##### Table of Contents



o
    
    REGISTRATION STATEMENT PURSUANT TOSECTION 12(b)OR (g) OF THE SECURITIES EXCHANGE ACT OF 1934ORþ
    
    ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d)OF THE SECURITIES EXCHANGE ACT OF 1934
 For the fiscal year
          ended December 31, 2009
 ORo
    
    TRANSITION REPORT PURSUANT TO SECTION 13OR 15(d)OF THE SECURITIES EXCHANGE ACT OF 1934For the transition period from  toORo
    
    SHELL COMPANY REPORT PURSUANT TO SECTION 13OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934Date
of event requiring this shell company report
 
  
     JAPAN
 
  
   Title of each class
    
    Name of each exchange on which registered(1) Common Stock (the shares)
    
    New York Stock Exchange*(2) American Depositary Shares
(ADSs), each of which
represents one share
    
    New York Stock Exchange
  
 
 
   
  þ o
  o þ
  þ o
  þ o
  þ o o
  þ  o  o
  o o
  o þ




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##### 



Page numberExplanatory
Note
    
    
    1Item 18. Financial Statements
    
    
    62Report of Independent Registered Public Accounting Firm
    
    
    63Consolidated Balance Sheets
    
    
    65Consolidated Statements of Income
    
    
    66Consolidated Statements of Equity
    
    
    67Consolidated Statements of Cash Flows
    
    
    69Notes to Consolidated Financial Statements
    
    
    70Schedule II  Valuation and Qualifying Accounts
    
    
    106Item 19. Exhibits
    
    
    107SIGNATURES
    
    
    108EXHIBIT
INDEX
    
    
    109
  i




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Explanatory Note
   1




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Item 18. Financial Statements
 Consolidated financial statements of Canon Inc. and Subsidiaries:
    
    Page numberReports of Ernst & Young ShinNihon LLC, Independent Registered Public Accounting Firm
    
    
    63Consolidated Balance Sheets as of December 31, 2009 and 2008
    
    
    65Consolidated Statements of Income for the years ended December 31, 2009, 2008 and 2007
    
    
    66Consolidated Statements of Equity for the years ended December 31, 2009, 2008 and 2007
    
    
    67Consolidated Statements of Cash Flows for the years ended December 31, 2009, 2008 and 2007
    
    
    69Notes to Consolidated Financial Statements
    
    
    70Schedule:Schedule II  Valuation and Qualifying Accounts for the years ended December 31, 2009, 2008 and 2007
    
    
    106
  62




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December 312009
    
    
    2008(As adjusted)
 (Note 1)(Millions of yen)AssetsCurrent assets:Cash and cash equivalents (Note 1)
    
    ¥
    795,034
    
    
    ¥
    679,196Short-term investments (Note 2)
    
    
    19,089
    
    
    
    7,651Trade receivables, net (Note 3)
    
    
    556,572
    
    
    
    595,422Inventories (Note 4)
    
    
    373,241
    
    
    
    506,919Prepaid expenses and other current assets (Notes 6 and 11)
    
    
    273,843
    
    
    
    275,660Total current assets
    
    
    2,017,779
    
    
    
    2,064,848Noncurrent receivables (Note 18)
    
    
    14,936
    
    
    
    14,752Investments (Note 2)
    
    
    114,066
    
    
    
    88,825Property, plant and equipment, net (Notes 5 and 6)
    
    
    1,269,785
    
    
    
    1,357,186Intangible assets, net (Note 7 )
    
    
    117,396
    
    
    
    119,140Other assets (Notes 6, 7, 10 and 11)
    
    
    313,595
    
    
    
    325,183Total assets
    
    ¥
    3,847,557
    
    
    ¥
    3,969,934Liabilities and equityCurrent liabilities:Short-term loans and current portion of long-term debt (Note 8)
    
    ¥
    4,869
    
    
    ¥
    5,540Trade payables (Note 9)
    
    
    339,113
    
    
    
    406,746Accrued income taxes (Note 11)
    
    
    50,105
    
    
    
    69,961Accrued expenses (Notes 10 and 18)
    
    
    274,300
    
    
    
    277,117Other current liabilities (Notes 5 and 11)
    
    
    115,303
    
    
    
    184,636Total current liabilities
    
    
    783,690
    
    
    
    944,000Long-term debt, excluding current installments (Note 8)
    
    
    4,912
    
    
    
    8,423Accrued pension and severance cost (Note 10)
    
    
    115,904
    
    
    
    110,784Other noncurrent liabilities (Note 11)
    
    
    63,651
    
    
    
    55,745Total liabilities
    
    
    968,157
    
    
    
    1,118,952Commitments and contingent liabilities (Note 18)Equity:Canon Inc. stockholders equity:Common stockAuthorized 3,000,000,000 shares;
issued 1,333,763,464 shares in 2009 and in 2008 (Note 12)
    
    
    174,762
    
    
    
    174,762Additional paid-in capital (Note 12)
    
    
    404,293
    
    
    
    403,790Legal reserve (Note 13)
    
    
    54,687
    
    
    
    53,706Retained earnings (Note 13)
    
    
    2,871,437
    
    
    
    2,876,576Accumulated other comprehensive income (loss) (Note 14)
    
    
    (260,818
    )
    
    
    (292,820
    )Treasury stock, at cost; 99,288,001 shares in 2009 and 99,275,245 shares in 2008
    
    
    (556,252
    )
    
    
    (556,222
    )Total Canon Inc. stockholders equity
    
    
    2,688,109
    
    
    
    2,659,792Noncontrolling interests
    
    
    191,291
    
    
    
    191,190Total equity
    
    
    2,879,400
    
    
    
    2,850,982Total liabilities and equity
    
    ¥
    3,847,557
    
    
    ¥
    3,969,934
 See accompanying Notes to Consolidated Financial Statements.
 65




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Years ended December 312009
    
    
    2008
    
    

2007(As adjusted) (Note 1)(Millions of yen)Net sales
    
    ¥
    3,209,201
    
    
    ¥
    4,094,161
    
    
    ¥
    4,481,346Cost of sales (Notes 5, 7, 10 and 18)
    
    
    1,781,808
    
    
    
    2,156,153
    
    
    
    2,234,365Gross profit
    
    
    1,427,393
    
    
    
    1,938,008
    
    
    
    2,246,981Operating expenses
(Notes 1, 5, 7, 10, 15 and 18):Selling, general and administrative expenses
    
    
    905,738
    
    
    
    1,067,909
    
    
    
    1,122,047Research and development expenses
    
    
    304,600
    
    
    
    374,025
    
    
    
    368,2611,210,338
    
    
    
    1,441,934
    
    
    
    1,490,308Operating profit
    
    
    217,055
    
    
    
    496,074
    
    
    
    756,673Other income (deductions):Interest and dividend income
    
    
    5,202
    
    
    
    19,442
    
    
    
    32,819Interest expense
    
    
    (336
    )
    
    
    (837
    )
    
    
    (1,471
    )Other, net (Notes 1, 2 and 17)
    
    
    (2,566
    )
    
    
    (33,532
    )
    
    
    (19,633
    )2,300
    
    
    
    (14,927
    )
    
    
    11,715Income before income taxes
    
    
    219,355
    
    
    
    481,147
    
    
    
    768,388Income taxes (Note 11)
    
    
    84,122
    
    
    
    160,788
    
    
    
    264,258Consolidated net income
    
    
    135,233
    
    
    
    320,359
    
    
    
    504,130Less: Net income attributable to noncontrolling interests
    
    
    3,586
    
    
    
    11,211
    
    
    
    15,798Net income attributable to Canon Inc.
    
    ¥
    131,647
    
    
    ¥
    309,148
    
    
    ¥
    488,332(Yen)Net income attributable to Canon Inc. stockholders per share (Note 16):Basic
    
    ¥
    106.64
    
    
    ¥
    246.21
    
    
    ¥
    377.59Diluted
    
    
    106.64
    
    
    
    246.20
    
    
    
    377.53Cash dividends per share
    
    
    110.00
    
    
    
    110.00
    
    
    
    110.00
 See accompanying Notes to Consolidated Financial Statements.
 66




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Accumulated
    
    
    
    
    
    
    TotalAdditional
    
    
    
    
    
    
    
    
    
    
    other
    
    
    
    
    
    
    Canon Inc.
    
    
    Non-Common
    
    
    paid-in
    
    
    Legal
    
    
    Retained
    
    
    comprehensive
    
    
    Treasury
    
    
    stockholders
    
    
    controlling
    
    
    Totalstock
    
    
    capital
    
    
    reserve
    
    
    earnings
    
    
    income (loss)
    
    
    stock
    
    
    equity
    
    
    interests
    
    
    equity(Millions of yen)Balance at December 31, 2006
    
    ¥
    174,603
    
    
    ¥
    403,510
    
    
    ¥
    43,600
    
    
    ¥
    2,368,047
    
    
    ¥
    2,718
    
    
    ¥
    (5,872
    )
    
    ¥
    2,986,606
    
    
    ¥
    216,801
    
    
    ¥
    3,203,407Cumulative effect of a change in
accounting principle  adoption
of accounting guidance for
sabbatical leave and other
similar benefits, net of tax
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (2,204
    )
    
    
    
    
    
    
    
    
    
    
    (2,204
    )
    
    
    
    
    
    
    (2,204
    )Conversion of convertible debt
    
    
    95
    
    
    
    95
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    190
    
    
    
    
    
    
    
    190Equity transactions with
noncontrolling interests and
other
    
    
    
    
    
    
    (617
    )
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (617
    )
    
    
    (12,185
    )
    
    
    (12,802
    )Dividends paid to Canon Inc.
stockholders
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (131,612
    )
    
    
    
    
    
    
    
    
    
    
    (131,612
    )
    
    
    
    
    
    
    (131,612
    )Dividends paid to
noncontrolling interests
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (4,612
    )
    
    
    (4,612
    )Transfer to legal reserve
    
    
    
    
    
    
    
    
    
    
    2,417
    
    
    
    (2,417
    )
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    Comprehensive income:Net income
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    488,332
    
    
    
    
    
    
    
    
    
    
    
    488,332
    
    
    
    15,798
    
    
    
    504,130Other comprehensive income
(loss), net of tax (Note 14):Foreign currency translation
adjustments
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (62
    )
    
    
    
    
    
    
    (62
    )
    
    
    (26
    )
    
    
    (88
    )Net unrealized gains and
losses on securities
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (1,778
    )
    
    
    
    
    
    
    (1,778
    )
    
    
    (577
    )
    
    
    (2,355
    )Net gains and losses on
derivative instruments
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    814
    
    
    
    
    
    
    
    814
    
    
    
    7
    
    
    
    821Pension liability adjustments
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    32,978
    
    
    
    
    
    
    
    32,978
    
    
    
    7,664
    
    
    
    40,642Total comprehensive income
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    520,284
    
    
    
    22,866
    
    
    
    543,150Repurchase of treasury stock, net
    
    
    
    
    
    
    3
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (450,314
    )
    
    
    (450,311
    )
    
    
    
    
    
    
    (450,311
    )Balance at December 31, 2007
    
    
    174,698
    
    
    
    402,991
    
    
    
    46,017
    
    
    
    2,720,146
    
    
    
    34,670
    
    
    
    (456,186
    )
    
    
    2,922,336
    
    
    
    222,870
    
    
    
    3,145,206Conversion of convertible debt
    
    
    64
    
    
    
    63
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    127
    
    
    
    
    
    
    
    127Equity transactions with
noncontrolling interests and
other
    
    
    
    
    
    
    761
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    761
    
    
    
    (26,218
    )
    
    
    (25,457
    )Dividends paid to Canon Inc.
stockholders
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (145,024
    )
    
    
    
    
    
    
    
    
    
    
    (145,024
    )
    
    
    
    
    
    
    (145,024
    )Dividends paid to noncontrolling
interests
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (5,123
    )
    
    
    (5,123
    )Transfer to legal reserve
    
    
    
    
    
    
    
    
    
    
    7,689
    
    
    
    (7,689
    )
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    Comprehensive income (loss):Net income
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    309,148
    
    
    
    
    
    
    
    
    
    
    
    309,148
    
    
    
    11,211
    
    
    
    320,359Other comprehensive income
(loss), net of tax (Note 14):Foreign currency translation
adjustments
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (258,764
    )
    
    
    
    
    
    
    (258,764
    )
    
    
    (1,911
    )
    
    
    (260,675
    )Net unrealized gains and
losses on securities
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (5,152
    )
    
    
    
    
    
    
    (5,152
    )
    
    
    (690
    )
    
    
    (5,842
    )Net gains and losses on
derivative instruments
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    2,342
    
    
    
    
    
    
    
    2,342
    
    
    
    
    
    
    
    2,342Pension liability adjustments
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (65,916
    )
    
    
    
    
    
    
    (65,916
    )
    
    
    (8,949
    )
    
    
    (74,865
    )Total comprehensive income (loss)
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (18,342
    )
    
    
    (339
    )
    
    
    (18,681
    )Repurchase of treasury stock, net
    
    
    
    
    
    
    (25
    )
    
    
    
    
    
    
    (5
    )
    
    
    
    
    
    
    (100,036
    )
    
    
    (100,066
    )
    
    
    
    
    
    
    (100,066
    )Balance at December 31, 2008
    
    ¥
    174,762
    
    
    ¥
    403,790
    
    
    ¥
    53,706
    
    
    ¥
    2,876,576
    
    
    ¥
    (292,820
    )
    
    ¥
    (556,222
    )
    
    ¥
    2,659,792
    
    
    ¥
    191,190
    
    
    ¥
    2,850,982
 67




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Accumulated
    
    
    
    
    
    
    TotalAdditional
    
    
    
    
    
    
    
    
    
    
    other
    
    
    
    
    
    
    Canon Inc.
    
