Honda 2011 3q-all-e
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  • 1. FY12 3rd Quarter Financial Results Honda Motor Co., Ltd. NSX Concept January 31, 2012 (North America) 1
  • 2. FY12 3rd Quarter Financial Results & FY12 Financial ForecastsFumihiko Ike Senior Managing Officer and Director Chief Operating Officer for Business Management Operations - FY12 3rd Quarter Consolidated Financial Results - FY12 Financial Forecasts - DividendKohei TakeuchiOperating Officer, General Manager of Accounting Division - FY12 3rd Quarter Consolidated Financial Results Net Sales and Other Operating Revenue Change in Income before Income Taxes Business Segment Information Geographical Information Change in Equity in Income of Affiliates Consolidated Capital Expenditures - FY12 Financial Forecasts 2
  • 3. Outline of FY12 3rd Quarter Financial Results (Consolidated) 3Q Results (Three Months) Financial Summary Unit (Sales) Honda achieved net income of 47.6 billion yen for the FY11 FY12 Change quarter. (千台) (thousands) Despite the negative currency impact and adverse impactMotorcycles 2,895 3,076 + 6.3% on the deferred income tax assets due to the change in income tax laws in Japan, the recovery of automobile salesAutomobiles 855 830 - 2.9% in major markets, solid growth of motorcycle business inPower Products 1,157 1,021 - 11.8% emerging markets and the companywide effort to reduce costs and expenses, helped absorb the negative impact 3Q Results (Three Months) caused by the flood in Thailand. Financial results FY11 FY12 Change Financial Highlights Yen (billions) Net sales & other Unit Sales: operating revenue 2,110.4 1,942.5 - 8.0% Motorcycle: Increased in all regions except Europe Operating income 125.6 44.2 - 64.7% Automobile: Increased in Japan and North America Income before income Decreased mainly in Asia and taxes 131.5 58.4 - 55.5% Other regions due to flooding in Thailand Equity in income of Power Products: Decreased in all regions mainly due to affiliates 43.4 22.9 - 47.3% flooding in Thailand Net income attributable Net sales & other operating revenue to Honda Motor Co., Ltd. 81.1 47.6 - 41.2% -Increased in motorcycle businessEPS attributable to -Decreased in automobile business due to the impact ofHonda Motor Co., Ltd. 45.01 26.45 - 18.56 flooding in Thailand(Yen) -Negative currency translation effectsNote : Shares which are based approx. approx. on calculation of EPS 1,802,304,000 shares 1,802,300,000 shares Operating income (weighted average number (weighted average number -The negative change in sales volume and model mix, of shares outstanding ) of shares outstanding ) due to the impact of flooding in ThailandAverage Rates (Yen) -Increased cost per unit due to decreased production Yen up by -Increased raw material costs US Dollar 83 77 6 yen -Negative currency effect due to appreciation of the Yen up by Japanese yen Euro 112 105 7 yen 3
  • 4. Outline of Nine Months Financial Results (Consolidated) 3Q Results (Three Months) Nine Months Results Unit (Sales) FY11 FY12 Change FY11 FY12 Change (千台) (thousands)Motorcycles 2,895 3,076 + 6.3% 8,511 9,103 + 7.0%Automobiles 855 830 - 2.9% 2,652 2,149 - 19.0%Power Products 1,157 1,021 - 11.8% 3,763 3,809 + 1.2% 3Q Results (Three Months) Nine Months Results Financial results FY11 FY12 Change FY11 FY12 Change Yen (billions) Net sales & other operating revenue 2,110.4 1,942.5 - 8.0% 6,723.7 5,543.0 - 17.6% Operating income 125.6 44.2 - 64.7% 523.5 119.3 - 77.2% Income before income taxes 131.5 58.4 - 55.5% 553.9 164.3 - 70.3% Equity in income of affiliates 43.4 22.9 - 47.3% 114.7 67.1 - 41.5% Net income attributable to Honda Motor Co., Ltd. 81.1 47.6 - 41.2% 489.5 139.8 - 71.4%EPS attributable toHonda Motor Co., Ltd. 45.01 26.45 - 18.56 270.82 77.62 - 193.20(Yen)Note : Shares which are based approx. approx. approx. approx. 1,802,304,000 shares 1,802,300,000 shares 1,807,578,000 shares 1,802,300,000 shares on calculation of EPS (weighted average number (weighted average number (weighted average number (weighted average number of shares outstanding ) of shares outstanding ) of shares outstanding ) of shares outstanding )Average Rates (Yen) Yen up by Yen up by US Dollar 83 77 6 yen 87 78 9 yen Yen up by Yen up by Euro 112 105 7 yen 114 110 4 yen 4
