Honda financial result_2011_3q_e
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Honda financial result_2011_3q_e Document Transcript

  • 1. January 31, 2012HONDA MOTOR CO., LTD. REPORTSCONSOLIDATED FINANCIAL RESULTSFOR THE FISCAL THIRD QUARTER ANDTHE FISCAL NINE-MONTH PERIOD ENDED DECEMBER 31, 2011Tokyo, January 31, 2012--- Honda Motor Co., Ltd. today announced its consolidatedfinancial results for the fiscal third quarter and the fiscal nine month period endedDecember 31, 2011.Third Quarter ResultsHonda’s consolidated net income attributable to Honda Motor Co., Ltd. for the fiscal thirdquarter ended December 31, 2011 totaled JPY 47.6 billion (USD 613 million), a decreaseof 41.2% from the same period last year. Basic net income attributable to Honda MotorCo., Ltd. per common share for the quarter amounted to JPY 26.45 (USD 0.34), a decreaseof JPY 18.56 (USD 0.24) from JPY 45.01 for the corresponding period last year. OneHonda American Depository Share represents one common share.Consolidated net sales and other operating revenue (herein referred to as “revenue”) forthe quarter amounted to JPY 1,942.5 billion (USD 24,988 million), a decrease of 8.0%from the same period last year, due primarily to decreased revenue in the automobilebusiness due to the supply chain disruption mainly caused by Thailand flood and theunfavorable foreign currency translation effects, despite increased revenue in themotorcycle business. Honda estimates that if calculated at the same exchange rate as thecorresponding period last year, revenue for the quarter would have decreased byapproximately 1.7%Consolidated operating income for the quarter amounted to JPY 44.2 billion (USD 570million), a decrease of 64.7% from the same period last year, due primarily to a decreasein sales volume and model mix, an increase in fixed costs per unit as production volumedecreased, the impact of raw material price increases and the unfavorable foreign currencyeffect.Consolidated income before income taxes and equity in income of affiliates for the quartertotaled JPY 58.4 billion (USD 752 million), a decrease of 55.5% from the same period lastyear. - 1 -
  • 2. Equity in income of affiliates amounted to JPY 22.9 billion (USD 295 million) for thequarter, a decrease of 47.3% from the corresponding period last year due mainly todeclined income in affiliated companies in China due to decreased sales and productioncaused by supply-chain disruption after the Great East Japan Earthquake occurred onMarch 11, 2011 (the “Earthquake”).Business SegmentWith respect to Honda’s sales for the fiscal third quarter by business segment, motorcycleunit sales totaled 3,076 thousand units, an increase of 6.3% from the same period lastyear* due mainly to increased unit sales in Asia and other regions including SouthAmerica. Revenue from sales to external customers increased 0.2%, to JPY 302.5 billion(USD 3,892 million), from the same period last year, due mainly to increased unit sales,despite unfavorable foreign currency translation effects. Operating income totaled to JPY25.8 billion (USD 333 million), a decrease of 11.2% from the same period last year, dueprimarily to increased SG&A expenses and unfavorable foreign currency effects, despitean increase in sales volume and model mix.*Of the net sales of Honda-brand motorcycle products that are manufactured and sold by overseas affiliatesaccounted for under the equity method, those with respect to which parts for manufacturing were notsupplied from Honda or its subsidiaries are not included in net sales and other operating revenue, inconformity with U.S. generally accepted accounting principles. Accordingly, these unit sales are notincluded in the financial results. Sales of such products amounted to approximately 750 thousand units forthe period.Honda’s automobile unit sales totaled 830 thousand units**, a decrease of 2.9% from thesame period last year due to decreased unit sales mainly in Asia primarily caused by theimpact of the Thailand flood. Revenue from sales to external customers decreased 10.1%,to JPY 1,451.0 billion (USD 18,665 million), from the same period last year due mainly toa decrease in sales unit and unfavorable currency translation effects. Honda reported anoperating loss of JPY 16.9 billion (USD 219 million), a decrease of JPY 85.3 billion (USD1,098 million) from the same period last year, due primarily to a decrease in sales volumeand model mix, the impact of raw material price increases, increased R&D expenses andunfavorable currency effects, despite decreased SG&A expenses.