    
    Non-Common
    
    
    paid-in
    
    
    Legal
    
    
    Retained
    
    
    comprehensive
    
    
    Treasury
    
    
    stockholders
    
    
    controlling
    
    
    Totalstock
    
    
    capital
    
    
    reserve
    
    
    earnings
    
    

income (loss)
    
    
    stock
    
    
    equity
    
    
    interests
    
    
    equity(Millions of yen)Balance at December 31, 2008
    
    ¥
    174,762
    
    
    ¥
    403,790
    
    
    ¥
    53,706
    
    
    ¥
    2,876,576
    
    
    ¥
    (292,820
    )
    
    ¥
    (556,222
    )
    
    ¥
    2,659,792
    
    
    ¥
    191,190
    
    
    ¥
    2,850,982Equity transactions with
noncontrolling interests and
other
    
    
    
    
    
    
    503
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    503
    
    
    
    (1,376
    )
    
    
    (873
    )Dividends paid to Canon Inc.
stockholders
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (135,793
    )
    
    
    
    
    
    
    
    
    
    
    (135,793
    )
    
    
    
    
    
    
    (135,793
    )Dividends paid to noncontrolling
interests
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (3,326
    )
    
    
    (3,326
    )Transfer to legal reserve
    
    
    
    
    
    
    
    
    
    
    981
    
    
    
    (981
    )
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    Comprehensive income:Net income
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    131,647
    
    
    
    
    
    
    
    
    
    
    
    131,647
    
    
    
    3,586
    
    
    
    135,233Other comprehensive income
(loss), net of tax (Note 14):Foreign currency translation
adjustments
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    33,340
    
    
    
    
    
    
    
    33,340
    
    
    
    30
    
    
    
    33,370Net unrealized gains and
losses on securities
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    2,150
    
    
    
    
    
    
    
    2,150
    
    
    
    67
    
    
    
    2,217Net gains and losses on
derivative instruments
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (1,422
    )
    
    
    
    
    
    
    (1,422
    )
    
    
    (1
    )
    
    
    (1,423
    )Pension liability adjustments
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (2,066
    )
    
    
    
    
    
    
    (2,066
    )
    
    
    1,121
    
    
    
    (945
    )Total comprehensive income
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    163,649
    
    
    
    4,803
    
    
    
    168,452Repurchase of treasury stock, net
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (12
    )
    
    
    
    
    
    
    (30
    )
    
    
    (42
    )
    
    
    
    
    
    
    (42
    )Balance at December 31, 2009
    
    ¥
    174,762
    
    
    ¥
    404,293
    
    
    ¥
    54,687
    
    
    ¥
    2,871,437
    
    
    ¥
    (260,818
    )
    
    ¥
    (556,252
    )
    
    ¥
    2,688,109
    
    
    ¥
    191,291
    
    
    ¥
    2,879,400
 See accompanying Notes to Consolidated Financial Statements.
 68




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Years ended December 312009
    
    
    2008
    
    
    2007(As adjusted) (Note 1)(Millions of yen)Cash flows from operating activities:Consolidated net income
    
    ¥
    135,233
    
    
    ¥
    320,359
    
    
    ¥
    504,130Adjustments to reconcile consolidated net income to net cash
provided by operating activities:Depreciation and amortization
    
    
    315,393
    
    
    
    341,337
    
    
    
    341,694Loss on disposal of property, plant and equipment
    
    
    8,215
    
    
    
    11,811
    
    
    
    9,985Impairment
loss of fixed assets(Note 5)
    
    
    15,466
    
    
    
    13,503
    
    
    
    15,908Deferred income taxes
    
    
    20,712
    
    
    
    (32,497
    )
    
    
    (35,021
    )Equity in (earnings) losses of affiliated companies
    
    
    12,649
    
    
    
    20,047
    
    
    
    (5,634
    )(Increase) decrease in trade receivables
    
    
    48,244
    
    
    
    83,521
    
    
    
    (10,722
    )(Increase) decrease in inventories
    
    
    143,580
    
    
    
    49,547
    
    
    
    (26,643
    )Increase (decrease) in trade payables
    
    
    (76,843
    )
    
    
    (36,719
    )
    
    
    21,136Increase (decrease) in accrued income taxes
    
    
    (21,023
    )
    
    
    (77,340
    )
    
    
    14,988Increase (decrease) in accrued expenses
    
    
    (9,827
    )
    
    
    (30,694
    )
    
    
    43,035Increase (decrease) in accrued (prepaid) pension and severance cost
    
    
    4,765
    
    
    
    (12,128
    )
    
    
    (15,387
    )Other, net
    
    
    14,671
    
    
    
    (34,063
    )
    
    
    (18,200
    )Net cash provided by operating activities
    
    
    611,235
    
    
    
    616,684
    
    
    
    839,269Cash flows from investing activities:Purchases of fixed assets (Note 5)
    
    
    (327,983
    )
    
    
    (428,168
    )
    
    
    (474,285
    )Proceeds from sale of fixed assets (Note 5)
    
    
    8,893
    
    
    
    7,453
    
    
    
    9,635Purchases of available-for-sale securities
    
    
    (3,253
    )
    
    
    (7,307
    )
    
    
    (2,281
    )Proceeds from sale and maturity of available-for-sale securities
    
    
    2,460
    
    
    
    4,320
    
    
    
    8,614Proceeds from maturity of held-to-maturity securities
    
    
    
    
    
    
    10,000
    
    
    
    10,000(Increase) decrease in time deposits, net
    
    
    (11,345
    )
    
    
    2,892
    
    
    
    31,681Acquisitions of subsidiaries, net of cash acquired
    
    
    (2,979
    )
    
    
    (5,999
    )
    
    
    (15,675
    )Purchases of other investments
    
    
    (37,981
    )
    
    
    (45,473
    )
    
    
    (2,432
    )Other, net
    
    
    1,944
    
    
    
    (10,198
    )
    
    
    2,258Net cash used in investing activities
    
    
    (370,244
    )
    
    
    (472,480
    )
    
    
    (432,485
    )Cash flows from financing activities:Proceeds from issuance of long-term debt
    
    
    3,361
    
    
    
    6,841
    
    
    
    2,635Repayments of long-term debt
    
    
    (6,282
    )
    
    
    (15,397
    )
    
    
    (13,046
    )Decrease in short-term loans, net
    
    
    (280
    )
    
    
    (2,643
    )
    
    
    (358
    )Dividends paid
    
    
    (135,793
    )
    
    
    (145,024
    )
    
    
    (131,612
    )Repurchases of treasury stock, net
    
    
    (42
    )
    
    
    (100,066
    )
    
    
    (450,311
    )Other, net
    
    
    (3,343
    )
    
    
    (21,276
    )
    
    
    (11,691
    )Net cash used in financing activities
    
    
    (142,379
    )
    
    
    (277,565
    )
    
    
    (604,383
    )Effect of exchange rate changes on cash and cash equivalents
    
    
    17,226
    
    
    
    (131,906
    )
    
    
    (13,564
    )Net change in cash and cash equivalents
    
    
    115,838
    
    
    
    (265,267
    )
    
    
    (211,163
    )Cash and cash equivalents at beginning of year
    
    
    679,196
    
    
    
    944,463
    
    
    
    1,155,626Cash and cash equivalents at end of year
    
    ¥
    795,034
    
    
    ¥
    679,196
    
    
    ¥
    944,463Supplemental disclosure for cash flow information :Cash paid during the year for:Interest
    
    ¥
    384
    
    
    ¥
    901
    
    
    ¥
    1,476Income taxes
    
    
    82,906
    
    
    
    263,392
    
    
    
    273,888
 See accompanying Notes to Consolidated Financial Statements.
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1.
    
    Basis of Presentation and Significant Accounting Policies
 (a)
    
    Description of BusinessCanon Inc. (the Company) and subsidiaries (collectively Canon) is one of the worlds leading
manufacturers in such fields as office products, consumer products and industry and other
products. Office products consist mainly of network multifunction devices (MFDs), copying
machines, laser printers and large format inkjet printers. Consumer products consist mainly of
digital single-lens reflex (SLR) cameras, compact digital cameras, interchangeable lenses,
digital video camcorders, inkjet multifunction peripherals, single function inkjet printers,
image scanners and broadcasting equipment. Industry and other products consist mainly of
semiconductor production equipment, mirror projection mask aligners for liquid crystal display
(LCD) panels, and medical equipment. Canons consolidated net sales for the years ended
December 31, 2009, 2008 and 2007 were distributed as follows: the Office Business Unit 51%, 55%
and 55%, the Consumer Business Unit 41%, 35% and 36%, the Industry and Others Business Unit 11%,
13% and 12%, and elimination between segments 3%, 3% and 3%, respectively. These percentages were
computed by dividing segment net sales, including intersegment sales, by consolidated net sales,
based on the segment operating results described in Note 21.Sales are made principally under the Canon brand name, almost entirely through sales
subsidiaries. These subsidiaries are responsible for marketing and distribution, and primarily
sell to retail dealers in their geographic area. Approximately 78%, 79% and 79% of consolidated
net sales for the years ended December 31, 2009, 2008 and 2007 were generated outside Japan, with
28%, 28% and 30% in the Americas, 31%, 33% and 33% in Europe, and 19%, 18% and 16% in other
areas, respectively.Canon sells laser printers on an OEM basis to Hewlett-Packard Company; such sales constituted
approximately 20%, 23% and 22% of consolidated net sales for the years ended December 31, 2009,
2008 and 2007, respectively, and are included in the Office Business Unit.Canons manufacturing operations are conducted primarily at 25 plants in Japan and 16 overseas
plants which are located in countries or regions such as the United States, Germany, France,
Taiwan, China, Malaysia, Thailand and Vietnam.(b)
    
    Basis of PresentationThe Company and its domestic subsidiaries maintain their books of account in conformity with
financial accounting standards of Japan. Foreign subsidiaries maintain their books of account in
conformity with financial accounting standards of the countries of their domicile.Certain adjustments and reclassifications have been incorporated in the accompanying
consolidated financial statements to conform with U.S. generally accepted accounting principles
(GAAP). These adjustments were not recorded in the statutory books of account.(c)
    
    Principles of ConsolidationThe consolidated financial statements include the accounts of the Company, its majority owned
subsidiaries and those variable interest entities where the Company or its consolidated
subsidiaries are the primary beneficiaries. All significant intercompany balances and
transactions have been eliminated.(d)
    
    Use of EstimatesThe preparation of the consolidated financial statements in conformity with U.S. GAAP requires
management to make estimates and assumptions that affect the reported amounts of assets and
liabilities and the disclosure of contingent assets and liabilities at the date of the
consolidated financial statements and the reported amounts of revenues and expenses during the
period. Significant estimates and assumptions are reflected in valuation and disclosure of
revenue recognition, allowance for doubtful receivables, valuation of inventories, impairment of
long-lived assets, environmental liabilities, valuation of deferred tax assets, uncertain tax
positions and employee retirement and severance benefit plans. Actual results could differ
materially from those estimates.(e)
    
    Translation of Foreign CurrenciesAssets and liabilities of the Companys subsidiaries located outside Japan with functional
currencies other than Japanese yen are translated into Japanese yen at the rates of exchange
in effect at the balance sheet date. Income and expense items are translated at the average
exchange rates prevailing during the year. Gains and losses resulting from translation of
financial statements are excluded from earnings and are reported in other comprehensive
income (loss).Gains and losses resulting from foreign currency transactions, including foreign exchange
contracts, and translation of assets and liabilities denominated in foreign currencies are
included in other income (deductions) in the consolidated statements of income. Foreign currency
exchange gains and losses was a net gain of ¥1,842 million for the year ended December 31, 2009,
and were net losses of ¥11,212 million and ¥31,943 million for the years ended December 31, 2008
and 2007, respectively.(f)
    
    Cash EquivalentsAll highly liquid investments acquired with original maturities of three months or less are
considered to be cash equivalents. Certain debt securities with original maturities of less
than three months classified as available-for-sale securities of ¥184,856 million and
¥194,030 million at December 31, 2009 and 2008, respectively, are included in cash and cash
equivalents in the consolidated balance sheets. Additionally, certain debt securities with
original maturities of less than three months classified as held-to-maturity securities of
¥999 million and ¥997 million at December 31, 2009 and 2008, respectively, are also
included in cash and cash equivalents. Fair value for these securities approximates their
cost.
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1.
    
