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, 2005

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.

1.

Interim Report For The 105th Business Term From January 1, 2005 to June 30, 2005 Canon Inc.

To Our Shareholders

     We are pleased to present our report for the first half of our 105th business term (from January 1, 2005 to June 30, 2005).

     Reviewing conditions in both the domestic and overseas economies during the first half of the current fiscal year, the U.S. economy was on a steady growth track, as evidenced by a gradual increase in personal consumption and improvement in employment condition, although a number of factors, such as a series of interest rate rise and jumps in the crude oil price, limited economic growth. The European economies remained flat as a whole, due to various factors, including stagnant domestic demand. On the other hand, Asian economies continued to show strong growth particularly in China, although the growth rate was somewhat slowing. As for Japan, the economy remained firm with capital investments showing gradual improvement and personal consumption taking a favorable turn toward the end of the first half. In the foreign exchange markets, the yen strengthened against the U.S. dollar, but weakened against the euro, compared to the first half of 2004.

     Looking at the markets in which we conduct business, growth of the domestic market for digital cameras and digital video cameras slowed down somewhat, but it continued to expand at overseas. The market for networked multifunctional devices and printers grew moderately on account of increasing demand for the multifunctionality and color. In the market for semiconductor production equipment, demand weakened due to such factors as the restrained capital investment by semiconductor manufacturers. Demand for mirror projection mask aligners for LCDs, however, was robust due to stronger capital investment by LCD panel manufacturers.

     Amid these business conditions, Canon entered the final year of Phase II (2001 to 2005) of its “Excellent Global Corporation Plan,” and implemented various measures throughout the Group to establish a solid business foundation. In particular, we focused on reforming the development process and promoting the automation of production through the joint efforts of our development, production engineering and manufacturing departments, believing that it was vital to further improve the speed of introducing new products into the market and price competitiveness in order to surpass our competitors in the severe business environment. Furthermore, as for the production of digital cameras, we increased our production capacity by setting

up a state-of-the-art factory in Oita city, which handles all stages from production of lenses, the mounting process of printed circuit boards to assembly, in preparation for anticipated severe international competition.

     As a result of these efforts, our earnings during the first half of the current fiscal year remained strong, as it was in the second half of the previous fiscal year. We recorded consolidated net sales of 1,755.8 billion yen (up 6.5% from the first half of 2004), consolidated income before income taxes and minority interests of 283.7 billion yen (up 9.1%), and consolidated net income of 175.3 billion yen (up 9.0%). On a non-consolidated basis, we recorded net sales of 1,158.5 billion yen (up 7.4%), ordinary profit of 210.1 billion yen (up 6.3%) and net income of 137.9 billion yen (up 8.6%). All of these figures were historic highs.

     We have decided to pay an interim dividend of 32.50 yen per share (up 7.50 yen from the interim dividend for the previous business term) from August 26.

     Looking ahead to the second half of the current fiscal year, while we expect the global economy to remain fairly stable, we believe that the market competition will intensify and our business environment will continue to be uncertain. Under these conditions, the Canon Group will work together as a single unit to tackle management reforms, in order to achieve the successful completion of Phase II of the “Excellent Global Corporation Plan.”

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

August 2005

FUJIO MITARAI
President & C.E.O.

Change in Business Results

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

 

Business Conditions by Operations

n  Sales by Operations

Consolidated

		Sales				Change from the First
Operations		(100 millions of yen)				Half of Fiscal 2004 (%)
Business Machines			11,970				4.8
Office Imaging Products			5,678				2.4
Computer Peripherals			5,777				8.9
Business Information Products			515				(10.2	)
Cameras			3,791				9.2
Optical and Other Products			1,797				13.1
Total			17,558				6.5

Non-Consolidated

		Sales				Change from the First
Operations		(100 millions of yen)				Half of Fiscal 2004 (%)
Business Machines			7,640				9.8
Office Imaging Products			2,576				4.9
Computer Peripherals			5,064				12.5
Cameras			2,797				(2.8	)
Optical and Other Products			1,148				20.7
Total			11,585				7.4

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.

Consolidated		Non-Consolidated

 

n  Business Machines Operations

Office Imaging Products

     While sales of color and digital devices were firm, competition continued to be fierce due to a continuing decline in prices.

