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 ..... January........................................... , 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.... January        28,     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.

1. Results For The Fourth Quarter And The Fiscal Year Ended December 31, 2008

RESULTS FOR THE FOURTH QUARTER
AND THE FISCAL YEAR ENDED DECEMBER 31, 2008

January 28, 2009

CONSOLIDATED RESULTS

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

		Actual																Projected
		Year ended				Year ended				Change(%)				Year ended				Year ending				Change(%)
		December 31, 2008				December 31, 2007								December 31, 2008				December 31, 2009
Net sales		¥	4,094,161			¥	4,481,346				-      8.6			$	44,990,780			¥	3,500,000				-    14.5
Operating profit			496,074				756,673				-    34.4				5,451,363				160,000				-    67.7
Income before income taxes and minority interests			481,147				768,388			-    37.4					5,287,330				160,000				-    66.7
Net income		¥	309,148			¥	488,332			-    36.7				$	3,397,231			¥	98,000				-    68.3
Net income per share:
- Basic		¥	246.21			¥	377.59				-    34.8			$	2.71			¥	79.39				-    67.8
- Diluted			246.20				377.53				-    34.8				2.71				-				-
		Actual
		As of				As of				Change(%)				As of
		December 31, 2008				December 31, 2007								December 31, 2008
Total assets		¥	3,969,934			¥	4,512,625				-    12.0			$	43,625,648
Stockholders’ equity		¥	2,659,792			¥	2,922,336				-      9.0			$	29,228,484

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 JPY91 = U.S.$1, the approximate exchange rate on the Tokyo Foreign Exchange Market as of December 30, 2008, solely for the convenience of the reader.

NON-CONSOLIDATED RESULTS

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

		Actual
		Year ended				Year ended				Change(%)				Year ended
		December 31, 2008				December 31, 2007								December 31, 2008
Net sales		¥	2,721,094			¥	2,887,912				-      5.8			$	29,902,132
Operating profit			358,706				533,841				-    32.8				3,941,824
Ordinary profit			359,086				552,843				-    35.0				3,946,000
Net income		¥	224,135			¥	366,973				-    38.9			$	2,463,022
Net income per share:
- Basic		¥	178.50			¥	283.75				-    37.1			$	1.96
- Diluted			178.49				283.70				-    37.1				1.96
Dividend per share			110.00				110.00				-				1.21
		Actual
		As of				As of				Change(%)				As of
		December 31, 2008				December 31, 2007								December 31, 2008
Total assets		¥	2,618,998			¥	2,790,892				-      6.2			$	28,780,198
Net assets		¥	1,865,005			¥	1,890,566				-      1.4			$	20,494,560

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

I. Operating Results and Financial Conditions

2008 in Review

Looking back at the global economy in 2008, while the effects of the subprime loan crisis led to a slowdown that was felt in major countries from the beginning of the year, stock markets plunged and the real economy in these countries rapidly deteriorated, especially toward the end of the year, as a result of increasing financial uncertainty triggered by the failures of major financial institutions in the United States. Furthermore, growth in Asia and other emerging economies slowed down sharply due to a decline in exports, and the sense of a severe recession of global proportions has gradually spread. As for foreign exchange markets, the unilateral yen buying that began in early autumn drove up the value of the yen against all other foreign currencies.

As for the markets in which Canon operates amid these conditions, within the digital camera segment, demand for digital single-lens reflex (SLR) cameras continued to expand. While demand for compact digital cameras declined sharply toward the end of the year and prices continued to fall, the market staged healthy growth for the year. As for the office imaging products market, sales of color network digital multifunction devices (MFDs) showed robust growth amid the shift toward color models in each region, although demand for monochrome models remained low. As for computer peripherals, in addition to a drop in demand for monochrome laser beam printers, sales of color-model printers, which had enjoyed sustained healthy expansion, remained relatively unchanged from the previous year. With regard to inkjet printers, although demand continued to shift from single-function to multifunction models, demand overall for the segment declined. Within the optical equipment segment, while the market for aligners, used to produce liquid crystal display (LCD) panels, realized a rapid recovery thanks to an increase in capital spending by LCD panel manufacturers, demand for steppers, utilized in the production of semiconductors, fell significantly. The average value of the yen during the year was ¥103.23 to the U.S. dollar, a year-on-year appreciation of about 14%, and ¥151.46 to the euro, a year-on-year appreciation of approximately 7%.

