July 23,2014

Summary Report of Consolidated Financial Results
for the second quarter ended June 30, 2014

Registered company name:
Stock listing:Code number:
URL:
Representative director:
Contact:

Canon Marketing Japan Inc.
Tokyo Stock Exchange, First Section
8060
http://cweb.canon.jp/eng/ir
Masami Kawasaki, President
Yo Shibasaki, Director Senior Vice President
Tel. +81-3-6719-9071
Dividend payable date (as planned):
August 26, 2014
U.S. Accounting Standards Applied:
No1.Consolidated business results for the six months ended June 30, 2014 (From January 1, 2014 to June 30, 2014)(1) Consolidated Results of Operations(Amounts less than one million yen are truncated)(Percentage represents increases or decreases from the previous year)
Net sales

Six months ended

Ordinary income

Net income

Millions of yen%

Millions of yen%

Millions of yen%

328,355

6.1

12,511207.7

13,452

176.4

7,851 297.9

309,432

(4.2)

4,066

(48.0)

4,867(44.0)

1,973

June 30, 2014
June 30, 2013
[Note] Comprehensive Income:Operating income

Millions of yen%

(57.9)

Six months ended June 30, 2014 : 7,950 million yen [177.9%]
Six months ended June 30, 2013 : 2,861 million yen [(39.7%)]
Net income
per share

Diluted net income
per share
Yen

Yen

June 30, 2014

60.55

-June 30, 2013

14.83

-

Six months ended(2) Consolidated Financial Position(Amounts less than one million yen are truncated)
Total assets

Net assets

Millions of yen

Millions of yen

Second quarter ended June 30, 2014
Year ended December 31, 2013
[Reference] Shareholders' equity:

Equity ratio

Net asset per share%Yen

439,631

263,45359.9

2,029.39

467,076

257,07555.0

1,980.22Second quarter ended June 30, 2014 : 263,166 million yen
Year ended December 31, 2013 : 256,794 million yen

2.Dividends
Dividend per share

Dividend per share

Year-end

AnnualFirst quarter-end

Second quarter-end

Third quarter-end

Yen

Yen

Yen

Yen

Yen

Year ended December 31, 2013-12.00

-

12.00

24.00

Year ending December 31, 2014

-

15.00
-

15.00

30.00

Year ending December 31, 2014
(forecast)[Note] Revision of cash dividend forecast for this period : Yes
3.Consolidated financial forecast for the fiscal year ending December 31, 2014

(Amounts less than one million yen are truncated)(Percentage represents increases or decreases from the previous year)
Net income
Operating income
Ordinary income
Net income
per share

Net sales
Millions of yen%

Millions of yen%

677,200

3.0

22,800

34.0

Full year[Note] Revision of forecast for this period : Yes-1-

Millions of yen%

23,900 31.2%

Yen

13,500 32.8

104.10Millions of yen

* 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 :NoneYes(3) Changes in accounting policies and accounting estimates, retrospective restatement( i ) Changes in accounting policies based on revisions of accounting standard :None( 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)
As of June 30, 2014 :

151,079,972

As of December 31, 2013 :151,079,972( ii ) Number of treasury stock at the end of the period
As of June 30, 2014 :

21,402,303

As of December 31, 2013 :

21,400,070( iii ) Average number of shares
As of June 30, 2014 :

129,678,657

As of June 30, 2013 :133,086,106

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, 2013

As of June 30, 2014

AssetsCurrent assets
Cash and deposits

20,082

17,640Notes and accounts receivable-trade132,696

95,355

Short-term investment securities

82,20095,800

Merchandise and finished goods

26,841

26,177578

685Work in process
Raw materials and supplies

814

786

Deferred tax assets

5,088

5,127

Short-term loans receivable

50,00050,044

Other

6,823

7,233

Allowance for doubtful accounts

(188)

(115)

324,938

298,734

49,12648,206

Total current assets
Noncurrent assets
Property, plant and equipment
Buildings and structures, net
Machinery, equipment and vehicles, net

917

4,510

4,574

Rental assets, net

9,340

10,041

Land

36,01236,503Tools, furniture and fixtures, net

Lease assets, net
Total property, plant and equipment

685

675

99,684

100,017

Intangible assets
Goodwill

447

383

Software12,006

10,181

Lease assets

93

144

Right of using facilities

316

317

Other

29

24

12,894

11,052

5,303

5,548

Total intangible assets
Investments and other assets
Investment securities
Long-term loans receivable