    Basis of Presentation and Significant Accounting Policies (continued)(g)
    
    InvestmentsInvestments consist primarily of time deposits with original maturities of more than three months,
debt and marketable equity securities, investments in affiliated companies and non-marketable
equity securities. Canon reports investments with maturities of less than one year as
short-term investments.Canon classifies investments in debt and marketable equity securities as available-for-sale or
held-to-maturity securities. Canon does not hold any trading securities, which are bought and
held primarily for the purpose of sale in the near term.Available-for-sale securities are recorded at fair value. Fair value is determined based on quoted
market prices, projected discounted cash flows or other valuation techniques as appropriate.
Unrealized holding gains and losses, net of the related tax effect, are reported as a separate
component of other comprehensive income (loss) until realized. Held-to-maturity securities are
recorded at amortized cost, adjusted for amortization of premiums and accretion of discounts.Available-for-sale and held-to-maturity securities are regularly reviewed for
other-than-temporary declines in the carrying amount based on criteria that include the length
of time and the extent to which the market value has been less than cost, the financial
condition and near-term prospects of the issuer and Canons intent and ability to retain the
investment for a period of time sufficient to allow for any anticipated recovery in market
value. For debt securities for which the declines are deemed to be other-than-temporary and
there is no intent to sell, impairments are separated into the amount related to credit loss,
which is recognized in earnings, and the amount related to all other factors, which is
recognized in other comprehensive income (loss). For debt securities for which the declines are
deemed to be other-than-temporary and there is an intent to sell, impairments in their entirety
are recognized in earnings. For equity securities for which the declines are deemed to be
other-than-temporary, impairments in their entirety are recognized in earnings. Canon recognizes
an impairment loss to the extent by which the cost basis of the investment exceeds the fair
value of the investment.Realized gains and losses are determined on the average cost method and reflected in earnings.Investments in affiliated companies over which Canon has the ability to exercise significant
influence, but does not hold a controlling financial interest, are accounted for by the equity
method.Non-marketable equity securities in companies over which Canon does not have the ability to
exercise significant influence are stated at cost and reviewed periodically for impairment.(h)
    
    Allowance for Doubtful ReceivablesAllowance for doubtful trade and finance receivables is maintained for all customers based on a
combination of factors, including aging analysis, macroeconomic conditions, significant one-time
events, and historical experience. An additional reserve for individual accounts is recorded when
Canon becomes aware of a customers inability to meet its financial obligations, such as in the
case of bankruptcy filings. If circumstances related to customers change, estimates of the
recoverability of receivables would be further adjusted. When all collection options are exhausted
including legal recourse, the accounts or portions thereof are deemed to be uncollectable and
charged against the allowance.(i)
    
    InventoriesInventories are stated at the lower of cost or market value. Cost is determined by the average
method for domestic inventories and principally by the first-in, first-out method for overseas
inventories.(j)
    
    Impairment of Long-Lived AssetsLong-lived assets, such as property, plant and equipment, and acquired intangibles subject to
amortization, are reviewed for impairment whenever events or changes in circumstances indicate
that the carrying amount of an asset may not be recoverable. Recoverability of assets to be held
and used is measured by a comparison of the carrying amount of the asset and the estimated
undiscounted future cash flows expected to be generated by the asset. If the carrying amount of
the asset exceeds its estimated undiscounted future cash flows, an impairment charge is
recognized in the amount by which the carrying amount of the asset exceeds the fair value of the
asset. Assets to be disposed of by sale are reported at the lower of the carrying amount or fair
value less costs to sell, and are no longer depreciated.(k)
    
    Property, Plant and EquipmentProperty, plant and equipment are stated at cost. Depreciation is calculated principally by the
declining-balance method, except for certain assets which are depreciated by the straight-line
method over the estimated useful lives of the assets.The depreciation period ranges from 3 years to 60 years for buildings and 1 year to 20 years for
machinery and equipment.Assets leased to others under operating leases are stated at cost and depreciated to the
estimated residual value of the assets by the straight-line method over the period ranging from
2 years to 5 years.
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1.
    
    Basis of Presentation and Significant Accounting Policies (continued)(l)
    
    Goodwill and Other Intangible AssetsGoodwill and other intangible assets with indefinite useful lives are not amortized, but are
instead tested for impairment annually in the fourth quarter of each year, or more frequently if
indicators of potential impairment exist. Canon performs its impairment test of goodwill at the
reporting unit level, which is one level below the operating segment level. All goodwill is
assigned to the reporting unit or units that benefit from the synergies arising from each
business combination. Intangible assets with finite useful lives, consisting primarily of
software and license fees, are amortized using the straight-line method over the estimated useful
lives, which range from 3 years to 5 years for software and 5 years to 10 years for license fees.
Certain costs incurred in connection with developing or obtaining internal use software are
capitalized. These costs consist primarily of payments made to third parties and the salaries of
employees working on such software development. Costs incurred in connection with developing
internal use software are capitalized at the application development stage. In addition, Canon
develops or obtains certain software to be sold where related costs are capitalized after
establishment of technological feasibility.(m)
    
    Environmental LiabilitiesLiabilities for environmental remediation and other environmental costs are accrued when
environmental assessments or remedial efforts are probable and the costs can be reasonably
estimated. Such liabilities are adjusted as further information develops or circumstances change.
Costs of future obligations are not discounted to their present values.(n)
    
    Income TaxesDeferred tax assets and liabilities are recognized for the estimated future tax consequences
attributable to differences between the financial statement carrying amounts of existing assets
and liabilities and their respective tax bases and operating loss and tax credit carryforwards.
Deferred tax assets and liabilities are measured using enacted tax rates expected to apply to
taxable income in the years in which those temporary differences are expected to be recovered or
settled. The effect on deferred tax assets and liabilities of a change in tax rates is recognized
in income in the period that includes the enactment date. Canon records a valuation allowance to
reduce the deferred tax assets to the amount that is more likely than not realizable.Canon recognizes the financial statement effects of tax positions when it is more likely than not,
based on the technical merits, that the tax positions will be sustained upon examination by
the tax authorities. Benefits from tax positions that meet the more-likely-than-not
recognition threshold are measured at the largest amount of benefit that is greater than 50%
likely of being realized upon settlement. Interest and penalties accrued related to
unrecognized tax benefits are included in income taxes in the consolidated statements of
income.(o)
    
    Stock-Based CompensationCanon measures stock-based compensation cost at the grant date, based on the fair value of the
award, and recognizes the cost on a straight-line basis over the requisite service period,
which is the vesting period.(p)
    
    Net Income Attributable to Canon Inc. Stockholders per ShareBasic net income attributable to Canon Inc. stockholders per share is computed by dividing net
income attributable to Canon Inc. by the weighted-average number of common shares outstanding
during each year. Diluted net income attributable to Canon Inc. stockholders per share includes the
effect from potential issuances of common stock based on the assumptions that all convertible
debentures were converted into common stock and all stock options were exercised.(q)
    
    Revenue RecognitionCanon generates revenue principally through the sale of office and
consumer products, equipment, supplies, and related services under
separate contractual arrangements. Canon recognizes revenue when
persuasive evidence of an arrangement exists, delivery has occurred
and title and risk of loss have been transferred to the customer or
services have been rendered, the sales price is fixed or determinable,
and collectibility is probable.Revenue from sales of office products, such as office network digital MFDs and
laser printers, and consumer products, such as digital cameras and inkjet multifunction
peripherals, is recognized upon shipment or delivery, depending upon when title and risk of loss
transfer to the customer.Revenue from sales of optical equipment, such as steppers and aligners that are sold with
customer acceptance provisions related to their functionality, is recognized when the equipment
is installed at the customer site and the specific criteria of the equipment functionality are
successfully tested and demonstrated by Canon. Service revenue is derived primarily from
separately priced product maintenance contracts on equipment sold to customers and is measured
at the stated amount of the contract and recognized as services are provided.Canon also offers separately priced product maintenance contracts for most office products, for
which the customer typically pays a stated base service fee plus a variable amount based on
usage. Revenue from these service maintenance contracts is measured at the stated amount of the
contract and recognized as services are provided and variable amounts are earned.Revenue from the sale of equipment under sales-type leases is recognized at the inception of the
lease. Income on sales-type leases and direct-financing leases is recognized over the life of
each respective lease using the interest method. Leases not qualifying as sales-type leases or
direct-financing leases are accounted for as operating leases and related revenue is recognized
ratably over the lease term. When equipment leases are bundled with product maintenance
contracts, revenue is first allocated considering the relative fair value of the lease and
non-lease deliverables based upon the estimated relative fair values of each element. Lease
deliverables generally include equipment, financing and executory costs, while non-lease
deliverables generally consist of product maintenance contracts and
supplies.
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1.
    
    Basis of Presentation and Significant Accounting Policies (continued)(q)
    
    Revenue Recognition (continued)For all other arrangements with multiple elements, Canon allocates revenue to each element based
on its relative fair value if such element meets the criteria for treatment as a separate unit
of accounting. Otherwise, revenue is deferred until the undelivered elements are fulfilled and
accounted for as a single unit of accounting.Canon records estimated reductions to sales at the time of sale for sales incentive programs
including product discounts, customer promotions and volume-based rebates. Estimated reductions
in sales are based upon historical trends and other known factors at the time of sale. In
addition, Canon provides price protection to certain resellers of its products, and records
reductions to sales for the estimated impact of price protection obligations when announced.Estimated product warranty costs are recorded at the time revenue is recognized and are included
in selling, general and administrative expenses in the consolidated statements of income.
Estimates for accrued product warranty costs are based on historical experience, and are
affected by ongoing product failure rates, specific product class failures outside of the
baseline experience, material usage and service delivery costs incurred in correcting a product
failure.Taxes collected from customers and remitted to governmental authorities are excluded from
revenues in the consolidated statements of income.(r)
    
    Research and Development CostsResearch and development costs are expensed as incurred.(s)
    
    Advertising CostsAdvertising costs are expensed as incurred. Advertising expenses were
¥78,009 million, ¥112,810 million and ¥132,429 million for the years
ended December 31, 2009, 2008 and 2007, respectively.(t)
    
    Shipping and Handling CostsShipping and handling costs totaled ¥45,966 million, ¥62,128 million
and ¥63,708 million for the years ended December 31, 2009, 2008 and
2007, respectively, and are included in selling, general and
administrative expenses in the consolidated statements of income.(u)
    
    Derivative Financial InstrumentsAll derivatives are recognized at fair value and are included in
prepaid expenses and other current assets, or other current
liabilities in the consolidated balance sheets.Canon uses and designates certain derivatives as a hedge of a forecasted transaction or the
variability of cash flows to be received or paid related to a recognized asset or liability
(cash flow hedge). Canon formally documents all relationships between hedging instruments and
hedged items, as well as its risk-management objective and strategy for undertaking various
hedge transactions. Canon also formally assesses, both at the hedges inception and on an
ongoing basis, whether the derivatives that are used in hedging transactions are highly
effective in offsetting changes in cash flows of hedged items. When it is determined that a
derivative is not highly effective as a hedge or that it has ceased to be a highly effective
hedge, Canon discontinues hedge accounting prospectively. Changes in the fair value of a
derivative that is designated and qualifies as a cash flow hedge are recorded in other
comprehensive income (loss), until earnings are affected by the variability in cash flows of the
hedged item. Gains and losses from hedging ineffectiveness are included in other income
(deductions). Gains and losses related to the components of hedging instruments excluded from
the assessment of hedge effectiveness are included in other income (deductions).Canon also uses certain derivative financial instruments which are not designated as hedges. The
changes in fair values of these derivative financial instruments are immediately recorded in
earnings.Canon classifies cash flows from derivatives as cash flows from operating activities in the
consolidated statements of cash flows.(v)
    
    GuaranteesCanon recognizes, at the inception of a guarantee, a liability for the fair value of the
obligation it has undertaken in issuing guarantees.
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1.
    