     As for office-use color machines in our “imageRUNNER series” digital networked multifunctional devices, sales grew as revenue from the medium-speed “iR C3220/2620 series” and “iR C3100 series” continued to be firm, and the marketing area of the high-speed “iR C5800 series” was expanded. Furthermore, in May 2005, we launched in Japan the “iR C3170/2570 series” as the follow-up to the “iR C3100 series,” which has increased our product strength and competitiveness. For the office-use black-and-white machines, business performance was firm as a result of our efforts to strengthen our product lineup and expand sales, such as the commencement of full-scale global marketing activities of our high-performance, medium-speed “iR4570/3570/2870/2270 series” featuring low power consumption and compact size, which was launched domestically last year. We also introduced the high-speed “iR6570/5570 series” that is highly productive and energy saving, starting from the launch to the domestic market in March 2005.

     For solutions business, we worked aggressively to propose workflow solutions that match clients’ needs by taking advantage of our Multifunctional Enbedded Application Platform (MEAP) incorporated in our “imageRUNNER series” machines, which offer users an expanded range of functions, and by strengthening our software line-up of “imageWARE series.” These efforts contributed to the sales growth of the “imageRUNNER series” and other products.

     For products targeting individuals and small-business owners, as the customer demand has shifted to multifunctional digital devices, we strove to expand sales through enhancing our product lineup. We started marketing the “Satera MF5750/5730/3110 series” black-and-white devices, which was introduced into the Japanese market last year, in the overseas markets. We also introduced “Satera MF8170” into the domestic market, the world’s first color machine for A4-size printing, which was launched in the North American market last year.

     As a result of these activities, sales for this segment grew 2.4% on a consolidated basis, and 4.9% on a non-consolidated basis, compared to the first half of 2004.

 

Change in Sales
100 MILLIONS OF YEN

Consolidated

Non-Consolidated

 

Computer Peripherals

     In inkjet printers, while demand grew for digital photo printers, a fierce competition for market share continued in terms of price and functions. Under the brand name of “PIXUS” for the Japanese market and “PIXMA” for overseas markets, we aggressively marketed our products that incorporate “FINE,” a high-precision print head technology that features both high-speed printing and extremely fine ink droplets, and “PictBridge,” an industry standard that enables easy direct printing from digital cameras. In particular, sales of our key models such as “PIXUS iP3100/4100” continued to be strong as was last year, and we strengthened the lineup of our products by offering “PIXUS iP9910,” a model that can handle A3 wide paper. In the multifunctional inkjet machines market where demand continues to increase rapidly, we endeavored to expand sales by launching the affordable “PIXMA MP110/130” for overseas, in addition to our “PIXUS MP770” which generated solid revenue. As a result, sales of the inkjet printers grew.

     As for laser beam printers, our OEM-brand products, both black-and-white and color, grew in terms of volume, contributing to favorable sales, against the background of robust demand of low-priced products. For Canon-brand products, an array of new products were released, including “Satera LBP3000” and “Satera LBP3210” black-and-white printers capable of printing A4 papers, “Satera LBP5200” color printer capable of printing A4 papers, and “Satera LBP5900/5600” newly-developed color printer capable of printing A3 papers that features high-speed four tandem engines. In addition, in an effort to propel our solution business, we launched a system named “MEAP-Lite,” that would expand printer functions enabling us to meet the mode of operation and needs of the customers in a precise manner.

     Regarding image scanners, our new “CanoScan LiDE 500F” received high praise for its slim design and its unique “3-way position” scan style. Also, sales were strong for our inkjet fax machines, both for the “FAX-B820” for the overseas markets and for the “FAXPHONE series” for the domestic market.

     As a result of these activities, sales for this segment grew 8.9% on a consolidated basis, and 12.5% on a non-consolidated basis compared to the first half of 2004.

 

Change in Sales
100 MILLIONS OF YEN

Consolidated

Non-Consolidated

 

     The demand for business-use document scanners marketed by Canon Electronics, Inc. continued to expand against the background of a trend toward document digitization. We recorded strong sales thanks to our “DR series” that continued to show brisk sales and the contribution from new products such as our affordable “DR-2580C/2050C series” and the mid-level “DR-5010C.”

