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 ……………………………………………… ,  2024

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, 2024	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, 2023

CONSOLIDATED RESULTS FOR THE FOURTH QUARTER AND

THE FISCAL YEAR ENDED DECEMBER 31, 2023

January 30, 2024

CONSOLIDATED RESULTS

			(Millions of yen, thousands of U.S. dollars, except per share amounts)
	Actual								Projected
	Year ended December 31, 2023		Year ended December 31, 2022		Change(%)		Year ended December 31, 2023		Year ending December 31, 2024		Change(%)
Net sales	¥	4,180,972	¥	4,031,414		+       3.7	$	29,443,465	¥	4,350,000		+      4.0
Operating profit		375,366		353,399		+       6.2		2,643,423		435,000		+    15.9
Income before income taxes		390,767		352,440		+     10.9		2,751,880		450,000		+    15.2
Net income attributable to Canon Inc.	¥	264,513	¥	243,961		+       8.4	$	1,862,768	¥	305,000		+    15.3
Net income attributable to Canon Inc. shareholders per share:
- Basic	¥	264.20	¥	236.71		+     11.6	$	1.86	¥	308.81		+    16.9
- Diluted		264.08		236.63		+     11.6		1.86		308.68		+    16.9
	Actual
	As of December 31, 2023		As of December 31, 2022		Change(%)		As of December 31, 2023
Total assets	¥	5,416,577	¥	5,095,530		+       6.3	$	38,144,908
Canon Inc. shareholders’ equity	¥	3,353,022	¥	3,113,105		+       7.7	$	23,612,831

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 JPY142=U.S.$1, the approximate exchange rate on the Tokyo Foreign Exchange Market as of December 29, 2023, 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

2023 in Review

Looking back at 2023, despite the unstable situations such as the Ukraine crisis and armed conflicts in the Middle East, the global economy recovered modestly thanks to the termination of the COVID-19 pandemic which had restricted economic activity for a prolonged period. In the United States, consumer spending remained solid thanks to the strong employment situation and increases in real income. In Europe, however, the economy was lagging with strong uninterrupted downward pressure on the economy due to the inflation and the continuation of tight monetary policies. In China, the economy continued its deceleration trend due to a sluggish real estate market and the lack of recovery in the personal consumption. In other emerging countries, the economy remained solid, mostly centering around consumer spending and the service industry. In Japan, the economy recovered moderately, with consumer spending showing signs of picking up on the back of improvement in the employment and personal income environment.

In the markets in which Canon operates, despite the recovery of product supplies following the resolution of component shortages and logistical disruptions, demand was lagging due to tight monetary policies associated with inflation, the sluggish Chinese and European economy, and increasing uncertainty surrounding geopolitical risks. On a product basis, despite stagnant market conditions in China, demand for office multifunction devices (MFDs) remained firm thanks to solid demand for printing equipment offering high productivity in other countries. For inkjet printers, the demand from customers working from home slowed. For laser printers, demand slowed due to the curbing of corporate investments. For medical equipment, demand remained firm, particularly in Japan and Europe. For cameras, demand remained solid thanks to the need for high-quality visual expression from professionals and enthusiasts. The market of network cameras continued to grow. For semiconductor lithography equipment, although demand for memory devices remained weak, the market has grown, particularly for power devices, analog devices and sensors. For FPD (Flat Panel Display) lithography equipment, the market continued to shrink due to restrained investments by panel manufacturers.

The average value of the yen for the year was ¥140.85 against the U.S. dollar, a year-on-year depreciation of approximately ¥9, and ¥152.20 against the euro, a year-on-year depreciation of approximately ¥14.

In 2023, net sales for the year increased by 3.7% year-on-year to ¥4,181.0 billion thanks to the recovery of product supplies and solid demand for network cameras and other new businesses, as well as the favorable effects of the depreciation of the yen. The sales were the second highest since 2007. Gross profit as a percentage of net sales increased by 1.8 points year-on-year to 47.1% due to a reduction in costs of components and logistics, and the favorable effects of the depreciation of the yen. Gross profit increased by 7.7% year-on-year to ¥1,968.9 billion. Operating expenses increased by 8.1% year-on-year to ¥1,593.5 billion due to an increase in sales-related expenses with the normalization of sales activity. In addition, operating expenses denominated in foreign currencies increased thanks to the depreciation of the yen. As a result, operating profit increased by 6.2% year-on-year to ¥375.4 billion. Other income (deductions) increased by ¥16.4 billion year-on-year to ¥15.4 billion due to a decrease of currency exchange losses, which were substantially incurred last year. As a result, income before income taxes increased by 10.9% year-on-year to ¥390.8 billion and net income attributable to Canon Inc. increased by 8.4% year-on-year to ¥264.5 billion. Consequently, sales and income increased for the third consecutive year.

