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  2010 / 2011
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                           K y o s e i

The corporate philosophy of Canon is kyosei.

A concise definition of this word would be

“Living and working together for the common good,”

but our definition is broader : “All people, regardless of race,

religion or culture, harmoniously living and working together

into the future.” Unfortunately, the presence of imbalances

in our world in such areas as trade, income levels and

the environment hinders the achievement of kyosei.

  Addressing these imbalances is an ongoing mission,

and Canon is doing its part by actively pursuing kyosei.

Truly global companies must foster good relations, not only

with their customers and the communities in which

they operate, but also with nations and the environment.

They must also bear the responsibility for the impact of

their activities on society. For this reason, Canon’s goal is

to contribute to global prosperity and the well-being

of mankind, which will lead to continuing growth and

bring the world closer to achieving kyosei.

We consider 2010 to be a turning point for Canon, and view         In 2010, we aim to further improve management quality and
it as the first year in a new era of growth. Coinciding with the   embrace the challenge of switching to a new growth track.
final year of Phase III of our Excellent Global Corporation           Toward these goals, we will target the overwhelming No.1
Plan, launched in 2006, 2010 also marks a renewed start of         position in all current business areas, and will strive to realize
a strategy targeting sound growth, one of the original             business expansion by further providing new services and
objectives of Phase III.                                           businesses made possible through advanced synergies
   In the midst of the global economic crisis, Canon perse-        between Canon imaging devices in accordance with our
vered in efforts to realize “improved management quality.”         “cross-media imaging” strategy. Additionally, we will
We successfully maintained a healthy business constitution         strengthen our leading-edge technologies, which will support
through such efforts as thoroughly strengthening our               the future development of current businesses, as well as the
supply-chain management, enabling us to make great strides         fundamental technologies of next-generation business
towards the realization of a real-time management structure        domains. Also, in pre-competitive fields, we are laying the
that allows the company to promptly respond to sudden              foundation for research and development.
changes in economic conditions. While working to further              Towards the improvement of management quality, we are
raise management quality, Canon will strive to meet new            promoting IT reforms aimed at consolidating information for
challenges, including the timely launch of innovative              all business processes throughout the company. In addition,
products and services, the enhancement of our sales system         in the unlikely event that a quality-related issue should occur,
across Asian markets, the cultivation of new businesses, and       we are building a quality control system to ensure that any
the promotion of international diversification.                    problem would be resolved before reaching our customers.
   Canon seeks to grow and prosper over the next 100, or              Moreover, we are solidifying our foundation as a truly
even 200 years, and is committed to becoming a truly               excellent company through active efforts to achieve sustain-
excellent global company admired and respected the world           able development in such areas as protecting the environ-
over. Based on our corporate philosophy of kyosei, we make         ment, compliance, and human resource development.
every effort to create technology to benefit future society for       For the time being, we expect the harsh economic climate
the prosperity of the world and the happiness of humankind.        to continue and uncertainty to prevail. Nevertheless, the
At the same time, towards the fulfillment of our social            entire company will continue making a unified effort to
responsibilities, we promote both enriched lifestyles and the      pursue reforms towards our Excellent Global Corporation
global environment while also carrying out social contribu-        Plan goal of joining the ranks of the world’s top 100 compa-
tion activities.                                                   nies in terms of all key business performance indicators.
   As Canon moves ahead, we look forward to your contin-              To this end, we appreciate your continued understanding
ued understanding and support.                                     and support.

                                             Fujio Mitarai                                                       Tsuneji Uchida
                                             Chairman and CEO,                                                   President and COO,
                                             Canon Inc.                                                          Canon Inc.

         2009                                                                                                           2009

                                       $34,883million                                                                       $1,431million
                                                      Japan     Americas          Europe    Other areas
                                                      22%         28%             31%       19%

                                                                                  $9,719million                Europe
                                                                                  11,084                                                                       12,004

                                                                                                              Canon Europe Ltd.

                                                            Canon U.S.A., Inc.

     Major operational sites
         Research & Development
         Sales & Marketing

                                                                                                            Rank                 Organization                        Number of patents
                                                                                                              1         IBM                                                   4,897
                                                                                                               2        SAMSUNG ELECTRONICS                                   3,605
                                                                                                               3        MICROSOFT                                             2,909
                                                                                                              4         CANON                                                 2,204
                                                                                                              5         PANASONIC                                              1,837
     Notes:                                                                                                    6        TOSHIBA                                                1,673
     • Net sales and employee numbers are based on consolidated
                                                                                                              7         SONY                                                   1,663
       financial statements for the fiscal year ended December 31, 2009.                                      8         INTEL                                                  1,538
     • U.S. dollar amounts are translated from yen at the rate of JPY92=U.S.$1,                               9         SEIKO EPSON                                            1,328
       the approximate exchange rate on the Tokyo Foreign Exchange Market as of                               10        HEWLETT - PACKARD                                      1,271
       December 30, 2009, solely for the convenience of the reader.
                                                                                                          • Based on weekly patent counts issued by the United States Patent and Trademark Office.
     • Sales ratios do not total 100% due to sales between segments of 3%.                                • IBM: International Business Machines Corporation

2009                                                             2009


             241                                                                  Japan
                                                                                                                Other areas
                                                                              Americas 7%                 Europe 7%

               Asia &                                $14,347million
               Oceania                               145,791

Canon (China) Co., Ltd.                                 Canon Inc. Headquarters


                                                         Canon Marketing Japan Inc.

