July 23, 2019

Summary Report of Consolidated Financial Results
for the second quarter ended June 30, 2019
Registered company name:

Canon Marketing Japan Inc.

Stock listing:Code number:Tokyo Stock Exchange, First Section
8060

URL:

https://cweb.canon.jp/eng/ir

Representative director:

Masahiro Sakata, President

Contact:

Shiro Hamada, Director Vice President
Tel. +81-3-6719-9071

Dividend payable date (as planned):
U.S. Accounting Standards Applied:

August 26, 2019
No

1.Consolidated business results for the six months ended June 30, 2019 (From January 1, 2019 to June 30, 2019)(1) Consolidated Results of Operations(Amounts less than one million yen are truncated)(Percentage represents increases or decreases from the previous year)
Profit attributable
Operating income
Ordinary income
to owners of parent

Net sales
Six months ended

14,348%30.5

Millions of yen

13,418%38.8

Millions of yen

302,856%
0.8

Millions of yen

June 30, 2019

9,436

%
26.9

June 30, 2018

300,523

(1.0)

9,664

(11.8)

10,996

(7.0)

7,436

(11.2)[Note] Comprehensive Income:Millions of yen

Six months ended June 30, 2019 : 12,099 million yen [43.7%]
Six months ended June 30, 2018 : 8,421 million yen [13.8%]
Basic earnings
per share
Yen

Diluted earnings
per share
Yen

June 30, 2019

72.78

72.77

June 30, 2018

57.35

Six months ended-(2) Consolidated Financial Position
Total assets
Second quarter ended June 30, 2019

Millions of yen
479,517

Millions of yen
310,117

498,790

303,570

Year ended December 31, 2018
[Reference] Shareholders' equity:(Amounts less than one million yen are truncated)
Equity ratio
Net asset per share

Net assets

%
64.6

Yen
2,387.1160.8

2,336.97

Second quarter ended June 30, 2019 : 309,529 million yen
Year ended December 31, 2018 : 303,027 million yen

2.Dividends
Dividend per shareFirst quarter-end

Second quarter-end Third quarter-end
Yen

Year ended December 31, 2018

Yen-

25.00

Year ending December 31, 2019

-

30.00

Year ending December 31, 2019-

(forecast)

Yen

Year-end

Annual

Yen

Yen-

35.00

60.00

-

30.00

60.00

[Note] Revision of cash dividend forecast for this period : Yes

3.Consolidated financial forecast for the fiscal year ending December 31, 2019

Net sales%
622,000 0.1

Millions of yen

Full year(Amounts less than one million yen are truncated)(Percentage represents increases or decreases from the previous year)
Profit attributable
Basic earnings
Operating income Ordinary income
to owners of parent
per share
Millions of yen%

30,0003.7[Note] Revision of forecast for this period : Yes-1-%
31,200 2.2

Millions of yen%
21,000 0.8

Millions of yen

Yen

161.95

*Others(1) Material changes in subsidiaries during this period(Changes in scope of consolidations resulting from change is subsidiaries) :(2) Application of a specified accounting procedure :

None
Yes

(3) Changes in accounting policies and accounting estimates, retrospective restatement( i ) Changes in accounting policies based on revisions of accounting standard :Yes( ii ) Changes in accounting policies other than ( i ) :None( iii ) Changes in accounting estimates :None( iv ) Retrospective restatement :None(4) Number of issued and outstanding shares (common stock)( i ) Number of issued and outstanding shares at the end of the period (including treasury stock)
151,079,972
As of June 30, 2019 :As of December 31, 2018 :

151,079,972( ii ) Number of treasury stock at the end of the period
21,413,140
As of June 30, 2019 :As of December 31, 2018 :

21,412,840( iii ) Average number of shares
As of June 30, 2019 :

129,666,970

As of June 30, 2018 :

129,668,003* Audits by CPAs or audit corporations are not required for quarterly financial results.
Disclaimer :Earnings projections are based on information available at the time these materials were announced, and theCompany cannot guarantee that they will be realized. Also, actual results may differ from the estimated figures
given due to various factors.

