FORM 6-K

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

Report of Foreign Issuer
Pursuant to Rule 13a-16 or 15d-16 of
the Securities Exchange Act of 1934

For the month of August      , 2008

CANON INC.

(Translation of registrant’s name into English)

30-2, Shimomaruko 3-Chome, Ohta-ku, Tokyo 146-8501, Japan

(Address of principal executive offices)

     [Indicate by check mark whether the registrant files or will file annual reports under cover Form 20-F or Form 40-F.

Form 20-F  þ		Form 40-F  o

     [Indicate by check mark whether the registrant by furnishing the information contained in this Form is also thereby furnishing the information to the Commission pursuant to Rule 12g3-2(b) under the Securities Exchange Act of 1934.

Yes  o		No  þ

     [If “Yes” is marked, indicate below the file number assigned to the registrant in connection with Rule 12g3-2(b):82-          

 

 

SIGNATURES

     Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.

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

The following materials are included.

To Our Shareholders

     We are pleased to present our report for the summary of the first half of our 108th business term (from January 1, 2008 to June 30, 2008).

     Reviewing conditions in both the Japanese and overseas economies during the first half of the current business term, the U.S. economy decelerated due to depressing residential investment in the wake of the subprime loan issue, and with soaring crude oil prices weighing on corporate profits and stifling personal consumption. European economies also slowed down under the impact from the U.S. economic situation. Asian economies sustained high growth centered in China, although growth rates diminished due to the sluggish EU and U.S. economies. Meanwhile, there was stagnation in the Japanese economy due to factors such as a stalling of exports from the global economic slowdown, a squeeze on corporate profits from soaring prices of crude oil and raw materials, and weak consumer spending due to inflation. In foreign exchange markets, compared with the first half of the previous fiscal year, the yen rose substantially against the U.S. dollar and rose slightly against the euro.

     As to the conditions of the markets in which the Canon Group operates, demand for digital cameras grew steadily for both single lens reflex (SLR) and compact types, while demand for color laser beam printers also continued to grow. For networked multifunctional devices, demand continued to shift from black-and-white to color machines. In the area of inkjet printers, rising demand for multifunction devices covered for a decline in single-function devices, leaving overall demand unchanged. Demand for mirror projection mask aligners for LCDs improved substantially due to recovered capital expenditures at LCD panel manufacturers, but demand for semiconductor production equipment was sluggish as memory device manufacturers restrained new capital investment.

     Under these business conditions, facing the third year of Phase III (2006 to 2010) of our “Excellent Global Corporation Plan,” to enable the manufacture of attractive products at a low cost and timely market introduction, the Canon

 

Group worked to reduce costs and raise operational efficiency by continuing to move forward with various measures in each area of development, procurement, production and sales, and also strengthened operating frameworks by newly establishing an Executive Officer System.

     As to the earnings for the first half of the current business term, on a consolidated basis, we recorded net sales of 2,113.4 billion yen (down 2.5% from the first half of 2007), income before taxes and minority interests of 339.2 billion yen (down 16.5%), and net income of 214.5 billion yen (down 15.9%). Also on a non-consolidated basis, we recorded net sales of 1,395.3 billion yen (up 1.8%), ordinary profit of 256.2 billion yen (down 15.2%), and net income of 168.4 billion yen (down 16.2%).

     For the interim dividend, we have decided to pay 55.0 yen per share from August 26.

     For the second half of the current business term, amid uncertainty over prices of natural resources, interest rates and foreign exchange rates, we expect a continued slowdown in global economic growth, and with competition intensifying more and more, business conditions for the Canon Group will remain extremely severe. Despite these adverse circumstances, the Canon Group is committed to making all necessary efforts to achieve improved results in the second half of the fiscal year.

     We look forward to your continued support and encouragement in the future.

August 2008

Fujio Mitarai
Chairman & CEO

Tsuneji Uchida
President & COO

  Change in Profits

Net Sales (Consolidated) 100 MILLIONS OF YEN		Net Sales (Non-Consolidated) 100 MILLIONS OF YEN

Income before Income Taxes and Minority Interests (Consolidated) 100 MILLIONS OF YEN		Ordinary Profit (Non-Consolidated) 100 MILLIONS OF YEN

Net Income (Consolidated) 100 MILLIONS OF YEN		Net Income (Non-Consolidated) 100 MILLIONS OF YEN

n Sales by Operations

Consolidated

Operations		Sales				Change from the First
		(100 millions of yen)				Half of Fiscal 2007 (%)
Business Machines			13,890				(4.0	)
Office Imaging Products			5,991				(5.3	)
Computer Peripherals			7,432				(2.3	)
Business Information Products			467				(12.6	)
Cameras			5,294				1.9
Optical and Other Products			1,950				(2.8	)
Total			21,134				(2.5	)