Canon Australia Pty. Ltd.


                            Best Global Brands                                                                  2009 brand value ranking
        2009                   BusinessWeek                                Overall ranking       33 rd          based on future earnings
                               September 28, 2009 issue

                                                                               ( Total sales)
                             FORTUNE Global 500 *                           Global ranking      190 th          Evaluation of five
                                                                                                                performance measures for
                               Fortune                                              (Profits)                   fiscal 2008, including total
                               July 20, 2009 issue                          Global ranking      131st           sales, profits, and total assets

                             FT Global 500                           (Market capitalization)
                                                                                                                Market capitalization
                                                                                                104 th
                                                                                                                ranking on March 31, 2009
                               Financial Times                             Global ranking                       (the number of outstanding
                               May 30/31, 2009 issue                                                            shares multiplied by share price)

                            * FORTUNE Global 500 is a registered trademark of Time Inc. in the United States.

                                             Digital Single Lens Reflex (SLR)   Compact Digital Cameras     Lenses for SLR Cameras

                                                                                                            Digital Camcorders

                                             Office Network Multifunction       Laser Printers              Laser Multifunction
                                             Devices                                                        Devices

                                                                                                            Solutions Software

                                             LCD Lithography Systems            Semiconductor Lithography   Ophthalmic Equipment

                                                                                                            Digital Radiography

     Note: Screen images may be simulated.

Multifunction Inkjet Printers       Inkjet Printers                  Liquid Crystal Display      Network Cameras
                                                                     (LCD) Projectors

                                    Compact Photo Printers           Image Scanners              Broadcast Equipment

Toner Cartridges                   Digital Production Systems          Large-Format Inkjet Printers

Document Scanners               Color Label / Card Printers     Components                    Vacuum Thin-Film Deposition

Handy Terminals                 Personal Information            Die Bonders                   Organic LED Panel Manufacturing
                                Products                                                      Equipment


           Realizing dramatic reductions in CO2 emissions, Canon imageRUNNER ADVANCE devices are expected to contribute greatly to environmental efforts.

Canon: Ef forts
for Tomorrow                 A customizable user interface enables users to tailor displays    Select exterior parts used in imageRUNNER ADVANCE devices are
                             to meet individual needs while frequently used settings can       made from the world’s first bio-based plastic, jointly developed
                             be initiated with a single touch.                                 with Toray, to achieve a 5V classification for flame retardance.

     Children learn about climate change in the Arctic Circle by studying polar bears. They answer questions on printouts in accordance with the findings from their research.

                                                                                                                                                   Canon: Ef forts
                                                                                                        ©Michel Terrettaz / WWF-Canon              for Tomorrow
     Environmental issues play an important part in the curriculum      Data on the movements of polar bears provides researchers
     of Mondweg Elementary School in Vienna, Austria.                   with important clues on the effects of global warming.

Polar Bear Tracker

Printing Solutions

            The imagePRESS C1+ brings high-resolution image quality to cutting-edge X-ray, CT scanning and MRI equipment required by healthcare professionals.

Canon: Ef forts
                                University MRI in Florida provides examination and diagnos-        The imagePRESS C1+ prints out images of body regions
for Tomorrow                    tic services, reflecting the specialized nature of healthcare in   requiring particular attention, easily allowing side-by-side
                                the United States.                                                 image comparisons.

     IT Reforms

           In 2010, Canon aims to consolidate its camera and business machine 3D CAD systems into a single system — one aspect of the company’s IT reforms.

Canon: Ef forts
for Tomorrow                  Synchronization of the three systems realized through             3D CAD parts information supports the management of CO2
                              management innovation efforts will enable true IT reforms         emissions throughout the entire product lifecycle.
                              beyond the boundaries of SCM.

     Students interview residents in the East Dongting Lake area. Surveys focused on the residents’ awareness of environmental preservation issues and current concerns.

                                                                                                                                                 Canon: Ef forts
                                                                                                                                                 for Tomorrow
     Teams from Peking University, Beijing Forestry University,          The East Dongting Lake National Nature Reserve is located in
     Tsinghua University, Sun Yat-sen University, and Fudan University   Hunan, China. Recent efforts have led to a recovery in the
     participated in the field survey.                                   numbers of migratory birds and freshwater fish in the area.

