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		……………………………………………… ,		2014

 

		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-………………..

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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.

 

 

Date….		April 25, 2014						By ……/s/…………… Shinichi    Aoyama ………
								(Signature)*
								Shinichi    Aoyama                          General Manager                          Consolidated Accounting Div.                          Canon Inc.

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

The following materials are included.

1. CONSOLIDATED RESULTS FOR THE FIRST QUARTER ENDED MARCH 31, 2014

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CONSOLIDATED RESULTS FOR

THE FIRST QUARTER ENDED MARCH 31, 2014

April 24, 2014

CONSOLIDATED RESULTS

 

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

 

			Actual																				Projected
		Three months ended March 31, 2014				Three months ended March  31, 2013				Change(%)								Three months ended March 31, 2014				Year ending December 31, 2014				Change(%)
Net sales		¥	868,312			¥	816,653				+				6.3			$	8,430,214			¥	3,860,000				+				3.4
Operating profit			82,639				54,773				+				50.9				802,320				365,000				+				8.2
Income before income taxes			79,191				60,255				+				31.4				768,845				370,000				+				6.4
Net income attributable                    to Canon Inc.		¥	47,610			¥	40,913				+				16.4			$	462,233			¥	240,000				+				4.1
Net income attributable to Canon Inc. stockholders per share:
- Basic		¥	42.11			¥	35.49				+				18.7			$	0.41			¥	213.53				+				6.4
- Diluted			42.11				35.49				+				18.7				0.41				-								-
		Actual
		As of March 31, 2014				As of December 31, 2013				Change(%)								As of March 31, 2014
Total assets		¥	4,064,480			¥	4,242,710				-				4.2			$	39,460,971
Canon Inc. stockholders’ equity		¥	2,816,450			¥	2,910,262				-				3.2			$	27,344,175

 

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 JPY 103 = U.S.$1, the approximate exchange rate on the Tokyo Foreign Exchange Market as of March 31, 2014, 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

 

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I. Operating Results and Financial Conditions

2014 First Quarter in Review

Looking back at the global economy in the first quarter of 2014, economic indicators show that the U.S. economy recovered smoothly despite the temporary impact of the major cold wave that struck the country. In Europe, Germany has led a moderate economic recovery. The Chinese economy remained weak while other emerging countries also faced slowdowns primarily owing to the currency depreciation. The Japanese economy enjoyed significant expansion leading up to the hike in the country’s consumption tax. As a result, the global economy overall continued realizing moderate growth.

As for the markets in which Canon operates amid these conditions, demand for office multifunction devices (MFDs) and laser printers maintained steady growth. Demand for interchangeable-lens digital cameras increased in Japan, fueled by the rush demand before the consumption tax increase, while demand overseas showed signs of recovery in Europe and China. As for digital compact cameras, demand continued to shrink in both developed countries as well as emerging markets. Looking at inkjet printers, although demand increased in Japan, overall market demand decreased slightly from the previous year. In the industry and others sector, a rebound in capital investment for memory devices led to a pickup in demand for semiconductor lithography equipment, while demand for lithography equipment used in the production of FPD showed modest recovery for large-size panels.

The average value of the yen during the quarter was ¥102.69 against the U.S. dollar, a year on year depreciation of approximately ¥10, and ¥140.77 against the euro, a year on year depreciation of approximately ¥18.

During the first quarter, MFDs and laser printers enjoyed steady growth that has continued from the previous year. Despite harsh market conditions, including the effects of shrinking demand for digital compact cameras, net sales of consumables for inkjet printers increased. As for industrial equipment, sales grew considerably compared with the severe market conditions from the corresponding period of the previous year. Consequently, first quarter net sales increased 6.3% year on year to ¥868.3 billion (U.S.$8,430 million), a result that also reflects the positive effect of favorable currency exchange rates. The gross profit ratio rose 2.4 points year on year to 49.7% thanks to ongoing cost-cutting efforts along with the depreciation of the yen. Despite an increase in foreign-currency-denominated operating expenses after conversion into yen due to the depreciation of the yen, Group-wide efforts to thoroughly reduce spending contributed to limiting the increase in operating expenses to just ¥348.8 billion (U.S.$3,387 million), an increase of 5.3% year on year. As a result, operating profit increased by 50.9% to ¥82.6 billion (U.S.$802 million). Other income (deductions) decreased by ¥8.9 billion (U.S.$87 million) due to foreign currency exchange losses while income before income taxes increased by 31.4% year on year to ¥79.2 billion (U.S.$769 million). Net income attributable to Canon Inc. increased by 16.4% to ¥47.6 billion (U.S.$462 million) due to the early repeal of the special reconstruction corporate tax.