Consolidated net sales for the period was ¥4,094.2 billion (U.S.$44,991 million), a year-on-year decline of 8.6%, due to the effects of the substantial rise in value of the yen along with falling prices of such consumer products as digital cameras and inkjet printers, and reduced sales volumes due to decreased demand for network MFDs, laser beam printers, and other office equipments. Despite the continued launch of new products and ongoing cost-cutting efforts, such factors as the sharp appreciation of the yen, falling product prices accompanied by the rise in prices of materials led to a decline in the gross profit ratio of 2.8 points to 47.3%. As a result, gross profit decreased by 13.8% to ¥1,938.0 billion (U.S.$21,297 million). While R&D expenditures increased slightly compared with the previous year, Group-wide cost reduction efforts contributed to a decline in total operating expenses of 3.2%. The sales-to-expense ratio rose by 2.0 points to 35.2% from the year before due to the reduction in sales. Consequently, operating profit dropped 34.4% compared with the previous year to a total of ¥496.1 billion (U.S.$5,451 million). Other income (deductions) decreased by ¥26.6 billion (U.S.$293 million) due to such factors as a reduction in interest income stemming from a decrease in cash surplus and a lower yield on investment, a decline in earnings on investments in affiliates accounted for by the equity method, and write-downs of non-current marketable securities. As a result, income before income taxes and minority interests totaled ¥481.1 billion (U.S.$5,287 million), a decline of 37.4% from the year-ago period, while net income also recorded a decrease of 36.7% to ¥309.1 billion (U.S.$3,397 million).

Basic net income per share was ¥246.21 (U.S.$2.71), a year-on-year decline of ¥131.38 (U.S.$1.44).

Results by Product Segment

Looking at the consolidated results for the year by business sector, within the business machines segment, as demand for network MFDs in global markets continued to shift to color models for the office imaging products category, the appreciation of the yen along with restrained investment in office equipment due to concern over business performance led to flagging sales in major regions. Consequently, sales for the category declined by 13.3% year on year. In the field of computer peripherals, laser beam printer sales suffered the significant impact of the strong yen along with reduced demand, resulting in a decrease in sales volume for monochrome models and slight increase for color models. As such, sales of laser beam printers declined 5.6% from the year-ago period. As for inkjet printers, as sales volume for single-function models continued to drop, efforts focusing on expanded sales of multifunction business-use models resulted in an increase in sales volume overall. Additionally, although sales of related consumables also displayed growth, the impact of the yen’s appreciation resulted in a sales decrease of 4.5% for inkjet printer products, and a decline in sales of 5.4% for the computer peripherals segment overall. As for business information products, reduced personal computer sales in the Japanese domestic market resulted in a sales decline of 20.1%. Collectively, sales of business machines overall for the year totaled ¥2,660.0 billion (U.S.$29,231 million), a decline of 9.4% compared with the previous year, while operating profit totaled ¥544.6 billion (U.S.$5,985 million), decreasing 16.2% mainly due to the reduction in sales.

Within the cameras segment, the high-resolution, competitively priced EOS Digital Rebel XSi (EOS 450D) and advanced-amateur model EOS 40D enjoyed healthy sales, contributing to growth in sales volume for digital SLR cameras. Sales volume also increased for compact digital cameras despite stagnant market conditions as the company bolstered its product lineup with the introduction of 16 new models, including 6 new ELPH (IXUS)-series models and 10 PowerShot-series models. Consequently, while unit sales of digital cameras increased by 4% year on year, sales value for the camera segment overall declined by 9.6% to ¥1,042.0 billion (U.S.$11,450 million) due to falling prices and the appreciation of the yen. Additionally, operating profit for the sector decreased by 38.9% year on year to ¥187.8 billion (U.S.$2,064 million) as a result of the drop in sales value, coupled with the significant decline in the gross profit ratio stemming from falling prices and the effects of the strong yen.

In the optical and other products segment, while sales of aligners, used to produce LCD panels, gained momentum owing to a recovery in demand, sales of steppers, used in the production of semiconductors, remained stagnant due to deteriorating market conditions. As a result, sales for the segment totaled ¥392.2 billion (U.S.$4,310 million), approximately the same level as the previous year. Operating profit for the segment fell to negative ¥45.5 billion (U.S.$500 million) as a result of a significant increase in cost of sales and outlays due to such factors as the disposal of inventories, which was carried out in response to rising concerns that weak market sentiment may continue, and the appreciation of the yen, along with the impairment of fixed assets equipped with current technologies.