111

Deferred tax assets

16,084

16,299

Guarantee deposits

5,571

5,347

Other

2,981

3,060

Allowance for doubtful accounts

(393)

(431)

Total investments and other assets

29,55929,826142,137

140,896

467,076

439,631

Total noncurrent assets
Total assets-3-Consolidated Quarterly Balance Sheets(Amounts less than one million yen are truncated)
As of December 31, 2013

As of June 30, 2014

Liabilities
Current liabilities
Notes and accounts payable-trade108,498

78,227

Lease obligations

446

442

Accrued expenses

24,976

17,234

Income taxes payable2,996

5,708

Accrued consumption taxes

2,965

3,529

Provision for bonuses

3,506

3,863

Provision for directors' bonuses

65

25

Provision for product warranties

654

654

Provision for loss on order received

84

25

Other

20,71921,587

Total current liabilities

164,914131,298

Noncurrent liabilities
Long-term loans payable

73

Lease obligations

454

500

Deferred tax liabilities

579

592

Deferred tax liabilities for land revaluation

31

31

38,23337,994933

1,000

Provision for retirement benefits
Accrued long service rewards for employees-

Other

4,780

4,761

Total noncurrent liabilities

45,08644,880210,000

176,178

Capital stock

73,30373,303

Capital surplus

82,81982,819Retained earnings

131,331

137,627

Total liabilities
Net assets
Shareholders' equity

Treasury stock(31,896)(31,900)

Total shareholders' equity

255,557

261,850

Accumulated other comprehensive income
Valuation difference on available-for-sale securities

1,138

Deferred gains or losses on hedges

1,268
-

Foreign currency translation adjustment
Total accumulated other comprehensive income
Minority interests
Total net assets
Total liabilities and net assets-4-(0)

9847

1,236

1,316

281

286

257,075

263,453

467,076

439,631

Consolidated Quarterly Statements of Income(Amounts less than one million yen are truncated)
Six months of FY2013(from January 1, 2013
to June 30, 2013)

Six months of FY2014(from January 1, 2014
to June 30, 2014)

Net sales

309,432

328,355

Cost of sales

204,516

213,641

Gross profit

104,916

114,713

Selling, general and administrative expenses

100,849

102,201

4,066

12,511129132

Operating income
Non-operating income
Interest incomeDividends income

7071

Insurance income

587

584

Other

310

309

1,097

1,097

Total non-operating income
Non-operating expenses
Interest expenses

16

Share of loss of entities accounted for using equity method18-1Foreign exchange losses

77

1

Other

202

136

Total non-operating expenses

296

157

4,867

13,45233

Ordinary income
Extraordinary income
Gain on sales of non-current assets
Gain on bargain purchase-Gain on sales of investment securities

12115

01112017

Loss on sales and retirement of non-current assets

322

109

Special extra retirement payments

597-

Office transfer expenses

137-

Other
Total extraordinary income
Extraordinary losses

Other

27

90

1,084

199

Income before income taxes and minority interests

3,903

13,269

Income taxes

1,914

5,400

Income before minority interests

1,988

7,868

Total extraordinary losses

Minority interests in income
Net income

15

17

1,973

7,851

※ To reflect this change in the presentation method, the Company has amended classification of its results for the previous fiscal year.
As a result, 1,712 million yen, which was included in cost of sales in the Consolidated Statements of Income for the previous year, is now
included in selling, general and administrative expenses.