Basic net income attributable to Canon Inc. shareholders per share was ¥264.20 for the year, a year-on-year increase of ¥27.49.

- 2 -

Results by Segment

Looking at Canon’s full year performance by business unit, in the Printing Business Unit, unit sales of equipment for the production printing market increased compared with the previous year, thanks to enhancing its product lineup by adding the imagePRESS V1350 and new Colorado series products that were well-received in the market. MFDs for offices continued to sell well, exceeding unit sales from the previous year, as the product supply shortage was abated, while demand for products including the imageRUNNER ADVANCE DX C3900, which is low and mid-speed color MFD series, was solid. As for inkjet printers, the number of unit sales decreased compared with the previous year as the surge in demand from users working from home subsided. As for laser printers, despite middle and high-speed color MFD products that were well-received, unit sales decreased compared with the previous year due to the curbing of corporate investments. These factors resulted in total sales for the business unit of ¥2,346.1 billion, a year-on-year increase of 3.2%, while income before income taxes increased by 3.9% year-on-year to ¥235.1 billion, mainly due to cost-cutting activities and the decrease in logistics costs.

In the Medical Business Unit, sales remained firm thanks to a recovery of investments in large-size equipment previously held back due to the COVID-19 pandemic and firm sales of magnetic resonance imaging (MRI) systems, diagnostic X-ray systems and diagnostic ultrasound systems mainly in Japan and Europe. These factors resulted in total sales for the business unit of ¥553.8 billion, a year-on-year increase of 7.9%, the highest recorded sales in the history of the business unit. Income before income taxes increased by 0.8% year-on-year to ¥32.1 billion due to active investments to augment its workforce in order to enhance its sales capacity.

In the Imaging Business Unit, sales of interchangeable-lens digital cameras, in particular mirrorless cameras like the EOS R6 Mark II, a full-frame mirrorless camera released the year before last, and the new entry-level EOS R50 and EOS R100 mirrorless cameras launched last year, remained solid. Sales of RF-series interchangeable-lenses remained solid as well. Sales of network cameras increased thanks to solid demand and enhanced sales activity against the background of diversifying applications. These factors resulted in total sales for the business unit of ¥861.6 billion, a year-on-year increase of 7.2%, while income before income taxes increased by 14.4% year-on-year to ¥146.4 billion due to an increase in the sales ratio of high-value-added mirrorless camera and solid profit of network cameras.

In the Industrial Business Unit, sales of semiconductor lithography equipment remained strong, particularly for those used in the production of power devices. As a result, unit sales exceeded the previous year. For FPD lithography equipment, however, unit sales decreased compared with the previous year due to reduced investments by panel manufacturers as the panel market worsened. These factors resulted in total sales for the business unit of ¥314.7 billion, a year-on-year decrease of 4.4%, while income before income taxes totaled ¥59.2 billion, a year-on-year decrease of 0.1%.

- 3 -

Cash Flow

During 2023, cash flow from operating activities increased by ¥188.6 billion year-on-year to ¥451.2 billion, mainly due to an improvement in working capital caused by an increase in profit and a reduction in inventory. Cash flow used in investing activities increased by ¥94.6 billion to ¥275.4 billion from the previous year due to an acquisition of Minaris Medical Co., Ltd., which has in vitro diagnostics and automated analyzer businesses, as well as continued capital investments to improve efficiency and productivity. Accordingly, free cash flow increased by ¥94.0 billion compared with the previous year to ¥175.8 billion.

Cash flow from financing activities decreased by ¥9.9 billion year-on-year to ¥156.7 billion due to dividends paid increased by ¥11.5 billion from the previous year resulted by an increase in the previous year’s year-end dividend and this term’s interim dividend, as well as repurchases of ¥100.0 billion of treasury stock.