Green Volunteer Action

     Excellent Global Corporation Plan
     The Excellent Global Corporation Plan is
     a medium-to-long-term management
     initiative designed to make Canon a truly
     excellent company that is admired and
     respected the world over. Through the
     plan, Canon aims to join the ranks of the
     world’s top 100 companies in terms of
                                                                                        Headquarters of
     all major management indicators.                                            Océ in the Netherlands,                                                     SEDs
                                                                which was made a consolidated subsidiary            (Surface-conduction Electron-emitter Displays)

     Phase III 2006 -2010
     Under Phase III, Canon is moving ahead with
                                                    Achieve the overwhelming No.1
                                                    position worldwide in
                                                    all current core businesses
                                                    Canon aims to attain the overwhelming No.1
                                                                                                 1         Expand business operations
                                                                                                           through diversification

                                                                                                           Diversification and globalization have enhanced
     such growth strategies as enhancing existing   position in each of its core businesses. Using         Canon’s corporate value. Having diversified by
     businesses and expanding into new areas. The   technological innovations to accomplish this           moving into such business areas as large-format
     company is also working to realize further     goal, the company is focusing on the                   inkjet printers, digital production systems, and
     improvements in management quality through     development of both key components to                  business solutions, Canon is also working to
     “real-time management” capable of responding   produce competitive products, and platform             establish display technologies. Group compa-
     quickly to dramatic changes in the business    technologies that can be shared company-wide.          nies in Japan, the United States and Europe are
     environment, along with the thorough           While hard at work on “cross-media imaging,”           independently diversifying their businesses by
     implementation of supply chain management      Canon is also actively conducting M&A and              capitalizing on their own unique technical
     and IT reforms.                                forming business partnerships to promote               specialties and products. Canon aims to
                                                    sound business growth.                                 establish a global Three Regional Headquarters
                                                                                                           management system with importing and
                                                                                                           exporting between regions.

                                 Canon-Kyoto University                              Automated toner cartridge production                                        A compliance card
                                  Joint Research Project

Identify new business domains
and accumulate required
To continue growing beyond 2010, Canon is
                                                3             Establish new production
                                                              systems to sustain international
                                                              In order to boost international competitiveness
                                                                                                                4           Nurture truly autonomous
                                                                                                                            individuals and promote
                                                                                                                            effective corporate reforms
                                                                                                                            A truly excellent company requires excellent
targeting new business domains in the fields of               and ensure consistent product quality, Canon is               employees. Canon is making a concerted effort
medical imaging, intelligent robots for                       working to establish fully automated production               to nurture future global leaders by handing
automated production, and safety and security.                lines built around automated machinery and                    down its corporate DNA — respect for
Along with the advancement of research and                    robots. Also, in addition to promoting the                    humanity, an emphasis on technology, and an
development by strengthening its                              in-house production of key components and                     enterprising spirit — through employee training
industry/academia partnerships with numerous                  major parts to enhance product differentiation,               programs and practices. At the same time, the
global research institutions, Canon is strength-              Canon is putting in place a regionally optimized              company is taking measures to increase
ening its fundamental research in new material                global production system that comprehensively                 compliance awareness among all employees
properties, advanced sensor technology, and                   considers product quality, transportation,                    with the goal of cultivating individuals society
other leading-edge technologies to secure                     employment practices, and production costs.                   can rely on.
long-term growth.

Phase I 1996 - 2000                                                                          Phase II 2001- 2005
To strengthen its financial base, Canon transformed its mindset from partial                 Aiming to become No.1 in all major business areas, Canon focused on strengthening
optimization to total optimization and shifted from a focus on sales to a focus on           product competitiveness along with the changing times, stepping up efforts to digitize
profit. During this phase, the company instituted various business innovations,              its products to deliver new value in an increasingly networked world. The company also
including cash flow management, selection and consolidation of business areas,               improved its corporate financial health through various management reforms across all
and reform activities in such areas as production and development.                           Canon Group businesses and divisions.
                  1933              1934               1936             1937              1941              1947               1955             1957              1961               1964

                                        Hansa Canon camera                                                     New York branch office                    Canonet camera
                                        introduced                                                             opened                                    introduced
                         Kwanon camera             Precision Optical Industry,                      Company name changed to                                       Canola 130 calculator
                         prototype developed       Co., Ltd. founded                                Canon Camera Co., Inc.                                        introduced
        Precision Optical Instruments                                          Japan’s first indirect X-ray                          Sole European distributor,
        Laboratory established                                                 camera introduced                                     Canon Europa, established

     Hansa Canon 35mm focal-plane-shutter           Canonet Electric Eye (EE) camera              Canola 130, the world’s first 10-key          NP-1100, Japan’s first plain paper copying
     camera                                                                                       electronic calculator                         machine