     With regard to calculators marketed by Canon Electronics Business Machines (H.K.) Co., Ltd., print-capable calculators continued to be popular in the U.S. The company also focused to increase its sales at both Japanese and European markets by strengthening the marketing structure, but sales remained flat due to the market contraction. As for electronic dictionaries, the company promoted the marketing activities targeting the Japanese market focused on language study. As a result, overall sales increased due to both of “wordtank V80”, which is designed for Chinese language studying, and “wordtank V30,” which boasts numerous English learning functions, sustaining brisk sales. The company also introduced “wordtank C50,” which contains the contents of the “Comprehensive Dictionary of Colloquial English” for the first time in the industry.

     As for servers and personal computers handled by Canon Sales Co., Inc., market demand held firm, supported by improvement in corporate earnings. However, sales reduced due to price reduction, etc.

     Consequently, consolidated sales for this segment decreased 10.2% compared to the first half of 2004.

Note: For this segment, there were no sales on a non-consolidated basis.

 

Change in Sales
100 MILLIONS OF YEN

Consolidated

 

     In digital cameras, we enjoyed a large sales growth in the single lens reflex (SLR) cameras market where demand stayed robust, thanks to the introduction of “EOS Kiss Digital N,” a follow-up model of the best-selling “EOS Kiss Digital,” and our efforts to promote its sales together with our “EOS 20D,” high-end amateur model. Sales of our flagship models, “EOS-1Ds Mark II” and “EOS-1D Mark II,” and our “EF lens series” products, also continued to be strong. In compact digital cameras, we released “PowerShot S2 IS,” “PowerShot A520” and “PowerShot A510,” the three new models for the “PowerShot series”, and “IXY DIGITAL 600” and “IXY DIGITAL 55,” the two new models for the “IXY DIGITAL series,” in an effort to boost sales. Furthermore, in the “SELPHY series” compact photo printers that use the industry-standard “PictBridge” technology, we launched the new “SELPHY CP 600,” which incorporates the “DIGIC II” image engine that further enhanced high speed and high image.

     In digital video cameras, we bolstered our product lineup by introducing three new products including “FV M30 KIT,” in addition to our flagship “XL2 KIT” and “IXY DV M3 KIT,” released last year.

     In film cameras, sales declined despite our effort of introducing three new models including the compact “Autoboy N130 II.”

     In addition, we endeavored to bolster sales of the “Power Projector SX50” LCD projector, which incorporates our “AISYS” new optical engine with reflective liquid crystal panel (LCOS) to achieve high resolution and brightness in a compact, low-cost unit.

     As a result of these activities, sales for this segment increased 9.2% on a consolidated basis, but decreased 2.8% on a non-consolidated basis compared to the first half of 2004.

 

Change in Sales
100 MILLIONS OF YEN

Consolidated

Non-Consolidated

 

     Although the shipment volume was in a downward trend in the market for semiconductor production equipment as a whole, our sales were firm thanks to the fact that the semiconductor manufacturers in both Japan and Asia moved forward their investments in 12-inch wafer factories. In addition, we launched the “FPA-5500iZa” i-line stepper and “FPA-6000ES6a” KrF (krypton fluoride) stepper. However, fierce price competition in the market led to a decline in sales.

     As for mirror projection mask aligners for LCDs, thanks to steady capital investment by LCD panel manufacturers in response to growing demand for products using LCD panels, demand for the “MPA-7800”, our fifth-generation mirror projection mask aligner for LCDs, grew briskly. Furthermore, as panel makers aggressively pursued the investment to increase the size and to lower the cost of panels for LCD TVs, we launched in advance of our competitors the “MPA-8000 series”, our seventh-generation mirror projection mask aligners for LCDs, which received high praise and pushed up sales significantly.

     Regarding broadcast-use television lenses, while demand was stagnant at the Japanese market, sales recovered in both Europe and Asia, leading to stable revenue mainly from lenses for High Definition Television (HDTV) cameras, introduced last year. In addition, we focused on increasing the sales of “HJ17eX7.6B” and other handy-type lenses for HDTV cameras in our “high-grade ENG lens series.” As a result, sales rose steadily.

     In medical equipment, sales of X-ray digital cameras in our “CXDI series” using Canon’s proprietary sensor technology achieved solid growth. In addition, sales of our “CR-DGi” non-mydriatic retinal digital camera remained robust, against the background of rising interest in preventing lifestyle-related diseases and spread of medical examinations.

     As a result of these activities, sales for this segment grew 13.1% on a consolidated basis, and 20.7% on a non-consolidated basis compared to the first half of 2004.