Owing to these factors, as well as the impact from foreign currency exchange adjustments, cash and cash equivalents increased by ¥39.2 billion to ¥401.3 billion from the end of the previous year.

Outlook

As for the outlook for 2024, there are still some global economic uncertainties due to various geopolitical risks, tightening monetary policies across the world in response to inflation, and the risk of an economic slowdown caused by China’s market stagnation and other factors. However, Canon expects the global economy to continue its recovery trend thanks to the strong employment situation and improved personal income environment, particularly in Japan and the United States.

In the market in which Canon operates, demand for office MFDs is expected to remain firm, thanks to strong demand for high-productivity printing. However, demand for laser printers is expected to be affected by the curbing of corporate investments. For inkjet printers, although there are concerns about the decrease in demand from customers working from home and fierce competition from competitors, Canon will focus on expanding sales by strengthening its refillable ink tank product lineup. As for the medical equipment market, demand is expected to remain solid thanks to the market growth of diagnostic imaging equipment despite such concerns as the curbing of medical institution investments due to uncertainty of the economic outlook. As for interchangeable-lens digital cameras, demand is expected to remain solid due to the shifting of demand to mirrorless cameras. For network cameras, the market is expected to maintain stable growth thanks to the growing demand for video analysis systems and high-value-added products. For semiconductor lithography equipment, robust market conditions are expected to continue thanks to the construction of new semiconductor factories in various countries and regions, and solid demand for equipment mainly for advanced semiconductor devices and power devices. For FPD lithography equipment, market conditions are expected to improve from the second half of the year, mainly due to demand for equipment for computer-related display panels such as tablet devices.

With regard to the currency exchange rates on which Canon bases its performance outlook, Canon anticipates exchange rates of ¥140 to the U.S. dollar and ¥155 to the euro, representing appreciation of approximately ¥1 against the U.S. dollar and depreciation of approximately ¥3 against the euro as the annual average rates of the previous year.

Having taken the aforementioned currency exchange rates into consideration, Canon projects full-year consolidated net sales of ¥4,350.0 billion, a year-on-year increase of 4.0%; operating profit of ¥435.0 billion, a year-on-year increase of 15.9%; income before income taxes of ¥450.0 billion, a year-on-year increase of 15.2%; and net income attributable to Canon Inc. of ¥305.0 billion, a year-on-year increase of 15.3%, due to the market growth of new business such as network cameras, the introduction of new products of office MFDs and interchangeable-lens digital cameras, both of which are Canon’s main businesses, and improvements in profitability expected from ongoing cost-cutting activities.

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

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.

Also, Canon is gathering information on trends in Japan and Overseas in relation to the International Financial Reporting Standards (IFRS).