**Certain sales of automobiles that are financed with residual value type auto loans by our domestic financesubsidiaries are accounted for as operating leases in conformity with U.S. generally accepted accountingprinciples. As a result, they are not included in total sales of our automobile segment or in our measure ofunit sales.Revenue from customers in the financial services business decreased 8.5%, to JPY 124.8billion (USD 1,605 million) from the same period last year due mainly to the unfavorableforeign currency translation effects. Operating income decreased 15.7% to JPY 37.5 - 2 -
  • 3. billion (USD 484 million) from the same period last year due mainly to the unfavorableforeign currency effects.Honda’s power product unit sales totaled 1,021 thousand units, a decrease of 11.8% fromthe same period last year due to decreased unit sales in all regions. Revenue from sales toexternal customers in power product and other businesses decreased 5.8%, to JPY 64.0billion (USD 824 million), from the same period last year, due mainly to decreased unitsales in power products and the unfavorable currency translation effects. Honda reportedan operating loss of JPY 2.1 billion (USD 28 million), a deterioration of JPY 0.1 billionfrom the same period last year due mainly to unfavorable foreign currency effects. - 3 -
  • 4. Geographical InformationWith respect to Honda’s sales for the fiscal third quarter by geographic segment, in Japan,revenue from domestic and exports sales amounted to JPY 863.1 billion (USD 11,104million), a decrease of 0.5% from the same period last year due mainly to decreasedrevenue in the automobile business mainly impacted by the supply-chain disruptionscaused by the Thailand flood. Honda reported an operating loss of JPY 41.2 billion (USD530 million), a decrease of JPY 55.8 billion (USD 718 million) from the same period lastyear due mainly to increased R&D expenses, the impact of raw material price increasesand the unfavorable foreign currency effects, despite decreased SG&A expenses.In North America, revenue decreased by 2.5%, to JPY 986.2 billion (USD 12,687 million),from the same period last year due mainly to unfavorable foreign currency translationeffects, despite increased revenue in the automobile business. Operating income totaledJPY 74.8 billion (USD 963 million), a decrease of 16.5% from the same period last yeardue mainly to the impact of raw material price increases and unfavorable foreign currencyeffects.In Europe, revenue decreased by 20.7%, to JPY 119.4 billion (USD 1,537 million), fromthe same period last year mainly due to decreased revenue in the automobile businessimpacted by Thailand flood and unfavorable foreign currency translation effects. Hondareported an operating loss of JPY 3.8 billion (USD 49 million), an improvement of JPY5.6 billion (USD 72 million) from the same period last year mainly due to decreasedSG&A expenses.In Asia, revenue decreased by 28.7%, to JPY 317.6 billion (USD 4,086 million), from thesame period last year as revenue from the automobile business decreased mainly impactedby Thailand flood and the unfavorable foreign currency translation effects, despiteincreased revenue in the motorcycle business. Operating income decreased by 62.7%, toJPY 13.3 billion (USD 172 million), from the same period last year due mainly to adecrease in sales volume and model mix, an increase in fixed costs per unit as productionoutput has reduced and unfavorable foreign currency effects.In Asia, in addition to subsidiaries, many affiliates accounted for under the equity method manufacture andsell Honda-brand products. Operating income does not include income from these affiliates. Income fromthese affiliates is recorded as equity in income of affiliates and reflected in net income. Accounting terms ofsome of the affiliates differ from the Company’s.In Other regions including South America, the Middle East, Africa and Oceania, revenuedecreased by 13.7%, to JPY 206.1 billion (USD 2,652 billion) from the same period lastyear as revenue from the automobile business decreased mainly impacted by Thailand - 4 -