-2-Consolidated Quarterly Balance Sheets(Amounts less than one million yen are truncated)
As of December 31, 2018
AssetsCurrent assets
Cash and deposits
Notes and accounts receivable
Securities
Merchandise and finished goods
Work in process
Raw materials and supplies
Short-term loans receivable
Other current assets
Allowance for doubtful receivables
Total current assets
Non-current assets
Property, plant and equipment
Buildings and structures, net
Machinery, equipment and vehicles, net
Tools, furniture and fixtures, net
Rental assets, net
Land
Leased assets, net
Construction in progress
Total property, plant and equipment
Intangible assets
SoftwareLease assets
Utilization rights
Other intangible assets
Total intangible assets
Investments and other assets
Investment in securities
Long-term loans receivable
Net defined benefit assets
Deferred tax assets
Lease deposits
Other investments and other assets
Allowance for doubtful receivables
Total investments and other assets
Total non-current assets
Total assets-3-As of June 30, 2019

65,071
117,041
70,50031,1821,191
647
90,014
7,792(91)
383,349

83,848101,335
15,50031,884138629
120,0128,158(95)
361,41228,657112
3,059
10,842
28,91863
333
71,987

27,683
106
3,184
10,452
28,91838
4,930
75,313

4,940
5
316
2
5,265

4,453
3
315
3
4,775

7,985
36
304
23,039
4,423
2,832
(432)
38,188
115,441
498,790

8,949
35
300
21,831
4,412
2,876
(390)
38,015
118,105
479,517

Consolidated Quarterly Balance Sheets(Amounts less than one million yen are truncated)
As of December 31, 2018
LiabilitiesCurrent liabilities
Notes and accounts payable
Lease obligations
Accrued expenses
Accrued income taxes
Consumption taxes payable
Provision for bonuses
Provision for directors' bonuses
Provision for product warranties
Provision for loss on order received
Other current liabilities
Total current liabilities
Long-term liabilities
Lease obligations
Deferred tax liabilities
Allowance for long-term continuous service rewards
Net defined benefit liabilities
Other long-term liabilities
Total long-term liabilities
Total liabilities
Net assets
Stockholders' equity
Common stock
Capital surplus
Retained earnings
Treasury stock
Total stockholders' equity
Accumulated other comprehensive income (loss)
Net unrealized gains on available-for-sale securities
Deferred gains or losses on hedges
Foreign currency translation adjustments
Remeasurements of defined benefit plans
Total accumulated other comprehensive income (loss)
Non-controlling interests
Total net assets
Total liabilities and net assets-4-

As of June 30, 201975,831
100
16,676
6,967
4,063
3,437
79
447
147
22,151
129,90346,24085
15,601
5,038
4,208
4,306
27692029,431
105,632

116
29
1,019
59,887
4,264
65,317
195,220

121
0
1,076
59,0703,499
63,767
169,400

73,30382,820189,957(31,924)
314,156

73,30382,820193,859(31,925)
318,057

2,518
175(13,725)(11,129)542
303,570
498,7903,057(1)40(11,625)(8,528)588
310,117479,517

Consolidated Quarterly Statements of Income(Amounts less than one million yen are truncated)
Six months of FY2018(from January 1, 2018
to June 30, 2018)
Net sales
Cost of sales
Gross profit
Selling, general and administrative expenses
Operating income
Non-operating income
Interest income
Dividend income
Insurance income
Gain on investments in partnership
Other non-operating income
Total non-operating income
Non-operating expenses
Interest expense
Other non-operating expenses
Total non-operating expenses
Ordinary profit
Extraordinary income
Gain on sales of fixed assets
Gain on sales of investment securities
Gain on sales of shares of subsidiaries and associates
Total extraordinary income
Extraordinary losses
Loss on sales and disposal of fixed assets
Loss on impairment of fixed assets
Loss on valuation of investment securities
Expenses for restructuring of business bases
Other extraordinary losses
Total extraordinary losses
Profit before income taxes
Income taxes
ProfitProfit attributable to non-controlling interests
Profit attributable to owners of parent