- 5 -

CANON INC. AND SUBSIDIARIES

CONSOLIDATED

III. Financial Statements

1. CONSOLIDATED BALANCE SHEETS

	Millions of yen
	As of   December 31, 2023			As of December 31, 2022			Change
ASSETS
Current assets		2,224,086			2,155,914			68,172
Cash and cash equivalents		401,323			362,101			39,222
Short-term investments		3,822			10,905			(7,083	)
Trade receivables		655,460			636,803			18,657
Inventories		796,881			808,312			(11,431	)
Current lease receivables		150,324			137,038			13,286
Prepaid expenses and other current assets		231,605			215,990			15,615
Allowance for credit losses		(15,329	)		(15,235	)		(94	)
Non-current assets		3,192,491			2,939,616			252,875
Noncurrent receivables		11,734			12,996			(1,262	)
Investments		78,505			65,128			13,377
Property, plant and equipment, net		1,095,879			1,035,065			60,814
Operating lease right-of-use assets		126,125			117,843			8,282
Intangible assets, net		274,942			280,995			(6,053	)
Goodwill		1,045,400			972,626			72,774
Noncurrent lease receivables		321,065			279,332			41,733
Other assets		242,659			179,297			63,362
Allowance for credit losses		(3,818	)		(3,666	)		(152	)
Total assets		5,416,577			5,095,530			321,047
LIABILITIES AND EQUITY
Current liabilities		1,439,176			1,365,353			73,823
Short-term loans and current portion of long-term debt		386,200			296,384			89,816
Short-term loans related to financial services		38,900			41,200			(2,300	)
Other short-term loans and current portion of long-term debt		347,300			255,184			92,116
Trade payables		309,930			355,930			(46,000	)
Accrued income taxes		56,983			48,414			8,569
Accrued expenses		373,544			365,847			7,697
Current operating lease liabilities		35,559			33,281			2,278
Other current liabilities		276,960			265,497			11,463
Non-Current liabilities		371,694			381,147			(9,453	)
Long-term debt, excluding current portion of long-term debt		2,954			2,417			537
Accrued pension and severance cost		171,779			189,215			(17,436	)
Noncurrent operating lease liabilities		92,604			85,331			7,273
Other noncurrent liabilities		104,357			104,184			173
Total liabilities		1,810,870			1,746,500			64,370
Canon Inc. shareholders’ equity		3,353,022			3,113,105			239,917
Common stock		174,762			174,762			—
Additional paid-in capital		404,935			404,838			97
Retained earnings		3,862,846			3,729,244			133,602
Legal reserve		61,634			64,509			(2,875	)
Other retained earnings		3,801,212			3,664,735			136,477
Accumulated other comprehensive income (loss)		268,758			62,623			206,135
Treasury stock, at cost		(1,358,279	)		(1,258,362	)		(99,917	)
Noncontrolling interests		252,685			235,925			16,760
Total equity		3,605,707			3,349,030			256,677
Total liabilities and equity		5,416,577			5,095,530			321,047
	Millions of yen
	As of December 31, 2023			As of December 31, 2022
Notes:
1. Accumulated depreciation		3,088,649			2,962,228
2. Accumulated other comprehensive income (loss):
Foreign currency translation adjustments		374,937			191,287
Net unrealized gains and losses on securities		26			(34	)
Net gains and losses on derivative instruments		924			(428	)
Pension liability adjustments		(107,129	)		(128,202	)

- 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, 2023			Three months     ended December 31, 2022			Change(%)
Net sales		1,163,718			1,157,175			+	0.6
Cost of sales		615,639			638,836
Gross profit		548,079			518,339			+	5.7
Operating expenses:
Selling, general and administrative expenses		347,002			335,338
Research and development expenses		85,084			85,657
		432,086			420,995
Operating profit		115,993			97,344			+	19.2
Other income (deductions):
Interest and dividend income		4,322			2,010
Interest expense		(793	)		(309	)
Other, net		(4,737	)		21,426
		(1,208	)		23,127
Income before income taxes		114,785			120,471			-	4.7
Income taxes		28,395			30,394
Consolidated net income		86,390			90,077
Less: Net income attributable to noncontrolling interests		5,824			5,234
Net income attributable to Canon Inc.		80,566			84,843			-	5.0
Results for the fiscal year
	Millions of yen
	Year ended December 31, 2023			Year ended December 31, 2022			Change(%)
Net sales		4,180,972			4,031,414			+	3.7
Cost of sales		2,212,062			2,203,612
Gross profit		1,968,910			1,827,802			+	7.7
Operating expenses:
Selling, general and administrative expenses		1,261,630			1,167,673
Research and development expenses		331,914			306,730
		1,593,544			1,474,403
Operating profit		375,366			353,399			+	6.2
Other income (deductions):
Interest and dividend income		13,425			5,177
Interest expense		(2,267	)		(1,046	)
Other, net		4,243			(5,090	)
		15,401			(959	)
Income before income taxes		390,767			352,440			+	10.9
Income taxes		106,346			92,356
Consolidated net income		284,421			260,084
Less: Net income attributable to noncontrolling interests		19,908			16,123
Net income attributable to Canon Inc.		264,513			243,961			+	8.4