  • 5. flood and unfavorable foreign currency translation effects, despite increased revenue inthe motorcycle business. Operating income totaled to JPY 12.5 billion (USD 161 million),a decrease of 20.2% from the same period last year mainly due to a decrease in salesvolume and model mix and unfavorable foreign currency effects.United States dollar amounts have been translated from yen solely for the convenience of the reader at therate of JPY 77.74=U.S.$1, the mean of the telegraphic transfer selling exchange rate and the telegraphictransfer buying exchange rate prevailing on the Tokyo foreign exchange market on December 31, 2011. - 5 -
  • 6. Nine Months ResultsHonda’s consolidated net income attributable to Honda Motor Co., Ltd. for the fiscal ninemonths ended December 31, 2011 totaled JPY 139.8 billion, a decrease of 71.4% from thesame period last year. Basic net income attributable to Honda Motor Co., Ltd. percommon share for the fiscal nine months amounted to JPY 77.62, a decrease of JPY193.20 from JPY 270.82 for the fiscal nine months in the previous fiscal year.Consolidated revenue for the period amounted to JPY 5,543.0 billion, a decrease of 17.6%from the same period last year, primarily due to decreased revenue in the automobilebusiness mainly led by decreased production attributable to the impact of the Earthquakeand Thailand flood, and unfavorable foreign currency translation effects, despite increasedrevenue in the motorcycle business.Consolidated operating income for the period totaled JPY 119.3 billion, a decrease of77.2% from the same period last year, due primarily to a decrease in sales volume andmodel mix, increase in fixed costs as volume of production decrease, the impact of rawmaterial price increases and unfavorable foreign currency effect, despite decreased SG&Aexpenses.Consolidated income before income taxes and equity in income of affiliates for the periodtotaled JPY 164.3 billion, a decrease of 70.3% from the same period last year.Equity in income of affiliates amounted to JPY 67.1 billion for the period, a decrease of41.5% from the same period last year.Business SegmentWith respect to Honda’s sales for the fiscal nine months by business segment, unit sales ofmotorcycles totaled 9,103 thousand units, an increase of 7.0% from the same period lastyear*, due mainly to increased unit sales in Asia and Other regions including SouthAmerica. Revenue from sales to external customers increased 5.9%, to JPY 990.2 billionfrom the same period last year, primarily due to increased unit sales, despite unfavorableforeign currency translation effects. Operating income totaled to JPY 109.7 billion, anincrease of 21.3% from the previous fiscal year, due primarily to an increase in salesvolume and model mix, despite increased SG&A expenses and unfavorable foreigncurrency effects.*Of the net sales of Honda-brand motorcycle products that are manufactured and sold by overseas affiliatesaccounted for under the equity method, those with respect to which parts for manufacturing were not - 6 -
  • 7. supplied from Honda or its subsidiaries are not included in net sales and other operating revenue, inconformity with U.S. generally accepted accounting principles. Accordingly, these unit sales are notincluded in the financial results. Sales of such products amounted to approximately 2,130 thousand units forthe period.Honda’s unit sales of automobiles for the fiscal nine months totaled 2,149 thousand units,a decrease of 19.0% from the same period last year, due mainly to production disruptionsin all regions resulting from the Earthquake and Thailand flood. Revenue from sales toexternal customers decreased 23.1%, to JPY 3,961.0 billion, from the same period lastyear**, due mainly to decreased unit sales and unfavorable foreign currency translationeffect. Honda reported an operating loss of JPY 122.3 billion, a decrease of JPY 426.0billion from the same period last year, due primarily to a decrease in sales volume andmodel mix, increase in fixed costs as volume of production decrease, the impact of rawmaterial price increases and unfavorable foreign currency effect, despite decreased SG&Aexpenses.