Basic net income attributable to Canon Inc. stockholders per share for the quarter was ¥42.11 (U.S.$0.41), a year on year increase of ¥6.62 (U.S.$0.06).

 

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Results by Segment

Looking at Canon’s quarterly performance by business unit, within the Office Business Unit, as for office MFDs, sales of color models increased from the year-ago period, led by the imageRUNNER ADVANCE C5200/C2200 series. With regard to digital production printing systems, sales volume for the imagePRESS C6011/C6010 series increased. As for high-speed continuous-feed printers and wide-format printers, sales of the Océ ColorStream 3000 series showed solid growth. Among laser printers, color multifunction models recorded healthy growth, contributing to a year on year increase in sales volume. As a result, sales for the business unit totaled ¥509.2 billion (U.S.$4,943 million), a year on year increase of 9.7%, while operating profit totaled ¥72.5 billion (U.S.$703 million), increasing 20.6%.

Within the Imaging System Business Unit, although sales volume of interchangeable-lens digital cameras declined owing to the priority placed on optimizing inventories in the market, the advanced-amateur-model EOS 70D and new entry-level EOS Rebel T5 digital SLR cameras realized healthy growth, contributing to Canon maintaining the world’s top market share for unit sales. As for digital compact cameras, although total sales volume declined due to the contraction of the market and the increasing popularity of smartphones, sales volume for high-added-value models, featuring high image quality and high magnification zoom capabilities increased from the previous year. As for inkjet printers, although sales volume declined from the same period of the previous year, sales of consumables enjoyed healthy growth. As a result, sales for the business unit decreased by 1.8% to ¥292.8 billion (U.S.$2,843 million) year on year, while operating profit totaled ¥42.0 billion (U.S.$408 million), an increase of 47.6%.

In the Industry and Others Business Unit, within the semiconductor lithography equipment, renewed investment in capital expenditure by memory manufactures led to increased first-quarter unit sales of lithography equipment for memory devices, while the recovery trend in investment for large-size panels fueled increased unit sales of FPD lithography equipment. Looking at medical equipment, sales volume for Canon’s mainstay digital radiography systems steadily increased. Consequently, sales for the business unit totaled ¥89.8 billion (U.S.$872 million), an increase of 19.6% year on year, while operating profit recorded a loss of ¥7.6 billion (U.S.$74 million) owing to the upfront investment.

Cash Flow

During the first quarter of 2014, cash flow from operating activities totaled ¥132.3 billion (U.S.$1,284 million), an increase of ¥76.8 billion (U.S.$746 million) compared with the previous year due to the increase in profit. Cash flow from investing activities decreased ¥16.9 billion (U.S.$164 million) year on year to ¥56.5 billion (U.S.$548 million) as a result of capital investment focused on new products. Accordingly, free cash flow totaled ¥75.8 billion (U.S.$736 million), an increase of ¥93.7 billion (U.S.$910 million) compared with the corresponding year-ago period.

Cash flow from financing activities recorded an outlay of ¥125.7 billion (U.S.$1,221 million), mainly arising from the dividend payout and the repurchasing of treasury stock.

Owing to these factors, as well as the negative impact from foreign currency translation adjustments, cash and cash equivalents decreased by ¥61.8 billion (U.S.$600 million) to ¥727.1 billion (U.S.$7,059 million) from the end of the previous year.

Outlook

As for the outlook in the second quarter onward, there are signs of brightness among developed countries with steady economic growth in the U.S. and the European economy expected to continue its moderate recovery. Although uncertainties remain in China and other emerging countries, they are expected to continue to realize economic expansion. As for the Japanese economy, despite concern over a temporary slowdown in the second quarter due to the increased consumption tax, conditions are expected to improve from the third quarter onward with healthy growth projected for the full year. The global economy, having bottomed out in 2013, is also expected to realize a moderate recovery.

