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 ..... July........................................................ , 2010  

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           X           Form 40-F                    

   [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                      No           X         

   [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. CONSOLIDATED RESULTS FOR THE SECOND QUARTER AND THE FIRST HALF ENDED JUNE 30, 2010

CONSOLIDATED RESULTS FOR THE SECOND QUARTER AND
THE FIRST HALF ENDED JUNE 30, 2010

July 27, 2010

CONSOLIDATED RESULTS FOR THE SECOND QUARTER

(Millions of yen, thousands of U.S. dollars, except per share amounts)

		Actual
		Three months				Three months								Three months
		ended				ended				Change(%)				ended
		June 30, 2010				June 30, 2009								June 30, 2010
Net sales		¥	970,358			¥	793,785			+	22.2			$	11,026,795
Operating profit			113,438				44,906			+	152.6				1,289,068
Income before income taxes			112,651				35,492			+	217.4				1,280,125
Net income attributable
to Canon Inc.		¥	67,638			¥	15,605			+	333.4			$	768,614
Net income attributable to Canon Inc. stockholders per share:
- Basic		¥	54.67			¥	12.64			+	332.5			$	0.62
- Diluted			54.66				12.64			+	332.4				0.62
CONSOLIDATED RESULTS FOR THE FIRST HALF
(Millions of yen, thousands of U.S. dollars, except per share amounts)
		Actual																Projected
		Six months				Six months								Six months				Year ending
		ended				ended				Change(%)				ended				December 31,				Change(%)
		June 30, 2010				June 30, 2009								June 30, 2010				2010
Net sales		¥	1,725,884			¥	1,480,819			+	16.5			$	19,612,318			¥	3,750,000			+	16.9
Operating profit			200,281				64,938			+	208.4				2,275,920				360,000			+	65.9
Income before income taxes			201,503				57,886			+	248.1				2,289,807				360,000			+	64.1
Net income attributable
to Canon Inc.		¥	124,449			¥	33,349			+	273.2			$	1,414,193			¥	240,000			+	82.3
Net income attributable to Canon Inc. stockholders per share:
- Basic		¥	100.68			¥	27.01			+	272.8			$	1.14			¥	193.53			+	81.5
- Diluted			100.68				27.01			+	272.8				1.14				-				-
		Actual
		As of June 30, 2010				As of December 31, 2009				Change(%)				As of June 30, 2010
Total assets		¥	4,016,902			¥	3,847,557			+	4.4			$	45,646,614
Canon Inc. stockholders’ equity		¥	2,699,378			¥	2,688,109			+	0.4			$	30,674,750

Notes:		1.		Canon’s consolidated financial statements are prepared in accordance with U.S. generally accepted accounting principles.
		2.		U.S. dollar amounts are translated from yen at the rate of JPY88=U.S.$1, the approximate exchange rate on the Tokyo Foreign Exchange Market as of June 30, 2010, solely for the convenience of the reader.

Canon Inc.		30-2, Shimomaruko 3-chome, Ohta-ku,
Headquarter office		Tokyo 146-8501, Japan
		Phone: +81-3-3758-2111

I. Operating Results and Financial Conditions

2010 Second Quarter in Review

Looking back at the global economy in the second quarter of 2010, economic conditions continued improving broadly amid the recovery trend from the second half of 2009. Although the pace of economic recovery in Europe has remained decidedly modest largely due to sluggish consumer spending triggered by the financial concerns of Greece and other Southern European nations, along with deteriorating unemployment conditions, the United States continued to record a recovery in consumer spending along with steady export growth, while Japan saw a rapid increase in exports, mainly to Asian countries. The Asian economies, such as those of China and India, along with other emerging countries, continued to display solid growth.