Cash Flow

In 2008, Canon generated cash flow from operating activities of ¥616.7 billion (U.S.$6,777 million), a decrease of ¥222.6 billion (U.S.$2,446 million) compared with the previous year, mainly reflecting the decrease in net income. Although capital investments were concentrated to items relevant to reinforcing production and achieving cost reductions, cash flow from investing activities totaled ¥472.5 billion (U.S.$5,192 million), a year-on-year increase of ¥40.0 billion (U.S.$440 million), mainly due to the acquisition of shares of Hitachi Displays, Ltd. toward the launch of Canon’s display business. As a result, free cash flow totaled ¥144.2 billion (U.S.$1,585 million), a decline of ¥262.6 billion (U.S.$2,885 million).

Cash flow from financing activities recorded an outlay of ¥277.6 billion (U.S.$3,050 million), mainly resulting from the dividend payout of ¥145.0 billion (U.S.$1,594 million) and the purchase of treasury stocks totaling ¥100.0 billion (U.S.$1,100 million). Consequently, cash and cash equivalents decreased by ¥265.3 billion (U.S.$2,915 million) to ¥679.2 billion (U.S.$7,464 million) from the end of the previous year, including the ¥131.9 billion (U.S.$1,450 million) negative impact of currency translation adjustments due to the appreciation of the yen.

Non-consolidated Results

Non-consolidated net sales totaled ¥2,721.1 billion (U.S.$29,902 million), a year-on-year decrease of 5.8%, ordinary profit declined by 35.0% to ¥359.1 billion (U.S.$3,946 million), and net income fell by 38.9% to ¥224.1 billion (U.S.$2,463 million).

Outlook

As for the outlook for the global economy in fiscal 2009, prospects remain highly uncertain in the face of the serious situation posed by the concurrent recession in Japan, America and Europe, along with the rapid slowdown in the growth rates of emerging economies. Prices of crude oil and materials are expected to fluctuate for the time being mainly due to political insecurity in producing countries. Amid these conditions, although countries worldwide have been embarking on various economic stimulus packages and financial policies, many concerns remain and considerable time is expected before such measures will gradually render effects to lead the global economy toward gentle recovery.

In the businesses in which Canon is involved, the compact digital camera and inkjet printer markets are expected to remain stagnant owing to weak buyer sentiment amid the depressed economic environment. Demand for network digital MFDs and laser beam printers is projected to remain sluggish for both monochrome and color models due to reluctance in office equipment purchases. Demand for steppers and aligners is also expected to contract as device makers and LCD panel manufacturers reconsider their capital expenditure plans.

With regard to the currency exchange rates on which Canon’s performance outlook for the full year is based, despite the highly unstable economic environment and uncertainty over future interest rate policies and economic prospects, Canon anticipates exchange rates of ¥90 to the U.S. dollar and ¥120 to the euro, representing year-on-year appreciation of approximately 15% against the U.S. dollar and about 26% against the euro, respectively. The company projects consolidated net sales of ¥3,500.0 billion (U.S.$38,462 million), a year-on-year decrease of 14.5%; operating profit of ¥160.0 billion (U.S.$1,758 million), a year-on-year decline of 67.7%; income before income taxes and minority interests of ¥160.0 billion (U.S.$1,758 million), a year-on-year decline of 66.7%; and net income of ¥98.0 billion (U.S.$1,077 million), a year-on-year decline of 68.3%.

Basic Policy Regarding Profit Distribution and Dividends for the Current Fiscal Year

Canon is being more proactive in returning profits to shareholders, mainly in the form of a dividend, taking into consideration planned future investments, free cash flow, and reflecting the company’s consolidated business performance. Specifically, Canon’s basic policy is to continuously strive to raise its consolidated payout ratio to approximately 30% over the medium to long term.

The company recorded a decrease in profits amid extremely severe economic conditions but, prioritizing stable returns to shareholders, plans to distribute a full-year dividend totaling ¥110.00 (U.S.$1.21) per share (interim dividend of ¥55.00 [U.S.$0.60] per share [already distributed], and year-end dividend of ¥55.00 [U.S.$0.60]), the same amount per share as 2007.

Based on the above, the consolidated payout ratio was 23.1% in 2005, 24.4% in 2006, 28.8% in 2007, and will be 44.4% in 2008.