  • 5. FY12 Financial Forecasts (Consolidated) Yen (billions) Change FY11 FY12 Results Revised Forecasts amount %Net sales & otheroperating revenue 8,936.8 7,850.0 - 1,086.8 - 12.2%Operating income 569.7 200.0 - 369.7 - 64.9%Income beforeincome taxes 630.5 250.0 - 380.5 - 60.4%Equity in income of affiliates 139.7 95.0 - 44.7 - 32.0%Net income attributable toHonda Motor Co., Ltd. 534.0 215.0 - 319.0 - 59.7%EPS attributable toHonda Motor Co., Ltd. (Yen) 295.67 119.29 - 176.38Note : Shares which are based approx. approx. on calculation of EPS 1,806,360,000 shares 1,802,300,000 shares (weighted average number (weighted average number of shares outstanding ) of shares outstanding )Average Rates (Yen)US Dollar 86 78 Yen up by 8 yenEuro 114 106 Yen up by 8 yen 5
  • 6. FY12 Financial Forecasts (Unconsolidated) Yen (billions) Change FY11 FY12 Results Revised Forecasts amount %Net sales 2,915.4 2,760.0 - 155.4 - 5.3%Operating income 13.9 - 150.0 - 163.9 -Ordinary income 229.7 35.0 - 194.7 - 84.8%Net income 86.6 50.0 - 36.6 - 42.3%Average Rates (Yen)US Dollar 86 78 Yen up by 8 yenEuro 114 106 Yen up by 8 yen 6
  • 7. Dividend (Yen) Change fromDividend per share FY11 FY12 Increase/Decrease previous Results Results forecasts from as of Oct. 31 (Projections) FY11 Results 1st quarter End 12 15 +3 - 2nd quarter End 12 15 +3 - 3rd quarter End 15 15 ± 0 - 4th quarter End 15 ( 15 ) (±0) - Fiscal Year 54 ( 60 ) (+6) - 7
  • 8. FY12 3rd Quarter Financial Results & FY12 Financial ForecastsFumihiko Ike Senior Managing Officer and Director Chief Operating Officer for Business Management Operations - FY12 3rd Quarter Consolidated Financial Results - FY12 Financial Forecasts - DividendKohei TakeuchiOperating Officer, General Manager of Accounting Division - FY12 3rd Quarter Consolidated Financial Results Net Sales and Other Operating Revenue Change in Income before Income Taxes Business Segment Information Geographical Information Change in Equity in Income of Affiliates Consolidated Capital Expenditures - FY12 Financial Forecasts 8
  • 9. Net Sales and Other Operating Revenue 3rd Quarter (Three months) Yen (billions) 3Q Net Sales by - 167.8 ( - 8.0 %) Business Segment FY11 FY12 Motorcycle Business 301.9 302.5 Excluding currency translation effects; - 36.5 ( - 1.7%) Automobile Business 1,613.8 1,451.0 + 45.7 - 86.9 Financial Services - 3.9 - 1.2 Business 136.4 124.8 2,110.4 (+ 15.1 %) (- 5.4 %) + 9.8 (- 2.9 %) ( - 1.8 %) - 131.3 Power Product & Other Businesses 68.0 64.0 Motorcycle 1,942.5 Automobile Financial Services Other adjustments Other Adjustments - 9.8 - Business Power Product Business Business Currency Effects & Total 2,110.4 1,942.5 Other Businesses Market average rates US Dollar 82.64 77.38FY11 3Q FY12 3Q Euro 112.23 104.29 Nine Months Yen (billions) - 1,180.7 (- 17.6 %) Nine Months Net Sales by Business Segment FY11 FY12 Excluding currency translation effects; - 850.5 (- 12.7 %) + 119.0 Motorcycle Business 935.0 990.2 - 963.6 (+ 12.7 %) (- 18.7 %) Automobile Business 5,148.7 3,961.0 6,723.7 - 5.7 - 0.2 Financial Services Motorcycle (- 1.4 %) (- 0.1 %) - 330.1 Business 427.3 387.1 Business 5,543.0 Power Product & Other Businesses 212.6 204.6 Automobile Financial Services Power Product Business Business & Currency Effects Other Businesses Other Adjustments - - Total 6,723.7 5,543.0 Market average rates US Dollar 86.84 78.99 FY11 FY12 Euro 113.30 110.61Nine Months Nine Months 9