Operations		Sales				Change from the First
		(100 millions of yen)				Half of Fiscal 2007 (%)
Business Machines			8,884				(3.9	)
Office Imaging Products			2,566				(7.4	)
Computer Peripherals			6,318				(2.4	)
Cameras			4,139				12.2
Optical and Other Products			930				19.7
Total			13,953				1.8

Consolidated		Non-Consolidated

Note:

Regarding the segment of “Business Information Products” within the “Business Machines” category in the consolidated information above, there were no sales on a non-consolidated basis.

n Business Machines Operations

Office Imaging Products

     In the “imageRUNNER series” of office-use digital networked multifunctional devices, we launched seven new models for four types of color machines in the Japanese market to accommodate to the market shift from black-and-white to color machines. We strengthened our product range especially by launching our affordable “iR C3580F/C3080F” with their printing speeds enhanced but without compromising their energy conservation and space-saving features, as well as the “iR C2550F” which offers the same basic functions at a lower price. Meanwhile, our top-line “iR C5185” continued to perform well in the U.S. In black-and-white devices, we worked to increase sales of the high-speed “iR5075N/5065N” multifunctional devices. Moreover, we promoted our solutions business by proposing printing environments adjusted to customers’ business formats and needs by using the Multifunctional Embedded Application Platform (“MEAP”) capable of expanding the range of functions installed on our “imageRUNNER series.”

     In the “imagePRESS series” of printers for digital commercial printing, the “imagePRESS C7000VP” was chosen for the Best 10 New Products Award presented by the Nikkan Kogyo Shimbun and concurrently received the Masuda Award which is given to products of special excellence. Additionally, we expanded our product range with the launch of the “imagePRESS C6000” which is capable of printing 60 pages per minute in both color and black-and-white.

     In the multifunctional black-and-white machines for individuals and small-business owners, we launched two new products such as the “Satera MF4270” which combines four functions (copier, printer, color scanner and fax) and an automated double-sided printing function in a compact body while offering a printing speed of 20 pages per minute, and worked to expand sales of these products.

     As a result of these activities, sales for this segment fell by 5.3% on a consolidated basis and by 7.4% on a non-consolidated basis, both in comparison to the first half of 2007.

 

Consolidated

 

Non-Consolidated

 

Computer Peripherals

     In the inkjet printers market, there was a moderate yet definite tendency towards a decline in prices, and market conditions remained severe. At the same time, the shift from single-function to multifunctional devices continued. Under this environment, in multifunctional devices, we launched the “PIXUS MX7600” suited for office-use and equipped with our newly developed “PgR” technology enabling high-grade printing on regular paper, and the home-use “PIXUS MX850” equipped with a duplex Auto Document Feeder, and worked to promote sales of these products. In single-function devices, we expanded our product range with the launch of the “PIXUS iP2600,” an entry model featuring slim form and stylish design, and the compact “PIXUS iP100” photo printer which offers five color ink, minimum 1pl ink drop size, and high-quality resolution printing of 9600 dpi. As a result, we were able to substantially increase unit sales of inkjet printers despite the sluggish market. Meanwhile, sales of consumables including ink cartridges were also strong.

     Regarding laser beam printers, OEM-brand products continued robust expansion in color products. In black-and-white products, the growth of multifunctional devices sustained strong but single-function devices slowed down. For Canon-brand products, in color machines, we launched the “Satera LBP5050/5050N” which features a compact body, only 262mm in height, and a color printing speed of 8 pages per minute, and worked to promote sales of these products. In black-and-white machines, we launched five models including the “Satera LBP3980” capable of printing 35 pages per minute and up to A3 size, and the “Satera LBP3310” capable of printing A4 size and equipped with an automatic duplexing capability as standard. Additionally, we worked to expand our solutions business utilizing the “MEAP-Lite” function expansion system.

     As a result of these activities, sales for this segment fell by 2.3% on a consolidated basis and by 2.4% on a non-consolidated basis, both in comparison to the first half of 2007.

 

Consolidated

 

Non-Consolidated

 

Business Information Products

     The office-use document scanners market continued to grow due to document digitization becoming widespread. Demand has been rising especially for low-priced compact products due to corporations carrying out upgrades of their internal PC and network environments. Under these conditions, in the “image FORMULA series” handled by Canon Electronics Inc., we launched the “DR-X10C” as a new version of the flagship model and promoted the compact and affordable “DR-2510C” and “DR-2010C,” achieving a steady growth in unit sales as a result.