    Basis of Presentation and Significant Accounting Policies (continued)(w)
    
    Recently Issued Accounting GuidanceIn June 2009, the Financial Accounting Standards Board (FASB) issued the Accounting Standards
Codification (ASC). The ASC has become the source of authoritative U.S.GAAP. Additionally,
rules and interpretive releases of the U.S. Securities and Exchange Commission (SEC) under
authority of the federal securities laws are also sources of authoritative U.S. GAAP for SEC
registrants. The ASC did not change current U.S GAAP, but was intended to simplify user access
to all authoritative U.S. GAAP by providing all the authoritative literature related to a
particular topic in one place. This Codification is effective for fiscal years and interim
periods ending after September 15, 2009 and was adopted by Canon beginning from the quarter
ended September 30, 2009. This adoption did not have a material impact on Canons consolidated
results of operations and financial condition. However, throughout the notes to the consolidated
financial statements, references that were previously made to various former authoritative U.S.
GAAP pronouncements have been removed.In December 2007, the FASB issued new accounting guidance for business combinations. This
guidance establishes principles and requirements for how an acquirer recognizes and measures in
its financial statements the identifiable assets acquired, the liabilities assumed, any
noncontrolling interest in the acquiree and the goodwill acquired in a business combination.
This guidance also establishes disclosure requirements to enable the evaluation of the nature
and financial effects of the business combination. This guidance is effective for fiscal years
beginning on or after December 15, 2008 and was adopted by Canon for any business combinations
with an acquisition date on or after January 1, 2009. This adoption did not have a material
impact on Canons consolidated results of operations and financial condition.In December 2007, the FASB issued new accounting guidance for noncontrolling interests in
consolidated financial statements. This guidance establishes accounting and reporting guidance
for ownership interests in subsidiaries held by parties other than the parent, the amount of
consolidated net income attributable to the parent and to the noncontrolling interest, changes
in a parents ownership interest, and the valuation of retained noncontrolling equity
investments when a subsidiary is deconsolidated. This guidance also establishes disclosure
requirements that clearly identify and distinguish between the interests of the parent and the
interests of the noncontrolling owners. This guidance is effective for fiscal years beginning on
or after December 15, 2008 on a prospective basis, except for certain presentation and
disclosure requirements, which must be applied retrospectively for all periods presented, and
was adopted by Canon in the first quarter beginning January 1, 2009. Upon the adoption of this
guidance, noncontrolling interests, which were previously referred to as minority interests and
classified between total liabilities and stockholders equity on the consolidated balance
sheets, are now included as a separate component of total equity. In addition, consolidated net
income on the consolidated statements of income now includes the net income (loss) attributable
to noncontrolling interests. These financial statement presentation requirements have been
adopted retrospectively and prior year amounts in the consolidated financial statements have
been reclassified or adjusted to conform to this guidance. This adoption did not have a material
impact on Canons consolidated results of operations and financial condition.In October 2009, the FASB issued new accounting guidance for revenue recognition under
multiple-deliverable arrangements. This guidance modifies the criteria for separating
consideration under multiple-deliverable arrangements and requires allocation of the overall
consideration to each deliverable using the estimated selling price in the absence of
vendor-specific objective evidence or third-party evidence of selling price for deliverables. As
a result, the residual method of allocating arrangement consideration will no longer be
permitted. The guidance also requires additional disclosures about how a vendor allocates
revenue in its arrangements and about the significant judgments made and their impact on revenue
recognition. This guidance is effective for fiscal years beginning on or after June 15, 2010 and
is required to be adopted by Canon no later than the first quarter beginning January 1, 2011
(with early adoption permitted). The provisions are effective prospectively for revenue
arrangements entered into or materially modified after the effective date, or retrospectively
for all prior periods. Canon is currently evaluating the effect that the adoption of this
guidance will have on its consolidated results of operations and financial condition.In October 2009, the FASB issued new accounting guidance for software revenue recognition. This
guidance modifies the scope of the software revenue recognition guidance to exclude from its
requirements non-software components of tangible products and software components of tangible
products that are sold, licensed, or leased with tangible products when the software components
and non-software components of the tangible product function together to deliver the tangible
products essential functionality. This guidance is effective for fiscal years beginning on or
after June 15, 2010 and is required to be adopted by Canon no later than the first quarter
beginning January 1, 2011 (with early adoption permitted) using the same effective date and the
same transition method used to adopt the guidance for revenue recognition under
multiple-deliverable arrangements. Canon is currently evaluating the effect that the adoption of
this guidance will have on its consolidated results of operations and financial condition.(x)
    
    ReclassificationsCertain reclassifications have been made to the prior years consolidated statements of cash
flows to conform to the current year presentation.
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2. Investments
  December 31, 2009Gross
    
    
    Grossunrealized
    
    
    unrealized
    
    
    FairCost
    
    
    holding gains
    
    
    holding losses
    
    
    value(Millions of yen)Current:Government bonds
    
    ¥
    222
    
    
    ¥
    
    
    
    ¥
    
    
    
    ¥
    222Noncurrent:Government bonds
    
    ¥
    225
    
    
    ¥
    
    
    
    ¥
    21
    
    
    ¥
    204Corporate bonds
    
    
    1,397
    
    
    
    27
    
    
    
    55
    
    
    
    1,369Fund trusts
    
    
    2,275
    
    
    
    300
    
    
    
    7
    
    
    
    2,568Equity securities
    
    
    11,932
    
    
    
    7,295
    
    
    
    1,501
    
    
    
    17,726¥
    15,829
    
    
    ¥
    7,622
    
    
    ¥
    1,584
    
    
    ¥
    21,867December 31, 2008Gross 
unrealized
    
    
    Gross 
unrealized
    
    
    FairCost
    
    
    holding gains
    
    
    holding losses
    
    
    value(Millions of yen)Current:Government bonds
    
    ¥
    1
    
    
    ¥
    
    
    
    ¥
    
    
    
    ¥
    1Fund trusts
    
    
    133
    
    
    
    16
    
    
    
    
    
    
    
    149¥
    134
    
    
    ¥
    16
    
    
    ¥
    
    
    
    ¥
    150Noncurrent:Government bonds
    
    ¥
    431
    
    
    ¥
    
    
    
    ¥
    18
    
    
    ¥
    413Corporate bonds
    
    
    1,593
    
    
    
    27
    
    
    
    32
    
    
    
    1,588Fund trusts
    
    
    2,366
    
    
    
    40
    
    
    
    170
    
    
    
    2,236Equity securities
    
    
    10,522
    
    
    
    2,532
    
    
    
    836
    
    
    
    12,218¥
    14,912
    
    
    ¥
    2,599
    
    
    ¥
    1,056
    
    
    ¥
    16,455
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2. Investments (continued)
  Cost
    
    
    Fair value(Millions of yen)Due within one year
    
    ¥
    222
    
    
    ¥
    222Due after one year through
five years
    
    
    3,274
    
    
    
    3,568Due after five years through ten years
    
    
    623
    
    
    
    573¥
    4,119
    
    
    ¥
    4,363
      3. Trade Receivables
  December 312009
    
    
    2008(Millions of yen)Notes
    
    ¥
    13,037
    
    
    ¥
    20,303Accounts
    
    
    554,878
    
    
    
    584,437567,915
    
    
    
    604,740Less allowance for doubtful receivables
    
    
    (11,343
    )
    
    
    (9,318
    )¥
    556,572
    
    
    ¥
    595,422
 76




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##### Table of Contents



4. Inventories
  December 312009
    
    
    2008(Millions of yen)Finished goods
    
    ¥
    228,161
    
    
    ¥
    316,533Work in process
    
    
    129,824
    
    
    
    171,511Raw materials
    
    
    15,256
    
    
    
    18,875¥
    373,241
    
    
    ¥
    506,919
 5. Property, Plant and Equipment
  December 312009
    
    
    2008(Millions of yen)Land
    
    ¥
    258,824
    
    
    ¥
    247,602Buildings
    
    
    1,299,154
    
    
    
    1,268,388Machinery and equipment
    
    
    1,422,076
    
    
    
    1,395,451Construction in progress
    
    
    105,713
    
    
    
    81,3463,085,767
    
    
    
    2,992,787Less accumulated depreciation
    
    
    (1,815,982
    )
    
    
    (1,635,601
    )¥
    1,269,785
    
    
    ¥
    1,357,186
     77




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##### Table of Contents



6. Finance Receivables and Operating Leases
  December 312009
    
    
    2008(Millions of yen)Total minimum lease payments receivable
    
    ¥
    206,267
    
    
    ¥
    198,611Unguaranteed residual values
    
    
    14,630
    
    
    
    16,310Executory costs
    
    
    (1,973
    )
    
    
    (1,729
    )Unearned income
    
    
    (26,994
    )
    
    
    (26,658
    )191,930
    
    
    
    186,534Less allowance for doubtful receivables
    
    
    (9,023
    )
    
    
    (8,268
    )182,907
    
    
    
    178,266Less current portion
    
    
    (65,146
    )
    
    
    (59,608
    )¥
    117,761
    
    
    ¥
    118,658
   Financing leases
    
    
    Operating leases(Millions of yen)Year ending December 31:2010
    
    ¥
    82,058
    
    
    ¥
    4,6852011
    
    
    59,342
    
    
    
    2,3042012
    
    
    38,834
    
    
    
    1,6272013
    
    
    18,580
    
    
    
    8142014
    
    
    6,396
    
    
    
    51Thereafter
    
    
    1,057
    
    
    
    10¥
    206,267
    
    
    ¥
    9,491
 78




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##### Table of Contents



7. Goodwill and Other Intangible Assets
   December 31, 2009
    
    

December
31, 2008Gross
    
    
    
    
    
    
    Grosscarrying
    
    
    Accumulated
    
    
    carrying
    
    
    Accumulatedamount
    
    
    amortization
    
    
    amount
    
    
    amortization(Millions of yen)Software
    
    ¥
    198,276
    
    
    ¥
    114,410
    
    
    ¥
    187,920
    
    
    ¥
    103,535License fees
    
    
    23,889
    
    
    
    13,546
    
    
    
    21,537
    
    
    
    11,104Other
    
    
    30,610
    
    
    
    8,258
    
    
    
    34,341
    
    
    
    10,925¥
    252,775
    
    
    ¥
    136,214
    
    
    ¥
    243,798
    
    
    ¥
    125,564
    Years ended December 312009
    
    

2008(Millions of yen)Balance at beginning of year
    
    ¥
    50,754
    
    
    ¥
    56,783Goodwill acquired during the year
    
    
    4,805
    
    
    
    4,975Translation adjustments and other
    
    
    312
    
    
    
    (11,004
    )Balance at end of year
    
    ¥
    55,871
    
    
    ¥
    50,754
  79




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##### Table of Contents



8. Short-Term Loans and Long-Term Debt
   December 312009
    
    
    2008(Millions of yen)Loans, principally from banks, maturing in
installments through 2017;
 bearing weighted
average interest of 0.30% and 2.93% at
December 31, 2009 and 2008, respectively
    