As for the markets in which Canon operates amid these conditions, within the office equipment market, as had occurred earlier with color-model network digital multifunction devices (MFDs), demand for monochrome models also finally headed toward recovery. Additionally, the market for laser printers achieved a turnaround compared with the previous year. As for the consumer products market, demand for digital single-lens reflex (SLR) cameras displayed healthy growth throughout most all global markets, while demand for compact digital cameras recovered in developed countries and grew steadily in emerging markets, such as those in Asia. With regard to inkjet printers, demand indicates a steady recovery trend with the market size expanding compared with the year-ago period. In the industry and others market, market conditions for semiconductor lithography equipment and liquid crystal display (LCD) lithography equipment were marked by an upturn in order placements, owing to improved sentiment within the semiconductor-device and LCD-panel markets. The average values of the yen during the second quarter and first half of the year were ¥91.96 and ¥91.35 to the U.S. dollar, respectively, year-on-year appreciations of approximately ¥5 and ¥4, and ¥116.34 and ¥120.20 to the euro, year-on-year appreciations of approximately ¥17 and ¥7.

Amid the effects of the strong yen, net sales for the quarter totaled ¥970.4 billion (U.S.$11,027 million), an increase of 22.2% from the year-ago period, and ¥1,725.9 billion (U.S.$19,612 million) for the first six months, a jump of 16.5%, owing to strong sales of such consumer products as digital SLR cameras, a strong recovery in sales of laser printers among office products, the turnaround within the industry and others market, and the impact of consolidation arising from corporate acquisitions, such as that of Océ N.V. Although the appreciation of the yen had a significant impact, the quarterly gross profit ratio rose 5.5 points year on year to 49.0%, and improved 5.4 points to 48.9% for the first half, mainly reflecting the launch of new products and ongoing cost-cutting efforts, along with heightened production turnover accompanying ramped up production. As a result, gross profit rose by 37.6% to ¥475.4 billion (U.S.$5,402 million) for the second quarter and increased by 31.0% to ¥843.9 billion (U.S.$9,590 million) for the six months ended June 30, 2010. Despite the impact of consolidation, Group-wide efforts to thoroughly cut spending contributed to an improvement in the operating expenses to sales ratio of 0.5 points to 37.3% for the quarter, and of 1.8 points to 37.3% for the first half of the year. Consequently, operating profit climbed approximately 2.5 fold to ¥113.4 billion (U.S.$1,289 million) for the quarter, and approximately 3.1 fold to ¥200.3 billion (U.S.$2,276 million) for the combined six-month period. Other income (deductions) recorded an increase due to an improvement in foreign currency exchange losses and earnings on investments in affiliates, leading to income before income taxes for the second quarter of ¥112.7 billion (U.S.$1,280 million), an approximately 3.2-fold increase year on year, and ¥201.5 billion (U.S.$2,290 million) for the six months ended June 30, 2010, an approximately 3.5-fold leap from the corresponding period of the previous year. Net income attributable to Canon Inc. surged approximately 4.3 fold to ¥67.6 billion (U.S.$769 million) for the quarter, and 3.7 fold to ¥124.4 billion (U.S.$1,414 million) for the first half.

Basic net income attributable to Canon Inc. stockholders per share for the quarter was ¥54.67 (U.S.$0.62), an increase of ¥42.03 (U.S.$0.48) compared with the corresponding quarter of the previous year, and ¥100.68 (U.S.$1.14) for the first half of 2010, a year-on-year increase of ¥73.67 (U.S.$0.84).

Results by Segment

Looking at Canon’s quarterly performance by business sector, within the Office Business Unit, while sales volume of color network digital MFDs increased by 39% boosted by the recovery in demand for office equipment along with the introduction of new image RUNNER ADVANCE-series products, sales volume for monochrome models increased by 21% reflecting the recovering market conditions. Laser printers, which suffered sluggish sales in the corresponding quarter of the previous year largely due to an adjustment of inventory levels, realized a significant increase in sales volume of 103%, almost double that of the previous year. Consequently, despite the significant effects of the strong yen, second-quarter sales for the segment totaled ¥521.9 billion (U.S.$5,931 million), growing 31.3% year on year, and ¥931.1 billion (U.S.$10,580 million) for the six months ended June 30, 2010, an increase of 19.9%. Operating profit increased 98.0% to ¥83.8 billion (U.S.$952 million) for the second quarter, and 72.8% to ¥155.9 billion (U.S.$1,771 million) for the combined six months of the year, mainly as a result of expanded sales and the sharp rise in the gross profit ratio.

