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 ….  January ……………………………………………… ,  2023

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.

CANON INC.

    (Registrant)

Date….	January 30, 2023	By....../s/.......... Sachiho Tanino.............
		(Signature)*
		Sachiho Tanino                  General Manager                  Consolidated Accounting Div.                  Canon Inc.

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

The following materials are included.

1.  RESULTS FOR THE FOURTH QUARTER AND THE FISCAL YEAR ENDED DECEMBER 31, 2022

CONSOLIDATED RESULTS FOR THE FOURTH QUARTER AND

THE FISCAL YEAR ENDED DECEMBER 31, 2022

January 30, 2023

CONSOLIDATED RESULTS

			(Millions of yen, thousands of U.S. dollars, except per share amounts)
	Actual								Projected
	Year ended December 31, 2022		Year ended December 31, 2021		Change(%)		Year ended December 31, 2022		Year ending December 31, 2023		Change(%)
Net sales	¥	4,031,414	¥	3,513,357		+     14.7	$	30,311,383	¥	4,287,000		+      6.3
Operating profit		353,399		281,918		+     25.4		2,657,135		360,000		+      1.9
Income before income taxes		352,440		302,706		+     16.4		2,649,925		390,000		+    10.7
Net income attributable to Canon Inc.	¥	243,961	¥	214,718		+     13.6	$	1,834,293	¥	270,000		+    10.7
Net income attributable to Canon Inc. shareholders per share:
- Basic	¥	236.71	¥	205.35		+     15.3	$	1.78	¥	265.91		+    12.3
- Diluted		236.63		205.29		+     15.3		1.78		265.82		+    12.3
	Actual
	As of December 31, 2022		As of December 31, 2021		Change(%)		As of December 31, 2022
Total assets	¥	5,095,530	¥	4,750,888		+       7.3	$	38,312,256
Canon Inc. shareholders’ equity	¥	3,113,105	¥	2,873,773		+       8.3	$	23,406,805

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 JPY133=U.S.$1, the approximate exchange rate on the Tokyo Foreign Exchange Market as of December 30, 2022, 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

- 1 -

I. Operating Results and Financial Conditions

2022 in Review

Looking back at 2022, while the global economy resumed its economic activities in earnest, the pace of economic recovery slowed due to global inflation and tight monetary policies in order to control inflation in each country. In the United States, although affected by inflation and tightening monetary policy, the economic recovery continued due to robust increases in personal consumption and expansion of exports. In Europe, the economy slowed down due to surge in energy prices resulting from the Ukraine crisis and continuous price hikes caused by inflation. In China, the recovery of personal consumption declined and capital investment slowed due to restrictions implemented under its Zero-COVID strategy. In other emerging countries, the economy recovered moderately, mainly in India and Southeast Asia. In Japan, affected by surge in price of energy and inflation caused by depreciation of the yen, the economy continued to recover moderately, mainly in terms of personal consumption.

Amid the unstable economic environment, in the markets in which Canon operates, despite a shortage of semiconductor chips and supply chain disruptions, demand improved moderately. Looking at performance by products, demand for office multifunction devices (MFDs) remained firm due to a recovery of in-office work. Meanwhile demand for laser printers and inkjet printers slowed due to decreased demand from customers working from home. For cameras, demand remained solid, mainly for mirrorless cameras and lenses for professionals and enthusiasts. For medical equipment, demand in Japan declined this year due to a drop-off following the conclusion of government spending in 2021, although investments in the medical field recovered slowly, mainly for diagnostic imaging unit products outside Japan. For semiconductor lithography equipment, while the memory devices market declined, overall demand remained firm due to strong demand for power devices and sensors. For FPD (Flat Panel Display) lithography equipment, demand tended to decline due to decreased demand from customers working from home amid the COVID-19 pandemic, and demand for laptop computers decreased in response to the current economic slowdown.

The average value of the yen for the year was ¥131.66 against the U.S. dollar, a year-on-year depreciation of approximately ¥22, and ¥138.42 against the euro, a year-on-year depreciation of approximately ¥8.