Six months of FY2019(from January 1, 2019
to June 30, 2019)

300,523
195,532
104,991
95,326
9,664

302,856
206,069
96,786
83,36813,418

111
111
536
465
253
1,477

93
106
474
161
203
1,038

6
139
145
10,9966102
108
14,348

120
378
214
714

55

106
15
90
47
16
276
11,434
3,965
7,468
327,436

147
82
157
14,196
4,694
9,501
65
9,436

* Starting from the first quarter of the current fiscal year, the Company recorded a portion of personnel expenses and others, which had
previously been posted as selling expenses, as the cost of sales. This is because the Company changed the aggregation range of costs asa result of examining the positioning of costs for the performance obligation of services, which has been increasingly important in recent
years in the wake of the early adoption of the Accounting Standard for Revenue Recognition in the first quarter of the current fiscalyear. Compared with the previous method, this change caused an increase of 9,993 million yen in the cost of sales and a decrease ingross profit by the same amount in the first half of the current fiscal year. There is no impact on operating income, ordinary income andprofit before income taxes.

-5-Consolidated Quarterly Statements of Comprehensive Income(Amounts less than one million yen are truncated)
Six months of FY2018(from January 1, 2018
to June 30, 2018)
ProfitOther comprehensive income (loss)
Net unrealized gains or losses on available-for-sale securities
Deferred gains or losses on hedges
Foreign currency translation adjustments
Remeasurements of defined benefit plans, net of tax
Total other comprehensive income (loss)
Comprehensive income
Comprehensive income attributable toOwners of parent
Non-controlling interests-6-

Six months of FY2019(from January 1, 2019
to June 30, 2019)

7,468

9,501

480
(9)
(22)
504
952
8,421

539
(2)
(38)
2,100
2,597
12,0998,392
28

12,03761

Consolidated Quarterly Statements of Cash Flows(Amounts less than one million yen are truncated)
Six months of FY2018(from January 1, 2018
to June 30, 2018)

Six months of FY2019(from January 1, 2019
to June 30, 2019)

Cash flows from operating activities
Profit before income taxes
Depreciation
Loss on Impairment of fixed assets
Increase (decrease) in allowance for doubtful receivables
Increase (decrease) in net defined benefit liabilities
Decrease (increase) in net defined benefit assets
Increase (decrease) in provision for bonuses
Interest and dividend income
Interest expense
Loss (gain) on sales and disposal of property, plant and equipment, netLoss (gain) on sales of investment securities
Loss (gain) on investments in partnership
Decrease (increase) in notes and accounts receivable-trade
Decrease (increase) in inventories
Increase (decrease) in notes and accounts payable-trade
Other, net
SubtotalInterest and dividends received
Interest paid
Income taxes paid
Net cash provided by (used in) operating activities

11,434
6,746
15
153
626
(33)
1,668
(222)
6(14)
(377)
(465)
20,116
1,369(22,333)(2,131)
16,558222(6)(5,009)11,765

14,196
6,098
(38)
2,239
(7)
868(200)
6135(161)
16,244(350)(29,592)
(142)
9,296
197
(6)
(6,208)3,280

Cash flows from investing activities
Payments for purchases of property, plant and equipment
Proceeds from sales of property, plant and equipment
Payments for purchases of intangible assets
Payments for purchases of investment in securities
Proceeds from sales of investments in securities(6,358)
250
(855)
(614)
291

(3,954)6(704)
(215)
204

526

-

(30,005)
77(36,686)(29,998)(204)(34,865)