Within the Consumer Business Unit, sales volumes of such new digital SLR cameras as the competitively priced EOS Digital Rebel T1i (EOS 500D) and the new EOS Digital Rebel T2i (EOS 550D), along with the EOS 5D Mark II and EOS 7D advanced-amateur models, sustained healthy growth. As for compact digital cameras, the Company launched four new ELPH (IXUS)-series models and five new PowerShot-series models, boosting sales volumes particularly in emerging markets. Consequently, sales volume for digital cameras recorded a year-on-year increase of 9%. With respect to inkjet printers, sales displayed solid growth, particularly in Asia, amid the market recovery, contributing to an increase in sales volume of 4%. Although the appreciation of the yen had a strong impact, sales for the segment rose 9.8% year on year to ¥364.0 billion (U.S.$4,137 million), and 14.0% to ¥654.3 billion (U.S.$7,435 million) for the six-month period. Operating profit increased by 71.6% to ¥66.9 billion (U.S.$761 million) for the quarter, and 101.3% to ¥114.3 billion (U.S.$1,298 million) for the first half, largely reflecting increased sales and the rise in the gross profit ratio.

In the Industry and Others Business Unit, independent business-related sales of Group subsidiaries increased in line with the turnaround in business conditions while sales volume of LCD lithography equipment grew appreciably, stimulated by the revival of the market. Sales volume of semiconductor lithography equipment, while remaining at a low level, also gained modestly. As a result, sales for the segment grew 27.5% to ¥108.9 billion (U.S.$1,238 million) for the quarter and 11.6% to ¥191.3 billion (U.S.$2,173 million) for the combined six months. Operating loss improved by ¥2.7 billion (U.S.$31 million) to ¥5.4 billion (U.S.$62 million) for the quarter and totaled ¥8.4 billion (U.S.$95 million) for the six-month period, a turnaround of ¥15.4 billion (U.S.$175 million) year on year owing to expanded sales combined with a reduction in expenses.

Cash Flow

During the first half of 2010, cash flows from operating activities totaled ¥348.6 billion (U.S.$3,961 million), an increase of ¥159.9 billion (U.S.$1,817 million) from the year-ago period, mainly due to the significant increase in profit. Although investments, such as for the acquisition of shares of Océ N.V. to strengthen the printing business, increased substantially, capital investment was focused on items relevant to introducing new products, which led to a year-on-year decrease of cash flows from investing activities of ¥41.3 billion (U.S.$470 million) to ¥177.0 billion (U.S.$2,011 million). Accordingly, free cash flows totaled ¥171.6 billion (U.S.$1,950 million), an increase of ¥201.2 billion (U.S.$2,287 million) from the corresponding year-ago period.

Cash flows from financing activities recorded an outlay of ¥150.6 billion (U.S.$1,711 million), mainly arising from the dividend payout coupled with the partial repayment of borrowings of Océ N.V. Cash and cash equivalents decreased by ¥23.3 billion (U.S.$265 million) to ¥771.7 billion (U.S.$8,769 million) from the end of the previous year due to the foreign currency translation adjustments stemming from the strong yen.

Outlook

As for the outlook in the third quarter and thereafter, although developed countries, especially in Europe, face uncertainty regarding future prospects due to such factors as fiscal challenges and employment problems, those economies appear to be steadily headed for recovery with China and other emerging nations, which are expected to fuel global growth, likely to continue enjoying healthy expansion.

In the businesses in which Canon is involved, within the office equipment market, demand for such products as color network digital MFDs and laser printers are projected to head toward a full-fledged recovery. With respect to the consumer products market, demand for digital SLR cameras and compact digital cameras is expected to achieve solid growth while sales of inkjet printers will likely expand gradually in response to the economic turnaround. As for the industry and others market, demand for semiconductor lithography equipment is expected to regain momentum as device makers begin investing again while demand for LCD lithography equipment is also expected to increase sharply as LCD panel manufacturers gear up to boost production.