**Certain sales of automobiles that are financed with residual value type auto loans by our domestic financesubsidiaries are accounted for as operating leases in conformity with U.S. generally accepted accountingprinciples. As a result, they are not included in total sales of our automobile segment or in our measure ofunit sales.Revenue from the financial services business to external customers decreased 9.4%, toJPY 387.1 billion, from the same period last year, primarily due to unfavorable foreigncurrency translation effects. Operating income decreased 8.6%, to JPY 134.0 billion, fromthe same period last year due mainly to unfavorable foreign currency effects, despite thedecreased allowance for losses on both credit and lease residual values.Honda’s unit sales of power products totaled 3,809 thousand units, an increase of 1.2%from the same period last year due primarily to an increase in unit sales in Asia, Europeand Japan. Revenue from sales to external customers in power product and otherbusinesses decreased by 3.8%, to JPY 204.6 billion from the same period last year, duemainly to unfavorable foreign currency translation effects, despite increased unit sales ofpower products. Honda reported an operating loss of JPY 2.0 billion, an improvement ofJPY 1.1 billion from the same period last year due primarily to an increase in sales volumeand model mix of power products. - 7 -
  • 8. Geographical InformationWith respect to Honda’s sales for the fiscal nine months by geographic segment, in Japan,revenue from domestic and export sales was JPY 2,293.9 billion, a decrease of 15.6%compared to the same period last year mainly due to decreased revenue in the automobilebusiness mainly impacted by the Earthquake and Thailand flood. Honda reported anoperating loss of JPY 122.4 billion, a decrease of JPY 210.3 billion from the same periodlast year, due mainly to a decrease in sales volume and model mix, increase in fixed costsper unit as production output has reduced mainly caused by the Earthquake and Thailandflood, and the unfavorable foreign currency effects, despite decreased SG&A expenses.In North America, revenue decreased by 20.7%, to JPY 2,514.3 billion from the sameperiod last year mainly due to decreased revenue in the automobile business primarily dueto the impact of the Earthquake and Thailand flood, and unfavorable foreign currencytranslation effects. Operating income totaled JPY 141.0 billion, a decrease of 49.0% fromthe same period last year mainly due to a decrease in sales volume and model mix,increase in fixed cost per unit as production output has reduced, the impact of raw materialprice increases and unfavorable foreign currency effects, despite decreased SG&Aexpenses.In Europe, revenue decreased by 17.3%, to JPY 414.9 billion from the same period lastyear mainly due to decreased revenue in the automobile business primarily due to theimpact of the Earthquake and Thailand flood, and unfavorable foreign currency translationeffects, despite increased revenue in the power product and other businesses. Hondareported an operating loss of JPY 13.9 billion a deterioration of JPY 5.4 billion from thesame period last year due mainly to a decrease in sales volume and model mix andincrease in fixed cost per unit as production output has reduced.In Asia, revenue decreased by 19.7% to JPY 1,098.9 billion from the same period last year,as revenue from the automobile business decreased mainly due to decreased productionimpacted by the Earthquake and Thailand flood and the unfavorable foreign currencytranslation effects, despite increased revenue in the motorcycle business. Operatingincome decreased by 49.1%, to JPY 60.3 billion from the same period last year duemainly to a decrease in sales volume and model mix, an increase in fixed cost per unit asproduction output has reduced, the impact of raw material price increases and unfavorableforeign currency effects.In Other Regions, revenue decreased by 5.2% to JPY 680.4 billion from the same periodlast year as revenue from the automobile business decreased mainly due to decreasedproduction impacted by the Earthquake and Thailand flood and the unfavorable foreign - 8 -
  • 9. currency translation effects, despite increased revenue in the motorcycle business.Operating income totaled JPY 51.3 billion, a decrease of 9.0% from the same period lastyear mainly due to increased SG&A expenses, despite an increase in sales volume andmodel mix. - 9 -