In 2022, Canon ensured adequate supplies of products through sustained efforts such as switching to alternative components and seeking new vendors, and taking swift action to secure transportation capacity while utilizing alternative transportation routes to deal with a shortage of components and the logistics disruption. Net sales for the year increased by 14.7% year-on-year to ¥4,031.4 billion due to adjustment of product prices and depreciation of the yen. Sales of new business exceeded ¥1,000 billion, and net sales exceeded ¥4,000 billion for the first time in five years since 2017 as a result of the business portfolio transformation. Gross profit as a percentage of net sales decreased by 1.0 points to 45.3% due to the increase in the ratio of hardware caused by stabilization of production supply including printers, in addition to the increased costs of parts and logistics. However, gross profit increased by 12.3% year-on-year to ¥1,827.8 billion, mainly due to price adjustment of products and the depreciation of the yen. Although operating expenses increased by 9.5% year-on-year to ¥1,474.4 billion as a result of increased operating expenses denominated in foreign currencies due to the depreciation of the yen, as well as an increase in selling expenses accompanying a growth in sales, the operating expense to sales ratio decreased by 1.8 points to 36.5% due to continued efficiency-focused cost control and improvements to management structure. As a result, operating profit increased by 25.4% year-on-year to ¥353.4 billion. Other income (deductions) decreased by ¥21.8 billion year-on-year to a loss of ¥1.0 billion, mainly due to deterioration of valuation gains and losses on securities and currency exchange losses from liabilities, incurred by group finance, denominated in foreign currencies, caused by the depreciation of the yen. As a result, income before income taxes increased by 16.4% year-on-year to ¥352.4 billion and net income attributable to Canon Inc. increased by 13.6% year-on-year to ¥244.0 billion.

Basic net income attributable to Canon Inc. shareholders per share was ¥236.71 for the year, a year-on-year increase of ¥31.36.

- 2 -

Results by Segment

Looking at Canon’s full year performance by business unit, in the Printing Business Unit, unit sales increased compared with the previous year due to the recovery of office MFDs production, thanks to supplies of semiconductor chips improving in the second half of the year. Sales of services and consumables increased moderately compared with the previous year due to a recovery of increase of in-office work. As for laser printers and inkjet printers, unit sales increased significantly compared with the previous year due to the recovery from stagnating production activities resulting from COVID-19 infections. However, consumables decreased compared with the previous year due to decreased demand from customers working from home. For equipment in the production printing market, sales increased compared with the previous year due to strong sales of the varioPRINT iX series of high-speed cut-sheet color inkjet presses, while revenue from services also increased. These factors resulted in total sales for the business unit of ¥2,261.9 billion, a year-on-year increase of 16.7%, while income before income taxes decreased by 3.1% year-on-year to ¥225.8 billion, due to the increase in costs of parts and logistics, despite price adjustment of products.

As for the Imaging Business Unit, unit sales of interchangeable-lens digital cameras were above those of the same period of the previous year due to continued robust demand for full-frame mirrorless cameras including the EOS R5 and EOS R6 as well as favorable reviews of the new EOS R7 and EOS R10 APS-C-size mirror-less cameras, despite stagnant production activities caused by a shortage of components. Unit sales of lenses increased owing to strong sales of RF-series interchangeable-lenses that expanded the product lineup. As for network cameras, sales increased significantly, mainly as a result of strengthening sales activities in response to diversifying market needs in addition to the recovery of product supply. As for professional video production equipment, sales of Cinema EOS-series cameras, including the new EOS R5 C, as well as professional video cameras and broadcast lenses, were strong. These factors resulted in total sales for the business unit of ¥803.5 billion, a year-on-year increase of 22.9%, while income before income taxes increased by 63.2% year-on-year to ¥128.0 billion mainly as a result of improved profitability due to an enhanced product mix.

As for the Medical Business Unit, demand in Japan declined this year due to a drop-off after an uptick from government spending, which concluded in 2021, and delays of installation work at medical institutions overseas. However, demand of large systems such as Computed tomography (CT) systems and Magnetic resonance imaging (MRI) systems recovered overseas, mainly in Europe and the United States. Sales of diagnostic ultrasound systems were also strong. These factors resulted in total sales for the business unit of ¥513.3 billion, a year-on-year increase of 6.9%, the highest recorded sales in the history of the business unit. Income before income taxes decreased by 7.0% year-on-year to ¥31.9 billion due to an increase in other income (deductions) accompanying a corporate acquisition transaction occurred in the prior year.

As for the Industrial Business Unit, regarding semiconductor lithography equipment, unit sales increased compared with the previous year as a result of maximizing production capacity amid strong sales for a wide range of products such as power devices and sensors. For FPD lithography equipment, performance remained high despite a decrease in unit sales compared with the previous year when the business unit caught up with the delayed equipment installation, although this was mitigated by the minimized impacts of both decreased demand from customers working from home amid the COVID-19 pandemic and the economic slowdown in the current year. For OLED display manufacturing equipment, sales decreased compared with the previous year as panel manufacturers reconsidered investment plans in response to diversifying OLED panel applications. These factors resulted in total sales for the business unit of ¥329.2 billion, a year-on-year decrease of 2.5%, while income before income taxes totaled ¥59.2 billion, a year-on-year increase of 30.7% following the increased unit sales of semiconductor lithography equipment.

- 3 -

Cash Flow

During 2022, cash flow from operating activities decreased by ¥188.4 billion year-on-year to ¥262.6 billion as a result of higher inventory levels of key devices and main products, and an increase in working capital. Cash flow from investing activities decreased by ¥26.4 billion year-on-year to ¥180.8 billion due to the absence of major M&A transactions and the increased sales of fixed assets resulting from optimization of branch office capacity at overseas sales subsidiaries, while capital investment to improve efficiency and productivity remained consistent and purchases of securities increased. Accordingly, free cash flow decreased by ¥162.0 billion compared with the previous year to ¥81.8 billion.