          A modest beginning in a small room                                                            Striving for the world’s best camera
          In 1933, a small laboratory dedicated to making high-quality                                  In 1950, Canon’s first president, Takeshi Mitarai, went to
          cameras was set up in a simple apartment room in the                                          America for the first time to attend an international trade fair.
          Roppongi area of Tokyo. At the time, all high-quality cameras                                 Having seen modern factories and a high standard of living
          were European with the majority coming from Germany.                                          first hand, upon his return, he built a fireproof factory of
          It was in this small room that young people with a big dream                                  steel-reinforced concrete in the Shimomaruko area of Tokyo,
          earnestly began their work on producing a high-quality                                        which he saw as essential for Canon to succeed in doing
          Japanese camera, marking the beginning of Canon.                                              business with the world at large. Mitarai also made clear his
          Through hard work and with an enterprising spirit, they                                       respect for humanity by stressing the importance of the San-ji,
          eventually succeeded in building a prototype, which was                                       or Three Selfs spirit, the guiding principle for Canon employ-
          named Kwanon after the Buddhist goddess of mercy. The                                         ees. In 1955, Canon made its first step into the global market
          following year, in 1935, Japan’s first-ever 35mm focal-plane-                                 with the opening of a U.S. office in New York City. In 1957,
          shutter camera, the Hansa Canon, was born, along with                                         Canon set up its sole European distributor, Canon Europa, in
          the Canon brand.                                                                              Geneva, Switzerland. By 1967 exports already topped 50% of
                                                                                                        the company’s total sales.

                                                                                                                                                                 Respect for
     Canon’s Corporate DNA                                                                                                                                       Humanity

     Behind Canon’s 70-plus-year history and development as a             technology permeate the company, and have continued to provide
     business lies its corporate DNA: a respect for humanity, an          society with new advances. These motivating factors are in turn                     Canon Corporate
     emphasis on technology, and an enterprising spirit that the          supported by a respect for humanity, which encompasses                                   DNA
     company has consistently passed on since its foundation. The         meritocracy and an emphasis on good health. Canon is committed
     enterprising spirit on which Canon was started as a venture          to passing its corporate DNA on to future generations to ensure the     Emphasis on                  Enterprising
                                                                                                                                                  Technology                      Spirit
     company and the relentless drive to distinguish itself through       company grows for another 100, or even 200 years.
1967               1969               1970             1970                1976                1976                1979               1982             1985                1987                1987

“Cameras in the                                                                   AE-1 SLR camera introduced                                  BJ-80 inkjet printer
 right hand,                                                                                                                                  introduced
 business machines         NP-1100 copying                        Premier Company                  LBP-10 laser printer introduced                         CLC-1 digital full-color
 in the left.”             machine introduced                     Plan launched                                                                            copying machine introduced
         Company name changed to                PPC-1 mask aligner introduced                                           PC-10/20 personal copying                          EOS650 AF SLR camera
         Canon Inc.                                                                                                     machine introduced                                 introduced

    AE-1, the world’s first SLR camera with a       LBP-10, the world’s first laser printer with        PC-10/20, the world’s first personal copying   BJ-80, the world’s first inkjet printer using
    built-in microcomputer                          a semiconductor laser                               machine with an all-in-one cartridge system    Bubble Jet technology

          The challenge of diversification                                                                    Averting disaster with the Premier Company Plan
          Soon after its founding, Canon was hard at work in 1941 on                                          By 1970, Canon grew to 44.8 billion yen in sales and more
          diversifying itself with the introduction of Japan’s first indirect                                 than 5,000 employees. But hit by dollar and oil shocks,
          X-ray camera and other products. In the 1960s, the company                                          followed by problems with a defective electronic calculator
          took further steps toward diversification by adding electrical,                                     display component in 1974, Canon fell on hard times. In the
          physical and chemical technologies to its optical and precision                                     first half of 1975, it failed to pay a dividend for the first time
          technologies. In 1964, Canon entered the office equipment                                           since becoming a public company. In 1976, Canon unveiled
          market with the debut of the world’s first 10-key electronic                                        its Premier Company Plan, an ambitious strategy to transform
          calculator. In 1967, the management slogan “cameras in the                                          Canon into an “excellent global company” through such
          right hand, business machines in the left” was unveiled and in                                      means as introducing a vertical business group constitution
          1969 the company changed its name from Canon Camera                                                 and establishing a horizontal development, production
          Co., Inc. to Canon Inc. Canon took on the challenge of                                              and sales system. The plan proposed high ideals and
          developing Japan’s first plain paper copying machine, which it                                      pooled the strength of its employees, enabling the company
          introduced in 1970, and realized further diversification from                                       to promptly recover.
          one challenging field to the next.

          The San-ji (Three Selfs) Spirit                                                 Self-motivation
                                                                                                                     Take the initiative and be
                                                                                                                     proactive in all things.
          The Three Selfs, the foundation of the company’s guiding principles
          that have been passed down since Canon was founded, are                                                    Conduct oneself with
          self-motivation, self-management and self-awareness. For Canon,               Self-management responsibility and accountability.
          which strives to be a truly excellent global corporation while
          maintaining the legacy of its corporate DNA, the Three Selfs continue                                      Understand one’s situation and
                                                                                          Self-awareness             role in all situations.
          to serve as the company’s most important guiding principles.
     1988            1990                1996             2000              2000              2000            2002              2006               2007            2009