With regard to currency exchange rates for the third quarter onward, on which Canon’s performance outlook is based, despite the effects of the financial concerns of Greece and other Southern European nations, along with uncertainty over future interest rate policies for major countries and other factors, Canon anticipates exchange rates for the period of ¥90 to the U.S. dollar and ¥110 to the euro, representing appreciations of approximately ¥1 against the U.S. dollar, and approximately ¥23 against the euro compared with the previous year. Upon taking into consideration current business sentiment based on these foreign exchange rate assumptions, Canon maintains its previous projections: net sales of ¥3,750.0 billion (U.S.$42,614 million), a year-on-year increase of 16.9%; operating profit of ¥360.0 billion (U.S.$4,091 million), a year-on-year increase of 65.9%; income before income taxes of ¥360.0 billion (U.S.$4,091 million), a year-on-year increase of 64.1%; and net income attributable to Canon Inc. of ¥240.0 billion (U.S.$2,727 million), a year-on-year increase of 82.3%.

Consolidated Outlook

Fiscal year

		Millions of yen
		Year ending								Change				Year ended				Change (%)
		December 31, 2010												December 31, 2009
		Previous Outlook (A)				Revised Outlook (B)				(B - A)				Results (C)				(B - C) / C
Net sales		¥	3,750,000			¥	3,750,000			¥	0			¥	3,209,201				+ 16.9%
Operating profit			360,000				360,000				0				217,055				+ 65.9%
Income before income taxes			360,000				360,000				0				219,355				+ 64.1%
Net income attributable to Canon Inc.		¥	240,000			¥	240,000			¥	0			¥	131,647				+ 82.3%

Basic Policy Regarding Profit Distribution

Canon is being more proactive in returning profits to shareholders, mainly in the form of a dividend, taking into consideration planned future investments, free cash flow, and the company’s consolidated business performance. Specifically, Canon’s medium- to long-term objective is to continuously strive to raise its consolidated payout ratio to approximately 30%.

The company plans to distribute an interim dividend of ¥55.00 (U.S.$0.63) per share for fiscal 2010, the same amount per share as fiscal 2009, to provide a stable return to shareholders. The year-end dividend, however, has yet to be decided.