    ¥
    20
    
    
    ¥
    95Capital lease obligations
    
    
    9,761
    
    
    
    13,6489,781
    
    
    
    13,743Less current portion
    
    
    (4,869
    )
    
    
    (5,320
    )¥
    4,912
    
    
    ¥
    8,423
  (Millions of yen)Year ending December 31:2010
    
    ¥
    4,8692011
    
    
    3,3572012
    
    
    1,0682013
    
    
    3522014
    
    
    98Thereafter
    
    
    37¥
    9,781
  9. Trade Payables
  December 312009
    
    
    2008(Millions of yen)Notes
    
    ¥
    7,608
    
    
    ¥
    14,544Accounts
    
    
    331,505
    
    
    
    392,202¥
    339,113
    
    
    ¥
    406,746
 80




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##### Table of Contents



10. Employee Retirement and Severance Benefits
   Obligations and funded status
  Japanese plans
    
    
    Foreign plansDecember 31
    
    
    December 312009
    
    
    2008
    
    
    2009
    
    
    2008(Millions of yen)Change in benefit obligations:Benefit obligations at beginning of
year
    
    ¥
    521,985
    
    
    ¥
    493,478
    
    
    ¥
    78,468
    
    
    ¥
    113,833Service cost
    
    
    21,759
    
    
    
    20,786
    
    
    
    2,426
    
    
    
    3,141Interest cost
    
    
    12,535
    
    
    
    12,253
    
    
    
    4,251
    
    
    
    4,991Plan participants contributions
    
    
    
    
    
    
    
    
    
    
    1,177
    
    
    
    1,460Amendments
    
    
    (674
    )
    
    
    (204
    )
    
    
    
    
    
    
    (86
    )Actuarial (gain) loss
    
    
    10,822
    
    
    
    10,160
    
    
    
    3,533
    
    
    
    (4,521
    )Benefits paid
    
    
    (15,107
    )
    
    
    (14,488
    )
    
    
    (1,784
    )
    
    
    (2,210
    )Foreign currency exchange rate
changes
    
    
    
    
    
    
    
    
    
    
    6,099
    
    
    
    (38,140
    )Benefit obligations at end of year
    
    
    551,320
    
    
    
    521,985
    
    
    
    94,170
    
    
    
    78,468Change in plan assets:Fair value of plan assets at
beginning of year
    
    
    429,870
    
    
    
    511,450
    
    
    
    62,996
    
    
    
    92,908Actual return on plan assets
    
    
    26,616
    
    
    
    (81,981
    )
    
    
    4,844
    
    
    
    (8,453
    )Employer contributions
    
    
    15,173
    
    
    
    14,716
    
    
    
    3,059
    
    
    
    8,317Plan participants contributions
    
    
    
    
    
    
    
    
    
    
    1,177
    
    
    
    1,460Benefits paid
    
    
    (14,451
    )
    
    
    (14,315
    )
    
    
    (1,784
    )
    
    
    (1,556
    )Foreign currency exchange rate
changes
    
    
    
    
    
    
    
    
    
    
    4,766
    
    
    
    (29,680
    )Fair value of plan assets at end
of year
    
    
    457,208
    
    
    
    429,870
    
    
    
    75,058
    
    
    
    62,996Funded status at end of year
    
    ¥
    (94,112
    )
    
    ¥
    (92,115
    )
    
    ¥
    (19,112
    )
    
    ¥
    (15,472
    )
 81




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##### Table of Contents



10. Employee Retirement and Severance Benefits (continued)
 Obligations and funded status (continued)
  Japanese plans
    
    
    Foreign plansDecember 31
    
    
    December 312009
    
    

2008
    
    
    2009
    
    

2008(Millions of yen)Other assets
    
    ¥
    707
    
    
    ¥
    806
    
    
    ¥
    2,069
    
    
    ¥
    2,461Accrued expenses
    
    
    
    
    
    
    
    
    
    
    (96
    )
    
    
    (70
    )Accrued pension and
severance cost
    
    
    (94,819
    )
    
    
    (92,921
    )
    
    
    (21,085
    )
    
    
    (17,863
    )¥
    (94,112
    )
    
    ¥
    (92,115
    )
    
    ¥
    (19,112
    )
    
    ¥
    (15,472
    )
  Japanese plans
    
    
    Foreign plansDecember 31
    
    
    December 312009
    
    
    2008
    
    
    2009
    
    
    2008(Millions of yen)Actuarial loss
    
    ¥
    237,822
    
    
    ¥
    251,731
    
    
    ¥
    19,411
    
    
    ¥
    15,650Prior service credit
    
    
    (155,928
    )
    
    
    (168,904
    )
    
    
    (670
    )
    
    
    (768
    )Net transition obligation
    
    
    1,444
    
    
    
    2,166
    
    
    
    
    
    
    
    ¥
    83,338
    
    
    ¥
    84,993
    
    
    ¥
    18,741
    
    
    ¥
    14,882
  Japanese plans
    
    
    Foreign plansDecember 31
    
    
    December 312009
    
    
    2008
    
    
    2009
    
    
    2008(Millions of yen)Accumulated benefit obligation
    
    ¥
    522,582
    
    
    ¥
    493,559
    
    
    ¥
    80,361
    
    
    ¥
    71,627
 82




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##### Table of Contents



10. Employee Retirement and Severance Benefits (continued)
 Obligations and funded status (continued)
  Japanese plans
    
    Foreign plansDecember 31
    
    December 312009
    
    2008
    
    2009
    
    2008(Millions of yen)Plans with projected benefit obligations in excess of plan assets:Projected benefit obligations
    
    ¥
    545,466
    
    
    ¥
    516,646
    
    
    ¥
    94,123
    
    
    ¥
    77,083Fair value of plan assets
    
    
    450,647
    
    
    
    423,725
    
    
    
    72,942
    
    
    
    59,150Plans with accumulated benefit obligations in excess of plan
assets:Accumulated benefit obligations
    
    ¥
    509,638
    
    
    ¥
    485,436
    
    
    ¥
    80,314
    
    
    ¥
    69,471Fair value of plan assets
    
    
    442,756
    
    
    
    420,341
    
    
    
    72,942
    
    
    
    59,089
 Components of net periodic benefit cost and other amounts recognized in other comprehensive income
(loss)
  Japanese plans
    
    
    Foreign plansYears ended December 31
    
    
    Years ended December 312009
    
    
    2008
    
    
    2007
    
    
    2009
    
    
    2008
    
    
    2007(Millions of yen)Service cost
    
    ¥
    21,759
    
    
    ¥
    20,786
    
    
    ¥
    20,161
    
    
    ¥
    2,426
    
    
    ¥
    3,141
    
    
    ¥
    4,016Interest cost
    
    
    12,535
    
    
    
    12,253
    
    
    
    11,888
    
    
    
    4,251
    
    
    
    4,991
    
    
    
    4,947Expected return on plan assets
    
    
    (15,808
    )
    
    
    (19,721
    )
    
    
    (21,148
    )
    
    
    (4,211
    )
    
    
    (5,519
    )
    
    
    (5,427
    )Amortization of net transition obligation
    
    
    722
    
    
    
    722
    
    
    
    722
    
    
    
    
    
    
    
    
    
    
    
    Amortization of prior service credit
    
    
    (13,650
    )
    
    
    (13,373
    )
    
    
    (13,479
    )
    
    
    (98
    )
    
    
    (271
    )
    
    
    (86
    )Amortization of actuarial loss
    
    
    13,923
    
    
    
    7,068
    
    
    
    4,868
    
    
    
    1,014
    
    
    
    898
    
    
    
    887¥
    19,481
    
    
    ¥
    7,735
    
    
    ¥
    3,012
    
    
    ¥
    3,382
    
    
    ¥
    3,240
    
    
    ¥
    4,337
 83




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##### Table of Contents



10. Employee Retirement and Severance Benefits (continued)
 Components of net periodic benefit cost and other amounts recognized in other comprehensive income (loss) (continued)
  Japanese plans
    
    
    Foreign plansYears ended December 31
    
    
    Years ended December 312009
    
    
    2008
    
    
    2009
    
    
    2008(Millions of yen)Current year actuarial (gain) loss
    
    ¥
    14
    
    
    ¥
    111,862
    
    
    ¥
    2,900
    
    
    ¥
    9,451Amortization of actuarial loss
    
    
    (13,923
    )
    
    
    (7,068
    )
    
    
    (1,014
    )
    
    
    (898
    )Prior service credit due to amendments
    
    
    (674
    )
    
    
    (204
    )
    
    
    
    
    
    
    (86
    )Amortization of prior service credit
    
    
    13,650
    
    
    
    13,373
    
    
    
    98
    
    
    
    271Amortization of net transition obligation
    
    
    (722
    )
    
    
    (722
    )
    
    
    
    
    
    
    ¥
    (1,655
    )
    
    ¥
    117,241
    
    
    ¥
    1,984
    
    
    ¥
    8,738
  Japanese plans
    
    
    Foreign plans(Millions of yen)Net transition obligation
    
    ¥
    722
    
    
    ¥
    Prior service credit
    
    
    (12,873
    )
    
    
    (117
    )Actuarial loss
    
    
    12,639
    
    
    
    1,245
 Assumptions
  Japanese plans
    
    
    Foreign plansDecember 31
    
    
    December 312009
    
    
    2008
    
    
    2009
    
    
    2008Discount rate
    
    
    2.3
    %
    
    
    2.4
    %
    
    
    5.2
    %
    
    
    5.3
    %Assumed rate of increase in future compensation levels
    
    
    3.0
    %
    
    
    3.0
    %
    
    
    3.5
    %
    
    
    3.1
    %
  Japanese plans
    
    
    Foreign plansYears ended December 31
    
    
    Years ended December 312009
    
    
    2008
    
    
    2007
    
    
    2009
    
    
    2008
    
    
    2007Discount rate
    
    
    2.4
    %
    
    
    2.5
    %
    
    
    2.5
    %
    
    
    5.3
    %
    
    
    5.1
    %
    
    
    4.5
    %Assumed rate of increase in future compensation
levels
    
    
    3.0
    %
    
    
    2.9
    %
    
    
    2.9
    %
    
    
    3.1
    %
    
    
    3.1
    %
    
    
    2.9
    %Expected long-term rate of return on plan assets
    
    
    3.7
    %
    
    
    3.7
    %
    
    
    3.9
    %
    
    
    6.2
    %
    
    
    6.5
    %
    
    
    6.0
    %
  84




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##### Table of Contents



10. Employee Retirement and Severance Benefits (continued)
 Plan assets
     
 Japanese plans
    
    
    Foreign plansLevel 1
    
    
    Level 2
    
    
    Level 3
    
    
    Total
    
    
    Level 1
    
    
    Level 2
    
    
    Level 3
    
    
    Total(Millions of yen)Equity securities:Japanese companies (a)
    
    ¥
    48,844
    
    
    ¥
    
    
    
    ¥
    
    
    
    ¥
    48,844
    
    
    ¥
    
    
    
    ¥
    
    
    
    ¥
    
    
    
    ¥
    Foreign companies
    
    
    5,444
    
    
    
    
    
    
    
    
    
    
    
    5,444
    
    
    
    3,898
    
    
    
    
    
    
    
    
    
    
    
    3,898Pooled funds (b)
    
    
    
    
    
    
    85,353
    
    
    
    
    
    
    
    85,353
    
    
    
    
    
    
    
    47,290
    
    
    
    
    
    
    
    47,290Debt securities:Government bonds (c)
    
    
    14,803
    
    
    
    
    
    
    
    
    
    
    
    14,803
    
    
    
    1,581
    
    
    
    
    
    
    
    
    
    
    
    1,581Municipal bonds
    
    
    
    
    
    
    879
    
    
    
    
    
    
    
    879
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    Corporate bonds
    
    
    
    
    
    
    7,665
    
    
    
    
    
    
    
    7,665
    
    
    
    
    
    
    
    6,673
    
    
    
    
    
    
    
    6,673Pooled funds (d)
    
    
    
    
    
    
    189,870
    
    
    
    
    