Cash flow from financing activities comprised the repayment of loans that were provided for the acquisition of Toshiba Medical Systems Corporation (Canon Medical Systems Corporation). As a result, long-term loans decreased by ¥120.0 billion. In addition, there are repurchases of ¥100.0 billion of treasury stock and dividend payout increased by ¥30.4 billion year-on-year. On the other hand, total outlay of ¥146.8 billion was recorded due to the increase in short-term loans in response to the increase in working capital.

Owing to these factors, as well as the impact from foreign currency exchange adjustments, cash and cash equivalents decreased by ¥39.3 billion to ¥362.1 billion from the end of the previous year.

Outlook

The outlook for the global economy from next year is expected to remain uncertain due to pandemic, geopolitical risk and economic slowdown risk in response to inflation mainly in Europe and the United States.

In the markets in which Canon operates, demand for office MFDs is expected to remain solid due to demand for high-productivity printing equipment. However, there are concerns that demand for laser printers and inkjet printers may be affected by the decrease in demand from customers working from home and the current economic slowdown. As for interchangeable-lens digital cameras, demand is expected to remain solid due to the need for high-quality visual expression. For network cameras, the market is expected to maintain stable growth due to the growing demand for video analysis and high value-added products. In addition, the market for professional video production equipment is expected to grow, supported by increasing demand for video content due to the spread of online video streaming. As for the medical equipment market, demand is expected to remain solid due to a recovery in large investments, mainly for diagnostic imaging unit products, previously held back due to the COVID-19 pandemic. For semiconductor lithography equipment, despite concerns of shrinking in some memory device market, demand of power devices is expected to remain solid. Furthermore, robust demand is expected to continue due to the spread of political initiatives repatriate semiconductor manufacturing capabilities. For FPD lithography equipment, there are concerns about a delay of investments of panel manufacturers mainly due to decreased demand from customers working from home amid the COVID-19 pandemic.

With regard to the currency exchange rates on which Canon bases its performance outlook for the next year, Canon anticipates exchange rates of ¥130 to the U.S. dollar and ¥140 to the euro, representing appreciation of approximately ¥2 against the U.S. dollar and depreciation of approximately ¥2 against the euro as the annual average rates of the previous year.

Upon taking into consideration of the above economic projection, despite concerns of global inflation and tightening monetary policies in each country, it is expected that policies will lead economic recovery in the second half of the year. Based on improved product costs and recovery of product supplies in response to easing of component shortages and logistical disruptions, Canon will strive to demonstrate the results of its new business portfolio and to supply the market with competitive new products. Accordingly, Canon projects full-year consolidated net sales of ¥4,287.0 billion, a year-on-year increase of 6.3%; operating profit of ¥360.0 billion, a year-on-year increase of 1.9%; income before income taxes of ¥390.0 billion, a year-on-year increase of 10.7%; and net income attributable to Canon Inc. of ¥270.0 billion, a year-on-year increase of 10.7%.

- 4 -

This document contains forward-looking statements with respect to future results, performance and achievements that are subject to risk and uncertainties and reflect management’s views and assumptions formed by available information. All statements other than statements of historical fact are statements that could be considered forward-looking statements. When used in this document, words such as “anticipate,” “believe,” “estimate,” “expect,” “intend,” “may,” “plan,” “project” or “should” and similar expressions, as they relate to Canon, are intended to identify forward-looking statements. Many factors could cause the actual results, performance or achievements of Canon to be materially different from any future results, performance or achievements that may be expressed or implied by such forward-looking statements, including, among others, changes in general economic and business conditions, changes in currency exchange rates and interest rates, introduction of competing products by other companies, lack of acceptance of new products or services by Canon’s targeted customers, inability to meet efficiency and cost reduction objectives, changes in business strategy and various other factors, both referenced and not referenced in this document. A detailed description of these and other risk factors is included in Canon’s annual report on Form 20-F, which is on file with the United States Securities and Exchange Commission. Should one or more of these risks or uncertainties materialize, or should underlying assumptions prove incorrect, actual results may vary materially from those described herein. Canon does not intend or assume any obligation to update these forward-looking statements.

II. Basic Concept Regarding the Selection of Accounting Standards

Canon is listed on the New York Stock Exchange and, since registering its American Depositary Receipts on the OTC (over-the-counter) market in 1969, has prepared its consolidated financial statements in accordance with U.S. generally accepted accounting principles (“GAAP”) over the long term.

Canon has continued to adopt U.S. GAAP in order to maintain the continuity of financial statements from the past and to maintain international comparability.