 

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In the businesses in which Canon is involved, demand for MFDs is projected to expand moderately, mainly for color models. Likewise, demand in the laser printer market is also expected to continue growing moderately, centered on multifunction models. As for interchangeable-lens digital cameras, despite the temporary slump in demand in the U.S. market, with signs of recovery in the European market and those of China and other emerging countries, total demand is expected to remain in line with that for the previous year. Within the digital compact camera market, although projections point to market contraction, mainly among low-end models due to the popularity of smartphones, demand for high-added-value models featuring high image quality and high-magnification zoom capabilities, is expected to grow steadily. As for inkjet printers, dwindling demand is expected to come to an end with the economic recovery, leveling off to remain in line with the previous year. Within the industrial equipment market, demand for semiconductor lithography equipment is expected to increase as device manufacturers boost capital investment, while demand for FPD lithography equipment will likely pick up along with the recovery in investment for large-size panels.

With regard to currency exchange rates for the second quarter onward, on which Canon’s performance outlook is based, despite the recent trend toward a weaker yen, uncertainties remain in the future and Canon anticipates exchange rates of ¥100 to the U.S. dollar and ¥135 to the euro, representing depreciations of approximately ¥3 against the U.S. dollar, and approximately ¥6 against the euro compared with the annual average rates of the previous year.

Upon taking into consideration these foreign exchange rate assumptions and the current economic forecast, Canon projects full-year consolidated net sales in 2014 of ¥3,860.0 billion (U.S.$37,476 million), a year on year increase of 3.4%; operating profit of ¥365.0 billion (U.S.$3,544 million), a year on year increase of 8.2%; income before income taxes of ¥370.0 billion (U.S.$3,592 million), a year on year increase of 6.4%; and net income attributable to Canon Inc. of ¥240.0 billion (U.S.$2,330 million), a year on year increase of 4.1%.

Consolidated Outlook

Fiscal year

 

		Millions of yen
		Year ending December 31, 2014								Change   (B - A)						Year ended December 31, 2013				Change (%)   (B - C) / C
		Previous Outlook (A)				Revised Outlook (B)										Results (C)
Net sales		¥	3,850,000			¥	3,860,000			¥	10,000					¥	3,731,380				+3.4%
Operating profit			360,000				365,000				5,000						337,277				+8.2%
Income before income taxes			360,000				370,000				10,000						347,604				+6.4%
Net income attributable to Canon Inc.		¥	240,000			¥	240,000			¥	-					¥	230,483				+4.1%

 

 

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CANON INC. AND SUBSIDIARIES

CONSOLIDATED

II. Financial Statements

1.    CONSOLIDATED BALANCE SHEETS

 

 

-5-

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CANON INC. AND SUBSIDIARIES

CONSOLIDATED

2.  CONSOLIDATED STATEMENTS OF INCOME AND CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME

 

 

-6-

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CANON INC. AND SUBSIDIARIES

CONSOLIDATED

3.    DETAILS OF SALES

 

Sales by business unit		Millions of yen																Thousands of U.S. dollars
		Three months ended   March 31, 2014				Three months ended   March 31, 2013				Change(%)								Three months ended   March 31, 2014
Office		¥	509,176			¥	464,206				+				9.7			$	4,943,456
Imaging System			292,809				298,107				-				1.8				2,842,806
Industry and Others			89,770				75,067				+				19.6				871,553
Eliminations			(23,443)				(20,727)								-				(227,601)
Total		¥	868,312			¥	816,653				+				6.3			$	8,430,214
Sales by region		Millions of yen																Thousands of U.S. dollars
		Three months ended March 31, 2014				Three months ended March 31, 2013				Change(%)								Three months ended March 31, 2014
Japan		¥	191,713			¥	159,718				+				20.0			$	1,861,291
Overseas:
Americas			228,531				232,002				-				1.5				2,218,748
Europe			261,911				246,365				+				6.3				2,542,825
Asia and Oceania			186,157				178,568				+				4.2				1,807,350
			676,599				656,935				+				3.0				6,568,923
Total		¥	868,312			¥	816,653				+				6.3			$	8,430,214

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

  2. The principal countries and regions included in each regional category are as follows:

 

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CANON INC. AND SUBSIDIARIES

CONSOLIDATED

4.    CONSOLIDATED STATEMENTS OF CASH FLOWS

 

 

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CANON INC. AND SUBSIDIARIES

CONSOLIDATED

5.    NOTE FOR GOING CONCERN ASSUMPTION

      Not applicable.