45
(65)
(1)
(4,537)(11)
0(4,571)(39)(29,531)
136,979
107,447(63)(0)(4,535)(15)(4,615)(22)(36,222)
135,571
99,348Proceeds from sales of shares of subsidiaries resulting in change
in scope of consolidation
Decrease (increase) in short-term loans receivable, net.
Other, net
Net cash provided by (used in) investing activities
Cash flows from financing activities
Increase (decrease) in short-term loans payable, net
Repayments of finance lease obligations
Payments for purchases of treasury stock
Dividends paid
Dividends paid to non-controlling shareholders
Other, netNet cash provided by (used in) financing activities
Effect of exchange rate changes on cash and cash equivalents
Net increase (decrease) in cash and cash equivalents
Cash and cash equivalents at beginning of period
Cash and cash equivalents at end of period-7-Consolidated Quarterly Segment Information
I. Six months of FY2018 (from January 1, 2018 to June 30, 2018)
Information on net sales and income (loss) by reportable segment(Amounts less than one million yen are truncated)

Reportable segment
ConsumerEnterprise

60,97589,200

Area

Professional

OtherTotal

Adjustment Consolidated

Net sales
Sales - external customers
Sales - intersegment
Total
Operating income (loss)

123,337

25,371

1,638

6,852

798

130,190

26,170
794

54

4,210

61,03093,411(1,103)

4,301

5,509

300,523-

300,523

2,282

14,198(14,198)-

3,920

314,722(14,198)

300,523

151

9,653

10

9,664

[Note]
1. Other includes call center business and BPO service business, which are not included in reportable segments.
2. Adjustment of Operating income (loss) is the elimination of intersegment transactions.
3. Total amount of Operating income (loss) for Reportable segments, Other and Adjustment is equal to the Operating income of Consolidated
Quarterly Statements of Income.

II. Six months of FY2019 (from January 1, 2019 to June 30, 2019)
Information on net sales and income (loss) by reportable segment(Amounts less than one million yen are truncated)

Reportable segment
Other

Total

Adjustment Consolidated

ConsumerEnterprise

57,661

93,858

126,701

22,3402,294

302,856

-

5

4,850

6,127

873

2,699

14,556(14,556)-

57,666

98,708132,829

23,213

4,993

317,412(14,556)

302,856

(269)

5,501

6,973

1,263

(92)

13,37542

13,418Area

Professional

Net sales
Sales - external customers
Sales - intersegment
Total
Operating income (loss)

302,856[Note]
1. Other includes call center business and BPO service business, which are not included in reportable segments.
2. Adjustment of Operating income (loss) is the elimination of intersegment transactions.
3. Total amount of Operating income (loss) for Reportable segments, Other and Adjustment is equal to the Operating income of Consolidated
Quarterly Statements of Income.

*NOTE*(Changes in Reporting Segments)
Starting from the first quarter of the current year, the Company transferred “Visual Solutions,” which was a subsegment of the “Professional”
segment, to the “Enterprise” and “Area” segments. In addition, the amount of intersegment transactions changed because the Company
consolidated the planning and development functions of the security business, which were scattered across group companies, into the business
units with marketing oversight at Canon Marketing Japan.
Prior-year segment information has been restated accordingly to reflect these changes.
(Changes in Accounting Policy)
Starting from the beginning of the first quarter of the current year, the Company applied the revenue recognition accounting standard andguidance and since the Company changed its accounting methods for revenue recognition, it also changed its measurement methods for thesegment income or loss of its business segments accordingly.
Compared to the previous method, in the first half of the current year, this change caused a decrease of 320 million yen in net sales and anincrease of 285 million yen in segment income in the “Consumer” segment, a increase of 206 million yen in net sales and a decrease of 4
million yen in segment income in the “Enterprise” segment, a decrease of 99 million yen in net sales and a decrease of 43 million yen insegment income in the “Area” segment, a decrease of 5 million yen in net sales and a decrease of 2 million yen in segment income in the“Professional” segment, and a decrease of 0 million yen in net sales and a decrease of 0 million yen in segment income in the “Other”
segment.

-8-