- 5 -

CANON INC. AND SUBSIDIARIES

CONSOLIDATED

III. Financial Statements

1. CONSOLIDATED BALANCE SHEETS

	Millions of yen
	As of     December 31, 2022			As of December 31, 2021			Change
ASSETS
Current assets		2,155,914			1,878,345			277,569
Cash and cash equivalents		362,101			401,395			(39,294	)
Short-term investments		10,905			3,377			7,528
Trade receivables		636,803			522,432			114,371
Inventories		808,312			650,568			157,744
Prepaid expenses and other current assets		353,028			314,489			38,539
Allowance for credit losses		(15,235	)		(13,916	)		(1,319	)
Non-current assets		2,939,616			2,872,543			67,073
Noncurrent receivables		12,996			16,388			(3,392	)
Investments		65,128			60,967			4,161
Property, plant and equipment, net		1,035,065			1,041,403			(6,338	)
Operating lease right-of-use assets		117,843			95,791			22,052
Intangible assets, net		280,995			301,793			(20,798	)
Goodwill		972,626			953,850			18,776
Other assets		458,629			404,720			53,909
Allowance for credit losses		(3,666	)		(2,369	)		(1,297	)
Total assets		5,095,530			4,750,888			344,642
LIABILITIES AND EQUITY
Current liabilities		1,365,353			1,060,833			304,520
Short-term loans and current portion of long-term debt		296,384			44,891			251,493
Short-term loans related to financial services		41,200			42,300			(1,100	)
Other short-term loans and current portion of long-term debt		255,184			2,591			252,593
Trade payables		355,930			338,604			17,326
Accrued income taxes		48,414			43,081			5,333
Accrued expenses		365,847			323,929			41,918
Current operating lease liabilities		33,281			30,945			2,336
Other current liabilities		265,497			279,383			(13,886	)
Non-Current liabilities		381,147			591,626			(210,479	)
Long-term debt, excluding current portion of long-term debt		2,417			179,750			(177,333	)
Accrued pension and severance cost		189,215			248,467			(59,252	)
Noncurrent operating lease liabilities		85,331			65,385			19,946
Other noncurrent liabilities		104,184			98,024			6,160
Total liabilities		1,746,500			1,652,459			94,041
Canon Inc. shareholders’ equity		3,113,105			2,873,773			239,332
Common stock		174,762			174,762			-
Additional paid-in capital		404,838			403,119			1,719
Retained earnings		3,729,244			3,606,052			123,192
Legal reserve		64,509			68,015			(3,506	)
Other retained earnings		3,664,735			3,538,037			126,698
Accumulated other comprehensive income (loss)		62,623			(151,794	)		214,417
Treasury stock, at cost		(1,258,362	)		(1,158,366	)		(99,996	)
Noncontrolling interests		235,925			224,656			11,269
Total equity		3,349,030			3,098,429			250,601
Total liabilities and equity		5,095,530			4,750,888			344,642
	Millions of yen
	As of December 31, 2022			As of December 31, 2021
Notes:
1. Accumulated depreciation		2,962,228			2,862,801
2. Accumulated other comprehensive income (loss):
Foreign currency translation adjustments		191,287			5,519
Net unrealized gains and losses on securities		(34	)		-
Net gains and losses on derivative instruments		(428	)		(894	)
Pension liability adjustments		(128,202	)		(156,419	)

- 6 -

CANON INC. AND SUBSIDIARIES

CONSOLIDATED

2. CONSOLIDATED STATEMENTS OF INCOME AND

CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME

Consolidated statements of income

Results for the fourth quarter

	Millions of yen
	Three months      ended December 31, 2022			Three months      ended December 31, 2021			Change(%)
Net sales		1,157,175			955,449			+	21.1
Cost of sales		638,836			517,598
Gross profit		518,339			437,851			+	18.4
Operating expenses:
Selling, general and administrative expenses		335,338			286,166
Research and development expenses		85,657			76,328
		420,995			362,494
Operating profit		97,344			75,357			+	29.2
Other income (deductions):
Interest and dividend income		2,010			713
Interest expense		(309	)		(205	)
Other, net		21,426			(4,306	)
		23,127			(3,798	)
Income before income taxes		120,471			71,559			+	68.4
Income taxes		30,394			8,132
Consolidated net income		90,077			63,427
Less: Net income attributable to noncontrolling interests		5,234			3,629
Net income attributable to Canon Inc.		84,843			59,798			+	41.9
Results for the fiscal year
	Millions of yen
	Year ended December 31, 2022			Year ended December 31, 2021			Change(%)
Net sales		4,031,414			3,513,357			+	14.7
Cost of sales		2,203,612			1,885,565
Gross profit		1,827,802			1,627,792			+	12.3
Operating expenses:
Selling, general and administrative expenses		1,167,673			1,058,536
Research and development expenses		306,730			287,338
		1,474,403			1,345,874
Operating profit		353,399			281,918			+	25.4
Other income (deductions):
Interest and dividend income		5,177			2,232
Interest expense		(1,046	)		(647	)
Other, net		(5,090	)		19,203
		(959	)		20,788
Income before income taxes		352,440			302,706			+	16.4
Income taxes		92,356			71,866
Consolidated net income		260,084			230,840
Less: Net income attributable to noncontrolling interests		16,123			16,122
Net income attributable to Canon Inc.		243,961			214,718			+	13.6