  • 10. Change in Income before Income Taxes <FY12 3rd Quarter> Yen (billions) Income before Income taxes - 73.0 Other Income Operating Income - 81.3 & Expenses + 8.2131.5 - 32.9 - 16.1 + 11.6 - 10.3 Revenue, - 33.6 model mix, etc. Cost Reduction, etc. Decrease in SG&A Increase in R&D + 4.7 58.4 + 3.5 Currency Effects Unrealized gains and Others losses related to derivative instruments (Exhibit 2)Operating Operating Income Income 125.6 44.2FY11 3Q FY12 3Q *Please refer to Exhibit 1 regarding currency effects 10
  • 11. Change in Income before Income Taxes <FY12 Nine Months > Yen ( billions ) Income before Income taxes - 389.5 Other Income Operating Income - 404.1 & Expenses 553.9 - 217.8 <Decrease Factors> + 14.5 - Increased fixed cost per unit due to decreased production - Increased raw material cost, etc. - 133.3 - Currency effect due to difference between average rates and transaction rates: - 9.3 Revenue, - Others + 23.1 model mix, etc. + 41.4 - 8.5 - 85.8 Increase in R&D Cost Reduction, etc. Decrease in SG&A + 13.8 164.3 + 0.7 Currency Effects Unrealized gains and Others losses related to <Increase Factors> derivative instruments - Decreased quality-related expenses, etc. (Exhibit 2) Operating Operating <Increase Factors> Income Income - Decreased sales incentives, etc. 523.5 <Decrease Factors> 119.3 -The change in unit sales and model mix in FY11 automobile business, etc. FY12Nine Months *Please refer to Exhibit 1 regarding currency effects Nine Months 11
  • 12. Motorcycle Unit Sales (Motorcycles + All-Terrain Vehicles, etc.) Unit Change from FY12 3Q Major increase / decrease factors (thousands) FY11 3Q - Increased scooter sales due to the introduction of GIORNO Japan 51 +5 - Positive impact of the introduction of CBR250R North - Increased sales of utility ATVs America 48 +4 - Increased sales of Shadow large cruiser model Activa (India) Europe 31 -8 - Decreased sales of SH series models due to weak sales in Southern Europe + 592 - Positive impact of the introduction of NSC110 in Italy ( + 7.0% ) Unit - Increased sales of Activa and CB Shine in India(thousands) Asia 2,450 + 109 - Increased sales of Air Blade and Wave series in Vietnam - Decreased sales in Thailand due to negative impact caused by the flood Approx. 13,99114,000 Other - Increased sales of CG150FAN and CG125FAN in Brazil Regions 496 + 71 - Increased sales of Wave model, etc., in Argentina12,000 Total 3,076 + 181 Approx. 5,480 Approx. 11,233 Approx. 2,13010,000 + 181 9,103 8,511 ( + 6.3% ) Unit sales of Honda-brand motorcycle 1,481 8,000 products that are manufactured and sold by 1,214 overseas affiliates accounted for under the equity method, but do not use any parts supplied by Honda and its subsidiaries 6,000 Approx. 4,667 Approx. 4,679 Approx. 4,645 Approx. 4,744 7,169 Approx. 4,026 6,868 Approx. 1,780 Approx. 1,950 Approx. 1,750 Approx. 1,810 Approx. 3,381 Approx. 3,826 Approx. 750 Approx. 750 4,000 Approx. 630 3,276 2,887 2,729 2,895 2,934 2,751 3,076 546 496 Other 344 445 425 476 439 Regions 2,000 Asia 58 2,450 31 144 140 2,374 64 2,153 41 2,341 39 2,310 2,152 62 2,567 47 Europe 38 53 North 147 147 60 43 44 46 48 America 45 47 46 52 52 63 51 Japan 138 166 0 1Q 2Q 3Q 4Q 1Q 2Q 3Q 9 Months 9 Months FY11 FY12 FY11 FY12 * Unit sales is the total of sales of completed products of Honda and its consolidated subsidiaries and sales of parts to Honda’s affiliates accounted for under the equity method. 12
  • 13. Motorcycle Business Net Sales/Operating Income (Margin) FY11 FY12 FY11 FY12 1Q 2Q 3Q 4Q 1Q 2Q 3Q 9 Months 9 Months Net YenSales 320.2 312.8 301.9 353.1 330.3 357.3 302.5 935.0 990.2 (billions) ( + 0.2% ) Currency Effect - 45.1 ( + 5.9% ) Currency Effect - 63.8 (Revenue from sales to (Revenue from sales to external customers) external customers) Operating Margin <Increase Factors> Operating Income -Changes in unit sales and model mix, etc Yen <Decrease Factors>(billions) -Increased SG&A expenses, 150 -Negative currency effect, etc (+ 21.3%) ( - 11.2%) 14% 13.6% 13.6% 11.1% 12% 10.9% 9.8% 9.6% 9.6% 9.7% 100 10% 8.5% 109.7 8% 90.4 6% 48.1 44.9 50 Includes 38.9 31.3 revenue 4% 30.0 29.1 related to dissolution of 25.8 a joint venture with Hero Honda 2% 0 0% 1Q 2Q 3Q 4Q 1Q 2Q 3Q 9 Months 9 Months FY11 FY12 FY11 FY12 13