CANON INC. AND SUBSIDIARIES

CONSOLIDATED

II. Financial Statements

1. CONSOLIDATED BALANCE SHEETS

		Millions of yen												Thousands of
														U.S. dollars
		As of				As of								As of
		June 30,				December 31,				Change				June 30,
		2010				2009								2010
ASSETS
Current assets:
Cash and cash equivalents		¥	771,697			¥	795,034			¥	(23,337	)		$	8,769,284
Short-term investments			35,264				19,089				16,175				400,727
Trade receivables, net			547,961				556,572				(8,611	)			6,226,830
Inventories			427,767				373,241				54,526				4,860,989
Prepaid expenses and other current assets			295,678				273,843				21,835				3,359,977
Total current assets			2,078,367				2,017,779				60,588				23,617,807
Noncurrent receivables			15,789				14,936				853				179,420
Investments			86,426				114,066				(27,640	)			982,114
Property, plant and equipment, net			1,263,422				1,269,785				(6,363	)			14,357,068
Intangible assets, net			170,158				117,396				52,762				1,933,614
Other assets			402,740				313,595				89,145				4,576,591
Total assets		¥	4,016,902			¥	3,847,557			¥	169,345			$	45,646,614
LIABILITIES AND EQUITY
Current liabilities:
Short-term loans and current portion of long-term debt		¥	6,834			¥	4,869			¥	1,965			$	77,659
Trade payables			385,682				339,113				46,569				4,382,750
Accrued income taxes			66,818				50,105				16,713				759,295
Accrued expenses			280,191				274,300				5,891				3,183,989
Other current liabilities			137,368				115,303				22,065				1,561,000
Total current liabilities			876,893				783,690				93,203				9,964,693
Long-term debt, excluding current installments			5,444				4,912				532				61,864
Accrued pension and severance cost			177,412				115,904				61,508				2,016,046
Other noncurrent liabilities			80,870				63,651				17,219				918,977
Total liabilities			1,140,619				968,157				172,462				12,961,580
Equity:
Canon Inc. stockholders’ equity:
Common stock			174,762				174,762				-				1,985,932
Additional paid-in capital			407,031				404,293				2,738				4,625,352
Legal reserve			55,291				54,687				604				628,307
Retained earnings			2,918,817				2,871,437				47,380				33,168,375
Accumulated other comprehensive income (loss)			(333,405	)			(260,818	)			(72,587	)			(3,788,693	)
Treasury stock, at cost			(523,118	)			(556,252	)			33,134				(5,944,523	)
Total Canon Inc. stockholders’ equity			2,699,378				2,688,109				11,269				30,674,750
Noncontrolling interests			176,905				191,291				(14,386	)			2,010,284
Total equity			2,876,283				2,879,400				(3,117	)			32,685,034
Total liabilities and equity		¥	4,016,902			¥	3,847,557			¥	169,345			$	45,646,614
		Millions of yen												Thousands of
														U.S. dollars
		As of				As of								As of
		June 30,				December 31,								June 30,
		2010				2009								2010
Notes:
1. Allowance for doubtful receivables		¥	16,250			¥	11,343							$	184,659
2. Accumulated depreciation			1,861,721				1,815,982								21,155,920
3. Accumulated other comprehensive income (loss):
Foreign currency translation adjustments			(275,371	)			(202,628	)							(3,129,216	)
Net unrealized gains and losses on securities			1,700				3,285								19,318
Net gains and losses on derivative instruments			2,033				71								23,102
Pension liability adjustments			(61,767	)			(61,546	)							(701,897	)

CANON INC. AND SUBSIDIARIES

CONSOLIDATED

2. CONSOLIDATED STATEMENTS OF INCOME

Results for the second quarter		Millions of yen												Thousands of
														U.S. dollars
		Three months				Three months								Three months
		ended				ended				Change(%)				ended
		June 30, 2010				June 30, 2009								June 30, 2010
Net sales		¥	970,358			¥	793,785			+	22.2			$	11,026,795
Cost of sales			494,995				448,320								5,624,943
Gross profit			475,363				345,465			+	37.6				5,401,852
Operating expenses:
Selling, general and administrative expenses			280,033				219,742								3,182,193
Research and development expenses			81,892				80,817								930,591
			361,925				300,559								4,112,784
Operating profit			113,438				44,906			+	152.6				1,289,068
Other income (deductions):
Interest and dividend income			1,722				1,357								19,568
Interest expense			(867	)			(137	)							(9,852	)
Other, net			(1,642	)			(10,634	)							(18,659	)
			(787	)			(9,414	)							(8,943	)
Income before income taxes			112,651				35,492			+	217.4				1,280,125
Income taxes			43,858				17,346								498,386
Consolidated net income			68,793				18,146								781,739
Less: Net income attributable to noncontrolling interests			1,155				2,541								13,125
Net income attributable to Canon Inc.		¥	67,638			¥	15,605			+	333.4			$	768,614

Note:

Consolidated comprehensive income for the three months ended June 30, 2010 and 2009 was JPY 5,095 million (decrease) (U.S.$ 57,898 thousand (decrease)) and JPY 37,400 million (increase), respectively.

