products		43,991		-		70,879		287,319	-37.9%	-
	Computer peripherals		72,738		-		118,685		457,816	-38.7%	-
	Business information products		2,750		-		4,217		14,729	-34.8%	-

	Cameras		45,325		-		64,266		339,141	-29.5%	-

	Optical and other products		11,527		-		12,617		55,566	-8.6%	-

	Total		176,331		938,100		270,664		1,154,571	-34.9%	-18.7%

	Europe
	Business machines		154,755		-		257,765		964,782	-40.0%	-

	Office imaging products		61,580		-		94,415		364,288	-34.8%	-
	Computer peripherals		90,025		-		159,236		584,247	-43.5%	-
	Business information products		3,150		-		4,114		16,247	-23.4%	-

	Cameras		48,034		-		69,091		333,069	-30.5%	-

	Optical and other products		7,278		-		10,260		43,549	-29.1%	-

	Total		210,067		1,022,100		337,116		1,341,400	-37.7%	-23.8%

	Other areas
	Business machines		54,712		-		84,740		328,358	-35.4%	-

	Office imaging products		17,318		-		23,827		97,015	-27.3%	-
	Computer peripherals		36,823		-		60,178		227,760	-38.8%	-
	Business information products		571		-		735		3,583	-22.3%	-

	Cameras		48,849		-		52,290		232,946	-6.6%	-

	Optical and other products		27,571		-		34,947		168,606	-21.1%	-

	Total		131,132		600,400		171,977		729,910	-23.8%	-17.7%

Total
	Business machines		451,606		2,151,900		691,786		2,660,019	-34.7%	-19.1%

	Office imaging products		197,520		911,400		287,524		1,119,523	-31.3%	-18.6%
	Computer peripherals		235,208		1,162,400		379,509		1,454,768	-38.0%	-20.1%
	Business information products		18,878		78,100		24,753		85,728	-23.7%	-8.9%

	Cameras		165,549		903,600		218,995		1,041,947	-24.4%	-13.3%

	Optical and other products		69,879		274,500		96,757		392,195	-27.8%	-30.0%

	Total		687,034		3,330,000		1,007,538		4,094,161	-31.8%	-18.7%

(P)=Projection

-S1-

Canon Inc.



2. SEGMENT INFORMATION BY PRODUCT		(Millions of yen)



		2009						2008						Change year over year
			1st quarter		Year			1st quarter			Year			1st quarter			Year
			1st quarter		(P)			1st quarter			Year			1st quarter			Year

	Business machines
	Unaffiliated customers		451,606			2,151,900			691,786			2,660,019			-34.7%			-19.1%
	Intersegment		-			-			-			-			-			-

	Total sales		451,606			2,151,900			691,786			2,660,019			-34.7%			-19.1%

	Operating profit		59,104			293,600			163,179			544,644			-63.8%			-46.1%
	% of sales		13.1%			13.6%			23.6%			20.5%			-			-

	Cameras
	Unaffiliated customers		165,549			903,600			218,995			1,041,947			-24.4%			-13.3%
	Intersegment		-			-			-			-			-			-

	Total sales		165,549			903,600			218,995			1,041,947			-24.4%			-13.3%

	Operating profit		7,830			78,800			45,726			187,787			-82.9%			-58.0%
	% of sales		4.7%			8.7%			20.9%			18.0%			-			-

	Optical and other products
	Unaffiliated customers		69,879			274,500			96,757			392,195			-27.8%			-30.0%
	Intersegment		41,214			187,200			56,215			235,690			-26.7%			-20.6%

	Total sales		111,093			461,700			152,972			627,885			-27.4%			-26.5%

	Operating profit		(11,349	)		(27,400	)		5,330			(45,490	)		-			-
	% of sales		-10.2%			-5.9%			3.5%			-7.2%			-			-