 

Change in Sales
100 MILLIONS OF YEN

Consolidated

Non-Consolidated

 

Balance Sheets / Statements of Income

Canon’s consolidated financial statements are prepared in accordance with accounting principles generally accepted in the United States of America.

Consolidated Balance Sheets

ASSETS						Millions of yen
		As of June 30,				As of Dec. 31,
		2005				2004
		(Unaudited)				(Audited)
Current assets:
Cash and cash equivalents			935,921				887,774
Marketable securities			1,236				1,554
Trade receivables, net			542,192				602,790
Inventories			485,887				489,128
Prepaid expenses and other current assets			249,867				250,906
Total current assets			2,215,103				2,232,152
Noncurrent receivables			14,162				14,567
Investments			99,808				97,461
Property, plant and equipment, net			1,042,448				961,714
Other assets			285,904				281,127
Total assets			3,657,425				3,587,021

LIABILITIES, MINORITY INTERESTS AND STOCKHOLDERS’ EQUITY						Millions of yen
		As of June 30,				As of Dec. 31,
		2005				2004
		(Unaudited)				(Audited)
Current liabilities:
Short-term loans and current portion of long-term debt			11,645				9,879
Trade payables			437,210				465,396
Income taxes			78,324				105,565
Accrued expenses			197,405				205,296
Other current liabilities			181,525				197,029
Total current liabilities			906,109				983,165
Long-term debt, excluding current installments			25,056				28,651
Accrued pension and severance cost			124,816				132,522
Other noncurrent liabilities			45,425				45,993
Total liabilities			1,101,406				1,190,331
Minority interests			192,049				186,794
Stockholders’ equity:
Common stock			174,153				173,864
Additional paid-in capital			402,013				401,773
Retained earnings			1,880,627				1,740,834
Accumulated other comprehensive income (loss)			(87,487	)			(101,312	)
Treasury stock			(5,336	)			(5,263	)
Total stockholders’ equity			2,363,970				2,209,896
Total liabilities, minority interests and stockholders’ equity			3,657,425				3,587,021

Notes:							Millions of yen
			As of June 30,				As of Dec. 31,
			2005				2004
			(Unaudited)				(Audited)
1.	Allowance for doubtful receivables			11,469				11,657
2.	Accumulated depreciation			1,185,569				1,173,305
3.	Accumulated other comprehensive income (loss):
	Foreign currency translation adjustments			(66,702	)			(79,751	)
	Net unrealized gains and losses on securities			6,836				7,470
	Net gains and losses on derivative financial instruments			67				(693	)
	Minimum pension liability adjustments			(27,688	)			(28,338	)
4.	The number of consolidated subsidiaries as of June 30, 2005 was 187, and the number of companies accounted for on equity basis as of June 30, 2005 was 16.

 

Consolidated Statements of Income

						Millions of yen
		Six months ended				Six months ended
		June 30, 2005				June 30, 2004
		(Unaudited)				(Unaudited)
Net sales			1,755,840				1,648,420
Cost of sales			905,800				822,653
Gross profit			850,040				825,767
Selling, general and administrative expenses			579,851				572,391
Operating profit			270,189				253,376
Other income (deductions):			13,544				6,598
Interest and dividend income			5,970				3,027
Interest expense			(771	)			(1,438	)
Other, net			8,345				5,009
Income before income taxes and minority interests			283,733				259,974
Income taxes			101,268				92,745
Minority interests			7,197				6,453
Net income			175,268				160,776

Notes:
1.	Net income per share
	Basic		¥	197.61
	Diluted		¥	197.38
2.	Canon’s comprehensive income consists of net income, change in foreign currency translation adjustments, change in net unrealized gains and losses on securities, change in minimum pension liability adjustments and change in net gains and losses on derivative financial instruments.
	Comprehensive income for six months ended June 30, 2004 and 2005 were ¥160,466 million and ¥189,093 million, respectively.