     Regarding calculators handled by Canon Electronics Business Machines (H.K.) Co., Ltd., we launched in the Japanese market the “FN-600” equipped with financial calculator functions such as loan calculations and worked to expand sales. Regarding electronic dictionaries handled by the same company, we launched the “wordtank V903” which offers rich Chinese language content for learners of Chinese, and the “wordtank C36” for high-school students, and worked to expand sales. Despite these efforts, sales of electronic dictionaries declined.

     Sales of servers and personal computers handled by Canon Marketing Japan Inc. declined as that company focused on its shift from sales of single products to the solutions business.

     As a result of these activities, sales for this segment fell by 12.6% on a consolidated basis in comparison to the first half of 2007. For this segment, there were no sales on a non-consolidated basis.

 

Consolidated

 

n Camera Operations

     In digital cameras, demand for SLR models continued to grow. Under these conditions, in the “EOS Kiss series” which has been widely popular in the market, we expanded our product range with the launch of the affordable “EOS Kiss X2” which accomplishes an even higher image quality owing to its 12.2 mega pixel CMOS sensor, and its sibling model, the “EOS Kiss F” for first-time users of SLR. Furthermore, as we worked to promote sales of the “EOS 40D” for advanced amateur photographers and other products, sales of SLR models developed positively. Consequently, sales of our EF lens series, dedicated flashes and other products also marked sound sales increases.

     Regarding compact digital cameras, in our stylishly designed “IXY DIGITAL series,” we launched four models including the “IXY DIGITAL 20 IS” which features an enhanced image stabilization and a 3x zoom function with upgraded color variation, and the “IXY DIGITAL 820 IS” which boasts a optical 5x zoom function. Additionally, in the “PowerShot series” with its ample product range for a variety of photographic styles, we launched three new products including the “PowerShot A590 IS” which realized a combination of high performance with ease of use by loading “Easy” mode that enables easy shots of beautiful photographs and features optical 4x zoom function. Sales of digital compact cameras increased as a result.

     In compact photo printers, in the dye sublimation “SELPHY series,” we strengthened our range of products by launching two new models including the “CP770” based on a new concept targeting “mothers with small children.”

     In digital video cameras, we increased our share of the market for HD video cameras by launching new products such as the “iVIS HF10” which enables recording up to twelve hours by loading double memory comprised of an internal flash memory and an SD card slot as recording medium.

     As a result of these activities, sales for this segment grew by 1.9% on a consolidated basis and by 12.2% on a non-consolidated basis, both in comparison to the first half of 2007.

 

Consolidated

 

Non-Consolidated

 

n Optical and Other Products Operations

     In mirror projection mask aligners for LCDs, the market improved substantially as panel manufacturers made proactive capital investment in reaction to the improved demand and supply situation for large-size LCD panels and rising panel prices. Under these conditions, as we worked to promote sales of our “MPAsp-H710,” the eighth-generation mirror projection mask aligners for LCDs and other products, sales resulted in significant sales growth.

     In semiconductor production equipment, we experienced lower sales amid sustained severe market conditions due to falling demand caused by semiconductor manufacturers curbing capital investment in reaction to slumping semiconductor prices.

     Regarding large-format inkjet printers, in the “imagePROGRAF series,” we launched the “imagePROGRAF iPF720” capable of printing A0-plus paper for businesses that use CAD drawings for architecture or design, and the “imagePROGRAF iPF605” capable of printing A1-plus paper. Sales posted solid growth as a result. Additionally, we launched “PosterArtist 2008,” a software application for the easy production of professional quality posters.

     Regarding broadcast-use television lenses, we promoted sale of television lenses including “DIGISUPER 86AF” equipped with an autofocus function adaptive to high definition television.

     In medical equipment, we launched “CR-1,” a non-mydriatic digital retinal camera capable of producing high-quality images for medical examinations at two-thirds less flash intensity than before.

     Sale of die bonders handled by Canon Machinery Inc. and magnetic head film deposition equipment handled by Canon ANELVA Corporation were depressed amid sluggish market conditions.

     As a result of these activities, sales for this segment fell by 2.8% on a consolidated basis and grew by 19.7% on a non-consolidated basis, both in comparison to the first half of 2007.