    
    
    189,870
    
    
    
    
    
    
    
    9,343
    
    
    
    
    
    
    
    9,343Mortgage backed securities
(and other asset backed securities)
    
    
    
    
    
    
    943
    
    
    
    
    
    
    
    943
    
    
    
    
    
    
    
    256
    
    
    
    
    
    
    
    256Life insurance company general
accounts
    
    
    
    
    
    
    94,269
    
    
    
    
    
    
    
    94,269
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    Other assets
    
    
    
    
    
    
    8,367
    
    
    
    771
    
    
    
    9,138
    
    
    
    
    
    
    
    6,017
    
    
    
    
    
    
    
    6,017¥
    69,091
    
    
    ¥
    387,346
    
    
    ¥
    771
    
    
    ¥
    457,208
    
    
    ¥
    5,479
    
    
    ¥
    69,579
    
    
    ¥
    
    
    
    ¥
    75,058
 85




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##### Table of Contents



10. Employee Retirement and Severance Benefits (continued)
 Plan assets (continued)
 (a)
    
    The plans equity securities include common stock of the Company and certain of its
subsidiaries in the amounts of ¥950 million at December 31, 2009.(b)
    
    These funds invest in listed equity securities consisting of approximately 50%
Japanese companies and 50% foreign companies for Japanese plans, and mainly foreign companies
for foreign plans.(c)
    
    This class includes approximately 80% Japanese government bonds and 20% foreign
government bonds.(d)
    
    These funds invest in approximately 55% Japanese government bonds, 25% foreign
government bonds, 10% Japanese municipal bonds, and 10% corporate bonds.
    Contributions
  Estimated future benefit payments
  Japanese plans
    
    
    Foreign plans(Millions of yen)Year ending December 31:2010
    
    ¥
    13,029
    
    
    ¥
    1,7652011
    
    
    14,571
    
    
    
    1,8672012
    
    
    15,643
    
    
    
    1,9722013
    
    
    17,120
    
    
    
    2,0042014
    
    
    17,961
    
    
    
    2,0742015  2019
    
    
    114,536
    
    
    
    12,939
 86




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##### Table of Contents



11. Income Taxes
  Year ended December 31, 2009Japanese
    
    
    Foreign
    
    
    Total(Millions of yen)Income before income taxes
    
    ¥
    130,857
    
    
    ¥
    88,498
    
    
    ¥
    219,355Income taxes:Current
    
    ¥
    45,079
    
    
    ¥
    18,331
    
    
    ¥
    63,410Deferred
    
    
    15,415
    
    
    
    5,297
    
    
    
    20,712¥
    60,494
    
    
    ¥
    23,628
    
    
    ¥
    84,122
 Year ended December 31, 2008Japanese
    
    
    Foreign
    
    
    Total(Millions of yen)Income before income taxes
    
    ¥
    382,299
    
    
    ¥
    98,848
    
    
    ¥
    481,147Income taxes:Current
    
    ¥
    168,428
    
    
    ¥
    24,857
    
    
    ¥
    193,285Deferred
    
    
    (34,073
    )
    
    
    1,576
    
    
    
    (32,497
    )¥
    134,355
    
    
    ¥
    26,433
    
    
    ¥
    160,788
 Year ended December 31, 2007Japanese
    
    
    Foreign
    
    
    Total(Millions of yen)Income before income taxes
    
    ¥
    575,017
    
    
    ¥
    193,371
    
    
    ¥
    768,388Income taxes:Current
    
    ¥
    238,921
    
    
    ¥
    60,358
    
    
    ¥
    299,279Deferred
    
    
    (31,930
    )
    
    
    (3,091
    )
    
    
    (35,021
    )¥
    206,991
    
    
    ¥
    57,267
    
    
    ¥
    264,258
 87




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##### Table of Contents



11. Income Taxes (continued)
   Years ended December 312009
    
    
    2008
    
    
    2007Japanese statutory income tax rate
    
    
    40.0
    %
    
    
    40.0
    %
    
    
    40.0
    %Increase (reduction) in income taxes resulting from:Expenses not deductible for tax purposes
    
    
    0.9
    
    
    
    0.5
    
    
    
    0.3Income of foreign subsidiaries taxed at lower than Japanese statutory tax rate
    
    
    (5.4
    )
    
    
    (2.6
    )
    
    
    (2.8
    )Tax credit for research and development expenses
    
    
    (2.8
    )
    
    
    (4.6
    )
    
    
    (4.5
    )Change in valuation allowance
    
    
    5.4
    
    
    
    0.1
    
    
    
    0.1Other
    
    
    0.2
    
    
    
    0.0
    
    
    
    1.3Effective income tax rate
    
    
    38.3
    %
    
    
    33.4
    %
    
    
    34.4
    %
  December 312009
    
    
    2008(Millions of yen)Prepaid expenses and other current assets
    
    ¥
    94,798
    
    
    ¥
    96,613Other assets
    
    
    117,263
    
    
    
    130,378Other current liabilities
    
    
    (2,018
    )
    
    
    (2,491
    )Other noncurrent liabilities
    
    
    (36,278
    )
    
    
    (29,075
    )¥
    173,765
    
    
    ¥
    195,425
 88




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11. Income Taxes (continued)
  December 312009
    
    
    2008(Millions of yen)Deferred tax assets:Inventories
    
    ¥
    24,121
    
    
    ¥
    36,817Accrued business tax
    
    
    3,861
    
    
    
    5,183Accrued pension and severance cost
    
    
    52,639
    
    
    
    51,713Research and development  costs capitalized for tax purposes
    
    
    45,718
    
    
    
    41,661Property, plant and equipment
    
    
    53,011
    
    
    
    58,682Accrued expenses
    
    
    29,409
    
    
    
    27,748Net operating losses carried forward
    
    
    12,305
    
    
    
    6,745Other
    
    
    44,709
    
    
    
    44,894265,773
    
    
    
    273,443Less valuation allowance
    
    
    (22,188
    )
    
    
    (10,817
    )Total deferred tax assets
    
    
    243,585
    
    
    
    262,626Deferred tax liabilities:Undistributed earnings of foreign subsidiaries
    
    
    (8,023
    )
    
    
    (10,407
    )Net unrealized gains on securities
    
    
    (2,052
    )
    
    
    (607
    )Tax deductible reserve
    
    
    (7,797
    )
    
    
    (8,119
    )Financing lease revenue
    
    
    (35,505
    )
    
    
    (31,035
    )Prepaid pension and severance cost
    
    
    (314
    )
    
    
    (2,644
    )Other
    
    
    (16,129
    )
    
    
    (14,389
    )Total deferred tax liabilities
    
    
    (69,820
    )
    
    
    (67,201
    )Net deferred tax assets
    
    ¥
    173,765
    
    
    ¥
    195,425
 89




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11. Income Taxes (continued)
    (Millions of yen)Within one year
    
    ¥
    1,534After one year through five years
    
    
    7,209After five years through ten years
    
    
    17,501Indefinite period
    
    
    8,166Total
    
    ¥
    34,410
    Years ended December 312009
    
    

2008
    
    

2007(Millions of yen)Balance at beginning of year
    
    ¥
    12,689
    
    
    ¥
    15,791
    
    
    ¥
    16,087Additions for tax positions of the current year
    
    
    
    
    
    
    8,700
    
    
    
    994Additions for tax positions of prior years
    
    
    1,442
    
    
    
    1,354
    
    
    
    1,902Reductions for tax positions of prior years
    
    
    (1,106
    )
    
    
    (8,512
    )
    
    
    (1,340
    )Lapse of the applicable statute of limitations
    
    
    
    
    
    
    
    
    
    
    (1,311
    )Settlements with tax authorities
    
    
    
    
    
    
    (1,208
    )
    
    
    (322
    )Other
    
    
    210
    
    
    
    (3,436
    )
    
    
    (219
    )Balance at end of year
    
    ¥
    13,235
    
    
    ¥
    12,689
    
    
    ¥
    15,791
     90




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12. Common Stock
  13. Legal Reserve and Retained Earnings
     14. Other Comprehensive Income (Loss)
  Years ended December 312009
    
    
    2008
    
    
    2007(Millions of yen)Foreign currency translation adjustments:Balance at beginning of year
    
    ¥
    (235,968
    )
    
    ¥
    22,796
    
    
    ¥
    22,858Adjustments for the year
    
    
    33,340
    
    
    
    (258,764
    )
    
    
    (62
    )Balance at end of year
    
    
    (202,628
    )
    
    
    (235,968
    )
    
    
    22,796Net unrealized gains and losses on securities:Balance at beginning of year
    
    
    1,135
    
    
    
    6,287
    
    
    
    8,065Adjustments for the year
    
    
    2,150
    
    
    
    (5,152
    )
    
    
    (1,778
    )Balance at end of year
    
    
    3,285
    
    
    
    1,135
    
    
    
    6,287Net gains and losses on derivative instruments:Balance at beginning of year
    
    
    1,493
    
    
    
    (849
    )
    
    
    (1,663
    )Adjustments for the year
    
    
    (1,422
    )
    
    
    2,342
    
    
    
    814Balance at end of year
    
    
    71
    
    
    
    1,493
    
    
    
    (849
    )Pension liability adjustments:Balance at beginning of year
    
    
    (59,480
    )
    
    
    6,436
    
    
    
    (26,542
    )Adjustments for the year
    
    
    (2,066
    )
    
    
    (65,916
    )
    
    
    32,978Balance at end of year
    
    
    (61,546
    )
    
    
    (59,480
    )
    
    
    6,436Total accumulated other comprehensive income (loss):Balance at beginning of year
    
    
    (292,820
    )
    
    
    34,670
    
    
    
    2,718Adjustments for the year
    
    
    32,002
    
    
    
    (327,490
    )
    
    
    31,952Balance at end of year
    
    ¥
    (260,818
    )
    
    ¥
    (292,820
    )
    
    ¥
    34,670
 91




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14. Other Comprehensive Income (Loss) (continued)
  Years ended December 31Before-tax amount
    
    
    Tax (expense) 
or benefit
    
    
    Net-of-tax 
amount(Millions of yen)2009:Foreign currency translation adjustments
    
    ¥
    35,459
    
    
    ¥
    (2,089
    )
    
    ¥
    33,370Net unrealized gains and losses on securities:Amount arising during the year
    
    
    2,231
    
    
    
    (1,333
    )
    
    
    898Reclassification adjustments for gains and losses realized in net income
    
    
    2,205
    
    
    
    (886
    )
    
    
    1,319Net change during the year
    
    
    4,436
    
    
    
    (2,219
    )
    
    
    2,217Net gains and losses on derivative instruments:Amount arising during the year
    
    
    298
    
    
    
    (119
    )
    
    
    179Reclassification adjustments for gains and losses realized in net income
    
    
    (2,670
    )
    
    
    1,068
    
    
    
    (1,602
    )Net change during the year
    
    
    (2,372
    )
    
    
    949
    
    
    
    (1,423
    )Pension liability adjustments:Amount arising during the year
    
    
    (4,115
    )
    
    
    1,891
    
    
    
    (2,224
    )Reclassification adjustments for gains and losses realized in net income
    
    
    1,911
    
    
    
    (632
    )
    
    
    1,279Net change during the year
    
    
    (2,204
    )
    
    
    1,259
    
    
    
    (945
    )Other comprehensive income (loss)
    
    ¥
    35,319
    
    
    ¥
    (2,100
    )
    
    ¥
    33,2192008:Foreign currency translation adjustments
    
    ¥
    (266,568
    )
    
    ¥
    5,893
    
    
    ¥
    (260,675
    )Net unrealized gains and losses on securities:Amount arising during the year
    
    
    (17,485
    )
    
    
    6,992
    
    
    
    (10,493
    )Reclassification adjustments for gains and losses realized in net income
    
    
    7,752
    
    
    
    (3,101
    )
    
    
    4,651Net change during the year
    
    
    (9,733
    )
    
    
    3,891
    
    
    
    (5,842
    )Net gains and losses on derivative instruments:Amount arising during the year
    
    
    23,121
    
    
    
    (9,248
    )
    
    
    13,873Reclassification adjustments for gains and losses realized in net income
    
    
    (19,219
    )
    
    
    7,688
    
    
    