                            Excellent Global Corporation         PowerShot S100 DIGITAL                              imagePROGRAF iPF9000                imageRUNNER ADVANCE
                            Plan launched                        ELPH (DIGITAL IXUS)                                 printer introduced                  network multifunction
                                                                 compact digital camera                                                                  device introduced
         Toner cartridge collection and                                                                 EOS-1Ds digital SLR
         recycling program launched                              introduced                             camera introduced
     Corporate philosophy of kyosei                  Canon Inc. ADRs listed on           iR series of network                               imagePRESS C7000VP
     introduced with the company’s                   the New York Stock Exchange         multifunction devices introduced                   digital press introduced
     second inauguration

       PowerShot S100 DIGITAL ELPH (DIGITAL             iR3250 network multifunction device         EOS-1Ds high-end professional digital           imagePROGRAF iPF9000 large-format
       IXUS in other areas) compact digital camera                                                  SLR camera                                      inkjet printer

             Canon’s second inauguration                                                                  The Excellent Global Corporation Plan
             Canon continued to grow under the Premier Company Plan.                                     Canon had developed unprecedented technologies and
             With the dawn of the personal computer age, Canon                                           carefully nurtured them to create business opportunities and
             introduced to the world a series of products never before                                   products unrivaled by any other company. But by the
             seen, among them a personal copying machine based on an                                     mid-1990s, the business division system that had been in
             all-in-one cartridge system, a laser printer with semiconductor                             place since the 1970s was showing signs of wear. Canon also
             laser, and a Bubble Jet inkjet printer. Canon also began                                    carried debt of more than 840 billion yen, meaning the
             promoting global production in earnest on the road to                                       company needed to improve its financial constitution if it was
             becoming an excellent global company. Then, in 1988, the                                    to carry out long-term R&D projects and launch new
             51st anniversary of the company’s founding, Canon                                           businesses. Fujio Mitarai became Canon’s 6th company
             announced its second inauguration and unveiled its corporate                                president in 1995, and in 1996 the Excellent Global Corpora-
             philosophy of kyosei, an unfamiliar term at the time. It also                               tion Plan was launched. Transforming the corporate mindset
             began promoting such progressive and environmentally                                        from partial to total optimization and from a focus on sales to
             sound activities as toner cartridge recycling in addition to                                a focus on profits, the new plan was the start of the innova-
             globalizing its development sites.                                                          tions that characterize today’s Canon.

                                                                                                                                                         CK Project research at Kyoto University, Japan

     Cross-Media Imaging                                                                                  CK Project
                                                               Canon pursues advanced synergies                                                       A joint research project with Kyoto University,
                                                               between imaging products — enabling                                                    the CK Project aims to realize medical imaging
                                                               consumers to realistically express their                                               devices capable of the ultra-early detection
                                                               ideas and thoughts at will. In this way,                                               of disease. Working with experts from
                                                               Canon will foster new possibilities in                                                 Kyoto University, Canon explores R&D
                                                               business and culture while expanding its                                               advances in medical imaging diagnostics,
                                                               involvement in such areas as printing,                                                 including optical imaging, ultrasound, mag-
                                                               medicine, and the arts.                                                                netic measurement, and molecular probes.
     Advanced synergies between digital cameras and printers                                              A mirror for optical coherence tomography

     Display Development                                                                                  Super Machine Vision
                                                               Seeking advances in high-quality next-                                                 Canon is developing robotic vision capable
                                                               generation flat-panel displays, Canon is                                               of detecting, assessing and learning from
                                                               researching and developing both large                                                  changes in surroundings. Drawing on the
                                                               screen SEDs with the same high image                                                   latest in optical, imaging, and recognition
                                                               quality as CRT displays, and low-power-                                                technologies, Canon is working to realize
                                                               consumption organic LED displays for                                                   Super Machine Vision for industrial and
                                                               mobile devices.                                                                        monitoring applications, offering capabili-
                                                                                                                                                      ties that surpass those of the human eye.
     An organic LED display                                                                               Development of robotic vision

                                                                                             Development of 3-D component-measuring technology to realize Super Machine Vision

High-Accuracy Color Management System                                               Key Components
                                     Kyuanos, Canon’s high-accuracy color                                                       Key components, such as digital camera
                                     management system, precisely matches                                                       image sensors, DIGIC image processors,
                                     colors among input and output devices,                                                     and Advanced iR Controllers used in
                                     which have varying ranges of color expres-                                                 multifunction office systems, are the key
                                     sion. Not only does Kyuanos faithfully                                                     to competitiveness in digital imaging
                                     reproduce colors, it automatically com-                                                    products. Canon applies its advanced
                                     pensates for variances in color appear-                                                    technologies and vast expertise in the
                                     ance due to lighting and other factors.                                                    development of these key components.
                                                                                    DIGIC 4 image processor

Simulation Technology                                                               3D CAD Design
                                     Canon’s proprietary simulation technol-                                                    Canon uses 3-D computer-aided design
                                     ogy predicts complex phenomena,                                                            (3D CAD) to develop products. Besides
                                     including the image-formation process in                                                   enabling the confirmation of positional
                                     copying machines and the ejection of ink                                                   relationships of components from all
                                     in inkjet printers. This capability supports                                               angles, CAD supports innovation through
                                     new technology research, enhances                                                          simulated function and performance
                                     product performance, and contributes                                                       evaluations and the sharing of data
                                     to shorter development lead-times.                                                         between company divisions.
Simulation of ink droplet ejection