6.    SEGMENT INFORMATION

 

(1)  SEGMENT INFORMATION BY BUSINESS UNIT

 

 

-9-

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CANON INC. AND SUBSIDIARIES

CONSOLIDATED

(2)  SEGMENT INFORMATION BY GEOGRAPHIC AREA

 

 

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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

 

1.

Number of Group Companies

 

		March 31, 2014		December 31, 2013		Change
Subsidiaries		255		257		(2)
Affiliates		11		11		-
Total		266		268		(2)

 

2.

Change in Group Entities

 

Subsidiaries
Addition:		2 companies
Removal:		4 companies

 

3.

Subsidiaries Listed on Domestic Stock Exchange

Tokyo Stock Exchange (1st section): Canon Marketing Japan Inc., Canon Electronics Inc.

 

(2)  SIGNIFICANT

ACCOUNTING POLICIES

Canon’s consolidated financial statements are prepared in accordance with U.S. generally accepted accounting principles.

 

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Canon Inc.

April 24, 2014

CONSOLIDATED FINANCIAL RESULTS FOR

THE FIRST QUARTER ENDED MARCH 31, 2014

SUPPLEMENTARY REPORT

TABLE OF CONTENTS

 

				PAGE
1.		SALES BY GEOGRAPHIC AREA AND BUSINESS UNIT			S    1
2.		SEGMENT INFORMATION BY BUSINESS UNIT			S    2
3.		OTHER INCOME / DEDUCTIONS			S    2
4.		BREAKDOWN OF PRODUCT SALES WITHIN BUSINESS UNIT			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.		INCREASE IN PP&E & 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

 

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Canon Inc.

 

1. SALES BY GEOGRAPHIC AREA AND BUSINESS UNIT		(Millions of yen)

				2014								2013										Change year over year
				1st quarter				Year (P)				1st quarter				Year						1st quarter				Year
Japan
		Office			102,020				-				90,534				368,308						+12.7%				-
		Imaging System			53,343				-				40,094				215,970						+33.0%				-
		Industry and Others			36,350				-				29,090				131,585						+25.0%				-
		Total			191,713				767,500				159,718				715,863						+20.0%				+7.2%
Overseas
		Office			406,079				-				371,596				1,625,590						+9.3%				-
		Imaging System			239,270				-				257,833				1,232,216						-7.2%				-
		Industry and Others			31,250				-				27,506				157,711						+13.6%				-
		Total			676,599				3,092,500				656,935				3,015,517						+3.0%				+2.6%
		Americas
		Office			156,166				-				142,983				629,472						+9.2%				-
		Imaging System			65,897				-				79,474				392,373						-17.1%				-
		Industry and Others			6,468				-				9,545				37,656						-32.2%				-
		Total			228,531				1,057,300				232,002				1,059,501						-1.5%				-0.2%
		Europe
		Office			173,532				-				163,809				694,563						+5.9%				-
		Imaging System			81,551				-				77,570				404,390						+5.1%				-
		Industry and Others			6,828				-				4,986				25,976						+36.9%				-
		Total			261,911				1,161,600				246,365				1,124,929						+6.3%				+3.3%
		Asia and Oceania
		Office			76,381				-				64,804				301,555						+17.9%				-
		Imaging System			91,822				-				100,789				435,453						-8.9%				-
		Industry and Others			17,954				-				12,975				94,079						+38.4%				-
		Total			186,157				873,600				178,568				831,087						+4.2%				+5.1%
Intersegment
		Office			1,077				-				2,076				6,175						-48.1%				-
		Imaging System			196				-				180				752						+8.9%				-
		Industry and Others			22,170				-				18,471				85,574						+20.0%				-
		Eliminations			(23,443	)			-				(20,727	)			(92,501	)					-				-
		Total			0				0				0				0						-				-
Total
		Office			509,176				2,119,900				464,206				2,000,073						+9.7%				+6.0%
		Imaging System			292,809				1,393,100				298,107				1,448,938						-1.8%				-3.9%
		Industry and Others			89,770				444,500				75,067				374,870						+19.6%				+18.6%
		Eliminations			(23,443	)			(97,500	)			(20,727	)			(92,501	)					-				-
		Total			868,312				3,860,000				816,653				3,731,380						+6.3%				+3.4%

(P)=Projection

 

- S1 -

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Canon Inc.