  • 14. Automobile Unit Sales Unit Change from FY12 3Q Major increase / decrease factors (thousands) FY11 3Q - Positive impact of the introduction of FIT SHUTTLE HYBRID, FREED HYBRID, N-BOX, etc. Japan 134 + 16 - Increased sales of STEPWGN - Reversal impact of the weak sales after termination of the government’s subsidy in 2011 North - Increased supply of CIVIC, increased sales of ODYSSEY, etc. America 366 +2 - Decreased supply of CR-V due to the timing of the model change FREED HYBRID (Japan) - Negative impact of decreased production at the U.K. plant due to flood in Thailand Europe 38 -3 - Positive impact of the introduction of JAZZ HYBRID in Germany - 503 Unit - Decreased production and sales caused by the flood in Thailand ( - 19.0% )(thousands) Asia 244 - 21 - Increased sales of parts for production of CIVIC to China - Positive impact of the introduction of BRIO in India 3,000 Other - Decreased sales in Brazil due mainly to tightening of the financing regulation Regions 48 - 19 - Decreased sales in Australia due to the decreased supply caused by the flood in Thailand 2,652 2,500 198 Total 830 - 25 2,149 770 151 2,000 - 25 ( - 2.9% ) 669 142 1,500 113 1,000 899 898 855 860 830 1,102 772 70 61 67 68 48 Other 860 265 547 46 Regions Asia 261 244 238 244 57 286 500 53 48 41 56 38 Europe 139 40 370 368 364 356 35 366 North 269 America 440 225 356 145 177 118 142 131 134 Japan 0 1Q 2Q 3Q 4Q 1Q 2Q 3Q 9 Months 9 Months FY11 FY12 FY11 FY12 * Unit sales is the total of sales of completed products of Honda and its consolidated subsidiaries and sales of parts to Honda’s affiliates accounted for under the equity method. ** Certain sales of automobiles that are financed with residual value type auto loans by our domestic finance subsidiaries are accounted for as operating leases in conformity with U.S. generally accepted accounting principles. As a result, they are not included in total sales of our automobile segment or in our measure of unit sales. 14
  • 15. Automobile Business Net Sales/Operating Income (Margin) FY11 FY12 FY11 FY12 1Q 2Q 3Q 4Q 1Q 2Q 3Q 9 Months 9 Months Yen Net Sales 1,814.4 1,723.5 1,615.9 1,648.4 1,178.8 1,337.1 1,455.6 5,153.8 3,971.6 (billions) Currency Effect - 75.7 Currency Effect - 224.0 ( - 9.9% ) (Revenue from sales to ( - 22.9% ) (Revenue from sales to external customers) external customers) Operating Margin Operating Income <Increase Factors> Yen(billions) -Decreased SG&A expenses. etc 15% <Decrease Factors> -Changes in unit sales and model mix, 303.7 300 -Increased raw material cost, -Increased R&D expenses, 12% -Negative currency effect, etc 8.2% 9% 200 5.9% 5.0% 6% 4.2% 100 148.9 3% 86.3 68.4 - 39.1 - 29.1 - 16.9 0% 0 - 76.2 - 1.2% - 2.4% - 2.2% - 3.1% -3%-100 -6% - 6.5% - 122.3-200 -9% 1Q 2Q 3Q 4Q 1Q 2Q 3Q 9 Months 9 Months FY11 FY12 FY11 FY12 15
  • 16. Power Products Unit Sales Unit Change from FY12 3Q Major increase / decrease factors (thousands) FY11 3Q - Decreased export sales of GX160 / 390 general-purpose engines for OEM use due to Japan 68 - 21 appreciated Japanese yen - Decreased sales of GX160 OEM engines for pumps due to the flood in Thailand North - Reversal impact of favorable sales of GCV160 engines in 2Q FY12 America 330 - 20 - Increased demand for EU2000 generators due to climates in the East Coast area - Decreased sales of GCV135、GX390 engines for OEM use due to economic uncertainty Europe 200 - 54 - Declined sales due to shortage of supply caused by the flood in Thailand WBK30 (India) - Decreased sales of GX390 engines for OEM use