- 7 -

CANON INC. AND SUBSIDIARIES

CONSOLIDATED

        Consolidated statements of comprehensive income

        Results for the fourth quarter

	Millions of yen
	Three months      ended December 31, 2022			Three months      ended December 31, 2021			Change(%)
Consolidated net income		90,077			63,427			+	42.0
Other comprehensive income (loss), net of tax:
Foreign currency translation adjustments		(122,455	)		40,006
Net unrealized gains and losses on securities		(13	)		-
Net gains and losses on derivative instruments		2,316			(648	)
Pension liability adjustments		26,378			36,373
		(93,774	)		75,731
Comprehensive income (loss)		(3,697	)		139,158				-
Less: Comprehensive income (loss) attributable to noncontrolling interests		5,824			5,449
Comprehensive income (loss) attributable to Canon Inc.		(9,521	)		133,709				-
Results for the fiscal year
	Millions of yen
	Year ended December 31, 2022			Year ended December 31, 2021			Change(%)
Consolidated net income		260,084			230,840			+	12.7
Other comprehensive income (loss), net of tax:
Foreign currency translation adjustments		186,563			120,439
Net unrealized gains and losses on securities		(34	)		-
Net gains and losses on derivative instruments		449			(972	)
Pension liability adjustments		29,897			56,508
		216,875			175,975
Comprehensive income (loss)		476,959			406,815			+	17.2
Less: Comprehensive income (loss) attributable to noncontrolling interests		18,581			19,102
Comprehensive income (loss) attributable to Canon Inc.		458,378			387,713			+	18.2

- 8 -

CANON INC. AND SUBSIDIARIES

CONSOLIDATED

3. DETAILS OF SALES

Results for the fourth quarter

	Millions of yen
Sales by business unit	Three months ended December 31, 2022			Three months ended December 31, 2021			Change(%)
Printing		638,129			520,650			+	22.6
Imaging		242,449			181,297			+	33.7
Medical		150,828			128,457			+	17.4
Industrial		95,453			95,901			-	0.5
Others and Corporate		57,285			51,740			+	10.7
Eliminations		(26,969	)		(22,596	)			-
Total		1,157,175			955,449			+	21.1
	Millions of yen
Sales by region	Three months ended December 31, 2022			Three months ended December 31, 2021			Change(%)
Japan		237,232			228,365			+	3.9
Overseas:
Americas		361,412			258,540			+	39.8
Europe		313,359			242,314			+	29.3
Asia and Oceania		245,172			226,230			+	8.4
		919,943			727,084			+	26.5
Total		1,157,175			955,449			+	21.1
Results for the fiscal year
	Millions of yen
Sales by business unit	Year ended December 31, 2022			Year ended December 31, 2021			Change(%)
Printing		2,261,938			1,938,847			+	16.7
Imaging		803,480			653,532			+	22.9
Medical		513,331			480,362			+	6.9
Industrial		329,232			337,721			-	2.5
Others and Corporate		223,021			186,593			+	19.5
Eliminations		(99,588	)		(83,698	)			-
Total		4,031,414			3,513,357			+	14.7
	Millions of yen
Sales by region	Year ended December 31, 2022			Year ended December 31, 2021			Change(%)
Japan		864,808			830,378			+	4.1
Overseas:
Americas		1,255,405			968,839			+	29.6
Europe		1,034,008			894,898			+	15.5
Asia and Oceania		877,193			819,242			+	7.1
		3,166,606			2,682,979			+	18.0
Total		4,031,414			3,513,357			+	14.7

* Based on the realignment of Canon’s internal management structure, from 2022, Canon has changed the name and structure of segments to Printing Business Unit, Imaging Business Unit, Medical Business Unit, and Industrial Business Unit, Others and Corporate, and Eliminations. Operating results for the three months ended December 31, 2021 and the year ended December 31, 2021 also have been reclassified.