    (11,531
    )Net change during the year
    
    
    3,902
    
    
    
    (1,560
    )
    
    
    2,342Pension liability adjustments:Amount arising during the year
    
    
    (111,215
    )
    
    
    39,233
    
    
    
    (71,982
    )Reclassification adjustments for gains and losses realized in net income
    
    
    (4,956
    )
    
    
    2,073
    
    
    
    (2,883
    )Net change during the year
    
    
    (116,171
    )
    
    
    41,306
    
    
    
    (74,865
    )Other comprehensive income (loss)
    
    ¥
    (388,570
    )
    
    ¥
    49,530
    
    
    ¥
    (339,040
    )
 92




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14. Other Comprehensive Income (Loss) (continued)
 Years ended December 31Before-tax 
amount
    
    
    Tax (expense)
 or benefit
    
    
    Net-of-tax 
amount(Millions of yen)2007:Foreign currency translation adjustments
    
    ¥
    (396
    )
    
    ¥
    308
    
    
    ¥
    (88
    )Net unrealized gains and losses on securities:Amount arising during the year
    
    
    (7,721
    )
    
    
    3,231
    
    
    
    (4,490
    )Reclassification adjustments for gains and losses realized in net income
    
    
    (580
    )
    
    
    2,715
    
    
    
    2,135Net change during the year
    
    
    (8,301
    )
    
    
    5,946
    
    
    
    (2,355
    )Net gains and losses on derivative instruments:Amount arising during the year
    
    
    589
    
    
    
    (236
    )
    
    
    353Reclassification adjustments for gains and losses realized in net income
    
    
    780
    
    
    
    (312
    )
    
    
    468Net change during the year
    
    
    1,369
    
    
    
    (548
    )
    
    
    821Pension liability adjustments:Amount arising during the year
    
    
    71,364
    
    
    
    (26,586
    )
    
    
    44,778Reclassification adjustments for gains and losses realized in net income
    
    
    (7,088
    )
    
    
    2,952
    
    
    
    (4,136
    )Net change during the year
    
    
    64,276
    
    
    
    (23,634
    )
    
    
    40,642Other comprehensive income (loss)
    
    ¥
    56,948
    
    
    ¥
    (17,928
    )
    
    ¥
    39,020
 15. Stock-Based Compensation
     Years ended December 312009
    
    

2008Expected term of option (in years)
    
    
    4.0
    
    
    
    4.0Expected volatility
    
    
    40.08
    %
    
    
    37.39
    %Dividend yield
    
    
    3.51
    %
    
    
    2.10
    %Risk-free interest rate
    
    
    0.64
    %
    
    
    0.95
    %
 93




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15. Stock-Based Compensation (continued)
  Weighted-averageWeighted-average
    
    
    remaining
    
    
    AggregateShares
    
    
    exercise price
    
    
    contractual term
    
    
    intrinsic value(Yen)
    
    
    (Year)
    
    
    (Millions of yen)Outstanding at January 1, 2008
    
    
    
    
    
    ¥
    Granted
    
    
    592,000
    
    
    
    5,502Forfeited
    
    
    
    
    
    
    Outstanding at December 31, 2008
    
    
    592,000
    
    
    
    5,502
    
    
    
    3.3
    
    
    ¥
    Granted
    
    
    954,000
    
    
    
    3,287Forfeited
    
    
    (34,000
    )
    
    
    4,851Outstanding at December 31, 2009
    
    
    1,512,000
    
    
    ¥
    4,119
    
    
    
    3.0
    
    
    ¥
    588
  16. Net Income Attributable to Canon Inc. Stockholders per Share
  Years ended December 312009
    
    

2008
    
    

2007(Millions of yen)Net income attributable to Canon Inc.
    
    ¥
    131,647
    
    
    ¥
    309,148
    
    
    ¥
    488,332Effect of dilutive securities:1.30% Japanese yen convertible debentures, due 2008
    
    
    
    
    
    
    2
    
    
    
    4Diluted net income attributable to Canon Inc.
    
    ¥
    131,647
    
    
    ¥
    309,150
    
    
    ¥
    488,336(Number of shares)Average common shares outstanding
    
    
    1,234,481,836
    
    
    
    1,255,626,490
    
    
    
    1,293,295,680Effect of dilutive securities:1.30% Japanese yen convertible debentures, due 2008
    
    
    
    
    
    
    79,929
    
    
    
    221,751Diluted common shares outstanding
    
    
    1,234,481,836
    
    
    
    1,255,706,419
    
    
    
    1,293,517,431
 (Yen)Net income attributable to Canon Inc. stockholders per share:Basic
    
    ¥
    106.64
    
    
    ¥
    246.21
    
    
    ¥
    377.59Diluted
    
    
    106.64
    
    
    
    246.20
    
    
    
    377.53
  94




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17. Derivatives and Hedging Activities
 Risk management policy
  Foreign currency exchange rate risk management
  Cash flow hedge
  Derivatives not designated as hedges
   December 312009
    
    
    2008(Millions of yen)To sell foreign currencies
    
    ¥
    494,314
    
    
    ¥
    350,959To buy foreign currencies
    
    
    30,978
    
    
    
    35,247
 Fair value of derivative instruments in the consolidated balance sheet
  Derivatives designated as hedging instruments
 December 31, 2009Balance sheet location
    
    
    Fair value(Millions of yen)Liabilities:Foreign exchange contracts
    
    Other current liabilities
    
    ¥
    644
 95




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##### Table of Contents



17. Derivatives and Hedging Activities (continued)
 Derivatives not designated as hedging instruments
 December 31, 2009Balance
sheet location
    

Fair value(Millions of yen)Assets:Foreign exchange contracts
    
    Prepaid expenses and other current assets
    
    ¥
    752Liabilities:Foreign exchange contracts
    
    Other current liabilities
    
    
    6,566
 Effect of derivative instruments on the consolidated statement of income
  Derivatives in cash flow hedging relationships
 Gain (loss) recognized inincome (ineffectiveGain (loss)
    
    
    Gain (loss) reclassified from
    
    
    portion and amountrecognized in OCI
    
    
    accumulated OCI into income
    
    
    excluded from(effective portion)
    
    
    (effective portion)
    
    
    effectiveness testing)Amount
    
    
    Location
    
    
    Amount
    
    
    Location
    
    
    Amount(Millions of yen)Foreign exchange contracts
    
    ¥
    (2,372
    )
    
    Other, net
    
    ¥
    2,670
    
    
    Other, net
    
    ¥
    (462
    )
  Derivatives not designated as hedging instruments
 Gain (loss) recognized in income on derivativeLocation
    
    
    Amount(Millions of yen)Foreign exchange contracts
    
    Other, net
    
    ¥
    (8,638
    )
 18. Commitments and Contingent Liabilities
 Commitments
   96




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18. Commitments and Contingent Liabilities (continued)
  (Millions of yen)Year ending December 31:2010
    
    ¥
    16,2592011
    
    
    13,3312012
    
    
    9,6412013
    
    
    6,5512014
    
    
    5,002Thereafter
    
    
    8,180Total future minimum lease payments
    
    ¥
    58,964
 Guarantees
    Years ended December 312009
    
    

2008(Millions of yen)Balance at beginning of year
    
    ¥
    17,372
    
    
    ¥
    20,138Addition
    
    
    21,670
    
    
    
    30,644Utilization
    
    
    (22,050
    )
    
    
    (26,846
    )Other
    
    
    (3,048
    )
    
    
    (6,564
    )Balance at end of year
    
    ¥
    13,944
    
    
    ¥
    17,372
 Legal proceedings
  97




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18. Commitments and Contingent Liabilities (continued)
 Legal proceedings (continued)
   19. Disclosures about the Fair Value of Financial Instruments and Concentrations of Credit Risk
 Fair value of financial instruments
  December 312009
    
    
    2008Carrying
    
    
    Estimated
    
    
    Carrying
    
    
    Estimatedamount
    
    
    fair value
    
    
    amount
    
    
    fair value(Millions of yen)Long-term debt, including current installments
    
    ¥
    (9,781
    )
    
    ¥
    (9,777
    )
    
    ¥
    (13,743
    )
    
    ¥
    (13,727
    )Foreign exchange contracts:Assets
    
    
    752
    
    
    
    752
    
    
    
    10,516
    
    
    
    10,516Liabilities
    
    
    (7,210
    )
    
    
    (7,210
    )
    
    
    (678
    )
    
    
    (678
    )
  Long-term debt
  98




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##### Table of Contents



19. Disclosures about the Fair Value of Financial Instruments and Concentrations of Credit Risk
(continued)
 Fair value of financial instruments (continued)
 Foreign exchange contracts
  Limitations
  Concentrations of credit risk
  20. Fair Value Measurements
   Level 1
    
    
    Inputs are quoted prices in active markets for identical assets or liabilities.
  Level 2
    
    
    Inputs are quoted prices for similar assets or liabilities in
active markets, quoted prices for identical or similar assets or liabilities in markets that are not active,
inputs other than quoted prices that are observable, and inputs that are derived principally
from or corroborated by observable market data by correlation or other means.
  Level 3
    
    
    Inputs are derived from valuation techniques in which one or
more significant inputs or value drivers are unobservable, which reflect the reporting entitys own
assumptions about the assumptions that market participants would use in establishing a
price.
 Assets and liabilities measured at fair value on a recurring basis
  December 31, 2009Level 1
    
    
    Level 2
    
    
    Level 3
    
    
    Total(Millions of yen)Assets:Cash and cash equivalents
    
    ¥
    
    
    
    ¥
    184,856
    
    
    ¥
    
    
    
    ¥
    184,856Available-for-sale securities (current):Government bonds
    
    
    222
    
    
    
    
    
    
    
    
    
    
    
    222Available-for-sale securities (noncurrent):Government bonds
    
    
    204
    
    
    
    
    
    
    
    
    
    
    
    204Corporate bonds
    
    
    
    
    
    
    29
    
    
    
    1,340
    
    
    
    1,369Fund trusts
    
    
    1,589
    
    
    
    979
    
    
    
    
    
    
    
    2,568Equity securities
    
    
    17,726
    
    
    
    
    
    
    
    
    
    
    
    17,726Derivatives
    
    
    
    
    
    
    752
    
    
    
    
    
    
    
    752Total assets
    
    ¥
    19,741
    
    
    ¥
    186,616
    
    
    ¥
    1,340
    
    
    ¥
    207,697Liabilities:Derivatives
    
    ¥
    
    
    
    ¥
    7,210
    
    
    ¥
    
    
    
    ¥
    7,210Total liabilities
    
    ¥
    
    
    
    ¥
    7,210
    
    
    ¥
    
    
    
    ¥
    7,210
 99




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20. Fair Value Measurements (continued)
 Assets and liabilities measured at fair value on a recurring basis (continued)
 December 31, 2008Level 1
    
    
    Level 2
    
    
    Level 3
    
    
    Total(Millions of yen)Assets:Cash and cash equivalents
    
    ¥
    
    
    
    ¥
    194,030
    
    
    ¥
    
    
    
    ¥
    194,030Available-for-sale securities (current):Government bonds
    
    
    1
    
    
    
    
    
    
    
    
    
    
    
    1Fund trusts
    
    
    149
    
    
    
    
    
    
    
    
    
    
    
    149Available-for-sale securities (noncurrent):Government bonds
    
    
    413
    
    
    
    
    
    
    
    
    
    
    
    413Corporate bonds
    
    
    43
    
    
    
    29
    
    
    
    1,516
    
    
    
    1,588Fund trusts
    
    
    1,284
    
    
    
    952
    
    
    
    
    
    
    
    2,236Equity securities
    
    
    12,218
    
    
    
    
    
    
    
    
    
    
    
    12,218Derivatives
    
    
    
    
    
    
    10,516
    
    
    
    
    
    
    
    10,516Total assets
    
    ¥
    14,108
    
    
    ¥
    205,527
    
    
    ¥
    1,516
    
    
    ¥
    221,151Liabilities:Derivatives
    
    ¥
    
    
    
    ¥
    678
    
    
    ¥
    
    
    
    ¥
    678Total liabilities
    
    ¥
    
    
    
    ¥
    678
    
    
    ¥
    
    
    
    ¥
    678
    Years ended December 312009
    
    