in Thailand and the Philippines due to5,000 shortage of supply caused by the flood in Thailand + 46 Asia 289 - 18 - Increased sales of WBK30 pumps and GK200 engines for OEM use for pumps in India (+ 1.2%) Unit supported by government’s subsidy for agriculture 4,500(thousands) - Declined supply of GX160 engines for OEM use to South Africa, and GX25 engines for Other Regions 134 - 23 OEM use to Australia caused by the flood in Thailand4,000 - Decreased sales of GX160 engines for long-tail boats 3,809 3,7633,500 Total 1,021 - 136 398 3773,000 1,078 1,018 - 1362,500 (- 11.8% )2,000 1,746 684 707 1,440 139 1,5121,500 1,166 307 109 1,276 105 1,157 399 1,021 344 134 136 157 490 Other 1,379 1,3441,000 390 134 Regions 230 367 307 307 289 Asia 200 254 200 Europe 500 662 706 577 200 350 437 North 367 330 America 99 96 89 104 120 Japan 284 303 0 115 68 1Q 2Q 3Q 4Q 1Q 2Q 3Q 9 Months 9 Months FY11 FY12 FY11 FY12 * Unit sales is the total of sales of completed products of Honda and its consolidated subsidiaries and sales of parts to Honda’s affiliates accounted for under the equity method. 16
  • 17. Power Product & Other Businesses Net Sales/Operating Income (Margin) FY11 FY12 FY11 FY12 1Q 2Q 3Q 4Q 1Q 2Q 3Q 9 Months 9 Months Net Yen Sales 77.9 74.5 72.1 83.1 73.9 72.1 68.0 224.7 214.1 (billions) ( - 5.7% ) Currency Effect - 2.6 ( - 4.7% ) Currency Effect - 7.7 (Revenue from sales to (Revenue from sales to Operating Margin external customers) external customers) Operating Income Yen(billions) 5 5% <Decrease Factors> -Decreased unit sales in 4 power product business, 4% -Negative currency effect, etc 3 3% 2 2% 1 0.4% 1% - 0.5 - 0.5 -0.1 0 0% 0.2 - 0.2% - 1.4% - 0.9% -1 -1% - 0.7% - 0.7% - 2.0 -2.3 - 2.1 - 2.0 -2 -2% - 3.1 -3 -3% - 2.9% - 2.8% -4 - 3.2% -4% -5 -5% 1Q 2Q 3Q 4Q 1Q 2Q 3Q 9 Months 9 Months FY11 FY12 FY11 FY12 17
  • 18. Financial Services Business Total Assets/Net Sales/Operating Income (Margin) FY11 FY12 FY11 FY12 1Q 2Q 3Q 4Q 1Q 2Q 3Q 9 Months 9 Months Total Assets Yen of Finance Subsidiaries 5,558.0 5,480.3 5,427.2 5,572.1 5,445.7 5,169.2 5,290.5 (billions) Net Sales 152.5 144.2 139.2 137.3 138.6 129.1 127.5 436.1 395.3 Operating Margin (- 8.4%) Currency Effect - 7.6 (- 9.3%) Currency Effect - 34.4 (Revenue from sales to (Revenue from sales to external customers) external customers) Yen Operating Income(billions) 200 <Decrease Factors> 50% - Negative currency impact, etc (- 8.6%) 180 160 38.7% 40% 35.8% ( - 15.7% ) 146.6 140 32.9% 32.0% 33.2% 134.0 28.8% 29.5% 120 33.6% 33.9% 30% 100 80 20% 60 54.6 53.6 47.4 44.6 42.8 39.6 37.5 40 10% 20 0 0% 1Q 2Q 3Q 4Q 1Q 2Q 3Q 9 Months 9 Months FY11 FY12 FY11 FY12 18
  • 19. Japan Net Sales/Operating Income (Margin) FY11 FY12 FY11 FY12 1Q 2Q 3Q 4Q 1Q 2Q 3Q 9 Months 9 Months Net Yen Sales 921.5 928.2 867.5 893.8 625.3 805.3 863.1 2,717.3 2,293.9 (billions) ( - 0.5% ) ( - 15.6% ) Operating Income Yen(billions) Operating Margin (%) <Increase Factors> -Decreased SG&A expenses, etc 100 <Decrease Factors> ( 3.2 % ) -Increased R&D expenses, -Increased raw material price, -Negative currency impact, etc 87.9 50 53.1 ( 1.7 % ) 20.1 14.6 ( - 4.8 % ) ( - 5.3 % ) 0 - 21.8 - 35.3 - 45.8 - 41.2 -50 -100 - 122.4 -150 1Q 2Q 3Q 4Q 1Q 2Q 3Q 9 Months 9 Months FY11 FY12 FY11 FY12 19
  • 20. North America Net Sales/Operating Income (Margin) FY11 FY12 FY11 FY12 1Q 2Q 3Q 4Q 1Q 2Q 3Q 9 Months 9 Months Net Sales 1,137.8 1,021.6 1,011.8 976.6 733.9 794.1 986.2 3,171.2 2,514.3 Yen (billions) ( - 2.5% ) ( - 20.7% ) Operating Income Yen Operating Margin (%)(billions)300 <Decrease Factors> ( 8.7 % ) -Increased raw material cost, -Negative currency impact, etc250 276.3 ( - 16.5%) ( - 49.0%)200150 ( 5.6 % ) 141.0100 ( 8.9 % ) 110.7 ( 7.6 % ) 89.6 50 75.8 74.8 47.7 24.5 18.5 0 1Q 2Q 3Q 4Q 1Q 2Q 3Q 9 Months 9 Months FY11 FY12 FY11 FY12 20