 

Non-Consolidated Balance Sheets

ASSETS						Millions of yen
		As of June 30,				As of Dec. 31,
		2005				2004
Current Assets			1,334,187				1,366,343
Cash and deposits			305,649				294,479
Notes receivable			221,088				236,935
Accounts receivable			477,876				503,361
Marketable securities			—				132
Finished goods			107,954				110,265
Work in process			79,311				86,707
Raw materials and supplies			4,631				3,342
Deferred tax assets			18,831				24,956
Short-term loans receivable			9,730				10,334
Other current assets			111,977				98,705
Allowance for doubtful receivables			(2,860	)			(2,873	)
Fixed Assets			1,093,784				1,018,460
Property, Plant And Equipment			643,814				569,392
Buildings			290,199				252,720
Machinery			131,677				108,439
Vehicles			390				382
Tools and equipment			51,502				45,194
Land			97,553				96,875
Construction in progress			72,493				65,782
Intangibles			22,607				19,834
Industrial property rights			628				481
Facility utility rights			974				443
Software			21,005				18,910
Investments			427,363				429,234
Marketable securities-noncurrent			35,704				37,139
Investment in affiliated companies			310,377				308,453
Long-term loans receivable			5,510				5,513
Long-term pre-paid expenses			9,995				11,063
Deferred tax assets-noncurrent			61,524				62,421
Guarantees			2,673				2,888
Other noncurrent assets			1,677				1,854
Allowance for doubtful receivables-noncurrent			(97	)			(97	)
TOTAL ASSETS			2,427,971				2,384,803

Notes:
1.	Current receivable from affiliated companies		768,740 million yen
	Noncurrent receivable from affiliated companies		5,507 million yen
	Current payable to affiliated companies		268,496 million yen
2.	Accumulated depreciation of property, plant and equipment		660,558 million yen

 

LIABILITIES AND STOCKHOLDERS’ EQUITY						Millions of yen
		As of June 30,				As of Dec. 31,
		2005				2004
Current Liabilities			587,657				637,853
Notes payable			6,183				20,558
Accounts payable			310,894				308,707
Short-term loans			40,597				37,732
Other payable			94,810				92,402
Accrued expenses			49,150				57,031
Accrued income taxes			61,160				81,387
Deposits			9,800				9,019
Accrued bonuses for employees			4,724				4,677
Other current liabilities			10,339				26,340
Noncurrent Liabilities			86,931				95,543
Convertible debenture			1,219				1,796
Accrued pension and severance cost			84,555				92,595
Accrued directors’ retirement benefit			1,157				1,152
TOTAL LIABILITIES			674,588				733,396
Common Stock			174,153				173,864
Capital Surplus			305,681				305,392
Additional paid-in capital			305,680				305,392
Other capital surplus			1				—
Retained Earnings			1,271,141				1,168,877
Legal reserve			22,114				22,114
Reserve for special depreciation			13,337				9,071
Reserve for deferral of capital gain on property			5				7
Special reserves			1,068,828				889,828
Unappropriated retained earnings			166,857				247,857
Net Unrealized Gains (Losses) on Securities			7,744				8,537
Treasury Stock			(5,336	)			(5,263	)
TOTAL STOCKHOLDERS’ EQUITY			1,753,383				1,651,407
TOTAL LIABILITIES AND STOCKHOLDERS’ EQUITY			2,427,971				2,384,803

3.	Contingent liabilities
	Guarantees		32,201 million yen
	Letter of awareness and others		539 million yen

 

Non-Consolidated Statements of Income

							Millions of yen
			Six months ended				Six months ended
			June 30, 2005				June 30, 2004
OPERATING PROFIT AND LOSS
Operating Revenue				1,158,478				1,078,553
Net sales				1,158,478				1,078,553
Operating Expenses				966,331				888,149
Cost of sales				741,242				666,940
Selling, general and administrative expenses				225,089				221,209
OPERATING PROFIT				192,147				190,404
OTHER INCOME AND EXPENSE
Other Income				37,951				27,560
Interest income				404				255
Dividend income				7,223				6,876
Rental income				12,626				5,869
Patent royalties				10,920				9,921
Miscellaneous income				6,778				4,639
Other Expense				19,973				20,293
Interest expense				33				54
Depreciation of rental assets				11,496				5,143
Loss on disposal and write-off of inventories				2,775				4,434
Foreign exchange loss				1,390				6,772
Miscellaneous loss				4,279				3,890
ORDINARY PROFIT				210,125				197,671
NON-ORDINARY INCOME AND LOSS
Non-Ordinary Income				1,835				3,576
Gain on sales of fixed assets				28				5
Gain on sales of marketable securities-noncurrent				1,797				3,571
Gain on sales of investments in affiliated companies				10				—
Non-Ordinary Loss				2,150				4,460
Loss on sales and disposal of fixed assets				2,150				4,460
INCOME BEFORE INCOME TAXES				209,810				196,787
Income taxes	— Current			64,322				64,517
	— Deferred			7,550				5,234
NET INCOME				137,938				127,036
Unappropriated retained earnings brought forward from previous term				28,919				22,277
Loss on sales of treasury stock				—				1,513
UNAPPROPRIATED RETAINED EARNINGS				166,857				147,800