- 7 -

CANON INC. AND SUBSIDIARIES

CONSOLIDATED

  Consolidated statements of comprehensive income

  Results for the fourth quarter

	Millions of yen
	Three months     ended December 31, 2023			Three months     ended December 31, 2022			Change(%)
Consolidated net income		86,390			90,077			-	4.1
Other comprehensive income (loss), net of tax
Foreign currency translation adjustments		(39,092	)		(122,455	)
Net unrealized gains and losses on securities		-			(13	)
Net gains and losses on derivative instruments		2,608			2,316
Pension liability adjustments		20,296			26,378
		(16,188	)		(93,774	)
Comprehensive income (loss)		70,202			(3,697	)			-
Less: Comprehensive income (loss) attributable to noncontrolling interests		8,381			5,824
Comprehensive income (loss) attributable to Canon Inc.		61,821			(9,521	)			-
Results for the fiscal year
	Millions of yen
	Year ended December 31, 2023			Year ended December 31, 2022			Change(%)
Consolidated net income		284,421			260,084			+	9.4
Other comprehensive income (loss), net of tax
Foreign currency translation adjustments		184,836			186,563
Net unrealized gains and losses on securities		60			(34	)
Net gains and losses on derivative instruments		1,394			449
Pension liability adjustments		24,289			29,897
		210,579			216,875
Comprehensive income (loss)		495,000			476,959			+	3.8
Less: Comprehensive income (loss) attributable to noncontrolling interests		24,352			18,581
Comprehensive income (loss) attributable to Canon Inc.		470,648			458,378			+	2.7

- 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, 2023			Three months ended December 31, 2022			Change(%)
Printing		642,632			640,167			+	0.4
Medical		164,204			150,828			+	8.9
Imaging		229,278			242,449			-	5.4
Industrial		98,954			95,453			+	3.7
Others and Corporate		48,432			55,247			-	12.3
Eliminations		(19,782	)		(26,969	)			-
Total		1,163,718			1,157,175			+	0.6
	Millions of yen
Sales by region	Three months ended December 31, 2023			Three months ended December 31, 2022			Change(%)
Japan		248,991			237,232			+	5.0
Overseas:
Americas		367,855			361,412			+	1.8
Europe		320,988			313,359			+	2.4
Asia and Oceania		225,884			245,172			-	7.9
		914,727			919,943			-	0.6
Total		1,163,718			1,157,175			+	0.6
Results for the fiscal year
	Millions of yen
Sales by business unit	Year ended December 31, 2023			Year ended December 31, 2022			Change(%)
Printing		2,346,076			2,272,610			+	3.2
Medical		553,780			513,331			+	7.9
Imaging		861,625			803,480			+	7.2
Industrial		314,719			329,232			-	4.4
Others and Corporate		189,791			212,349			-	10.6
Eliminations		(85,019	)		(99,588	)			-
Total		4,180,972			4,031,414			+	3.7
	Millions of yen
Sales by region	Year ended December 31, 2023			Year ended December 31, 2022			Change(%)
Japan		901,589			864,808			+	4.3
Overseas:
Americas		1,312,438			1,255,405			+	4.5
Europe		1,111,211			1,034,008			+	7.5
Asia and Oceania		855,734			877,193			-	2.4
		3,279,383			3,166,606			+	3.6
Total		4,180,972			4,031,414			+	3.7

* A certain business, which was previously included in Others, has been presented within the Printing Business Unit from the beginning of the first quarter of 2023. Operating results for the three months ended December 31, 2022 and the year ended December 31, 2022 also have been reclassified.

Notes:	1.  The primary products included in each of the segments are as follows:
	Printing Business Unit :
	Digital continuous feed presses / Digital sheet-fed presses / Large format printers Office multifunction devices (MFDs) / Document solutions / Laser multifunction printers (MFPs) / Laser printers / Inkjet printers / Image scanners / Calculators
	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
	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
	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

- 9 -

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, 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
Equity transactions with noncontrolling interests and other				158			(3,534	)		3,534			-									158			(97	)		61
Dividends to Canon Inc. shareholders										(130,870	)		(130,870	)								(130,870	)					(130,870	)
Dividends to noncontrolling interests																									(7,495	)		(7,495	)
Transfers to legal reserve							659			(659	)		-									-						-
Comprehensive income:
Net income										264,513			264,513									264,513			19,908			284,421
Other comprehensive income (loss), net of tax:
Foreign currency translation adjustments																183,650						183,650			1,186			184,836
Net unrealized gains and losses on securities																60						60						60
Net gains and losses on derivative instruments																1,352						1,352			42			1,394
Pension liability adjustments																21,073						21,073			3,216			24,289
Total comprehensive income (loss)																						470,648			24,352			495,000
Repurchases and reissuance of treasury stock				(61	)					(41	)		(41	)					(99,917	)		(100,019	)					(100,019	)
Balance at December 31, 2023		174,762		404,935			61,634			3,801,212			3,862,846			268,758			(1,358,279	)		3,353,022			252,685			3,605,707