 

Consolidated

 

Non-Consolidated

 

  Consolidated Financial Statements

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

Consolidated Balance Sheets

ASSETS		Millions of yen
		As of June 30, 2008 (Unaudited)				As of Dec. 31, 2007
Current assets:
Cash and cash equivalents			866,395				944,463
Short-term investments			20,931				20,499
Trade receivables, net			703,690				794,240
Inventories			614,179				563,474
Prepaid expenses and other current assets			278,608				286,111
Total current assets			2,483,803				2,608,787
Noncurrent receivables			14,748				15,239
Investments			129,084				90,086
Property, plant and equipment, net			1,384,775				1,364,702
Other assets			445,786				433,811
Total assets			4,458,196				4,512,625
LIABILITIES AND STOCKHOLDERS’ EQUITY		Millions of yen
		As of June 30, 2008 (Unaudited)				As of Dec. 31, 2007
Current liabilities:
Short-term loans and current portion of long-term debt			16,114				18,317
Trade payables			511,112				514,226
Accrued income taxes			106,407				150,726
Accrued expenses			316,407				357,525
Other current liabilities			182,574				215,911
Total current liabilities			1,132,614				1,256,705
Long-term debt, excluding current installments			10,138				8,680
Accrued pension and severance cost			42,979				44,710
Other noncurrent liabilities			53,268				57,324
Total liabilities			1,238,999				1,367,419
Minority interests			211,268				222,870
Commitment and contingent liabilities
Stockholders’ equity:
Common stock			174,736				174,698
[Authorized shares] (share)			[3,000,000,000	]			[3,000,000,000	]
[Issued shares] (share)			[1,333,711,360	]			[1,333,636,210	]
Additional paid-in capital			402,866				402,991
Legal reserve			52,500				46,017
Retained earnings			2,852,485				2,720,146
Accumulated other comprehensive income (loss)			(18,444	)			34,670
Treasury stock, at cost			(456,214	)			(456,186	)
[Treasury shares] (share)			[72,594,874	]			[72,588,428	]
Total stockholders’ equity			3,007,929				2,922,336
Total liabilities and stockholders’ equity			4,458,196				4,512,625

 

Notes:

1.		Allowance for doubtful receivables	13,213 million yen
2.		Accumulated depreciation of property, plant and equipment	1,683,150 million yen
3.		Accumulated other comprehensive income (loss) includes foreign currency translation adjustments, net unrealized gains and losses on securities, net gains and losses on derivative financial instruments and pension liability adjustments.
4.		Time deposits and Marketable securities, which had been previously disclosed separately in the consolidated balance sheets, have been reclassified to Short-term investments to conform to the current year presentation.
5.		Collateral assets	223 million yen
6.		Guarantees of bank borrowings by employees and consolidated subsidiaries and affiliated companies	26,066 million yen
7.		Number of consolidated subsidiaries and affiliated companies accounted for under equity method is 240 and 18 respectively.

 

Consolidated Statements of Income

Millions of yen
		Six months ended				Six months ended
		June 30, 2008				June 30, 2007
		(Unaudited)				(Unaudited)
Net sales			2,113,432				2,166,724
Cost of sales			1,071,977				1,059,170
Gross profit			1,041,455				1,107,554
Operating expenses:
Selling, general and administrative expenses			535,009				548,411
Research and development expenses			175,463				170,267
			710,472				718,678
Operating profit			330,983				388,876
Other income (deductions):
Interest and dividend income			10,966				17,367
Interest expense			(663	)			(795	)
Other, net			(2,041	)			693
			8,262				17,265
Income before income taxes and minority interests			339,245				406,141
Income taxes			117,338				142,836
Income before minority interests			221,907				263,305
Minority interests			7,422				8,122
Net income			214,485				255,183

Note:

	Net income per share
	Basic		170.08 yen
	Diluted		170.07 yen

 

Consolidated Statement of Stockholders’ Equity

Millions of yen
		Common stock				Additional paid-in capital				Legal reserve				Retained earnings				Accumulated other comprehensive income (loss)				Treasury stock				Total stockholders’ equity
Balance at December 31, 2007			174,698				402,991				46,017				2,720,146				34,670				(456,186	)			2,922,336
Conversion of convertible debt and other			38				(120	)																			(82	)
Cash dividends															(75,663	)											(75,663	)
Transfers to legal reserve											6,483				(6,483	)											—
Comprehensive income:
Net income															214,485												214,485
Other comprehensive income (loss), net of tax
Foreign currency translation adjustments																			(48,367	)							(48,367	)
Net unrealized gains and losses on securities																			(1,601	)							(1,601	)
Net gains and losses on derivative instruments																			(1,439	)							(1,439	)
Pension liability adjustments																			(1,707	)							(1,707	)
Total comprehensive income																											161,371
Repurchase of treasury stock, net							(5	)															(28	)			(33	)
Balance at June 30, 2008 (Unaudited)			174,736				402,866				52,500				2,852,485				(18,444	)			(456,214	)			3,007,929