  • 21. Europe Net Sales/Operating Income (Margin) FY11 FY12 FY11 FY12 1Q 2Q 3Q 4Q 1Q 2Q 3Q 9 Months 9 Months Net Sales 189.8 161.3 150.7 197.3 150.9 144.5 119.4 501.9 414.9 Yen (billions) ( - 20.7% ) ( - 17.3% ) Operating Income Yen Operating Margin (%)(billions) 30 25 <Increase Factors> 20 -Decreased SG&A expenses, etc 15 10 5 ( - 1.7 % ) 4.0 ( - 6.3 % ) ( - 3.2 % ) ( - 3.4 % ) 0 -0.3 - 4.0 - 3.8 -5 -1.7 -6.1 - 8.4 -9.4-10 - 13.9-15 1Q 2Q 3Q 4Q 1Q 2Q 3Q 9 Months 9 Months FY11 FY12 FY11 FY12 21
  • 22. Asia Net Sales/Operating Income (Margin) FY11 FY12 FY11 FY12 1Q 2Q 3Q 4Q 1Q 2Q 3Q 9 Months 9 Months Net Yen Sales 470.2 452.9 445.5 472.4 373.4 407.7 317.6 1,368.7 1,098.9 (billions) ( - 28.7% ) ( - 19.7% ) Operating Income Yen Operating Margin (%)(billions)150 <Decrease Factors> -Changes in revenue and model mix, -Increased cost per unit due to decreased production, ( 8.7 % ) -Negative currency impact, etc ( - 49.1% ) 118.5100 ( - 62.7% ) ( 5.5 % ) 50 60.3 ( 8.0 % ) 44.4 38.3 35.7 32.1 ( 4.2 % ) 25.1 21.8 13.3 0 1Q 2Q 3Q 4Q 1Q 2Q 3Q 9 Months 9 Months FY11 FY12 FY11 FY12 22
  • 23. Other Regions Net Sales/Operating Income (Margin) FY11 FY12 FY11 FY12 1Q 2Q 3Q 4Q 1Q 2Q 3Q 9 Months 9 Months Net Sales 236.3 242.5 238.8 264.3 229.9 244.3 206.1 717.7 680.4 Yen (billions) ( - 13.7% ) ( - 5.2% ) Operating Income Yen Operating Margin (%)(billions)70 ( - 9.0% )60 <Decrease Factors> -Changes in revenue and model mix, ( 7.9 % ) -Negative currency effect etc ( 7.5 % ) 56.350 51.340 ( - 20.2% )3020 ( 6.6 % ) 23.0 20.2 20.4 ( 6.1 % )10 15.6 15.7 12.5 13.1 0 1Q 2Q 3Q 4Q 1Q 2Q 3Q 9 Months 9 Months FY11 FY12 FY11 FY12 23
  • 24. Change in Equity in income of affiliates Total Asia Yen(billions) - 20.5 - 47.6 140 ( - 47.3 % ) ( - 41.5 % ) 120 114.7 100 91.5 80 67.1 66.4 60 43.4 40 35.6 35.6 34.4 27.5 29.5 28.6 29.3 25.0 22.9 22.1 19.5 15.5 14.8 20 0 1Q 2Q 3Q 4Q 1Q 2Q 3Q 9 Months 9 Months FY11 FY12 FY11 FY12 24
  • 25. Operating Income of Affiliates in Asia and Honda’s Equity in Income from Asia FY11 FY12 FY11 FY12 1Q 2Q 3Q 4Q 1Q 2Q 3Q 9 Months 9 MonthsOperating Yen Income 82.5 78.0 73.2 75.8 73.3 40.3 54.7 233.8 168.4 (billions) Net Income 71.1 64.1 60.2 66.5 62.5 34.1 45.4 195.5 142.1 Operating Income of Affiliates and Honda’s Equity in Income Operating Income Equity in Income Yen - 12.2 - 25.1 (billions) 250.0 ( - 35.6 % ) 233.8 ( - 27.5 % ) 200.0 168.4 150.0 100.0 91.5 82.5 78.0 75.8 73.2 73.3 66.4 54.7 50.0 34.4 40.3 27.5 29.5 29.3 22.1 19.5 14.8 0.0 1Q 2Q 3Q 4Q 1Q 2Q 3Q 9 Months 9 Months FY11 FY12 FY11 FY12 Affiliates accounted for under the equity method in Asia As of the end of December 31, 2011 Motorcycle Business: Automobile Business : China Sundiro Honda Motorcycle Co., Ltd.* China Guangqi Honda Automobile Co., Ltd.* Wuyang-Honda Motors (Guangzhou) Co., Ltd.* Dongfeng Honda Engine Co., Ltd.* Indonesia P.T. Astra Honda Motor * Dongfeng Honda Automobile Co., Ltd.* Malaysia Boon Siew Honda Sdn. Bhd Pakistan Atlas Honda Ltd. Thailand A.P. Honda Co., Ltd. Others 34 , Total 43 companies Fiscal term of companies marked “*” differs from that of Honda Motor Co., Ltd. 25
  • 26. Consolidated Capital Expenditures <FY12 Nine Months> + 49.3 ( + 25.9 % ) Yen (billions) Excluding currency translation effects + 62.2 ( + 32.7 % ) + 42.0 + 0.0 - 0.7 - 12.9 Financial 239.7 Power product Currency + 20.8 Services & Translation Business Other Businesses 190.4 Automobile Effects Business Motorcycle BusinessFY11 Nine Months ※ Capital expenditures in results aforementioned exclude FY12 Nine Months Market average rates investment in operating leases and intangible assets Market average rates US$ 1= JPY 87 US$ 1= JPY 79 (Yen up by 8 yen) Euro 1= JPY 113 Euro 1= JPY 111 (Yen up by 2 yen) Yen (billions) Yen (billions) Motorcycle Motorcycle Business 21.0 Business 39.4 Automobile Automobile Business 162.0 Business 194.1 Financial Services Financial Services Business 0.1 Business 0.1 Power Product & Power Product & Other Businesses 7.1 Other Businesses 6.0 Total 190.4 Total 239.7 26