  • 10. Consolidated Statements of Balance Sheets for the Fiscal Nine Months EndedDecember 31, 2011Total assets decreased JPY 688.5 billion, to JPY 10,882.2 billion from March 31, 2011,mainly due to a decrease in trade accounts and notes receivable and unfavorable foreigncurrency translation effects, despite an increase in property on operating leases. Totalliabilities decreased by JPY 464.8 billion, to JPY 6,523.1 billion from March 31, 2011,mainly due to foreign currency translation effects. Total equity decreased JPY 223.7billion, to JPY 4,359.1 billion from March 31, 2011 due mainly to foreign currencytranslation effects. - 10 -
  • 11. Consolidated Statements of Cash Flows for the Fiscal Nine MonthsConsolidated cash and cash equivalents at December 31, 2011 decreased by JPY 136.3billion from March 31, 2011, to JPY 1,142.7 billion. The reasons for the increases ordecreases for each cash flow activity compared with the previous fiscal year are asfollows.Cash flows from operating activitiesNet cash provided by operating activities amounted to JPY 507.9 billion of cash inflowsfor the fiscal nine months ended December 31, 2011. Cash inflows from operatingactivities decreased by JPY 257.6 billion compared with the same period of the previousfiscal year due mainly to a decrease in cash received from customers primarily caused bydecreased unit sales in the automobile business, despite decreased payments for parts andraw materials primarily caused by a decrease in automobile production.Cash flows from investing activitiesNet cash used in investing activities amounted to JPY 457.5 billion of cash outflows. Cashoutflows from investing activities decreased by JPY 157.7 billion compared with the sameperiod of the previous fiscal year, due mainly to a decrease in payments for purchases ofheld-to-maturity securities, a decrease in acquisitions of finance subsidiaries-receivablesand a decrease in purchase of operating lease assets, despite a decrease in collections offinance subsidiaries-receivables.Cash flows from financing activitiesNet cash used in financing activities amounted to JPY 95.0 billion of cash outflows. Cashoutflows from financing activities increased by JPY 74.1 billion, compared with the sameperiod of the previous fiscal year, due mainly to a decrease in proceeds from debts and anincrease in dividends paid, despite a decrease in purchases of treasury stock. - 11 -
  • 12. Forecasts for the Fiscal Year Ending March 31, 2012In regard to the forecasts of the financial results for the fiscal year ending March 31, 2012,Honda projects consolidated results to be as shown below:The forecasts are based on the assumption that the average exchange rates for the Japaneseyen to the U.S. dollar and the Euro will be JPY 77 and JPY 97, respectively, for the fiscalfourth quarter of the year ending March 31, 2012, and JPY 78 and JPY 106, respectively,for the fiscal full year ending March 31, 2012.Projected unit sales for the full year ending March 31, 2012 are shown below. Changes from FY2011 Unit (thousands) (thousands)Motorcycle business 12,660 + 1,215Automobile business 3,150 - 362Power product and Other Businesses 5,850 + 341FY2012 Forecasts for Consolidated Results Fiscal year ending March 31, 2012 Yen (billions) Changes from FY 2011 Net sales and other operating revenue 7,850 - 12.2% Operating income 200 - 64.9% Income before income taxes and equity in income of affiliates 250 - 60.4% Net income attributable to 215 - 59.7% Honda Motor Co., Ltd. Yen Basic net income attributable to 119.29 Honda Motor Co., Ltd. per common share - 12 -