Notes:	1.  The primary products included in each of the segments are as follows:
	Printing Business Unit :
	Office multifunction devices (MFDs) / Document solutions / Laser multifunction printers (MFPs) / Laser printers / Inkjet printers / Image scanners / Calculators / Digital continuous feed presses / Digital sheet-fed presses / Large format printers
	Imaging Business Unit :
	Interchangeable-lens digital cameras / Interchangeable lenses / Digital compact cameras / Compact photo printers / MR Systems / Network cameras / Video management software / Video content analytics software / Digital camcorders / Digital cinema cameras / Broadcast equipment / Projectors
	Medical Business Unit :
	Computed tomography (CT) systems / Diagnostic ultrasound systems / Diagnostic X-ray systems / Magnetic resonance imaging (MRI) systems / Clinical chemistry analyzers / Digital radiography systems / Ophthalmic equipment
	Industrial Business Unit :
	Semiconductor lithography equipment / FPD (Flat panel display) lithography equipment / OLED Display Manufacturing Equipment / Vacuum thin-film deposition equipment / Die bonders
	Others :
	Handy terminals / Document scanners
	2.  The principal countries and regions included in each regional category are as follows:
	Americas: United States of America, Canada, Latin America Europe: United Kingdom, Germany, France, Netherlands, European countries, Middle East and Africa Asia and Oceania: China, Asian countries, Australia

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CANON INC. AND SUBSIDIARIES

CONSOLIDATED   

4. CONSOLIDATED STATEMENTS OF EQUITY

Millions of yen   

	Common   stock		Additional   paid-in   capital			Retained earnings									Accumulated   other   comprehensive   income (loss)			Treasury   stock			Total Canon   Inc.   shareholders’   equity			Noncontrolling   interests			Total equity
						Legal   reserve			Other retained   earnings			Total retained   earnings
Balance at December 31, 2020		174,762		404,620			69,436			3,409,371			3,478,807			(324,789	)		(1,158,369	)		2,575,031			209,010			2,784,041
Equity transactions with noncontrolling interests and other				(62	)																	(62	)		1,725			1,663
Dividends to Canon Inc. shareholders										(88,891	)		(88,891	)								(88,891	)					(88,891	)
Dividends to noncontrolling interests																									(5,181	)		(5,181	)
Transfers to legal reserve				(1,429	)		(1,421	)		2,850			1,429									-						-
Comprehensive income:
Net income										214,718			214,718									214,718			16,122			230,840
Other comprehensive income (loss), net of tax:
Foreign currency translation adjustments																119,165						119,165			1,274			120,439
Net unrealized gains and losses on securities																						-						-
Net gains and losses on derivative instruments																(994	)					(994	)		22			(972	)
Pension liability adjustments																54,824						54,824			1,684			56,508
Total comprehensive income (loss)																						387,713			19,102			406,815
Repurchases and reissuance of treasury stock				(10	)					(11	)		(11	)					3			(18	)					(18	)
Balance at December 31, 2021		174,762		403,119			68,015			3,538,037			3,606,052			(151,794	)		(1,158,366	)		2,873,773			224,656			3,098,429
Equity transactions with noncontrolling interests and other				298			(4,538	)		4,536			(2	)								296			(1,151	)		(855	)
Dividends to Canon Inc. shareholders										(119,326	)		(119,326	)								(119,326	)					(119,326	)
Dividends to noncontrolling interests																									(6,161	)		(6,161	)
Transfers to legal reserve				1,432			1,032			(2,464	)		(1,432	)								-						-
Comprehensive income:
Net income										243,961			243,961									243,961			16,123			260,084
Other comprehensive income (loss), net of tax:
Foreign currency translation adjustments																185,768						185,768			795			186,563
Net unrealized gains and losses on securities																(34	)					(34	)					(34	)
Net gains and losses on derivative instruments																466						466			(17	)		449
Pension liability adjustments																28,217						28,217			1,680			29,897
Total comprehensive income (loss)																						458,378			18,581			476,959
Repurchases and reissuance of treasury stock				(11	)					(9	)		(9	)					(99,996	)		(100,016	)					(100,016	)
Balance at December 31, 2022		174,762		404,838			64,509			3,664,735			3,729,244			62,623			(1,258,362	)		3,113,105			235,925			3,349,030