  Non-Consolidated Financial Statements

Non-Consolidated Balance Sheets

ASSETS	Millions of yen
		As of June 30,				As of Dec. 31,
		2008				2007
Current assets			1,344,356				1,356,510
Cash and deposits			22,818				5,676
Notes receivable			247,038				233,775
Accounts receivable			564,623				604,547
Marketable securities			42,430				75,920
Finished goods			131,107				110,168
Work in process			124,410				112,051
Raw materials and supplies			5,077				4,731
Deferred tax assets			47,262				52,989
Short-term loans receivable			51,273				49,735
Other current assets			108,319				106,926
Allowance for doubtful receivables			(1	)			(8	)
Fixed assets			1,491,704				1,434,382
Property, plant and equipment, net			927,128				912,986
Buildings			491,715				465,680
Machinery			184,835				172,863
Vehicles			329				399
Tools and equipment			53,625				55,167
Land			138,187				138,165
Construction in progress			58,437				80,712
Intangibles fixed assets			43,125				42,497
Software			39,903				39,205
Other intangibles			3,222				3,292
Investments and other assets			521,451				478,899
Marketable securities-noncurrent			30,889				28,471
Investments in affiliated companies			411,166				367,132
Long-term loans receivable			6,767				6,767
Long-term pre-paid expenses			12,251				12,957
Deferred tax assets-noncurrent			55,505				57,381
Guarantees			1,392				1,787
Other noncurrent assets			3,539				4,465
Allowance for doubtful receivables-noncurrent			(58	)			(61	)
Total assets			2,836,060				2,790,892

 

LIABILITIES AND NET ASSETS		Millions of yen
		As of June 30,				As of Dec. 31,
		2008				2007
Current liabilities			811,879				854,642
Notes payable			2,519				2,440
Accounts payable			419,527				419,444
Short-term loans			139,914				94,465
Other payable			74,004				109,473
Accrued expenses			56,169				79,992
Accrued income taxes			78,830				115,668
Deposits			11,753				10,576
Accrued warranty expenses			3,269				4,705
Accrued bonuses for employees			5,197				5,194
Accrued directors’ bonuses			198				360
Other current liabilities			20,499				12,325
Noncurrent liabilities			42,185				45,684
Convertible debt			53				128
Accrued pension and severance cost			38,081				41,713
Accrued directors’ retirement benefits			1,449				1,368
Reserve for environmental provision			1,370				2,475
Accrued long service rewards for employees			1,232				-
Total liabilities			854,064				900,326
Stockholders’ Equity			1,979,601				1,886,784
Common stock			174,736				174,698
Capital surplus			306,282				306,250
Additional paid-in capital			306,262				306,225
Other capital surplus			20				25
Retained earnings			1,954,797				1,862,022
Legal reserve			22,114				22,114
Other retained earnings			1,932,683				1,839,908
Reserve for special depreciation			5,917				7,694
Reserve for deferral of capital gain on property			2,023				1,255
Special reserves			1,249,928				1,249,928
Retained earnings brought forward			674,815				581,031
Treasury stock, at cost			(456,214	)			(456,186	)
Valuation and translation adjustments			2,333				3,782
Net unrealized gains (losses) on securities			3,141				5,028
Net deferred gains (losses) on hedges			(808	)			(1,246	)
Subscription rights to shares			62				-
Total net assets			1,981,996				1,890,566
Total liabilities and net assets			2,836,060				2,790,892

 

Non-Consolidated Statements of Income

Millions of yen
			Six months ended				Six months ended
			June 30, 2008				June 30, 2007
Net sales				1,395,347				1,370,988
Cost of sales				894,697				830,843
Gross profit				500,650				540,145
Selling, general and administrative expenses				264,760				259,782
Operating profit				235,890				280,363
Other Income				62,703				60,708
Interest income				687				1,684
Dividend income				9,462				13,970
Rental income				29,620				21,855
Royalty income				15,203				17,726
Miscellaneous income				7,731				5,473
Other Expense				42,382				38,795
Interest expense				1,928				314
Depreciation of rental assets				26,321				19,009
Loss on disposal and write-off of inventories				1,388				1,910
Foreign exchange loss				8,920				12,499
Miscellaneous loss				3,825				5,063
Ordinary profit				256,211				302,276
Non-Ordinary Income				16				494
Gain on sales of fixed assets				16				404
Gain on sales of marketable securities-noncurrent				0				90
Non-Ordinary Loss				1,595				1,433
Loss on sales and disposal of fixed assets				1,595				1,433
Income before income taxes				254,632				301,337
Income taxes	-Current			77,625				104,356
	-Deferred			8,568				(3,944	)
Net income				168,439				200,925