 

2. SEGMENT INFORMATION BY BUSINESS UNIT

(Millions of yen)

				2014								2013										Change year  over year
					1st quarter				Year (P)				1st quarter				Year						1st quarter			Year
Office
		External customers			508,099				2,116,800				462,130				1,993,898						+9.9%			+6.2%
		Intersegment			1,077				3,100				2,076				6,175						-48.1%			-49.8%
		Total sales			509,176				2,119,900				464,206				2,000,073						+9.7%			+6.0%
		Operating profit			72,457				287,100				60,071				266,908						+20.6%			+7.6%
		% of sales			14.2%				13.5%				12.9%				13.3%						-			-
Imaging System
		External customers			292,613				1,391,500				297,927				1,448,186						-1.8%			-3.9%
		Intersegment			196				1,600				180				752						+8.9%			+112.8%
		Total sales			292,809				1,393,100				298,107				1,448,938						-1.8%			-3.9%
		Operating profit			42,026				200,000				28,481				203,794						+47.6%			-1.9%
		% of sales			14.4%				14.4%				9.6%				14.1%						-			-
Industry and Others
		External customers			67,600				351,700				56,596				289,296						+19.4%			+21.6%
		Intersegment			22,170				92,800				18,471				85,574						+20.0%			+8.4%
		Total sales			89,770				444,500				75,067				374,870						+19.6%			+18.6%
		Operating profit			(7,621	)			(17,500	)			(7,536	)			(25,331	)					-			-
		% of sales			-8.5%				-3.9%				-10.0%				-6.8%						-			-
Corporate and Eliminations
		External customers			-				-				-				-						-			-
		Intersegment			(23,443	)			(97,500	)			(20,727	)			(92,501	)					-			-
		Total sales			(23,443	)			(97,500	)			(20,727	)			(92,501	)					-			-
		Operating profit			(24,223	)			(104,600	)			(26,243	)			(108,094	)					-			-
Consolidated
		External customers			868,312				3,860,000				816,653				3,731,380						+6.3%			+3.4%
		Intersegment			-				-				-				-						-			-
		Total sales			868,312				3,860,000				816,653				3,731,380						+6.3%			+3.4%
		Operating profit			82,639				365,000				54,773				337,277						+50.9%			+8.2%
		% of sales			9.5%				9.5%				6.7%				9.0%						-			-
																				(P)=Projection
3. OTHER INCOME / DEDUCTIONS																						(Millions of yen)
					2014								2013										Change year  over year
				1st quarter				Year (P)				1st quarter				Year						1st quarter				Year
		Interest and dividend, net			1,501				4,900				931				6,029						+570			(1,129)
		Forex gain (loss)			(5,807	)			(6,200	)			3,182				(1,992	)					(8,989	)		(4,208)
		Equity earnings (loss) of affiliated companies			93				600				(86	)			(664	)					+179			+1,264
		Other, net			765				5,700				1,455				6,954						(690	)		(1,254)
		Total			(3,448	)			5,000				5,482				10,327						(8,930	)		(5,327)
																							(P)=Projection

 

- S2 -

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Canon Inc.

 

4. BREAKDOWN OF PRODUCT SALES WITHIN BUSINESS UNIT
				2014				2013
				1st quarter		Year (P)		1st quarter		Year
Office
		Monochrome copiers		15%		16%		16%		16%
		Color copiers		18%		20%		19%		19%
		Printers		43%		41%		43%		42%
		Others		24%		23%		22%		23%
Imaging System
		Cameras		62%		64%		65%		67%
		Inkjet printers		29%		28%		26%		25%
		Others		9%		8%		9%		8%
Industry and Others
		Lithography equipment		16%		24%		9%		17%
		Others		84%		76%		91%		83%
										(P)=Projection
5. SALES GROWTH IN LOCAL CURRENCY (Year over year)
				2014
				1st quarter		Year (P)
Office
		Japan		+12.7%		-
		Overseas		-2.2%		-
		Total		+0.5%		+3.2%
Imaging System
		Japan		+33.0%		-
		Overseas		-17.3%		-
		Total		-10.5%		-6.2%
Industry and Others
		Japan		+25.0%		-
		Overseas		+7.1%		-
		Total		+17.2%		+18.0%
Total
		Japan		+20.0%		+7.2%
		Overseas		-7.7%		-0.5%
		Americas		-11.0%		-2.7%
		Europe		-7.1%		-1.0%
		Asia and Oceania		-4.2%		+3.1%
		Total		-2.3%		+1.0%
						(P)=Projection