II. Management Policy

  (1) Basic Policy

Under the corporate philosophy of kyosei—living and working together for the common good—Canon’s basic 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.

  (2) Management Goals

Based on this basic management policy, Canon launched two consecutive five-year management plans—Phase I of its Excellent Global Corporation Plan in 1996, and Phase II in 2001— with the aim of becoming a truly excellent global corporation. Through these two management plans, the company promoted a range of management reforms, thoroughly strengthening its product competitiveness and financial base. Since 2006, under a new five-year management plan—Phase III, which targets further growth and improved corporate value—Canon is pursuing “sound growth,” making use of the solid management foundation achieved through the two preceding plans, and further expanding its corporate scale while maintaining a high level of profitability. In particular, the company is focusing on the following five important management objectives.

1)		Achieving the overwhelming No. 1 position worldwide in all current core businesses
2)		Expanding business operations through diversification
3)		Identifying new business domains and accumulating required technologies
4)		Establishing new production systems to sustain international competitiveness
5)		Nurturing truly autonomous and strong individuals promoting everlasting corporate reforms

Canon is, however, currently facing an economic environment said to occur once in a century. Amid these harsh conditions, we are making a major change in course this year from “sound growth” to “improved management quality,” and pushing forward to overcome this crisis while preparing to burst ahead of other companies when the economic environment recovers.

  (3) Business Challenges and Countermeasures

At Canon, the creation of new businesses and maintaining a high profitability structure represent two very important management objectives to ensure continuous future growth.

     As for new businesses, the company is promoting research based on leading-edge technologies in its areas of expertise, such as biotechnology, nanotechnology and life sciences. At the same time, Canon is also looking into M&A opportunities and business tie-ups toward launching such businesses. Additionally, the company aims to enter the display business, moving away from a focus on still images while strengthening the ability to deliver video images, which will play an increasingly important role in the broadband era.

     With regard to maintaining the company’s current high profitability structure, in order to effectively respond to the intensifying price competition centered on the consumer goods market and the investment burden that accompanies the launch of competitive new businesses, Canon believes that it is important to further improve the profit-earning ability of current businesses. To facilitate this, the company is promoting the development of new products and actively carrying out cost-reduction activities.

     Canon also views its approach to the environment as an important management issue. From the product planning stage through to design, development, production, sales, use, recovery and recycling, the company focuses its energies on such areas as creating environmentally conscious products that realize energy efficiency, resource efficiency, and eliminate the use of hazardous substances. Additionally, Canon actively promotes the development of recycling systems, the expansion of green procurement policies, the disclosure of environmental information, and participation in environmental conservation activities at the community level.

CANON INC. AND SUBSIDIARIES

CONSOLIDATED

III. Financial Statements

1. CONSOLIDATED STATEMENTS OF INCOME

Results for the fourth quarter		Millions of yen												Thousands of
														U.S. dollars
		Three months				Three months								Three months
		ended				ended				Change(%)				ended
		December 31, 2008				December 31, 2007								December 31, 2008
Net sales		¥	994,740			¥	1,263,799			-	21.3			$	10,931,209
Cost of sales			573,343				652,724								6,300,473
Gross profit			421,397				611,075			-	31.0				4,630,736
Operating expenses:
Selling, general and administrative expenses			273,681				309,519								3,007,484
Research and development expenses			111,891				107,980								1,229,571
			385,572				417,499								4,237,055
Operating profit			35,825				193,576			-	81.5				393,681
Other income (deductions):
Interest and dividend income			3,849				7,319								42,297
Interest expense			(164	)			(326	)							(1,802	)
Other, net			(22,597	)			(649	)							(248,319	)
			(18,912	)			6,344								(207,824	)
Income before income taxes and minority interests			16,913				199,920			-	91.5				185,857
Income taxes			3,816				67,844								41,934
Income before minority interests			13,097				132,076								143,923
Minority interests			1,475				4,231								16,209
Net income		¥	11,622			¥	127,845			-	90.9			$	127,714
Note: Comprehensive income for the three months ended December 31, 2008 and 2007 was JPY194,776 million (decrease) (U.S.$2,140,396 thousand decrease) and JPY102,988 million (increase), respectively.
Results for the fiscal year		Millions of yen												Thousands of
														U.S. dollars
		Year ended				Year ended				Change(%)				Year ended
		December 31, 2008				December 31, 2007									December 31, 2008
Net sales		¥	4,094,161			¥	4,481,346			-	8.6			$	44,990,780
Cost of sales			2,156,153				2,234,365								23,693,989
Gross profit			1,938,008				2,246,981			-	13.8				21,296,791
Operating expenses:
Selling, general and administrative expenses			1,067,909				1,122,047								11,735,263
Research and development expenses			374,025				368,261								4,110,165
			1,441,934				1,490,308								15,845,428
Operating profit			496,074				756,673			-	34.4				5,451,363
Other income (deductions):
Interest and dividend income			19,442				32,819								213,648
Interest expense			(837	)			(1,471	)							(9,198	)
Other, net			(33,532	)			(19,633	)							(368,483	)
			(14,927	)			11,715								(164,033	)
Income before income taxes and minority interests			481,147				768,388			-	37.4				5,287,330
Income taxes			160,788				264,258								1,766,901
Income before minority interests			320,359				504,130								3,520,429
Minority interests			11,211				15,798								123,198
Net income		¥	309,148			¥	488,332			-	36.7			$	3,397,231
Note: Comprehensive income for the year ended December 31, 2008 and 2007 was JPY18,342 million (decrease) (U.S.$201,560 thousand decrease) and JPY520,284 million (increase), respectively.