2008(Millions of yen)Balance at beginning of year
    
    ¥
    1,516
    
    

    ¥
    1,889Total gains or losses (realized or unrealized):Included in earnings
    
    
    (221
    )
    
    
    (559
    )Included in other comprehensive income (loss)
    
    
    (1
    )
    
    
    (8
    )Purchases, issuances, and settlements
    
    
    46
    
    
    
    194Balance at end of year
    
    ¥
    1,340
    
    
    ¥
    1,516
  100




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##### Table of Contents



20. Fair Value Measurements (continued)
 Assets and liabilities measured at fair value on a nonrecurring basis
   21. Segment Information
   Segment information
       101




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##### Table of Contents



21. Segment Information (continued)
 Segment information (continued)
  Industry and
    
    
    Corporate andOffice
    
    
    Consumer
    
    
    Others
    
    
    eliminations
    
    
    Consolidated(Millions of yen)2009:Net sales:External customers
    
    ¥
    1,635,056
    
    
    ¥
    1,299,194
    
    
    ¥
    274,951
    
    
    ¥
    
    
    
    ¥
    3,209,201Intersegment
    
    
    10,020
    
    
    
    1,966
    
    
    
    83,047
    
    
    
    (95,033
    )
    
    
    Total
    
    
    1,645,076
    
    
    
    1,301,160
    
    
    
    357,998
    
    
    
    (95,033
    )
    
    
    3,209,201Operating cost and expenses
    
    
    1,415,680
    
    
    
    1,117,668
    
    
    
    433,954
    
    
    
    24,844
    
    
    
    2,992,146Operating
profit (loss)
    
    ¥
    229,396
    
    
    ¥
    183,492
    
    
    ¥
    (75,956
    )
    
    ¥
    (119,877
    )
    
    ¥
    217,055Total assets
    
    ¥
    745,646
    
    
    ¥
    437,160
    
    
    ¥
    359,635
    
    
    ¥
    2,305,116
    
    
    ¥
    3,847,557Depreciation and amortization
    
    
    90,878
    
    
    
    48,701
    
    
    
    60,770
    
    
    
    115,044
    
    
    
    315,393Capital expenditures
    
    
    96,718
    
    
    
    27,503
    
    
    
    25,644
    
    
    
    108,387
    
    
    
    258,2522008:Net sales:External customers
    
    ¥
    2,223,253
    
    
    ¥
    1,453,647
    
    
    ¥
    417,261
    
    
    ¥
    
    
    
    ¥
    4,094,161Intersegment
    
    
    23,356
    
    
    
    2,428
    
    
    
    105,144
    
    
    
    (130,928
    )
    
    
    Total
    
    
    2,246,609
    
    
    
    1,456,075
    
    
    
    522,405
    
    
    
    (130,928
    )
    
    
    4,094,161Operating cost and expenses
    
    
    1,789,263
    
    
    
    1,232,951
    
    
    
    570,281
    
    
    
    5,592
    
    
    
    3,598,087Operating
profit (loss)
    
    ¥
    457,346
    
    
    ¥
    223,124
    
    
    ¥
    (47,876
    )
    
    ¥
    (136,520
    )
    
    ¥
    496,074Total assets
    
    ¥
    822,660
    
    
    ¥
    502,927
    
    
    ¥
    453,581
    
    
    ¥
    2,190,766
    
    
    ¥
    3,969,934Depreciation and amortization
    
    
    99,962
    
    
    
    58,082
    
    
    
    71,557
    
    
    
    111,736
    
    
    
    341,337Capital expenditures
    
    
    139,046
    
    
    
    52,641
    
    
    
    31,445
    
    
    
    180,268
    
    
    
    403,4002007:Net sales:External customers
    
    ¥
    2,456,798
    
    
    ¥
    1,585,307
    
    
    ¥
    439,241
    
    
    ¥
    
    
    
    ¥
    4,481,346Intersegment
    
    
    20,720
    
    
    
    2,645
    
    
    
    110,742
    
    
    
    (134,107
    )
    
    
    Total
    
    
    2,477,518
    
    
    
    1,587,952
    
    
    
    549,983
    
    
    
    (134,107
    )
    
    
    4,481,346Operating cost and expenses
    
    
    1,912,343
    
    
    
    1,260,113
    
    
    
    527,039
    
    
    
    25,178
    
    
    
    3,724,673Operating profit
    
    ¥
    565,175
    
    
    ¥
    327,839
    
    
    ¥
    22,944
    
    
    ¥
    (159,285
    )
    
    ¥
    756,673Total assets
    
    ¥
    981,627
    
    
    ¥
    590,208
    
    
    ¥
    535,825
    
    
    ¥
    2,404,965
    
    
    ¥
    4,512,625Depreciation and amortization
    
    
    97,886
    
    
    
    56,278
    
    
    
    65,331
    
    
    
    122,199
    
    
    
    341,694Capital expenditures
    
    
    126,857
    
    
    
    35,548
    
    
    
    113,178
    
    
    
    194,081
    
    
    
    469,664
  102




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21. Segment Information (continued)
 Geographic information
  2009
    
    
    2008
    
    
    2007(Millions of yen)Net sales:Japan
    
    ¥
    702,344
    
    
    ¥
    868,280
    
    
    ¥
    947,587Americas
    
    
    894,154
    
    
    
    1,154,571
    
    
    
    1,336,168Europe
    
    
    995,150
    
    
    
    1,341,400
    
    
    
    1,499,286Other areas
    
    
    617,553
    
    
    
    729,910
    
    
    
    698,305Total
    
    ¥
    3,209,201
    
    
    ¥
    4,094,161
    
    
    ¥
    4,481,346Long-lived
assets:Japan
    
    ¥
    1,205,887
    
    
    ¥
    1,314,092
    
    
    ¥
    1,284,283Americas
    
    
    59,273
    
    
    
    43,435
    
    
    
    45,492Europe
    
    
    44,875
    
    
    
    47,392
    
    
    
    68,944Other areas
    
    
    77,146
    
    
    
    71,407
    
    
    
    78,499Total
    
    ¥
    1,387,181
    
    
    ¥
    1,476,326
    
    
    ¥
    1,477,218
   103




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##### Table of Contents



21. Segment Information (continued)
 Geographic information (continued)
  Corporate andJapan
    
    
    Americas
    
    
    Europe
    
    
    Other areas
    
    
    eliminations
    
    
    Consolidated(Millions of yen)2009:Net sales:External customers
    
    ¥
    827,762
    
    
    ¥
    871,633
    
    
    ¥
    991,336
    
    
    ¥
    518,470
    
    
    ¥
    
    
    
    ¥
    3,209,201Intersegment
    
    
    1,714,375
    
    
    
    1,263
    
    
    
    919
    
    
    
    534,147
    
    
    
    (2,250,704
    )
    
    
    Total
    
    
    2,542,137
    
    
    
    872,896
    
    
    
    992,255
    
    
    
    1,052,617
    
    
    
    (2,250,704
    )
    
    
    3,209,201Operating cost and expenses
    
    
    2,288,471
    
    
    
    860,863
    
    
    
    964,606
    
    
    
    1,019,208
    
    
    
    (2,141,002
    )
    
    
    2,992,146Operating profit
    
    ¥
    253,666
    
    
    ¥
    12,033
    
    
    ¥
    27,649
    
    
    ¥
    33,409
    
    
    ¥
    (109,702
    )
    
    ¥
    217,055Total assets
    
    ¥
    1,386,511
    
    
    ¥
    198,094
    
    
    ¥
    378,477
    
    
    ¥
    384,795
    
    
    ¥
    1,499,680
    
    
    ¥
    3,847,5572008:Net sales:External customers
    
    ¥
    998,676
    
    
    ¥
    1,141,560
    
    
    ¥
    1,337,147
    
    
    ¥
    616,778
    
    
    ¥
    
    
    
    ¥
    4,094,161Intersegment
    
    
    2,318,521
    
    
    
    3,758
    
    
    
    4,329
    
    
    
    670,678
    
    
    
    (2,997,286
    )
    
    
    Total
    
    
    3,317,197
    
    
    
    1,145,318
    
    
    
    1,341,476
    
    
    
    1,287,456
    
    
    
    (2,997,286
    )
    
    
    4,094,161Operating cost and expenses
    
    
    2,812,645
    
    
    
    1,136,288
    
    
    
    1,314,942
    
    
    
    1,247,156
    
    
    
    (2,912,944
    )
    
    
    3,598,087Operating profit
    
    ¥
    504,552
    
    
    ¥
    9,030
    
    
    ¥
    26,534
    
    
    ¥
    40,300
    
    
    ¥
    (84,342
    )
    
    ¥
    496,074Total assets
    
    ¥
    1,607,653
    
    
    ¥
    203,255
    
    
    ¥
    417,562
    
    
    ¥
    344,638
    
    
    ¥
    1,396,826
    
    
    ¥
    3,969,9342007:Net sales:External customers
    
    ¥
    1,048,310
    
    
    ¥
    1,329,479
    
    
    ¥
    1,499,821
    
    
    ¥
    603,736
    
    
    ¥
    
    
    
    ¥
    4,481,346Intersegment
    
    
    2,494,251
    
    
    
    4,608
    
    
    
    3,496
    
    
    
    824,844
    
    
    
    (3,327,199
    )
    
    
    Total
    
    
    3,542,561
    
    
    
    1,334,087
    
    
    
    1,503,317
    
    
    
    1,428,580
    
    
    
    (3,327,199
    )
    
    
    4,481,346Operating cost and expenses
    
    
    2,768,998
    
    
    
    1,281,805
    
    
    
    1,441,972
    
    
    
    1,378,306
    
    
    
    (3,146,408
    )
    
    
    3,724,673Operating profit
    
    ¥
    773,563
    
    
    ¥
    52,282
    
    
    ¥
    61,345
    
    
    ¥
    50,274
    
    
    ¥
    (180,791
    )
    
    ¥
    756,673Total assets
    
    ¥
    1,899,452
    
    
    ¥
    280,458
    
    
    ¥
    591,104
    
    
    ¥
    424,244
    
    
    ¥
    1,317,367
    
    
    ¥
    4,512,625
 104




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22. Subsequent Events
 Share
exchange agreement to make Canon Finetech Inc. a wholly owned subsidiary of Canon Inc.
     Acquisition of Océ N.V.
 
   105




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Balance at
    
    
    Addition-
    
    
    Deduction-
    
    
    
    
    
    
    Balancebeginning of
    
    
    charged to
    
    
    bad debts
    
    
    Translation
    
    
    at end ofperiod
    
    
    income
    
    
    written off
    
    
    adjustments
    
    
    period(Millions of yen)Year ended December 31, 2009:Allowance for doubtful receivables
    
    ¥
    9,318
    
    
    ¥
    3,054
    
    
    ¥
    1,474
    
    
    ¥
    445
    
    
    ¥
    11,343Year ended December 31, 2008:Allowance for doubtful receivables
    
    ¥
    14,547
    
    
    ¥
    1,304
    
    
    ¥
    3,618
    
    
    ¥
    (2,915
    )
    
    ¥
    9,318Year ended December 31, 2007:Allowance for doubtful receivables
    
    ¥
    13,849
    
    
    ¥
    3,527
    
    
    ¥
    2,978
    
    
    ¥
    149
    
    
    ¥
    14,547
 106




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##### Table of Contents



Item 19. Exhibits
  12
    
    Certifications of Chairman and CEO and Executive Vice President and CFO pursuant to Section 302 of the Sarbanes-Oxley Act13
    
    Certification of Chairman and CEO and Executive Vice President and CFO pursuant to Section 906 of the Sarbanes-Oxley Act
 107




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CANON INC.
(Registrant)By:
    /s/ Toshizo TanakaToshizo TanakaExecutive Vice President and CFOCanon Inc.
30-2, Shimomaruko 3-chome,
Ohta-ku, Tokyo 146-8501, Japan  108




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EXHIBIT INDEX
 Exhibit number
    
    TitleExhibit 12
    
    Certifications of Chairman and CEO and Executive Vice President and CFO
pursuant to Section 302 of the Sarbanes-Oxley ActExhibit 13
    
    Certification of Chairman and CEO and Executive Vice President and CFO
pursuant to Section 906 of the Sarbanes-Oxley Act
 109