                                                                                                                    Cell production of compact digital cameras at Oita Canon (Japan)

     Automated Production System                                                               Cell Production
                                                Canon is currently building automated                                              All Canon factories across the world use the cell
                                                production lines that run nonstop every                                            production system, which eliminates conveyor
                                                day of the year. Design, production technol-                                       belt assembly lines in favor of small teams, or
                                                ogy, and manufacturing expertise combine                                           “cells,” of workers that handle multiple proce-
                                                through the sharing of experience and                                              dures to complete a product. The system allows
                                                know-how to establish entirely automated                                           workers to change the number of procedures
                                                production systems with increasingly                                               they perform according to skill level while also
                                                enhanced quality and stability.                                                    facilitating adjustments in production output.
     Automated production of toner cartridges                                                  Canon Vietnam

     In-House Production                                                                       PO (Purchase Order)-Based Production System
                                                Canon carries out the in-house develop-                                            Canon's PO-based production system aims to
                                                ment and production of its proprietary key                                         allow the company to manufacture products
                                                components and devices with the aim of                                             based on the quantity of purchase orders
                                                creating innovative products while reducing                                        received from sales companies without
                                                costs. The company also promotes the                                               incurring a surplus of procurement parts. Unlike
                                                in-house production of functional parts,                                           forecast-based production, the system
                                                circuit boards and other major components,                                         demands close collaboration between parts-
                                                molds and manufacturing equipment.                                                 procurement, production and sales operations.
     Production of image sensors                                                               Oita Canon (Japan)

                                                                                                           Cell production of imageRUNNER ADVANCE network MFDs at Canon Suzhou (China)

Intelli-Tech                                                                                    The Expert (Multi-Skilled Worker) System
                                                  At Canon, “intelli-tech” refers to the                                                  Canon’s Expert System recognizes
                                                  tools and equipment created by produc-                                                  employees with exceptional work skills.
                                                  tion workers to make their work more                                                    Workers are evaluated based on the
                                                  efficient. These innovative, space-saving                                               number of operations they can perform,
                                                  tools are actively utilized at Canon facto-                                             specialized knowledge, work speed and
                                                  ries around the world today — at a fraction                                             other abilities. The system contributes to
                                                  of the cost of previously used tools and                                                improvements in cell production quality
                                                  equipment.                                                                              and increased productivity.
An intelli-tech screw dispenser tool                                                            A Super-grade Expert

Green Procurement                                                                               The Master Craftsman System
                                                  Green Procurement prioritizes the purchase                                              At Canon, employees with exceptional
                                                  of products with minimal environmental                                                  skill who have received awards from
                                                  burden. As a parts buyer, Canon issued its                                              public institutes are acknowledged as
                                                  Green Procurement Standards in 1997 and                                                 master craftsmen, of which there are
                                                  began evaluating the chemical substance                                                 currently 28. They apply their outstand-
                                                  management of its parts suppliers. Results                                              ing skills to lens polishing, precision
                                                  of chemical evaluations are utilized in the                                             machining and other processes, and
                                                  development of new products.                                                            pass them on to the next generation.
Verification at a printer circuit board factory                                                 A master craftsman working on a mold

                                                                                                                  An event targeting professional photographers (U.K.)

     Global Sales Framework                                                                Solutions Business
                                             Each of Canon’s regional marketing head-                                Canon provides services to meet the IT
                                  Canon      quarters — Canon U.S.A., Canon Europe,                                  requirements and printing needs of
        Canon Inc.                U.S.A.
                                             Canon China, Canon Australia, and Canon                                 customers. The company accurately
                                  Canon      Marketing Japan — oversees its own                                      provides solutions from the customer's
           Feedback               Europe     regional sales while cooperating closely                                perspective to improve such aspects as
                                  Canon      with Japan’s product development teams,                                 functionality, security, and cost reduc-
         Canon        Canon      Marketing
        Australia     China                  listening closely to customer comments                                  tion, contributing to workflow innova-
                                             which are then reflected in Canon products.                             tions across various industries.
                                                                                           Fraport AG (Germany)

     Unification of Canon Europe Headquarters                                              Canon Managed Document Services
                                             In 2009, Canon Europe consolidated its                                  Canon introduced a comprehensive manage-
                                             headquarters in London, uniting strate-                                 ment service that provides support in the
                                             gic functions previously assigned to                                    effective management of document input-
                                             separate consumer and business prod-                                    output environments. Providing proposals for
                                             uct divisions. This integration enables                                 fleet optimization and business process
                                             more efficient implementation of sales                                  improvements as part of its high quality service,
                                             strategies throughout the Europe,                                       Canon contributes to reduced costs and
                                             Middle East, and Africa region.                                         increased productivity for customers worldwide.
     Canon Europe headquarters (U.K.)