 

Notes to Non-Consolidated Balance Sheets

1.		Accumulated depreciation of property, plant and equipment		915,209 million yen
		Accumulated impairment losses of property, plant and equipment		564 million yen
2.		Cautionary obligation and other cautionary obligation contract		20,786 million yen

Note to Non-Consolidated Statements of Income

Net income per share		133.57 yen

Standard for Allowances

(Accrued long service rewards for employees)
		Accrued long service rewards is maintained based on expected amounts to cover the rewards payable under the byelaw applied to long-service employee.

Note to change in Accounting Policy

		The Company has a byelaw for Refresh Leave to grant long service reward and refresh leave at a regular period to the employees who have been serving the Company for long years in order to refresh mind and body as well as generating new energy.
		As the significance of amounts rose due to the increase in numbers of employees, and reinforcement of attendance record systems enabled to estimate the rational amounts of reward payable, the Company changed the accounting policy for long service reward from the expense of the term in which the reward was paid, to recognization of accrued long service reward based on expected amounts under the byelaw from this interim accounting period, in order to calculate periodical profit and loss more appropriately.
		As a result, operating profit, ordinary profit and income before income taxes have decreased by 1,232 million yen, and net income has decreased by 739 million yen for the interim accounting period ended June 30, 2008.

 

Non-Consolidated Statement of changes in Stockholders’ Equity

		Stockholders’ equity
			Common stock				Capital surplus										Retained earnings
								Additional paid-in capital					Other capital surplus					Legal reserve
																							Reserve for
																							special
																							depreciation
Balance at December 31, 2007				174,698					306,225					25					22,114					7,694
Changes in the term
Conversion of convertible debt				38					37
Transfer to reserve for special depreciation																								116
Reversal of reserve for special depreciation																								(1,893	)
Transfer to reserve for deferral of capital gain on property
Reversal of reserve for deferral of capital gain on property
Dividends from surplus
Net income
Purchase of treasury stock
Disposal of treasury stock														(5	)
Net change of items other than stockholders’ equity
Total changes in the term				38					37					(5	)				—					(1,777	)
Balance at June 30, 2008				174,736					306,262					20					22,114					5,917

Notes:

1.		Number of shares issued as of June 30, 2008		1,333,711,360 shares
2.		Classes and number of treasury stock

Classes of stock

Balance as of December 31, 2007

Increase

Decrease

Balance as of June 30, 2008

Common stock

72,588,428 shares

10,315 shares

3,869 shares

72,594,874 shares

(Reason for change)
The increase reflects the purchase of 10,315 shares based on the shareholders’ request for purchase of shares less-than-one-unit. The decrease reflects the sale of 3,869 shares based on the shareholders’ request for the sale of shares less-than-one-unit.

 

Millions of yen
Stockholders’ equity																										Valuation and translation adjustments										Subscription rights to shares					Total net assets
Retained earnings																Treasury stock					Total stockholders’ equity					Net unrealized gains (losses) on securities					Net deferred profits (losses) on hedges
Other retained earnings
	Reserve for deferral of capital gain on property					Special reserves					Retained earnings brought forward
		1,255					1,249,928					581,031					(456,186	)				1,886,784					5,028					(1,246	)				-					1,890,566
																						75																				75
												(116	)									-																				-
												1,893										-																				-
		795										(795	)									-																				-
		(27	)									27										-																				-
												(75,663	)									(75,663	)																			(75,663	)
												168,439										168,439																				168,439
																	(52	)				(52	)																			(52	)
																	24					19																				19
																						-					(1,887	)				438					62					(1,387	)
		768					-					93,784					(28	)				92,817					(1,887	)				438					62					91,430
		2,023					1,249,928					674,815					(456,214	)				1,979,601					3,141					(808	)				62					1,981,996

3.