	Corporate and Eliminations
	Unaffiliated customers		-			-			-			-			-			-
	Intersegment		(41,214	)		(187,200	)		(56,215	)		(235,690	)		-			-

	Total sales		(41,214	)		(187,200	)		(56,215	)		(235,690	)		-			-

	Operating profit		(35,553	)		(165,000	)		(43,405	)		(190,867	)		-			-


	Consolidated
	Unaffiliated customers		687,034			3,330,000			1,007,538			4,094,161			-31.8%			-18.7%
	Intersegment		-			-			-			-			-			-

	Total sales		687,034			3,330,000			1,007,538			4,094,161			-31.8%			-18.7%

	Operating profit		20,032			180,000			170,830			496,074			-88.3%			-63.7%
	% of sales		2.9%			5.4%			17.0%			12.1%			-			-

(P)=Projection

3. OTHER INCOME / DEDUCTIONS																	(Millions of yen)


		2009						2008						Change year over year
			1st quarter		Year			1st quarter			Year			1st quarter			Year
			1st quarter		(P)			1st quarter			Year			1st quarter			Year

	Interest and dividend, net		1,350			2,200			5,781			18,605			(4,431	)		(16,405	)
	Forex gain / loss		3,755			3,800			(10,576	)		(11,212	)		+14,331			+15,012
	Equity earnings / loss of affiliated companies		(5,306	)		(9,900	)		164			(20,047	)		(5,470	)		+10,147
	Other, net		2,563			3,900			443			(2,273	)		+2,120			+6,173

	Total		2,362			0			(4,188	)		(14,927	)		+6,550			+14,927

(P)=Projection

-S2-

Canon Inc.

4. SALES COMPOSITION BY PRODUCT



	2009						2008
	1st quarter			Year			1st quarter			Year
	1st quarter			(P)			1st quarter			Year

Office imaging products
Monochrome copying machines		40	%		40	%		42	%		41	%
Color copying machines		36	%		36	%		36	%		37	%
Others		24	%		24	%		22	%		22	%

Computer peripherals
Laser beam printers		71	%		68	%		75	%		73	%
Inkjet printers		28	%		31	%		24	%		26	%
Others		1	%		1	%		1	%		1	%

Business information products
Personal computers		65	%		63	%		63	%		60	%
Others		35	%		37	%		37	%		40	%

Cameras
Digital cameras		78	%		78	%		75	%		75	%
Video cameras		7	%		9	%		7	%		9	%
Interchangeable lenses and others		15	%		13	%		18	%		16	%

Optical and other products
Semiconductor production equipment		34	%		29	%		46	%		46	%
Others		66	%		71	%		54	%		54	%

(P)=Projection

5. SALES GROWTH IN LOCAL CURRENCY (Year over year)



	2009
	1st quarter			Year
	1st quarter			(P)

Business machines
Japan		-21.1	%			-
Overseas		-27.9	%			-

Total		-26.4	%		-11.5	%

Cameras
Japan		-30.0	%			-
Overseas		-9.3	%			-

Total		-12.5	%		-3.3	%

Optical and other products
Japan		-39.6	%			-
Overseas		-13.1	%			-

Total		-23.8	%		-26.2	%

Total
Japan		-25.6	%		-11.4	%
Overseas		-22.4	%		-10.7	%
Americas		-27.6	%		-12.1	%
Europe		-22.2	%		-10.3	%
Other areas		-14.7	%		-9.1	%

Total		-23.1	%		-10.8	%

(P)=Projection

-S3-

Canon Inc.

6. PROFITABILITY



		2009							2008
		1st quarter				Year (P)			1st quarter			Year

	ROE *1		2.7	%			4.2	%		14.8	%		11.1	%

	ROA *2		1.8	%			2.8	%		9.8	%		7.3	%

*1 Based on Net Income attributable to Canon Inc and Total Canon Inc.stockholders’ equity													(P)=Projection
*2 Based on Net Income attributable to Canon Inc.