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CANON INC. AND SUBSIDIARIES

CONSOLIDATED

5. CONSOLIDATED STATEMENTS OF CASH FLOWS

	Millions of yen
	Year ended December 31, 2022			Year ended December 31, 2021
Cash flows from operating activities:
Consolidated net income		260,084			230,840
Adjustments to reconcile consolidated net income to net cash provided by operating activities:
Depreciation and amortization		226,492			221,246
(Gain) loss on disposal of fixed assets		(6,458	)		7,745
Deferred income taxes		(7,800	)		(9,826	)
(Increase) decrease in trade receivables		(78,203	)		44,678
Increase in inventories		(108,510	)		(61,017	)
Increase in lease receivables		(30,379	)		(1,075	)
Increase in trade payables		3,293			52,138
Increase in accrued income taxes		3,472			24,017
Increase (decrease) in accrued expenses		23,407			(8,673	)
Decrease in accrued pension and severance cost		(42,580	)		(41,477	)
Other, net		19,785			(7,568	)
Net cash provided by operating activities		262,603			451,028
Cash flows from investing activities:
Purchases of fixed assets		(188,527	)		(177,350	)
Proceeds from sale of fixed assets		14,733			3,796
Purchases of held to maturity securities		-			(2,216	)
Proceeds from maturity of held to maturity securities		2,151			-
Purchases of securities		(21,558	)		(2,162	)
Proceeds from sale and maturity of securities		7,680			1,714
Acquisitions of businesses, net of cash acquired		(5,890	)		(31,751	)
Other, net		10,591			713
Net cash used in investing activities		(180,820	)		(207,256	)
Cash flows from financing activities:
Proceeds from issuance of long-term debt		300			175,100
Repayments of long-term debt		(122,067	)		(347,029	)
Decrease in short-term loans related to financial services, net		(1,100	)		(2,700	)
Increase (decrease) in other short-term loans, net		197,826			(175	)
Transaction with noncontrolling interests		3,700			1,527
Dividends paid		(119,326	)		(88,891	)
Repurchases and reissuance of treasury stock, net		(100,016	)		(17	)
Other, net		(6,161	)		(5,181	)
Net cash used in financing activities		(146,844	)		(267,366	)
Effect of exchange rate changes on cash and cash equivalents		25,767			17,305
Net change in cash and cash equivalents		(39,294	)		(6,289	)
Cash and cash equivalents at beginning of period		401,395			407,684
Cash and cash equivalents at end of period		362,101			401,395

* Certain items in the consolidated statements of cash flows for the year ended December 31, 2021, have been reclassified to conform to the current year’s presentation.

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CANON INC. AND SUBSIDIARIES

CONSOLIDATED

6. NOTE FOR GOING CONCERN ASSUMPTION

      Not applicable.

7. SEGMENT INFORMATION

  SEGMENT INFORMATION BY BUSINESS UNIT

Results for the fiscal year		Millions of yen
		Year ended      December 31, 2022		Year ended      December 31, 2021		Change(%)
Printing
Net sales:
	External customers		2,255,402		1,934,012	+	16.6
	Intersegment		6,536		4,835	+	35.2
	Total		2,261,938		1,938,847	+	16.7
Operating cost and expenses			2,049,964		1,713,154	+	19.7
Operating profit			211,974		225,693	-	6.1
Other income (deductions)			13,806		7,259	+	90.2
Income before income taxes			225,780		232,952	-	3.1
Total assets			1,224,187		1,009,922	+	21.2
Depreciation and amortization			72,946		69,549	+	4.9
Capital expenditures			66,550		63,609	+	4.6
Imaging
Net sales:
	External customers		803,057		651,494	+	23.3
	Intersegment		423		2,038	-	79.2
	Total		803,480		653,532	+	22.9
Operating cost and expenses			676,850		574,814	+	17.8
Operating profit			126,630		78,718	+	60.9
Other income (deductions)			1,403		(256)		-
Income before income taxes			128,033		78,462	+	63.2
Total assets			349,338		236,143	+	47.9
Depreciation and amortization			20,374		21,840	-	6.7
Capital expenditures			17,841		12,069	+	47.8
Medical
Net sales:
	External customers		513,028		480,029	+	6.9
	Intersegment		303		333	-	9.0
	Total		513,331		480,362	+	6.9
Operating cost and expenses			482,326		450,942	+	7.0
Operating profit			31,005		29,420	+	5.4
Other income (deductions)			890		4,876	-	81.7
Income before income taxes			31,895		34,296	-	7.0
Total assets			356,799		311,247	+	14.6
Depreciation and amortization			13,418		12,435	+	7.9
Capital expenditures			11,956		11,888	+	0.6
Industrial
Net sales:
	External customers		320,817		328,164	-	2.2
	Intersegment		8,415		9,557	-	11.9
	Total		329,232		337,721	-	2.5
Operating cost and expenses			271,213		292,854	-	7.4
Operating profit			58,019		44,867	+	29.3
Other income (deductions)			1,194		434	+	175.1
Income before income taxes			59,213		45,301	+	30.7
Total assets			233,969		212,156	+	10.3
Depreciation and amortization			12,195		11,193	+	9.0
Capital expenditures			15,271		10,127	+	50.8
Others and Corporate
Net sales:
	External customers		139,110		119,658	+	16.3
	Intersegment		83,911		66,935	+	25.4
	Total		223,021		186,593	+	19.5
Operating cost and expenses			296,399		282,643	+	4.9
Operating profit			(73,378)		(96,050)		-
Other income (deductions)			(12,147)		14,978		-
Income before income taxes			(85,525)		(81,072)		-
Total assets			2,952,891		2,999,754	-	1.6
Depreciation and amortization			107,559		106,229	+	1.3
Capital expenditures			71,673		81,307	-	11.8
Eliminations
Net sales:
	External customers		-		-		-
	Intersegment		(99,588)		(83,698)		-
	Total		(99,588)		(83,698)		-
Operating cost and expenses			(98,737)		(82,968)		-
Operating profit			(851)		(730)		-
Other income (deductions)			(6,105)		(6,503)		-
Income before income taxes			(6,956)		(7,233)		-
Total assets			(21,654)		(18,344)		-
Depreciation and amortization			-		-		-
Capital expenditures			-		-		-
Consolidated
Net sales:
	External customers		4,031,414		3,513,357	+	14.7
	Intersegment		-		-		-
	Total		4,031,414		3,513,357	+	14.7
Operating cost and expenses			3,678,015		3,231,439	+	13.8
Operating profit			353,399		281,918	+	25.4
Other income (deductions)			(959)		20,788		-
Income before income taxes			352,440		302,706	+	16.4
Total assets			5,095,530		4,750,888	+	7.3
Depreciation and amortization			226,492		221,246	+	2.4
Capital expenditures			183,291		179,000	+	2.4