Dividend from surplus

Resolution

Classes of stock

Total amount of dividends (millions of yen)

Dividend per share (yen)

Record date

Effective date

March 28, 2008

The ordinary general meeting of shareholders

Common stock

75,663

60.00

December 31, 2007

March 31, 2008

July 24, 2008 Board of directors’ meeting

Common stock

69,361

55.00

June 30, 2008

August 26, 2008

  COMPANY PROFILE

The following statements are the status as of June 30, 2008, if not specified otherwise.

n Canon Group Global Network

(1)  Major Overseas Bases

Name [Location]
R&D
Canon Development Americas, Inc.          [U.S.A.]
Canon Technology Europe Ltd.          [U.K.]
Canon Research Centre France S.A.S.          [France]
Canon Information Systems Research Australia Pty. Ltd.          [Australia]
Manufacturing
Canon Virginia, Inc.          [U.S.A.]
Canon Giessen GmbH          [Germany]
Canon Bretagne S.A.S.          [France]
Canon Dalian Business Machines, Inc.          [China]
Canon Zhuhai, Inc.          [China]
Canon Zhongshan Business Machines Co., Ltd.          [China]
Canon (Suzhou) Inc.          [China]
Canon Inc, Taiwan          [Taiwan]
Canon Hi-Tech (Thailand) Ltd.          [Thailand]
Canon Vietnam Co., Ltd.          [Vietnam]
Canon Opto (Malaysia) Sdn. Bhd.          [Malaysia]
Marketing
Canon U.S.A., Inc.          [U.S.A.]
Canon Canada Inc.          [Canada]
Canon Latin America, Inc.          [U.S.A.]
Canon Europa N.V.          [Netherlands]
Canon (UK) Ltd.          [U.K.]
Canon France S.A.S.          [France]
Canon Deutschland GmbH          [Germany]
Canon North-East Oy          [Finland]
Canon Middle East FZ-LLC          [U.A.E.]
Canon (China) Co., Ltd.          [China]
Canon Hongkong Co., Ltd.          [Hong Kong]
Canon Korea Consumer Imaging Inc.          [Korea]
Canon Singapore Pte. Ltd.          [Singapore]
Canon Australia Pty. Ltd.          [Australia]
Canon do Brasil Indústria e Comércio Limitada          [Brazil]
Canon Chile, S.A.          [Chile]
Canon South Africa Pty. Ltd.          [South Africa]
R&D, Manufacturing and Marketing
Canon Electronic Business Machines (H.K.) Co., Ltd.          [Hong Kong]

 

(2)  Major Domestic Bases

Name [Location]
Canon Inc.,
Headquarters          [Tokyo]
Kawasaki Office          [Kanagawa Pref.]
Ayase Office          [Kanagawa Pref.]
Hiratsuka Development Center          [Kanagawa Pref.]
Optics R&D Center          [Tochigi Pref.]
Tamagawa Plant          [Kanagawa Pref.]
Kosugi Office          [Kanagawa Pref.]
Toride Plant          [Ibaraki Pref.]
Fuji-Susono Research Park          [Shizuoka Pref.]
Yako Office          [Kanagawa Pref.]
Utsunomiya Plant          [Tochigi Pref.]
Utsunomiya Optical Products Plant          [Tochigi Pref.]
Ami Plant          [Ibaraki Pref.]
Manufacturing
Oita Canon Inc.          [Oita Pref.]
Canon Chemicals Inc.          [Ibaraki Pref.]
Nagahama Canon Inc.          [Shiga Pref.]
Fukushima Canon Inc.          [Fukushima Pref.]
Marketing
Canon Marketing Japan Inc.          [Tokyo]
Canon Software Inc.          [Tokyo]
R&D, Manufacturing and Marketing
Canon Electronics Inc.          [Saitama Pref.]
Canon Finetech Inc.          [Saitama Pref.]
Canon Machinery Inc.          [Shiga Pref.]
Nisca Corporation          [Yamanashi Pref.]
Canon Precision Inc.          [Aomori Pref.]
Canon ANELVA Corporation          [Kanagawa Pref.]

n Main Activities of the Canon Group

     Canon Group is engaged in the development, manufacture and sales of the following products.

Operations				Main Products
Business Machines		Office Imaging Products		Network Multifunction Devices, Laser Multifunction Printers, Copying Machines
		Computer Peripherals		Laser Beam Printers, Inkjet Printers, Inkjet Multifunction Printers, Image Scanners
		Business Information Products		Computers, Document Scanners, Handy Terminals, Calculators, Electronic Dictionaries
Cameras				Digital Cameras, Digital Video Cameras, Interchangeable Lenses, LCD Projectors
Optical and Other Products				Semiconductor Production Equipment, Mirror Projection Mask Aligners for LCDs, Broadcast-use Television Lenses, Medical Image Recording Equipment, Large-Format Inkjet Printers, Vacuum Equipment for Electronic Components

 

n  Employees of the Canon Group

Consolidated

Number of employees		142,491 persons
(Increase of 11,139 persons from the end of the previous term)
Americas		10,881 persons
Europe		12,318 persons
Japan		58,906 persons
Others		60,386 persons

Note:
The number of employees represents the total number of employees excluding those who do not work full-time.