7. IMPACT OF FOREIGN EXCHANGE RATES
	(1) Exchange rates														(Yen)


		2009										2008
		1st quarter				2nd-4th quarter (P)			Year (P)			1st quarter			Year

	Yen/US$		93.86				95.00			94.78			104.78			103.23
	Yen/Euro		121.85				125.00			124.31			157.59			151.46


														(P)=Projection

	(2) Impact of foreign exchange rates on sales (Year over year)				(Billions of yen)

		2009
		1st quarter				Year (P)

	US$		(27.4	)			(109.5	)
	Euro		(43.9	)			(156.0	)
	Other currencies		(7.1	)			(33.7	)

	Total		(78.4	)			(299.2	)


						(P)=Projection

	(3) Impact of foreign exchange rates per yen	(Billions of yen)

		2009
		2nd-4th quarter (P)

On sales
	US$		11.6
	Euro		4.8

On operating profit
	US$		6.8
	Euro		3.4

		(P)=Projection

8. STATEMENTS OF CASH FLOWS										(Millions of yen)


		2009							2008
		1st quarter				Year (P)			1st quarter			Year

	Net cash provided by operating activities		52,446				425,000			107,489			616,684

	Net cash used in investing activities		(102,026	)			(325,000	)		(189,483	)		(472,480	)

	Free cash flow		(49,580	)			100,000			(81,994	)		144,204

	Net cash used in financing activities		(70,958	)			(144,000	)		(84,877	)		(277,565	)

	Effect of exchange rate changes on cash and cash equivalents		18,535				(5,200	)		(69,923	)		(131,906	)

	Net change in cash and cash equivalents		(102,003	)			(49,200	)		(236,794	)		(265,267	)

	Cash and cash equivalents at end of period		577,193				630,000			707,669			679,196

(P)=Projection


* In connection with the adoption of SFAS No. 160, only the total of “net cash provided by operating activities” will be provided from this quarter.

-S4-

Canon Inc.

9. R&D EXPENDITURE

(Millions of yen)



	2009				2008
	1st quarter		Year (P)		1st quarter		Year

Business machines		23,208		-		25,884		123,531
Cameras		11,458		-		11,904		45,458
Optical and other products		38,123		-		41,767		205,036

Total		72,789		320,000		79,555		374,025

% of sales		10.6%		9.6%		7.9%		9.1%

(P)=Projection

10. INCREASE IN PP&E & DEPRECIATION AND AMORTIZATION

(Millions of yen)



	2009				2008
	1st quarter		Year (P)		1st quarter		Year

Increase in PP&E		61,917		290,000		89,435		361,988
Depreciation and amortization		75,523		330,000		82,201		341,337

(P)=Projection

11. INVENTORIES


(1) Inventories		(Millions of yen)



	2009		2008		Difference
	Mar.31		Dec.31		Difference

Business machines		245,404		234,958		+10,446
Cameras		100,478		115,852		(15,374	)
Optical and other products		154,081		156,109		(2,028	)

Total		499,963		506,919		(6,956	)


(2) Inventories/Sales*		(Days)



	2009		2008		Difference
	Mar.31		Dec.31		Difference

Business machines		42		34		+8
Cameras		43		41		+2
Optical and other products		155		144		+11

Total		54		47		+7

*Index based on the previous six months sales.

12. DEBT RATIO



	2009		2008		Difference
	Mar.31		Dec.31		Difference

Total debt / Total assets		0.3%		0.4%		-0.1%

13. OVERSEAS PRODUCTION RATIO



	2009		2008
	1st quarter		Year

Overseas production ratio		36%		39%

14. NUMBER OF EMPLOYEES



	2009		2008		Difference
	Mar.31		Dec.31		Difference

Japan		72,385		72,445		(60	)
Overseas		85,634		94,535		(8,901	)

Total		158,019		166,980		(8,961	)

-S5-