  • 13. The reasons for the increases or decreases for forecasts of the operating income, andincome before income taxes and equity in income of affiliates for the fiscal year endingMarch 31, 2012 from the corresponding period last year are as follows. Yen (billions) Revenue, model mix, etc., excluding currency effect - 171.2 Cost reduction, the effect of raw material cost fluctuations, etc. - 79.0 SG&A expenses, excluding currency effect + 46.0 R&D expenses - 37.5 Currency effect - 128.0Operating income compared with fiscal year 2011 - 369.7 Fair value of derivative instruments 17.0 Others - 27.7Income before income taxes and equity in income of affiliates compared with fiscal year 2011 - 380.5Dividend per Share of Common StockThe Board of Directors of Honda Motor Co., Ltd., at its meeting held on January 31, 2012,resolved to make the quarterly dividend JPY 15 per share of common stock, the recorddate of which is December 31, 2011. The total expected annual dividend per share ofcommon stock for the fiscal year ending March 31, 2012, is JPY 60 per share.This announcement contains "forward-looking statements" as defined in Section 27A of the Securities Actof 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended. Such statementsare based on managements assumptions and beliefs taking into account information currently available to it.Therefore, please be advised that Honda’s actual results could differ materially from those described inthese forward-looking statements as a result of numerous factors, including general economic conditions inHonda’s principal markets and foreign exchange rates between the Japanese yen and the U.S. dollar, theEuro and other major currencies, as well as other factors detailed from time to time.OthersAccounting policies specifically applied for quarterly consolidated financial statements・Income taxesHonda computes interim income tax expense (benefit) by multiplying reasonably estimated annualeffective tax rate, which includes the effects of deferred taxes, by year-to-date income beforeincome taxes and equity in income of affiliates for the fiscal nine months ended December 31,2011. If a reliable estimate cannot be made, Honda utilizes the actual year-to-date effective taxrate. - 13 -
  • 14. Consolidated Financial Summary For the three months and nine months ended December 31, 2010 and 2011Financial Highlights Yen (millions) Three months Three months Nine months Nine months ended Ended ended ended Dec. 31, 2010 Dec. 31, 2011 Dec. 31, 2010 Dec. 31, 2011 unaudited unaudited unaudited unaudited Net sales and other 2,110,414 1,942,545 6,723,788 5,543,033 operating revenue Operating income 125,653 44,298 523,569 119,388 Income before income taxes and equity in 131,580 58,492 553,933 164,346 income of affiliates Net income attributable to Honda Motor Co., 81,118 47,662 489,534 139,888 Ltd. Yen Basic net income attributable to Honda 45.01 26.45 270.82 77.62 Motor Co., Ltd per common share U.S. Dollar (millions) Three months Nine months ended ended Dec. 31, 2011 Dec. 31, 2011 unaudited unaudited Net sales and other 24,988 71,302 operating revenue Operating income 570 1,536 Income before income taxes and equity in 752 2,114 income of affiliates Net income attributable to Honda Motor Co., 613 1,799 Ltd. U.S. Dollar Basic net income attributable to Honda 0.34 1.00 Motor Co., Ltd per common share - 14 -
  • 15. [1] Consolidated Balance Sheets Yen (millions) Mar. 31, 2011 Dec. 31, 2011 Assets audited unaudited Current assets: Cash and cash equivalents 1,279,024 1,142,719 Trade accounts and notes receivable 787,691 605,522 Finance subsidiaries-receivables, net 1,131,068 1,048,114 Inventories 899,813 882,931 Deferred income taxes 202,291 194,277 Other current assets 390,160 335,796 Total current assets 4,690,047 4,209,359 Finance subsidiaries-receivables, net 2,348,913 2,234,563 Investments and advances: Investments in and advances to affiliates 440,026 456,666 Other, including marketable equity securities 199,906 155,924 Total investments and advances 639,932 612,590 Property on operating leases: Vehicles 1,645,517 1,630,150 Less accumulated depreciation 287,885 277,034 Net property on operating leases 1,357,632 1,353,116 Property, plant and equipment, at cost: Land 483,654 477,697 Buildings 1,473,067 1,442,417 Machinery and equipment 3,166,353 3,089,143 Construction in progress 202,186 207,583 5,325,260 5,216,840 Less accumulated depreciation and amortization 3,385,904 3,369,151 Net property, plant and equipment 1,939,356 1,847,689 Other assets 594,994 624,979 Total assets 11,570,874 10,882,296 - 15 -