CANON INC. AND SUBSIDIARIES

CONSOLIDATED

2. DETAILS OF SALES

		Millions of yen												Thousands of
Results for the fourth quarter														U.S. dollars
		Three months				Three months								Three months
Sales by product		ended				ended				Change(%)				ended
		December 31, 2008				December 31, 2007								December 31, 2008
Business machines:
Office imaging products		¥	250,608			¥	352,645			-	28.9			$	2,753,934
Computer peripherals			350,958				420,862			-	16.6				3,856,682
Business information products			18,457				29,668			-	37.8				202,824
			620,023				803,175			-	22.8				6,813,440
Cameras			262,762				365,102			-	28.0				2,887,495
Optical and other products			111,955				95,522			+	17.2				1,230,274
Total		¥	994,740			¥	1,263,799			-	21.3			$	10,931,209
		Millions of yen												Thousands of
														U.S. dollars
		Three months				Three months								Three months
Sales by region		ended				ended				Change(%)				ended
		December 31, 2008				December 31, 2007								December 31, 2008
Japan		¥	224,710			¥	270,620			-	17.0			$	2,469,341
Overseas:
Americas			283,002				380,414			-	25.6				3,109,912
Europe			308,121				437,989			-	29.7				3,385,945
Other areas			178,907				174,776			+	2.4				1,966,011
			770,030				993,179			-	22.5				8,461,868
Total		¥	994,740			¥	1,263,799			-	21.3			$	10,931,209
		Millions of yen												Thousands of
Results for the fiscal year														U.S. dollars
Sales by product		Year ended December 31, 2008				Year ended December 31, 2007				Change(%)				Year ended December 31, 2008
Business machines:
Office imaging products		¥	1,119,523			¥	1,290,788			-	13.3			$	12,302,451
Computer peripherals			1,454,768				1,537,511			-	5.4				15,986,462
Business information products			85,728				107,243			-	20.1				942,065
			2,660,019				2,935,542			-	9.4				29,230,978
Cameras			1,041,947				1,152,663			-	9.6				11,449,967
Optical and other products			392,195				393,141			-	0.2				4,309,835
Total		¥	4,094,161			¥	4,481,346			-	8.6			$	44,990,780
		Millions of yen												Thousands of
														U.S. dollars
Sales by region		Year ended December 31, 2008				Year ended December 31, 2007				Change(%)				Year ended December 31, 2008
Japan		¥	868,280			¥	947,587			-	8.4			$	9,541,538
Overseas:
Americas			1,154,571				1,336,168			-	13.6				12,687,593
Europe			1,341,400				1,499,286			-	10.5				14,740,659
Other areas			729,910				698,305			+	4.5				8,020,990
			3,225,881				3,533,759			-	8.7				35,449,242
Total		¥	4,094,161			¥	4,481,346			-	8.6			$	44,990,780