- 10 -

CANON INC. AND SUBSIDIARIES

CONSOLIDATED

5. CONSOLIDATED STATEMENTS OF CASH FLOWS

	Millions of yen
	Year ended December 31, 2023			Year ended December 31, 2022
Cash flows from operating activities:
Consolidated net income		284,421			260,084
Adjustments to reconcile consolidated net income to net cash provided by operating activities:
Depreciation and amortization		238,676			226,492
Loss (gain) on disposal of fixed assets		4,025			(6,458	)
Deferred income taxes		(10,353	)		(7,800	)
Decrease (increase) in trade receivables		16,625			(78,203	)
Decrease (increase) in inventories		65,595			(108,510	)
Increase in lease receivables		(24,838	)		(30,379	)
(Decrease) increase in trade payables		(57,631	)		3,293
Increase in accrued income taxes		6,880			3,472
(Decrease) increase in accrued expenses		(16,083	)		23,407
Decrease in accrued pension and severance cost		(32,208	)		(42,580	)
Contribution of cash to retirement benefit trust		(18,000	)		-
Other, net		(5,919	)		19,785
Net cash provided by operating activities		451,190			262,603
Cash flows from investing activities:
Purchases of fixed assets		(230,308	)		(188,527	)
Proceeds from sale of fixed assets		3,670			14,733
Proceeds from maturity of held to maturity securities		-			2,151
Purchases of securities		(11,755	)		(21,558	)
Proceeds from sale and maturity of securities		16,582			7,680
Acquisitions of businesses, net of cash acquired		(54,570	)		(5,890	)
Other, net		1,009			10,591
Net cash used in investing activities		(275,372	)		(180,820	)
Cash flows from financing activities:
Repayments of long-term debt		(55,893	)		(122,067	)
Decrease in short-term loans related to financial services, net		(2,300	)		(1,100	)
Increase in other short-term loans, net		140,213			197,826
Dividends paid		(130,870	)		(119,326	)
Repurchases and reissuance of treasury stock, net		(100,019	)		(100,016	)
Other, net		(7,860	)		(2,161	)
Net cash used in financing activities		(156,729	)		(146,844	)
Effect of exchange rate changes on cash and cash equivalents		20,133			25,767
Net change in cash and cash equivalents		39,222			(39,294	)
Cash and cash equivalents at beginning of period		362,101			401,395
Cash and cash equivalents at end of period		401,323			362,101

* Certain items in the consolidated statements of cash flows for the year ended December 31, 2022, have been reclassified to conform to the current year's presentation.