Results for the first half		Millions of yen												Thousands of
														U.S. dollars
		Six months				Six months								Six months
		ended				ended				Change(%)				ended
		June 30, 2010				June 30, 2009								June 30, 2010
Net sales		¥	1,725,884			¥	1,480,819			+	16.5			$	19,612,318
Cost of sales			881,953				836,540								10,022,193
Gross profit			843,931				644,279			+	31.0				9,590,125
Operating expenses:
Selling, general and administrative expenses			490,825				425,735								5,577,557
Research and development expenses			152,825				153,606								1,736,648
			643,650				579,341								7,314,205
Operating profit			200,281				64,938			+	208.4				2,275,920
Other income (deductions):
Interest and dividend income			2,743				2,791								31,171
Interest expense			(953	)			(221	)							(10,830	)
Other, net			(568	)			(9,622	)							(6,454	)
			1,222				(7,052	)							13,887
Income before income taxes			201,503				57,886			+	248.1				2,289,807
Income taxes			73,975				24,105								840,625
Consolidated net income			127,528				33,781								1,449,182
Less: Net income attributable to noncontrolling interests			3,079				432								34,989
Net income attributable to Canon Inc.		¥	124,449			¥	33,349			+	273.2			$	1,414,193

Note:

Consolidated comprehensive income for the six months ended June 30, 2010 and 2009 was JPY 52,747 million (increase) (U.S.$ 599,398 thousand (increase)) and JPY 91,273 million (increase), respectively.

CANON INC. AND SUBSIDIARIES

CONSOLIDATED

3. DETAILS OF SALES

Results for the second quarter

														Thousands of
		Millions of yen												U.S. dollars
		Three months				Three months								Three months
Sales by business unit		ended				ended				Change(%)				ended
		June 30, 2010				June 30, 2009								June 30, 2010
Office		¥	521,943			¥	397,630			+	31.3			$	5,931,170
Consumer			364,027				331,542			+	9.8				4,136,670
Industry and Others			108,930				85,464			+	27.5				1,237,841
Eliminations			(24,542	)			(20,851	)			-				(278,886	)
Total		¥	970,358			¥	793,785			+	22.2			$	11,026,795

														Thousands of
		Millions of yen												U.S. dollars
		Three months				Three months								Three months
Sales by region		ended				ended				Change(%)				ended
		June 30, 2010				June 30, 2009								June 30, 2010
Japan		¥	170,145			¥	173,378			-	1.9			$	1,933,466
Overseas:
Americas			269,939				225,529			+	19.7				3,067,489
Europe			310,969				239,108			+	30.1				3,533,739
Other areas			219,305				155,770			+	40.8				2,492,101
			800,213				620,407			+	29.0				9,093,329
Total		¥	970,358			¥	793,785			+	22.2			$	11,026,795

Results for the first half

														Thousands of
		Millions of yen												U.S. dollars
		Six months				Six months								Six months
Sales by business unit		ended				ended				Change(%)				ended
		June 30, 2010				June 30, 2009								June 30, 2010
Office		¥	931,077			¥	776,300			+	19.9			$	10,580,420
Consumer			654,314				573,934			+	14.0				7,435,386
Industry and Others			191,258				171,318			+	11.6				2,173,386
Eliminations			(50,765	)			(40,733	)			-				(576,874	)
Total		¥	1,725,884			¥	1,480,819			+	16.5			$	19,612,318

														Thousands of
		Millions of yen												U.S. dollars
		Six months				Six months								Six months
Sales by region		ended				ended				Change(%)				ended
		June 30, 2010				June 30, 2009								June 30, 2010
Japan		¥	337,661			¥	342,882			-	1.5			$	3,837,057
Overseas:
Americas			474,494				401,860			+	18.1				5,391,977
Europe			541,647				449,175			+	20.6				6,155,080
Other areas			372,082				286,902			+	29.7				4,228,204
			1,388,223				1,137,937			+	22.0				15,775,261
Total		¥	1,725,884			¥	1,480,819			+	16.5			$	19,612,318

Notes:

1.

The primary products included in each of the segments are as follows:

Office :

Office network digital multifunction devices (MFDs) / Color network digital MFDs / Personal-use network digital MFDs / Office copying machines / Full-color copying machines / Personal-use copying machines / Laser printers /Large format inkjet printers

Consumer :

Digital SLR cameras / Compact digital cameras / Interchangeable lenses / Digital video camcorders / Inkjet multifunction peripherals / Single function inkjet printers / Image scanners / Broadcasting equipment

Industry and Others :

Semiconductor lithography equipment / LCD lithography equipment / Medical image recording equipment / Magnetic heads / Micromotors / Computers / Handy terminals / Document scanners / Calculators

2.