  • 27. Forecast: Unit Sales by Business Segment Unit sales of Honda-brand motorcycle products that are manufactured and sold by overseas Unit Motorcycles affiliates accounted for under the equity Automobiles Power Products(thousands) method, but do not use any parts Approx. supplied by Honda and its 7,000 subsidiaries - 285 18,73518,000 6,075 Approx. 4,000 6,000 5,850 Approx. 15,770 5,509 555 15,600 530 Other Approx. Approx. 3,512 3,435 Regions15,000 Approx. 537 7,290 266 5,000 3,065 2,940 220 3,150 1,570 12,705 12,660 3,000 200 1,485 Asia12,000 11,445 1,955 1,990 1,008 1,080 4,000 1,325 880 1,690 1,190 9,000 198 1,090 Europe 2,000 195 165 3,000 1,174 1,458 1,375 1,320 9,178 10,120 10,040 6,000 2,000 including unit sales that is financed with 2,390 2,365 North residual value type auto loans, America 1,000 and are defined as operating lease sales 2,085 under US GAAP. 3,000 1,000 202 215 205 582 565 585 595 185 195 200 190 220 225 388 370 380 Japan 0 0 0 FY11 FY12 FY12 FY11 FY12 FY12 FY11 FY12 FY12 Forecasts Revised Forecasts Revised Forecasts Revised As of Aug.1 Forecasts As of Aug.1 Forecasts As of Aug.1 Forecasts 27
  • 28. FY12 Financial Forecasts (Consolidated) Yen (billions) Change FY11 FY12 Results Revised Forecasts amount %Net sales & otheroperating revenue 8,936.8 7,850.0 - 1,086.8 - 12.2%Operating income 569.7 200.0 - 369.7 - 64.9%Income beforeincome taxes 630.5 250.0 - 380.5 - 60.4%Equity in income of affiliates 139.7 95.0 - 44.7 - 32.0%Net income attributable toHonda Motor Co., Ltd. 534.0 215.0 - 319.0 - 59.7%EPS attributable toHonda Motor Co., Ltd. (Yen) 295.67 119.29 - 176.38Note : Shares which are based approx. approx. on calculation of EPS 1,806,360,000 shares 1,802,300,000 shares (weighted average number (weighted average number of shares outstanding ) of shares outstanding )Average Rates (Yen)US Dollar 86 78 Yen up by 8 yenEuro 114 106 Yen up by 8 yen 28
  • 29. Forecast: Change in Income before Income Taxes Yen (billions) Income before Income taxes - 380.5 ( - 60.4 % ) Other Income Operating Income - 369.7 ( - 64.9 % ) & Expenses - 10.7630.5 - 171.2 - 79.0 + 46.0 - 37.5 Revenue, - 128.0 model mix, etc. Cost Reduction, Increase Decrease - 27.7 etc. in R&D + 17.0 in SG&A 250.0 Currency Effect Unrealized gains Others and losses related to derivative instrumentsOperating Operating Income Income 569.7 200.0FY11 FY12 Revised Forecasts 29
  • 30. Forecast: Change in Income before Income Taxes Yen (billions) Income before Income taxes - 35.0 ( - 12.3 % ) Other Income Operating Income - 70.0 ( - 25.9 % ) & Expenses + 35.0 285.0 - 84.0 - 57.0 + 30.0 + 61.0 + 18.0 250.0 + 17.0 - 20.0 Decrease Others in R&D Currency Effect Unrealized gains Revenue, and losses model mix, Cost Reduction, related to Decrease etc. derivative etc. in SG&A instruments - Impact of the flood in Thailand :Approx. - 110.0 Operating Operating Income - Negative currency effect :Approx. - 57.0 Income 270.0 - Companywide effort to reduce 200.0 FY12 costs and expenses : Approx. + 97.0 FY12 Forecasts RevisedAs of Aug. 1 Forecasts 30
  • 31. Forecast: Capital Expenditures, Depreciation, R&D Expenses Yen (billions) FY11 FY12 Change Results Revised ForecastsCapitalexpenditures* 311.3 410.0 + 98.7Depreciation andamortization* 325.2 295.0 - 30.2R&D expenses 487.5 525.0 + 37.5* “Capital expenditures” in results and the forecast aforementioned exclude investment in operating leases and acquisition of intangible assets.* “Depreciation and amortization” in results and the forecast aforementioned exclude depreciation of investment in operating leases and amortization of intangible assets. 31