- 11 -

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, 2023		Year ended  December 31, 2022		Change(%)
Printing
Net sales:
	External customers		2,339,718		2,266,074	+	3.2
	Intersegment		6,358		6,536	-	2.7
	Total		2,346,076		2,272,610	+	3.2
Operating cost and expenses			2,117,767		2,060,219	+	2.8
Operating profit			228,309		212,391	+	7.5
Other income (deductions)			6,752		13,806	-	51.1
Income before income taxes			235,061		226,197	+	3.9
Total assets			1,247,666		1,224,187	+	1.9
Depreciation and amortization			69,712		72,946	-	4.4
Capital expenditures			65,175		66,550	-	2.1
Medical
Net sales:
	External customers		552,296		513,028	+	7.7
	Intersegment		1,484		303	+	389.8
	Total		553,780		513,331	+	7.9
Operating cost and expenses			522,131		482,326	+	8.3
Operating profit			31,649		31,005	+	2.1
Other income (deductions)			490		890	-	44.9
Income before income taxes			32,139		31,895	+	0.8
Total assets			361,251		356,799	+	1.2
Depreciation and amortization			14,041		13,418	+	4.6
Capital expenditures			12,094		11,956	+	1.2
Imaging
Net sales:
	External customers		861,456		803,057	+	7.3
	Intersegment		169		423	-	60.0
	Total		861,625		803,480	+	7.2
Operating cost and expenses			716,046		676,850	+	5.8
Operating profit			145,579		126,630	+	15.0
Other income (deductions)			854		1,403	-	39.1
Income before income taxes			146,433		128,033	+	14.4
Total assets			406,390		349,338	+	16.3
Depreciation and amortization			22,062		20,374	+	8.3
Capital expenditures			28,922		17,841	+	62.1
Industrial
Net sales:
	External customers		303,807		320,817	-	5.3
	Intersegment		10,912		8,415	+	29.7
	Total		314,719		329,232	-	4.4
Operating cost and expenses			256,121		271,213	-	5.6
Operating profit			58,598		58,019	+	1.0
Other income (deductions)			568		1,194	-	52.4
Income before income taxes			59,166		59,213	-	0.1
Total assets			244,275		233,969	+	4.4
Depreciation and amortization			12,931		12,195	+	6.0
Capital expenditures			10,432		15,271	-	31.7
Others and Corporate
Net sales:
	External customers		123,695		128,438	-	3.7
	Intersegment		66,096		83,911	-	21.2
	Total		189,791		212,349	-	10.6
Operating cost and expenses			276,136		286,144	-	3.5
Operating profit			(86,345)		(73,795)		-
Other income (deductions)			12,454		(12,147)		-
Income before income taxes			(73,891)		(85,942)		-
Total assets			3,180,186		2,952,891	+	7.7
Depreciation and amortization			119,930		107,559	+	11.5
Capital expenditures			115,102		71,673	+	60.6
Eliminations
Net sales:
	External customers		-		-		-
	Intersegment		(85,019)		(99,588)		-
	Total		(85,019)		(99,588)		-
Operating cost and expenses			(82,595)		(98,737)		-
Operating profit			(2,424)		(851)		-
Other income (deductions)			(5,717)		(6,105)		-
Income before income taxes			(8,141)		(6,956)		-
Total assets			(23,191)		(21,654)		-
Depreciation and amortization			-		-		-
Capital expenditures			-		-		-
Consolidated
Net sales:
	External customers		4,180,972		4,031,414	+	3.7
	Intersegment		-		-		-
	Total		4,180,972		4,031,414	+	3.7
Operating cost and expenses			3,805,606		3,678,015	+	3.5
Operating profit			375,366		353,399	+	6.2
Other income (deductions)			15,401		(959)		-
Income before income taxes			390,767		352,440	+	10.9
Total assets			5,416,577		5,095,530	+	6.3
Depreciation and amortization			238,676		226,492	+	5.4
Capital expenditures			231,725		183,291	+	26.4

*A certain business, which was previously included in Others, has been presented within the Printing Business Unit from the beginning of the first quarter of 2023. Operating results for the year ended December 31, 2022 also have been reclassified. *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.

- 12 -

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, 2023		Year ended  December 31, 2022
Net income attributable to Canon Inc.
-Basic		264,513		243,961
-Diluted		264,508		243,957
	Number of shares
Weighted average common shares outstanding
-Basic		1,001,199,905		1,030,644,385
-Diluted		1,001,604,002		1,030,979,260
	Yen
Net income attributable to
Canon Inc. shareholders per share:
-Basic		264.20		236.71
-Diluted		264.08		236.63

(2) SUBSEQUENT EVENT

On January 4, 2024, 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.

On January 29, 2024, the Board of Directors of Canon Marketing Japan Inc., a subsidiary of the Company, approved a plan to establish a corporate venture capital fund, Canon Marketing Japan MIRAI Fund, for the purpose of accelerating open innovation with startups that possess cutting-edge technologies and business ideas. The Canon Marketing Japan MIRAI Fund will be invested by Canon Marketing Japan Inc. and Global Brain Corporation for ¥10 billion over the planned 10 year investment period. The investment ratio is 99.5% and 0.5%, respectively.

On January 30, 2024, the Board of Directors of Canon approved a plan to repurchase its own shares under the Article 156, as applied pursuant to Paragraph 3, Article 165, of the Companies Act of Japan, as follows.

1. Reason for repurchase:

Canon decided to acquire its own shares with the aim of further improving its corporate value through active growth investment and enhancing shareholder returns by improving capital efficiency. As a part of this approach for shareholder returns, Canon passed a resolution to acquire its own shares.