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

CANON INC. AND SUBSIDIARIES

CONSOLIDATED

3. SEGMENT INFORMATION BY PRODUCT

Results for the fourth quarter		Millions of yen												Thousands of
														U.S. dollars
		Three months				Three months				Change(%)				Three months
		ended				ended								ended
		December 31, 2008				December 31, 2007								December 31, 2008
Business machines
Net sales:
Unaffiliated customers		¥	620,023			¥	803,175			-	22.8			$	6,813,440
Intersegment			-				-				-				-
Total			620,023				803,175			-	22.8				6,813,440
Operating cost and expenses			512,437				640,756			-	20.0				5,631,176
Operating profit		¥	107,586			¥	162,419			-	33.8			$	1,182,264
Cameras
Net sales:
Unaffiliated customers		¥	262,762			¥	365,102			-	28.0			$	2,887,495
Intersegment			-				-				-				-
Total			262,762				365,102			-	28.0				2,887,495
Operating cost and expenses			232,648				271,835			-	14.4				2,556,572
Operating profit		¥	30,114			¥	93,267			-	67.7			$	330,923
Optical and other products
Net sales:
Unaffiliated customers		¥	111,955			¥	95,522			+	17.2			$	1,230,274
Intersegment			52,326				65,381			-	20.0				575,011
Total			164,281				160,903			+	2.1				1,805,285
Operating cost and expenses			218,742				163,558			+	33.7				2,403,758
Operating profit (loss)		¥	(54,461	)		¥	(2,655	)			-			$	(598,473	)
Corporate and Eliminations
Net sales:
Unaffiliated customers		¥	-			¥	-				-			$	-
Intersegment			(52,326	)			(65,381	)			-				(575,011	)
Total			(52,326	)			(65,381	)			-				(575,011	)
Operating cost and expenses			(4,912	)			(5,926	)			-				(53,978	)
Operating profit (loss)		¥	(47,414	)		¥	(59,455	)			-			$	(521,033	)
Consolidated
Net sales:
Unaffiliated customers		¥	994,740			¥	1,263,799			-	21.3			$	10,931,209
Intersegment			-				-				-				-
Total			994,740				1,263,799			-	21.3				10,931,209
Operating cost and expenses			958,915				1,070,223			-	10.4				10,537,528
Operating profit		¥	35,825			¥	193,576			-	81.5			$	393,681

Note:

General corporate expenses of JPY48,253 million (U.S.$530,253 thousand) and JPY59,318 million in the three months ended December 31, 2008 and 2007, respectively, are included in “Corporate and Eliminations.”

CANON INC. AND SUBSIDIARIES

CONSOLIDATED

Results for the fiscal year		Millions of yen												Thousands of
														U.S. dollars
		Year ended				Year ended				Change(%)				Year ended
		December 31, 2008				December 31, 2007								December 31, 2008
Business Machines
Net sales:
Unaffiliated customers		¥	2,660,019			¥	2,935,542			-	9.4			$	29,230,978
Intersegment			-				-				-				-
Total			2,660,019				2,935,542			-	9.4				29,230,978
Operating cost and expenses			2,115,375				2,285,281			-	7.4				23,245,879
Operating profit			544,644				650,261			-	16.2				5,985,099
Assets			1,487,885				1,762,167			-	15.6				16,350,385
Depreciation and amortization			163,920				159,309			+	2.9				1,801,319
Increase in property, plant and equipment		¥	172,197			¥	166,143			+	3.6			$	1,892,275
Cameras
Net sales:
Unaffiliated customers		¥	1,041,947			¥	1,152,663			-	9.6			$	11,449,967
Intersegment			-				-				-				-
Total			1,041,947				1,152,663			-	9.6				11,449,967
Operating cost and expenses			854,160				845,237			+	1.1				9,386,374
Operating profit			187,787				307,426			-	38.9				2,063,593
Assets			499,287				561,504			-	11.1				5,486,670
Depreciation and amortization			39,412				37,180			+	6.0				433,099
Increase in property, plant and equipment		¥	43,086			¥	32,870			+	31.1			$	473,472
Optical and Other Products
Net sales:
Unaffiliated customers		¥	392,195			¥	393,141			-	0.2			$	4,309,835
Intersegment			235,690				238,659			-	1.2				2,590,000
Total			627,885				631,800			-	0.6				6,899,835
Operating cost and expenses			673,375				610,720			+	10.3				7,399,725
Operating profit (loss)			(45,490	)			21,080				-				(499,890	)
Assets			495,095				544,734			-	9.1				5,440,604
Depreciation and amortization			88,017				69,843			+	26.0				967,220
Increase in property, plant and equipment		¥	68,542			¥	78,449			-	12.6			$	753,209
Corporate and Eliminations
Net sales:
Unaffiliated customers		¥	-			¥	-				-			$	-
Intersegment			(235,690	)			(238,659	)			-				(2,590,000	)
Total			(235,690	)			(238,659	)			-				(2,590,000	)
Operating cost and expenses			(44,823	)			(16,565	)			-				(492,561	)
Operating profit (loss)			(190,867	)			(222,094	)			-				(2,097,439	)
Assets			1,487,667				1,644,220			-	9.5				16,347,989
Depreciation and amortization			49,988				75,362			-	33.7				549,318
Increase in property, plant and equipment		¥	78,163			¥	151,087			-	48.3			$	858,934
Consolidated
Net sales:
Unaffiliated customers		¥	4,094,161			¥	4,481,346			-	8.6			$	44,990,780
Intersegment			-				-				-				-
Total			4,094,161				4,481,346			-	8.6				44,990,780
Operating cost and expenses			3,598,087				3,724,673			-	3.4				39,539,417
Operating profit			496,074				756,673			-	34.4				5,451,363
Assets			3,969,934				4,512,625			-	12.0				43,625,648
Depreciation and amortization			341,337				341,694			-	0.1				3,750,956
Increase in property, plant and equipment		¥	361,988			¥	428,549			-	15.5			$	3,977,890