The principal countries and regions included in each regional category are as follows: Americas: United States of America, Canada, Latin America / Europe: England, Germany, France, Netherlands / Other Areas: Asian regions, China, Oceania

CANON INC. AND SUBSIDIARIES

CONSOLIDATED

4.  CONSOLIDATED STATEMENTS OF CASH FLOWS

		Millions of yen								Thousands of U.S. dollars
		Six months				Six months				Six months
		ended				ended				ended
		June 30, 2010				June 30, 2009				June 30, 2010
Cash flows from operating activities:
Consolidated net income		¥	127,528			¥	33,781			$	1,449,182
Adjustments to reconcile net income to net cash provided by operating activities:
Depreciation and amortization			125,968				155,003				1,431,455
(Gain) loss on disposal of property, plant and equipment			4,597				(2,977	)			52,239
Deferred income taxes			4,911				11,367				55,807
Decrease in trade receivables			15,598				101,401				177,250
(Increase) decrease in inventories			(49,876	)			98,766				(566,773	)
Increase (decrease) in trade payables			87,995				(146,775	)			999,943
Increase (decrease) in accrued income taxes			19,734				(52,879	)			224,250
Decrease in accrued expenses			(24,228	)			(40,676	)			(275,318	)
Increase in accrued (prepaid) pension and severance cost			2,605				824				29,602
Other, net			33,743				30,866				383,443
Net cash provided by operating activities			348,575				188,701				3,961,080
Cash flows from investing activities:
Purchases of fixed assets			(96,783	)			(195,449	)			(1,099,807	)
Proceeds from sale of fixed assets			1,306				8,450				14,841
Purchases of available-for-sale securities			(9,028	)			(50	)			(102,591	)
Proceeds from sale and maturity of available-for-sale securities			24				241				273
Increase in time deposits, net			(16,840	)			(20,153	)			(191,364	)
Acquisitions of subsidiaries, net of cash acquired			(55,533	)			(2,979	)			(631,057	)
Purchases of other investments			(505	)			(10,133	)			(5,739	)
Other, net			377				1,741				4,285
Net cash used in investing activities			(176,982	)			(218,332	)			(2,011,159	)
Cash flows from financing activities:
Proceeds from issuance of long-term debt			3,107				2,228				35,307
Repayments of long-term debt			(2,751	)			(3,232	)			(31,261	)
Decrease in short-term loans, net			(76,661	)			(204	)			(871,148	)
Dividends paid			(67,897	)			(67,897	)			(771,557	)
Repurchases of treasury stock, net			(5,022	)			(18	)			(57,068	)
Other, net			(1,381	)			(2,237	)			(15,693	)
Net cash used in financing activities			(150,605	)			(71,360	)			(1,711,420	)
Effect of exchange rate changes on cash and cash equivalents			(44,325	)			25,360				(503,694	)
Net change in cash and cash equivalents			(23,337	)			(75,631	)			(265,193	)
Cash and cash equivalents at beginning of period			795,034				679,196				9,034,477
Cash and cash equivalents at end of period		¥	771,697			¥	603,565			$	8,769,284

CANON INC. AND SUBSIDIARIES

CONSOLIDATED

5. NOTE FOR GOING CONCERN ASSUMPTION

      Not applicable.