2. Total number of shares to be repurchased:	Up to 33 million shares (Equivalent to 3.3% of issued shares (Excluding treasury stock))
3. Total cost of repurchase:	Up to ¥100.0 billion
4. Period of repurchase:	From February 1, 2024 to January 31, 2025

- 13 -

NON-CONSOLIDATED

(Current Titles are Shown in the Parentheses)

Effective Date: March 28, 2024

Directors

(1) Director to be retired

Kunitaro Saida (Director)

(2) Candidates for new Director to be appointed

Executive Vice President	Kazuto Ogawa	(Senior Managing Executive Officer, Group Executive of Global Marketing Strategy Headquarters)
Senior Managing Director	Hiroaki Takeishi	(Senior Managing Executive Officer, Head of Industrial Group)
Senior Managing Director	Minoru Asada	(Senior Managing Executive Officer, Group Executive of Finance & Accounting Headquarters)
Outside Director	Masayuki Ikegami	(Attorney), Justice of the Supreme Court, Japan (former)
Outside Director	Masaki Suzuki	Vice-Minister of the Environment of Ministry of the Environment Japan (former)
Outside Director	Akiko Ito	Commissioner of Consumer Affairs Agency, Japan (former)

- 14 -

NON-CONSOLIDATED

(Current Titles are Shown in the Parentheses)

Effective Date: March 28, 2024

Audit & Supervisory Board Members

(1) Audit & Supervisory Board Member to be retired

Katsuhito Yanagibashi (Audit & Supervisory Board Member)

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

Chikahiro Okayama (Senior Vice President of Canon (China) Co., Ltd.)

- 15 -

NON-CONSOLIDATED

(Current Titles are Shown in the Parentheses)

Executive Officers (1/2)

(1) Executive Officers to be retired

   Effective Date: March 28, 2024

Kazuto Ogawa	(Senior Managing Executive Officer, Group Executive of Global Marketing Strategy Headquarters)
Hiroaki Takeishi	(Senior Managing Executive Officer, Head of Industrial Group)
Minoru Asada	(Senior Managing Executive Officer, Group Executive of Finance & Accounting Headquarters)

Note: Kazuto Ogawa will be appointed Executive Vice President and Director of Canon Inc. as of March 28, 2024. Hiroaki Takeishi and Minoru Asada will be appointed Senior Managing Director of Canon Inc. as of March 28, 2024.

   Effective Date: March 31, 2024

Masanori Yamada	(Senior Managing Executive Officer, Head of Imaging Group)
Takanobu Nakamasu	(Managing Executive Officer, President & CEO of Canon Production Printing Holding B.V.)

Note: Masanori Yamada will be appointed Adviser of Canon Inc. as of April 1, 2024.

(2) New Executive Officers to be appointed

   Effective Date: April 1, 2024

Takahito Miura	(Senior General Manager of Global Legal Administration Center)
Seiya Miura	(Deputy Unit Executive of Semiconductor Production Equipment Unit)

- 16 -

NON-CONSOLIDATED

(Current Titles are Shown in the Parentheses)

Executive Officers (2/2)

(3) Executive Officers to be promoted

   Effective Date: April 1, 2024

Executive Vice President	Toshio Takiguchi	(Senior Managing Executive Officer, Head of Medical Group, President & CEO of Canon Medical Systems Corporation)
Executive Vice President	Go Tokura	(Senior Managing Executive Officer, Deputy Head of Imaging Group)
Senior Managing Executive Officer	Hisahiro Minokawa	(Managing Executive Officer, Group Executive of Human Resources Management & Organization Headquarters)
Managing Executive Officer	Akiko Tanaka	(Executive Officer, Deputy Group Executive of R&D Headquarters)
Managing Executive Officer	Noriko Gunji	(Executive Officer, Group Executive of Sustainability Headquarters)
Managing Executive Officer	Hideki Sanatake	(Executive Officer, Group Executive of Corporate Intellectual Property and Legal Headquarters)
Managing Executive Officer	Saijiro Endo	(Executive Officer, Senior General Manager of Digital Printing Development Technology Planning & Management Center)
Managing Executive Officer	Isao Kobayashi	(Executive Officer, President & CEO of Canon U.S.A., Inc.)

- 17 -