Notes:	1. General corporate expenses of JPY190,698 million (U.S.$2,095,582 thousand) and JPY221,979 million in the years ended December 31, 2008 and 2007, respectively, are included in “Corporate and Eliminations.”
	2. Corporate assets of JPY1,487,667 million (U.S.$16,347,989 thousand) and JPY1,644,220 million as of December 31, 2008 and 2007, respectively, which mainly consist of cash and cash equivalents, short-term investments, investments and corporate properties, are included in “Corporate and Eliminations.”

CANON INC. AND SUBSIDIARIES

CONSOLIDATED

4. SEGMENT INFORMATION BY GEOGRAPHIC AREA

Results for the fiscal year		Millions of yen												Thousands of
														U.S. dollars
		Year ended December 31, 2008				Year ended December 31, 2007				Change(%)				Year ended December 31, 2008
Japan
Net sales:
Unaffiliated customers		¥	998,676			¥	1,048,310			-	4.7			$	10,974,462
Intersegment			2,318,521				2,494,251			-	7.0				25,478,252
Total			3,317,197				3,542,561			-	6.4				36,452,714
Operating cost and expenses			2,757,356				2,722,672			+	1.3				30,300,615
Operating profit			559,841				819,889			-	31.7				6,152,099
Assets		¥	1,908,675			¥	2,715,294			-	29.7			$	20,974,451
Americas
Net sales:
Unaffiliated customers		¥	1,141,560			¥	1,329,479			-	14.1			$	12,544,615
Intersegment			3,758				4,608			-	18.4				41,297
Total			1,145,318				1,334,087			-	14.1				12,585,912
Operating cost and expenses			1,136,288				1,281,805			-	11.4				12,486,681
Operating profit			9,030				52,282			-	82.7				99,231
Assets		¥	458,189			¥	506,295			-	9.5			$	5,035,044
Europe
Net sales:
Unaffiliated customers		¥	1,337,147			¥	1,499,821			-	10.8			$	14,693,923
Intersegment			4,329				3,496			+	23.8				47,572
Total			1,341,476				1,503,317			-	10.8				14,741,495
Operating cost and expenses			1,314,942				1,441,972			-	8.8				14,449,913
Operating profit			26,534				61,345			-	56.7				291,582
Assets		¥	477,571			¥	732,579			-	34.8			$	5,248,033
Others
Net sales:
Unaffiliated customers		¥	616,778			¥	603,736			+	2.2			$	6,777,780
Intersegment			670,678				824,844			-	18.7				7,370,088
Total			1,287,456				1,428,580			-	9.9				14,147,868
Operating cost and expenses			1,247,156				1,378,306			-	9.5				13,705,011
Operating profit			40,300				50,274			-	19.8				442,857
Assets		¥	317,684			¥	367,234			-	13.5			$	3,491,033
Corporate and Eliminations
Net sales:
Unaffiliated customers		¥	-			¥	-				-			$	-
Intersegment			(2,997,286	)			(3,327,199	)			-				(32,937,209	)
Total			(2,997,286	)			(3,327,199	)			-				(32,937,209	)
Operating cost and expenses			(2,857,655	)			(3,100,082	)			-				(31,402,803	)
Operating profit (loss)			(139,631	)			(227,117	)			-				(1,534,406	)
Assets		¥	807,815			¥	191,223			+	322.4			$	8,877,087
Consolidated
Net sales:
Unaffiliated customers		¥	4,094,161			¥	4,481,346			-	8.6			$	44,990,780
Intersegment			-				-				-				-
Total			4,094,161				4,481,346			-	8.6				44,990,780
Operating cost and expenses			3,598,087				3,724,673			-	3.4				39,539,417
Operating profit			496,074				756,673			-	34.4				5,451,363
Assets		¥	3,969,934			¥	4,512,625			-	12.0			$	43,625,648