-5-Consolidated Quarterly Statements of Comprehensive Income(Amounts less than one million yen are truncated)
Six months of FY2013(from January 1, 2013
to June 30, 2013)
Income before minority interests

Six months of FY2014(from January 1, 2014
to June 30, 2014)

1,988

7,868

Other comprehensive income
Valuation difference on available-for-sale-securities

766

Deferred gains or losses on hedges

130-

Foreign currency translation adjustment

105

Total other comprehensive income(0)
(48)

872

81

2,861

7,950

Comprehensive income attributable to owners of the parent

2,835

7,930

Comprehensive income attributable to minority interests

25

19

Comprehensive income
Comprehensive income attributable to-6-Consolidated Quarterly Statements of Cash Flows(Amounts less than one million yen are truncated)
Six months of FY2013(from January 1, 2013
to June 30, 2013)

Six months of FY2014(from January 1, 2014
to June 30, 2014)

Cash flows from operating activities
Income before income taxes and minority interests

3,903

13,269Depreciation8,5908,587

Amortization of goodwill

23

Gain on bargain purchase

56
-(12)

Increase (decrease) in allowance for doubtful accounts

(113)

(37)

Increase (decrease) in provision for retirement benefits

(250)

(292)

(1,046)-Increase (decrease) in provision for directors' retirement benefits

(199)

(203)

Interest expenses

Interest and dividends income

1618

Loss (gain) on sales and retirement of property, plant and equipment

286

81

21,17337,963

Decrease (increase) in notes and accounts receivable-trade
Decrease (increase) in inventories
Increase (decrease) in notes and accounts payable-trade

2,069

520

(17,101)(30,365)

Other, net(1,614)(5,422)

Subtotal

15,73824,163

Interest and dividends income received

206

203

Interest expenses paid

(16)

(18)

Income taxes paid

(5,082)(2,884)

Net cash provided by (used in) operating activities

10,845

21,464

Cash flows from investing activities
Proceeds from sales of securities
Purchase of property, plant and equipment
Proceeds from sales of property, plant and equipment
Purchase of intangible assets

10-(8,960)(5,419)57

9(1,353)(1,400)Purchase of investment securities

(94)

(97)

Proceeds from sales of investment securities

699

4

Purchase of shares of subsidiaries

-

(939)

Proceeds from sales of shares of subsidiaries and associates-

17

Purchase of shares of subsidiaries resulting in change in scope of consolidation-(555)Net decrease (increase) in short-term loans receivable

1

(29)

Net decrease (increase) in time deposits

34

100

Other, net
Net cash provided by (used in) investing activities(33)

16(9,638)(8,293)

(355)

(269)

(1)

(3)

Net cash provided by (used in) financing activities
Repayments of finance lease obligations
Purchase of treasury shares(1,866)(1,556)

Cash dividends paid to minority shareholders

Cash dividends paid

(9)

(12)

Other, net

0(70)(2,232)(1,912)

Net cash provided by (used in) financing activities
Effect of exchange rate change on cash and cash equivalents
Net increase (decrease) in cash and cash equivalents

0(0)(1,024)

11,258Cash and cash equivalents at beginning of period

108,259

102,182

Cash and cash equivalents at end of period

107,235

113,440-7-Consolidated Quarterly Segment Information
I. Six months of FY2013 (from January 1, 2013 to June 30, 2013)
Information on net sales and income (loss) by reportable segment.
BusinessSolutions(Amounts less than one million yen are truncated)

IT
Solutions

Imaging
System55,527

77,764

Industrial /Medical

Other

Total

Adjustment Consolidated

Net sales
Sales - external customers

163,669-

Sales - intersegment
Total
Operating income (loss)

14,443

12,437-33--

309,432-

14,443(14,443)

309,432-

163,669

69,971

77,764

12,43733

323,876(14,443)

309,4323,397

161,484(1,000)

168

4,066

-

4,066

[Note] "Other" includes businesses, such as shared service businesses, which are not included in other reportable segments.
II. Six months of FY2014 (from January 1, 2014 to June 30, 2014)
Information on net sales and income (loss) by reportable segment.
BusinessSolutions(Amounts less than one million yen are truncated)

IT
Solutions

Imaging
SystemIndustrial /Medical60,99083,096

14,414

Other

Total

Adjustment Consolidated

328,355-Net sales
Sales - external customers

169,826-

Sales - intersegment
Total
Operating income (loss)

18,664-27--

328,355

18,664(18,664)

169,826

79,654

83,096

14,41427

347,019(18,664)

328,355

-

5,235

2,129

5,415

(495)

226

12,511-

12,511[Note] "Other" includes businesses, such as shared service businesses, which are not included in other reportable segments.
[Note] Starting from FY2014, the segment name of the Industrial Equipment was changed to Industrial / Medical. The change in the segment
name entails no changes in the amounts presented.

-8-