Non-Consolidated

Number of employees		21,986 persons
Increase from the end of the previous term		1,100 persons
Average age		39.2 years
Average years of service		15.7 years

Notes:

n  Shares and Share Options of the Company

(1) Shares

Number of Shares Issuable           3,000,000,000 shares

Number of Shares Issued, Capital Stock and Number of Shareholders

		As of the end of				Increase (decrease)				As of the end of
		the Previous Term				during this Half-Term				this Half-Term
Number of Shares			1,333,636,210				75,150				1,333,711,360
Issued (share)
Capital Stock (yen)			174,698,297,729				37,499,850				174,735,797,579
Number of Shareholders (person)			158,388				52				158,440

Note:
The increase of the number of shares issued and capital stock during this half-term reflect the conversion of convertible debentures into shares.

(2) Shareholding by Category

		Number of Shareholders				Number of Shares
Banking Companies			375				477,272,195
Securities Underwriting Companies			63				50,811,941
Other Domestic Companies			1,394				43,195,443
Foreign Companies, etc.			1,187				592,595,812
Individual and Others			155,420				97,241,095
Treasury Stock			1				72,594,874
Total			158,440				1,333,711,360

Shareholding Ratio

(3) Share Options

		Number of share		Class and number of shares		Number of
		options		to be acquired		holders
1st Share Options		5,920 options		Common stock      592,000 shares		63 persons

 

n  Directors and Corporate Auditors of the Company

Directors

Position		Name		Business in Charge or Representative of other Organization, etc.
Chairman & CEO		Fujio Mitarai		Chairman of Nippon Keidanren
President & COO		Tsuneji Uchida
Executive Vice President		Toshizo Tanaka		Group Executive of Policy & Economy Research
& CFO				Headquarters
Senior Managing Director		Nobuyoshi Tanaka		Group Executive of Corporate Intellectual
				Property and Legal Headquarters
Senior Managing Director		Junji Ichikawa		Chief Executive of Optical Products Operations
Senior Managing Director		Akiyoshi Moroe		Group Executive of External Relations
				Headquarters and Group Executive of General
				Affairs Headquarters
Senior Managing Director		Kunio Watanabe		Group Executive of Corporate Planning
				Development Headquarters and Deputy Group
				Executive of Policy & Economic Research
				Headquarters
Managing Director		Yoroku Adachi		President & CEO of Canon U.S.A., Inc.
Managing Director		Yasuo Mitsuhashi		Chief Executive of Peripheral Products
				Operations
Managing Director		Tomonori Iwashita		Group Executive of Environment Headquarters
				and Group Executive of Quality Management
				Headquarters
Managing Director		Masahiro Osawa		Group Executive of Finance & Accounting
				Headquarters
Managing Director		Shigeyuki Matsumoto		Group Executive of Device Technology
				Development Headquarters and Deputy Group
				Executive of Core Technology Development
				Headquarters
Managing Director		Katsuichi Shimizu		Chief Executive of Inkjet Products Operations
Managing Director		Ryoichi Bamba		President of Canon Europa N.V.
Managing Director		Toshio Homma		Chief Executive of L Printer Products Operations
Managing Director		Masaki Nakaoka		Chief Executive of Office Imaging Products
				Operations
Managing Director		Haruhisa Honda		Group Executive of Production Engineering
				Headquarters
Director		Shunichi Uzawa		Executive Vice President of Canon U.S.A., Inc.
Director		Toshiyuki Komatsu		Deputy Group Executive of Corporate Planning
				Development Headquarters
Director		Tetsuro Tahara		Group Executive of Global Manufacturing &
				Logistics Headquarters
Director		Seijiro Sekine		Group Executive of Information &
				Communication Systems Headquarters
Director		Shunji Onda		Group Executive of Global Procurement
				Headquarters
Director		Kazunori Fukuma		President & Representative Director of SED Inc.
Director		Hideki Ozawa		President of Canon (China) Co., Ltd.
Director		Masaya Maeda		Group Executive of Image Communication
				Products Operations