  • 32. Caution with Respect to Forward-Looking Statements:This slide contains forward-looking statements about the performance of Honda, which are based on management’sassumptions and beliefs taking into account information currently available to it. Therefore, please be advised thatHonda’s actual results could differ materially from those described in these forward-looking statements as a result ofnumerous factors, including general economic conditions in Honda’s principal markets and foreign exchange ratesbetween the Japanese yen and the U.S. dollar, the Euro and other major currencies, as well as other factors detailedfrom time to time.Accounting standards:Our consolidated financial standards are prepared in conformity with U.S. generally accepted accounting principles.Notice on the Factors for Increases and Decreases in Income:With respect to the discussion above of the change in operating income, management has identified the factors set forthbelow and used what it believes to be a reasonable method to analyze the respective changes in such factors. Each ofthese factors is explained below. Management has analyzed changes in these factors at the levels of the Company andits material consolidated subsidiaries.(1)“Foreign currency effects” consist of translation adjustments, which come from the translation of the currency offoreign subsidiaries’ financial statements into Japanese Yen, and foreign currency adjustments, which result fromforeign-currency-denominated sales, which, at the levels of the Company and those consolidated subsidiaries whichhave been analyzed, primarily relate to the following currencies: U.S. dollar, Canada dollar, Euro, GBP, BRL andJapanese Yen.(2) With respect to “cost reduction and effects of raw material cost fluctuations”, management has analyzed costreduction and effects of raw material cost fluctuations at the levels of the Company and its material foreignmanufacturing subsidiaries in North America, Europe and other regions.(3) With respect to “changes in net sales and model mix”, management has analyzed changes in sales volume and inthe mix of product models sold in major markets which have resulted in increases/decreases in profit, as well as certainother reasons for increases/decreases in net sales and cost of sales.(4) With respect to “selling, general and administrative expenses”, management has analyzed reasons for anincrease/decrease in selling, general and administrative expenses from the previous fiscal year net of currencytranslation effects. 32
  • 33. -Currency Effects- (Exhibit 1) (effects associated with sales transactions and translation effects) Yen (billion) Average Rates (Yen) FY12 FY12 3Q 9 Months FY11 FY12 Change 3Q 3Q Yen up by JPY / USD - 15.5 83 77 6 yen - 44.0 Yen up by JPY / Euro - 1.4 112 105 7 yen - 1.6 JPY / Others - 4.7 ― ― ― - 7.6 Transactions between other currencies - 0.7 ― ― ― - 0.7 *1Difference of average rates(Impact on Operating income) - 22.4 *1:Impact of YOY difference of FOREX to be used for booking revenue of foreign currency transactions - 54.0Difference between transaction *2rates and average rates - 1.6 *2:Impact of YOY difference between average FOREX and hedge rates during the period - 9.3(Impact on Other income & expenses)Currency effect associatedwith sales transaction - 24.0 - 63.3Currency effect from *3 *3:Effect due to the difference of the rate used for translatingtranslation of foreign financial Honda’s overseas subsidiaries’ financial statementsstatements - 11.1 denominated in foreign currencies into Japanese yen with the corresponding period of the fiscal year - 31.7(impact on operating income) Total - 35 2 - 95.1 33
  • 34. - Unrealized Gains and Losses Related to Derivative Instruments - (Exhibit 2) Yen (billion) 3Q 9 Months FY11 FY12 Change FY11 FY12 ChangeForeign currency + 0.1 - 5.2 - 5.4 + 14.7 + 8.5 - 6.2 ForwardInterest rate swap Currency swap - 2.5 + 6.2 + 8.7 + 12.1 + 18.3 + 6.1 Others - 0.1 + 0.0 + 0.2 - 0.3 + 0.4 + 0.7 Total - 2.4 + 1.0 + 3.5 + 26.6 + 27.3 + 0.7 34
  • 35. 35