                                                                                         New products on display at On-Demand Russia, a commercial printing exhibition held in Moscow

Canon Business Solutions                                                                 Enhanced Sales Framework in Emerging Markets
                                       Canon Business Solutions, a wholly                                                             Canon is strengthening its sales capa-
                                       owned subsidiary of Canon U.S.A., boasts                                                       bilities to better serve emerging markets
                                       one of the strongest portfolios in the                                                         in Russia, the Middle East, Africa, and
                                       document management industry. In 2009,                                                         Asia. To build brand trust in these
                                       the company expanded its sales base with                                                       markets, the company endeavors to
                                       13 new offices and strengthened human                                                          introduce products that match regional
                                       resource development to provide high-                                                          needs, participate in various exhibitions,
                                       quality sales and services across the U.S.                                                     and reinforce its service training.
Network digital MFP service training                                                     Canon Ru (Russia)

IT Outsourcing Business                                                                  Quick Response and Repair Centers (QRCs)
                                       As part of its Solutions Business, Canon                                                       Excellence in after-service support is essen-
                                       Marketing Japan provides services related to                                                   tial to Chinese customers. Canon China has
                                       the outsourcing of IT systems operations as                                                    set up QRCs in Beijing, Shanghai, Guang-
                                       well as cloud computing, contributing to                                                       zhou, and other cities to provide prompt
                                       reduced IT investment costs. The company                                                       repair of digital cameras, inkjet printers, and
                                       plans to build a large-scale data center with                                                  other Canon products by knowledgeable
                                       cutting-edge capabilities by 2012 to strengthen                                                staff. By the end of 2010, the company plans
                                       the infrastructure of this business.                                                           to have a total of 25 QRCs in operation.
Remote operation center                                                                  A QRC in Shanghai

                                                                                                                                      “Crab forest,” located within the premises of Oita Canon Materials,
                                                                                                                                                                supports the preservation of biodiversity.

     “Action for Green” Environmental Vision                                                          Environmentally Conscious Offices
                                                        Canon’s “Action for Green” environ-                                                            Canon workplaces around the world
                                                        mental vision, introduced in 2009, lays                                                        strive to conserve energy and resources,
                                                        out a detailed action plan targeting                                                           employing such environmentally
                                                        activities during each stage of the prod-                                                      conscious facilities as air conditioning
                                                        uct lifecycle — produce, use and recycle.                                                      systems that make use of rainwater and
                                                        The company monitors progress                                                                  outdoor air, automatic solar blinds,
                                                        through the PDCA (plan-do-check-act)                                                           thermal insulation and motion-sensitive
                                                        process.                                                                                       sensors.
                                                                                                      Automatic solar blinds at Canon Austria

     Environmental Activities at Production Sites                                                     High-Speed Color On-Demand Fixing Technology
                                                        Canon has achieved zero waste output at                                                        In conventional print fixing systems, the
                                                        all of its plants worldwide and promotes                               Rotation direction      roller had to be kept hot at all times, but by
                                                                                                        Ceramic heater
                                                        such cutting-edge environmental meas-                                              film        employing a thin fixing film, Canon made
                                                        ures as natural energy use, wastewater                                                         possible energy-saving technology that only
                                                        recycling and chemical substance man-                                               Paper      requires heating when printing. The com-
                                                        agement. The company also works to                                                             pany also newly developed a more efficient
                                                                                                                             Drive direction
                                                        preserve local ecosystems and biodiversity                                                     fixing film and toner to realize energy
                                                                                                        Pressure roller
                                                        through tree planting and other activities.                                                    savings during high-speed color printing.
     A free-cooling system at Canon Precision (Japan)                                                 Color on-demand fixing system

                            Canon’s imageRUNNER ADVANCE network MFDs take the environment into consideration at all stages of the product lifecycle — produce, use and recycle.

Copying Machine Remanufacturing                                                 Color Universal Design
                          Canon disassembles copying machines                           FU7-8137

                                                                                                   Originals with holes
                                                                                                   Originaux perforés
                                                                                                   Originales con agujeros
                                                                                                                                        When designing products, Canon takes
                          collected from customers, selects and                                                                         into account individual differences in color
                                                                                                   Originais com furos

                                                                                                   Folded originals
                                                                                                   Originaux pliés

                          cleans reusable components, and replaces                                                                      perception and other factors to ensure high
                                                                                                   Originales doblados
                                                                                                   Originais dobrados

                                                                                                   Curled originals

                          worn parts to create copying machines that                                                                    visibility. For its product operation panels
                                                                                                   Originaux bouclés
                                                                                                   Originales curvados
                                                                                                   Originais encaracolados

                          realize the same level of quality as new                                                                      and other displays, the company analyzes
                                                                                                   Stapled originals
                                                                                                   Originaux agrafés
                                                                                                   Originales grapados
                                                                                                   Originais agrafados

                          models. These remanufacturing efforts are                                                                     and evaluates lighting conditions and usage
                                                                                                   Clipped originals
                                                                                                   Originaux avec trombone
                                                                                                   Originales con clips
                                                                                                   Originais com clips