 

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																					Canon Inc.
6. PROFITABILITY
				2014								2013
				1st quarter				Year (P)				1st quarter				Year
ROE *1					6.7%				8.2%				6.2%				8.4%
ROA *2					4.6%				5.6%				4.1%				5.6%
																	(P)=Projection
*1 Return on Equity ; Based on Net Income attributable to Canon Inc. and Total Canon Inc. Stockholders’ Equity *2 Return on Assets ; Based on Net Income attributable to Canon Inc.   7. IMPACT OF FOREIGN EXCHANGE RATES
		(1) Exchange rates																			(Yen	)
				2014												2013
				1st quarter				2nd-4th quarter (P)				Year (P)				1st quarter				Year
		Yen/US$			102.69				100.00				100.61				92.76				97.84
		Yen/Euro			140.77				135.00				136.29				122.35				130.01
																					(P)=Projection
		(2) Impact of foreign exchange rates on sales (Year over year)						(Billions of yen)
				2014
				1st quarter				Year (P)
		US$			+23.2				+23.3
		Euro			+27.7				+40.3
		Other currencies			+5.6				+7.0
		Total			+56.5				+70.6
									(P)=Projection
		(3) Impact of foreign exchange rates per yen		(Billions of yen)
				2014
				2nd-4th quarter (P)
On sales
		US$			12.7
		Euro			5.4
On operating profit
		US$			4.9
		Euro			2.8
					(P)=Projection
8. STATEMENTS OF CASH FLOWS																	(Millions of yen	)
				2014								2013
				1st quarter				Year (P)				1st quarter				Year
Net cash provided by operating activities					132,254				510,000				55,414				507,642
Net cash used in investing activities					(56,475	)			(300,000	)			(73,403	)			(250,212	)
Free cash flow					75,779				210,000				(17,989	)			257,430
Net cash used in financing activities					(125,744	)			(196,600	)			(84,061	)			(222,181	)
Effect of exchange rate changes on cash and cash equivalents					(11,853	)			(27,300	)			28,364				86,982
Net change in cash and cash equivalents					(61,818	)			(13,900	)			(73,686	)			122,231
Cash and cash equivalents at end of period					727,091				775,000				592,992				788,909
																	(P)=Projection

 

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Canon Inc.

 

9. R&D EXPENDITURE																(Millions of yen)
				2014								2013
				1st quarter				Year (P)				1st quarter				Year
		Office			24,686				-				24,658				105,246
		Imaging System			20,940				-				20,037				84,377
		Industry and Others			6,194				-				5,814				25,701
		Corporate and Eliminations			22,998				-				23,007				91,000
		Total			74,818				310,000				73,516				306,324
% of sales					8.6%				8.0%				9.0%				8.2%
																	(P)=Projection
10. INCREASE IN PP&E & DEPRECIATION AND AMORTIZATION																(Millions of yen)
				2014								2013
				1st quarter				Year (P)				1st quarter				Year
		Increase in PP&E			38,054				210,000				50,793				188,826
		Depreciation and amortization			61,352				270,000				64,340				275,173
																	(P)=Projection
11. INVENTORIES
(1) Inventories												(Millions of yen)
				2014				2013				Difference
				Mar.31				Dec.31
		Office			216,560				227,413				(10,853	)
		Imaging System			221,981				221,368				+613
		Industry and Others			110,996				104,992				+6,004
		Total			549,537				553,773				(4,236	)
(2) Inventories/Sales*												(Days)
				2014				2013				Difference
				Mar.31				Dec.31
		Office			38				41				(3	)
		Imaging System			57				53				+4
		Industry and Others			124				115				+9
		Total			53				52				+1
*Index based on the previous six months sales.
12. DEBT RATIO
				2014				2013				Difference
				Mar.31				Dec.31
		Total debt / Total assets			0.1%				0.1%				0.0%
13. OVERSEAS PRODUCTION RATIO
				2014				2013
				1st quarter				Year
		Overseas production ratio			61%				57%
14. NUMBER OF EMPLOYEES
				2014				2013				Difference
				Mar.31				Dec.31
		Japan			69,366				69,825				(459	)
		Overseas			121,346				124,326				(2,980	)
		Total			190,712				194,151				(3,439	)

 

- S5 -