6.  SEGMENT INFORMATION

(1) SEGMENT INFORMATION BY BUSINESS UNIT

Results for the second quarter		Millions of yen												Thousands of
														U.S. dollars
		Three months				Three months								Three months
		ended				ended				Change(%)				ended
		June 30, 2010				June 30, 2009								June 30, 2010
Office
Net sales:
External customers		¥	521,061			¥	395,485			+	31.8			$	5,921,148
Intersegment			882				2,145			-	58.9				10,022
Total			521,943				397,630			+	31.3				5,931,170
Operating cost and expenses			438,159				355,321			+	23.3				4,979,079
Operating profit		¥	83,784			¥	42,309			+	98.0			$	952,091
Consumer
Net sales:
External customers		¥	363,562			¥	331,148			+	9.8			$	4,131,386
Intersegment			465				394			+	18.0				5,284
Total			364,027				331,542			+	9.8				4,136,670
Operating cost and expenses			297,094				292,526			+	1.6				3,376,068
Operating profit		¥	66,933			¥	39,016			+	71.6			$	760,602
Industry and Others
Net sales:
External customers		¥	85,735			¥	67,152			+	27.7			$	974,261
Intersegment			23,195				18,312			+	26.7				263,580
Total			108,930				85,464			+	27.5				1,237,841
Operating cost and expenses			114,354				93,622			+	22.1				1,299,477
Operating profit (loss)		¥	(5,424	)		¥	(8,158	)			-			$	(61,636	)
Corporate and Eliminations
Net sales:
External customers		¥	-			¥	-				-			$	-
Intersegment			(24,542	)			(20,851	)			-				(278,886	)
Total			(24,542	)			(20,851	)			-				(278,886	)
Operating cost and expenses			7,313				7,410				-				83,103
Operating profit		¥	(31,855	)		¥	(28,261	)			-			$	(361,989	)
Consolidated
Net sales:
External customers		¥	970,358			¥	793,785			+	22.2			$	11,026,795
Intersegment			-				-				-				-
Total			970,358				793,785			+	22.2				11,026,795
Operating cost and expenses			856,920				748,879			+	14.4				9,737,727
Operating profit		¥	113,438			¥	44,906			+	152.6			$	1,289,068

CANON INC. AND SUBSIDIARIES

CONSOLIDATED

Results for the first half		Millions of yen												Thousands of
														U.S. dollars
		Six months				Six months								Six months
		ended				ended				Change(%)				ended
		June 30, 2010				June 30, 2009								June 30, 2010
Office
Net sales:
External customers		¥	926,577			¥	771,647			+	20.1			$	10,529,284
Intersegment			4,500				4,653			-	3.3				51,136
Total			931,077				776,300			+	19.9				10,580,420
Operating cost and expenses			775,206				686,089			+	13.0				8,809,159
Operating profit		¥	155,871			¥	90,211			+	72.8			$	1,771,261
Consumer
Net sales:
External customers		¥	653,291			¥	573,041			+	14.0			$	7,423,761
Intersegment			1,023				893			+	14.6				11,625
Total			654,314				573,934			+	14.0				7,435,386
Operating cost and expenses			540,048				517,164			+	4.4				6,136,909
Operating profit		¥	114,266			¥	56,770			+	101.3			$	1,298,477
Industry and Others
Net sales:
External customers		¥	146,016			¥	136,131			+	7.3			$	1,659,273
Intersegment			45,242				35,187			+	28.6				514,113
Total			191,258				171,318			+	11.6				2,173,386
Operating cost and expenses			199,637				195,117			+	2.3				2,268,602
Operating profit (loss)		¥	(8,379	)		¥	(23,799	)			-			$	(95,216	)
Corporate and Eliminations
Net sales:
External customers		¥	-			¥	-				-			$	-
Intersegment			(50,765	)			(40,733	)			-				(576,874	)
Total			(50,765	)			(40,733	)			-				(576,874	)
Operating cost and expenses			10,712				17,511				-				121,728
Operating profit		¥	(61,477	)		¥	(58,244	)			-			$	(698,602	)
Consolidated
Net sales:
External customers		¥	1,725,884			¥	1,480,819			+	16.5			$	19,612,318
Intersegment			-				-				-				-
Total			1,725,884				1,480,819			+	16.5				19,612,318
Operating cost and expenses			1,525,603				1,415,881			+	7.7				17,336,398
Operating profit		¥	200,281			¥	64,938			+	208.4			$	2,275,920