                          carried out in Japan, the Americas and                                   Face up originals
                                                                                                   Originaux face dessus
                                                                                                   Originales cara arriba
                                                                                                   Originais com a face
                                                                                                   virada para cima
                                                                                                                                        conditions, utilizing the information to
                          Europe to achieve a high parts-reuse ratio.                                                                   refine colors, shapes, patterns and tones.
Canon Virginia (U.S.A.)                                                          An MFD display indicating the use of
                                                                                 a prohibited document

Tamagawa General Measurement Testing Laboratory                                 Pursuing Comfortable Operation
                          This comprehensive test facility meas-                                                                        In pursuit of improved comfort and ease of
                          ures radio waves, electrical stress, ambi-                                                                    use, Canon evaluates the strain users expe-
                          ent noise and other phenomena. Having                                                                         rience during product use by measuring
                          received ISO/IEC 17025 accreditation,                                                                         joint angles and physiological responses
                          the laboratory enables Canon to perform                                                                       like myoelectric potential. Such analysis led
                          essential product quality testing for                                                                         to the design of large-format inkjet printers
                          electromagnetic compatibility, flame                                                                          that enable roll paper to be loaded with
                          retardance and other specifications.                                                                          less stress on muscles and joints.
Semi-anechoic chamber                                                            Slide-in roll paper loading

                                                                                                                       A work by a Junior Photographer: “I’m off!”

     Yellowstone Park Foundation                                      WWF Conservation Partner
                            Since 1997, Canon has been the largest                                                In 1998, Canon Europe became WWF’s
                            supporter of wildlife conservation and                                                (World Wide Fund For Nature) first
                            research in Yellowstone National Park.                                                corporate Conservation Partner. This
                            Through Web-based programs, Canon                                                     cooperative alliance has enabled the
                            technology is being used for education,                                               WWF to digitize its outstanding image
                            as well as to increase public access to                                               library. Canon Europe has also supplied
                            the magic of one of the most popular                                                  imaging equipment for WWF activities
                            parks in the world.                                                                   in Europe, the Middle East, and Africa.
                                                                      © Michel Gunther / WWF-Canon

     Sponsorship of American Cancer Society                           Partnership with Red Cross in Europe
                            Since 1998, Canon has been a flagship                                                 In 2006, Canon Europe, a longtime
                            sponsor of American Cancer Society’s                                                  supporter of Red Cross activities, signed a
                            “Making Strides Against Breast Cancer                                                 partnership agreement with the Red Cross
                            Walk,” which includes donating funds                                                  in Europe. The company contributes to
                            and products, and encouraging employ-                                                 youth education and aid projects
                            ees to participate in the walk.                                                       conducted by 13 National Red Cross
                                                                                                                  Societies across Europe through equip-
                                                                                                                  ment donations and physical support.
                                                                      The Danish Red Cross’s Study Café project

                                                                                                     Color matching for the Tsuzuri Project to create a replica of the folding screen “Dragon and Tiger” by Sesson Shukei

Image -Light of Hope                                                                                                 The Tsuzuri Project (Cultural Heritage Inheritance Project )
                                                     Canon China, along with the China Youth                                                                                    Canon digital technology and traditional
                                                     Development Foundation, carries out the                                                                                    Japanese craftsmanship come together in the
                                                     Image-Light of Hope project, a three-year                                                                                  Tsuzuri Project, an initiative co-sponsored by
                                                     initiative to found photography classes at 100                                                                             NPO Kyoto Culture Association to create high-
                                                     Hope Schools across China. The company                                                                                     resolution scale replicas of Japanese cultural
                                                     also promotes international exchanges,                                                                                     assets. The project enables original artwork to
                                                     allowing children from China and Japan to                                                                                  be preserved while replicated treasures can be
                                                     share their photographs with each other.                                                                                   displayed and enjoyed by the general public.
A photography class at a Hope School in China                                                                        Applying gold paint to a replica of the folding screen
                                                                                                                     “Waves at Matsushima” by Tawaraya Sotatsu

Junior Photographers                                                                                                 UNHCR Urban Refugee Photo Exhibition
                                                     Working in cooperation with schools and commu-                                                                             Canon supports the United Nations High
                                                     nities across Japan, the Junior Photographers                                                                              Commissioner for Refugees (UNHCR) in
                                                     project aims to stimulate children’s artistic sensibili-                                                                   its efforts to provide assistance and protec-
                                                     ties and awareness of the global environment                                                                               tion to refugees. Canon cooperated with
                                                     through photo classes. Since its launch in 2004,                                                                           the UNHCR for “INVISIBLE IN THE CITY,” a
                                                     some 5,000 children have participated in the                                                                               photo exhibition held at the Shanghai
                                                     project and, in 2009, exhibits displaying student                                                                          Expo focusing on the plight of refugees in
                                                     photos were held in four major Japanese cities.                                                                            major cities throughout the world.
Junior photographers in action in Fukushima, Japan                                                                   Pre-photo exhibition at the U.N. Office in Geneva ©UNHCR


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