CANON INC. AND SUBSIDIARIES

CONSOLIDATED

5. CONSOLIDATED BALANCE SHEETS

		Millions of yen												Thousands of
														U.S. dollars
		As of				As of								As of
		December 31,				December 31,				Change				December 31,
		2008				2007								2008
ASSETS
Current assets:
Cash and cash equivalents		¥	679,196			¥	944,463			¥	(265,267	)		$	7,463,692
Short-term investments			7,651				20,499				(12,848	)			84,077
Trade receivables, net			595,422				794,240				(198,818	)			6,543,099
Inventories			506,919				563,474				(56,555	)			5,570,538
Prepaid expenses and other current assets			275,660				286,111				(10,451	)			3,029,231
Total current assets			2,064,848				2,608,787				(543,939	)			22,690,637
Noncurrent receivables			14,752				15,239				(487	)			162,110
Investments			88,825				90,086				(1,261	)			976,099
Property, plant and equipment, net			1,357,186				1,364,702				(7,516	)			14,914,132
Intangible assets			119,140				112,516				6,624				1,309,231
Other assets			325,183				321,295				3,888				3,573,439
Total assets		¥	3,969,934			¥	4,512,625			¥	(542,691	)		$	43,625,648
LIABILITIES AND STOCKHOLDERS’ EQUITY
Current liabilities:
Short-term loans and current portion of long-term debt		¥	5,540			¥	18,317			¥	(12,777	)		$	60,879
Trade payables			406,746				514,226				(107,480	)			4,469,736
Accrued income taxes			69,961				150,726				(80,765	)			768,802
Accrued expenses			277,117				357,525				(80,408	)			3,045,242
Other current liabilities			184,636				215,911				(31,275	)			2,028,967
Total current liabilities			944,000				1,256,705				(312,705	)			10,373,626
Long-term debt, excluding current installments			8,423				8,680				(257	)			92,560
Accrued pension and severance cost			110,784				44,710				66,074				1,217,407
Other noncurrent liabilities			55,745				57,324				(1,579	)			612,583
Total liabilities			1,118,952				1,367,419				(248,467	)			12,296,176
Minority interests			191,190				222,870				(31,680	)			2,100,988
Stockholders’ equity:
Common stock			174,762				174,698				64				1,920,462
Additional paid-in capital			403,790				402,991				799				4,437,253
Legal reserve			53,706				46,017				7,689				590,176
Retained earnings			2,876,576				2,720,146				156,430				31,610,725
Accumulated other comprehensive income (loss)			(292,820	)			34,670				(327,490	)			(3,217,802	)
Treasury stock, at cost			(556,222	)			(456,186	)			(100,036	)			(6,112,330	)
Total stockholders’ equity			2,659,792				2,922,336				(262,544	)			29,228,484
Total liabilities and stockholders’ equity		¥	3,969,934			¥	4,512,625			¥	(542,691	)		$	43,625,648
		Millions of yen												Thousands of
														U.S. dollars
		As of				As of								As of
		December 31, 2008				December 31, 2007								December 31, 2008
Notes:
1.Allowance for doubtful receivables		¥	9,318			¥	14,547							$	102,396
2.Accumulated depreciation			1,635,601				1,594,374								17,793,637
3.Accumulated other comprehensive income (loss):
Foreign currency translation adjustments			(235,968	)			22,796								(2,593,055	)
Net unrealized gains and losses on securities			1,135				6,287								12,473
Net gains and losses on derivative instruments			1,493				(849	)							16,407
Pension liability adjustments			(59,480	)			6,436								(653,627	)
4.Time deposits and Marketable securities, which had been previously disclosed separately in the consolidated balance sheets, have been reclassified to Short-term investments to conform to the current year presentation. Intangible assets, which were previously included in Other assets, have been reclassified in the consolidated balance sheets to conform to the current year presentation.