Notes:
1.	Transactions with affiliated companies:		Sales		1,108,622 million yen
			Purchase		653,111 million yen
			Other transaction		32,519 million yen
2.	Net income per share				155.52 yen

 

Consolidated

		Sales				Change from the First
Region		(100 millions of yen)				Half of Fiscal 2004 (%)
Americas			5,181				4.7
Europe			5,517				7.0
Japan			4,161				0.6
Others			2,699				20.4
Total			17,558				6.5

Non-Consolidated

		Sales				Change from the First
Region		(100 millions of yen)				Half of Fiscal 2004 (%)
Americas			3,854				7.9
Europe			3,997				6.0
Japan			1,592				(9.4	)
Others			2,142				27.2
Total			11,585				7.4

Consolidated		Non-Consolidated

(100 MILLIONS OF YEN)

COMPANY PROFILE
(The following statements are the status as of June 30, 2005, 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 (China) Co., Ltd.          [China]
     Canon Hongkong Co., Ltd.          [Hong Kong]
     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]
     Ayase Office          [Kanagawa Pref.]
     Hiratsuka Development Center          [Kanagawa Pref.]
     Ami Plant          [Ibaraki Pref.]
     Optics R&D Center          [Tochigi Pref.]
     Toride Plant          [Ibaraki Pref.]
     Kosugi Office          [Kanagawa Pref.]
     Fuji-Susono Research Park          [Shizuoka Pref.]
     Yako Development Center          [Kanagawa Pref.]
     Tamagawa Plant          [Kanagawa Pref.]
     Utsunomiya Plant          [Tochigi Pref.]
     Utsunomiya Optical Products Plant          [Tochigi Pref.]

Manufacturing
     Canon Chemicals Inc.          [Ibaraki Pref.]
     Nagahama Canon Inc.          [Shiga Pref.]
     Fukushima Canon Inc.          [Fukushima Pref.]
     Oita Canon Inc.          [Oita Pref.]

Marketing
     Canon Sales Co., Inc.          [Tokyo]
     Canon Software Inc.          [Tokyo]

R&D, Manufacturing and Marketing
     Canon Electronics Inc.          [Saitama Pref.]
     Canon Finetech Inc.          [Ibaraki Pref.]
     Nisca Corporation          [Yamanashi Pref.]

 

 

 

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

Operations				Main Products
Business Machines		Office Imaging Products		Digital Multifunctional Devices,
				Copying Machines,
				Laser Facsimiles
		Computer Peripherals		Laser Beam Printers,
				Inkjet Printers,
				Inkjet Multifunctional Devices,
				Inkjet Facsimiles,
				Image Scanners
		Business Information Products		Computers,
				Document Scanners,
				Microfilm Equipment,
				Handy Terminals,
				Calculators,
				Electronic Dictionaries
Cameras				Digital Cameras,
				Film 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,
				Ophthalmic Equipment,
				X-Ray Equipment,
				Medical Image Recording Equipment

 

Consolidated
Number of employees		109,434 persons
(Increase of 1,177 persons from the end of the previous term)
Americas		10,096 persons
Europe		10,793 persons
Japan		46,709 persons
Others		41,836 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		19,797 persons
Increase from the end of the previous term		325 persons
Average age		39.1 years
Average years of service		16.3 years

Notes:
1.	The number of employees represents the total number of employees excluding those who do not work full-time.
2.	The number of employees does not include those who have been dispatched to affiliated companies, etc. (2,041 persons).