*Based on the realignment of Canon’s internal management structure, from 2022, Canon has changed the name and structure of segments to Printing Business Unit, Imaging Business Unit, Medical Business Unit, and Industrial Business Unit, Others and Corporate, and Eliminations. Operating results for the year ended December 31, 2021 also have been reclassified.

*Others and Corporate expenses include certain corporate research and development expenses. Amortization costs of identified intangible assets resulting from the purchase price allocation of Toshiba Medical Systems Corporation (Canon Medical Systems Corporation) are also included in corporate expenses.

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CANON INC. AND SUBSIDIARIES

8. NOTE ON SIGNIFICANT CHANGES IN SHAREHOLDERS’ EQUITY

None.

9. BASIS OF PRESENTATION AND SIGNIFICANT ACCOUNTING POLICIES

SIGNIFICANT ACCOUNTING POLICIES

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

10. NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(1) NET INCOME ATTRIBUTABLE TO CANON INC. SHAREHOLDERS PER SHARE

Results for the fiscal year	Millions of yen
	Year ended     December 31, 2022		Year ended     December 31, 2021
Net income attributable to Canon Inc.
-Basic		243,961		214,718
-Diluted		243,957		214,714
	Number of shares
Average common shares outstanding
-Basic		1,030,644,385		1,045,632,588
-Diluted		1,030,979,260		1,045,909,654
	Yen
Net income attributable to
Canon Inc. shareholders per share:
-Basic		236.71		205.35
-Diluted		236.63		205.29

(2) SUBSEQUENT EVENT

On January 5, 2023, Canon borrowed ¥140 billion under its existing overdraft facilities with Mizuho Bank, Ltd. and MUFG Bank, Ltd. for required operating funds. The overdraft facilities bear interest at a rate equal to a base rate plus a spread.

- 13 -

NON-CONSOLIDATED

(Current Titles are Shown in the Parentheses)

Effective Date: March 30, 2023

Audit & Supervisory Board Members

(1) Audit & Supervisory Board Member to be retired

Hiroaki Sato (Audit & Supervisory Board Member)

(2) Candidate for new Audit & Supervisory Board Member to be appointed

Hideya Hatamochi (President of Canon (Suzhou) Inc.)

- 14 -

NON-CONSOLIDATED

(Current Titles are Shown in the Parentheses)

Executive Officers

(1) Executive Officers to be retired

      Effective Date: March 31, 2023

Kenichi Nagasawa	(Senior Managing Executive Officer, Group Executive of Corporate Intellectual Property and Legal Headquarters, Senior General Manager of Economic Security Office)
Aitake Wakiya	(Senior Managing Executive Officer, Executive Vice President & CFO of Canon Europe Ltd.)
Nobuyuki Tainaka	(Executive Officer, Senior General Manager of Global Legal Administration Center)

(2) New Executive Officer to be appointed

      Effective Date: April 1, 2023

Katsuhito Sakurai (Senior General Manager of Semiconductor Device Development Center 1)

(3) Executive Officers to be promoted

      Effective Date: April 1, 2023

Senior Managing Executive Officer	Shunsuke Inoue	(Managing Executive Officer, Group Executive of R&D Headquarters)
Senior Managing Executive Officer	Soichi Hiramatsu	(Managing Executive Officer, Group Executive of Procurement Headquarters)
Senior Managing Executive Officer	Go Tokura	(Managing Executive Officer, Deputy Head of Imaging Group)
Senior Managing Executive Officer	Minoru Asada	(Managing Executive Officer, Group Executive of Finance & Accounting Headquarters)
Managing Executive Officer	Katsuhiko Shinjo	(Executive Officer, Deputy Group Executive of R&D Headquarters)
Managing Executive Officer	Masaki Omori	(Executive Officer, President of Canon Machinery Inc.)
Managing Executive Officer	Takeshi Ichikawa	(Executive Officer, Group Executive of Device Technology Development Headquarters)

- 15 -