Total Number of Shares Issuable           2,000,000,000 shares

Total Outstanding Shares, Capital Stock and Number of Shareholders

		As of the end of				Increase during				As of the end of
		the Previous Term				this Half-Term				this Half-Term
Total Outstanding Shares (share)			887,977,251				385,436				888,362,687
Capital Stock (yen)			173,864,347,825				288,691,564				174,153,039,389
Number of Shareholders (person)			49,483				710				50,193

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

 

		Number of Shareholders				Number of Shares
Banking Companies			300				324,517,508
Securities Underwriting Companies			44				26,735,610
Other Domestic Companies			757				29,245,169
Foreign Companies, etc.			1,154				461,865,254
Individual and Others			47,937				44,865,351
Treasury Stock			1				1,133,795
Total			50,193				888,362,687

Shareholding Ratio

 

(3) Treasury Stock

Acquisition during this

Disposition during this

Half-Term

Half-Term

Number of

Total Amount

Total Amount

Treasury Stock

Number of

of Acquisition

Number of

of Disposition

as of the end of

Shares

Price

Shares

Price

this Half-Term

Common stock

76 million yen

Common stock

3 million yen

Common stock

13,458 shares

530 shares

1,133,795 shares

Notes:
1.	The acquisitions and dispositions during this half-term reflect the purchase and sales of less-than-one-unit shares, respectively.
2.	There were no share annulment procedures with respect to the Company’s treasury stock during this half-term.
3.	The number of the Company’s treasury stock as of the end of the previous term was 1,120,867 shares of common stock.

(4)  Convertible Debentures
MILLIONS OF YEN

 

Directors

(As of August 1, 2005)
Position		Name		Business in Charge or Main Occupation
President & CEO		Fujio Mitarai
Senior Managing Director		Yukio Yamashita		Group Executive of Human Resources Management & Organization Headquarters
Senior Managing Director		Toshizo Tanaka		Group Executive of Finance & Accounting Headquarters
Senior Managing Director		Tsuneji Uchida		Chief Executive of Image Communication Products Operations
Managing Director		Yusuke Emura		Group Executive of Global Environment Promotion Headquarters
Managing Director		Nobuyoshi Tanaka		Group Executive of Corporate Intellectual Property and Legal Headquarters
Managing Director		Junji Ichikawa		Chief Executive of Optical Products Operations
Managing Director		Hajime Tsuruoka		President of Canon Europa N.V.
Managing Director		Akiyoshi Moroe		Group Executive of General Affairs Headquarters
Managing Director		Kunio Watanabe		Group Executive of Corporate Planning Development Headquarters
Managing Director		Hironori Yamamoto		Group Executive of Global Manufacturing Headquarters
Managing Director		Yoroku Adachi		President of Canon U.S.A., Inc.
Managing Director		Yasuo Mitsuhashi		Chief Executive of Peripheral Products Operations
Director		Katsuichi Shimizu		Chief Executive of Inkjet Products Operations
Director		Ryoichi Bamba		Executive Vice President of Canon U.S.A., Inc.
Director		Tomonori Iwashita		Deputy Chief Executive of Image Communication Products Operations
Director		Toshio Homma		Group Executive of L Printer Business Promotion Headquarters
Director		Shigeru Imaiida		Deputy Group Executive of Global Manufacturing Headquarters
Director		Masahiro Osawa		Group Executive of Global Procurement Headquarters
Director		Keijiro Yamazaki		Group Executive of Information & Communication Systems Headquarters
Director		Shunichi Uzawa		President of SED Inc.
Director		Masaki Nakaoka		Chief Executive of Office Imaging Products Operations
Director		Toshiyuki Komatsu		Group Executive of Leading-Edge Technology Development Headquarters; Group Executive of Core Technology Development Headquarters
Director		Shigeyuki Matsumoto		Group Executive of Device Technology Development Headquarters
Director		Haruhisa Honda		Chief Executive of Chemical Products Operations

 

Corporate Auditors

(As of August 1, 2005)
Position		Name		Business in Charge or Main Occupation
Corporate Auditor		Teruomi Takahashi
Corporate Auditor		Kunihiro Nagata
Corporate Auditor		Tadashi Ohe		Attorney
Corporate Auditor		Tetsuo Yoshizawa

Notes:
1.	Directors Mr. Kinya Uchida and Mr. Ikuo Soma retired at the end of the Ordinary General Meeting of Shareholders for the 104th Business Term which was held on March 30, 2005.
2.	Corporate Auditors Mr. Tadashi Ohe and Mr. Tetsuo Yoshizawa are outside Corporate Auditors defined by Article 18, Paragraph 1 of the Law regarding Exceptional Rules of the Commercial Code concerning Auditing, etc. of Stock Corporations.

 

INFORMATION ON SHARES