  • 16. [1] Consolidated Balance Sheets – continued Yen (millions) Mar. 31, 2011 Dec. 31, 2011Liabilities and Equity audited unaudited Current liabilities: Short-term debt 1,094,740 1,019,866 Current portion of long-term debt 962,455 966,466 Trade payables: Notes 25,216 24,190 Accounts 691,520 653,315 Accrued expenses 525,540 430,591 Income taxes payable 31,960 22,992 Other current liabilities 236,761 196,218 Total current liabilities 3,568,192 3,313,638 Long-term debt, excluding current portion 2,043,240 1,849,536 Other liabilities 1,376,530 1,359,954 Total liabilities 6,987,962 6,523,128 Equity: Honda Motor Co., Ltd. shareholders’ equity: Common stock, authorized 7,086,000,000 shares; issued 1,811,428,430 shares on Mar. 31, 2011 and 86,067 86,067 1,811,428,430 shares on Dec. 31, 2011 Capital surplus 172,529 172,529 Legal reserves 46,330 46,843 Retained earnings 5,666,539 5,724,811 Accumulated other comprehensive income (loss), net (1,495,380) (1,758,752) Treasury stock, at cost 9,126,716 shares on Mar. 31, 2011 and 9,128,231 shares on Dec. 31, 2011 (26,110) (26,115) Total Honda Motor Co., Ltd. shareholders’ equity 4,449,975 4,245,383 Noncontrolling interests 132,937 113,785 Total equity 4,582,912 4,359,168 Commitments and contingent liabilities Total liabilities and equity 11,570,874 10,882,296 - 16 -
  • 17. [2] Consolidated Statements of Income (A) For the three months ended December 31, 2010 and 2011 Yen (millions) Three months Three months ended ended Dec. 31, 2010 Dec. 31, 2011 unaudited unaudited Net sales and other operating revenue 2,110,414 1,942,545 Operating costs and expenses: Cost of sales 1,517,648 1,446,474 Selling, general and administrative 343,003 317,354 Research and development 124,110 134,419 1,984,761 1,898,247 Operating income 125,653 44,298 Other income (expenses): Interest income 6,069 8,775 Interest expense (2,017) (2,445) Other, net 1,875 7,864 5,927 14,194 Income before income taxes and equity in 131,580 58,492 income of affiliates Income tax expense: Current 19,575 (904) Deferred 67,461 34,151 87,036 33,247 Income before equity in income of affiliates 44,544 25,245 Equity in income of affiliates 43,443 22,911 Net income 87,987 48,156 Less: Net income attributable to 6,869 494 noncontrolling interests Net income attributable to 81,118 47,662 Honda Motor Co., Ltd. Yen Basic net income attributable to 45.01 26.45 Honda Motor Co., Ltd. per common share - 17 -
  • 18. (B) For the nine months ended December 31, 2010 and 2011 Yen (millions) Nine months ended Nine months ended Dec. 31, 2010 Dec. 31, 2011 unaudited unauditedNet sales and other operating revenue 6,723,788 5,543,033Operating costs and expenses: Cost of sales 4,849,409 4,141,925 Selling, general and administrative 987,045 909,418 Research and development 363,765 372,302 6,200,219 5,423,645 Operating income 523,569 119,388Other income (expenses): Interest income 16,836 25,119 Interest expense (6,264) (7,509) Other, net 19,792 27,348 30,364 44,958 Income before income taxes and equity in 553,933 164,346 income of affiliatesIncome tax expense: Current 40,511 57,346 Deferred 117,165 29,451 157,676 86,797 Income before equity in income of affiliates 396,257 77,549Equity in income of affiliates 114,742 67,111 Net income 510,999 144,660Less: Net income attributable to 21,465 4,772 noncontrolling interests Net income attributable to 489,534 139,888 Honda Motor Co., Ltd. YenBasic net income attributable to 270.82 77.62Honda Motor Co., Ltd. per common share - 18 -
  • 19. [3] Consolidated Statements of Cash Flows Yen (millions) Nine months Nine months ended ended Dec. 31, 2010 Dec. 31, 2011 unaudited unauditedCash flows from operating activities: Net income 510,999 144,660 Adjustments to reconcile net income to net cash provided by operating activities: Depreciation excluding property on operating leases 262,251 228,448 Depreciation of property on operating leases 160,036 154,054 Deferred income taxes 117,165 29,451 Equity in income of affiliates (114,742) (67,111) Dividends from affiliates 44,156 47,261 Provision for credit and lease residual losses on finance 11,328 7,905 subsidiaries-receivables Impairment loss on investments in securities 673 501 Damaged and Impairment loss on long-lived assets and 534 7,654 goodwill excluding property on operating leases Loss (gain) on derivative instruments, net (26,644) (27,380) Decrease (increase) in assets: Trade accounts and notes receivable 73,716 123,712 Inventories (93,519) (45,264) Other current assets 18,408 57,835 Other assets (9,105) (11,115) Increase (decrease) in liabilities: Trade accounts and notes payable (61,340) 14,023 Accrued expenses (28,242) (58,769) Income taxes payable 10,226 (8,027) Other current liabilities (3,940) (28,872) Other liabilities (81,850) (22,696) Other, net (24,480) (38,309) Net cash provided by operating activities 765,630 507,961Cash flows from investing activities: Increase in investments and advances (7,432) (18,363) Decrease in investments and advances 10,759 10,458 Payments for purchases of available-for-sale securities (199) ― Proceeds from sales of available-for-sale securities 2,319 ― Payments for purchases of held-to-maturity securities (164,145) (14,624) Proceeds from redemptions of held-to-maturity securities 79,517 45,827 Capital expenditures (204,193) (240,522) Proceeds from sales of property, plant and equipment 18,311 21,921 Proceeds from insurance recoveries for damaged property, 4,944 plant and equipment Acquisitions of finance subsidiaries-receivables (1,629,600) (1,546,337) Collections of finance subsidiaries-receivables 1,567,415 1,504,989 Purchases of operating lease assets (586,391) (498,380) Proceeds from sales of operating lease assets 298,308 272,504 Net cash used in investing activities (615,331) (457,583) - 19 -
  • 20. [3] Consolidated Statements of Cash Flows – continued Yen (millions) Nine months Nine months ended ended Dec. 31, 2010 Dec. 31, 2011 unaudited unaudited Cash flows from financing activities: Increase (decrease) in short-term debt, net 127,340 5,008 Proceeds from long-term debt 579,844 707,736 Repayment of long-term debt (612,441) (711,590) Dividends paid (65,136) (81,103) Dividends paid to noncontrolling interests (15,641) (15,060) Sales (purchases) of treasury stock, net (34,794) (5) Net cash provided by (used in) financing activities (20,828) (95,014) Effect of exchange rate changes on cash and (90,704) (91,669) cash equivalents Net change in cash and cash equivalents 38,767 (136,305) Cash and cash equivalents at beginning of the year 1,119,902 1,279,024 Cash and cash equivalents at end of the period 1,158,669 1,142,719 - 20 -
  • 21. [4] Assumptions for Going ConcernNone[5] Significant changes in Honda Motor Co., Ltd. shareholders’ equityNone[6] Segment InformationHonda has four reportable segments: the Motorcycle business, the Automobile business, the Financialservices business and the Power product & other businesses, which are based on Honda’s organizationalstructure and characteristics of products and services. Operating segments are defined as components ofHonda’s about which separate financial information is available that is evaluated regularly by managementin deciding how to allocate resources and in assessing performance. The accounting policies used for thesereportable segments are consistent with the accounting policies used in Honda’s consolidated financialstatements.Principal products and services, and functions of each segment are as follows: Segment Principal products and services Functions Motorcycles, all-terrain vehicles Research & Development, Manufacturing, Motorcycle business Sales and related services (ATVs) and relevant parts Research & Development, Manufacturing Automobile business Automobiles and relevant parts Sales and related services Retail loan and lease related to Honda Financial services business Financial, insurance services products, and Others Power product Power products and relevant parts, Research & Development, Manufacturing & Other businesses and others Sales and related services, and Others1. Segment information based on products and services(A) For the three months ended December 31, 2010 Yen (millions) Financial Power Product Motorcycle Automobile Segment Reconciling Other Services & Other Consolidated Business Business Total Items Adjustments Business BusinessesNet sales and otheroperating revenue: External 301,996 1,613,841 136,442 68,023 2,120,302 ― (9,888) 2,110,414 customers Intersegment ― 2,087 2,854 4,164 9,105 (9,105) ― ― Total 301,996 1,615,928 139,296 72,187 2,129,407 (9,105) (9,888) 2,110,414Segment income 29,132 68,400 44,603 (2,079) 140,056 ― (14,403) 125,653(loss)For the three months ended December 31, 2011 Yen (millions) Financial Power Product Motorcycle Automobile Segment Reconciling Other Services & Other Consolidated Business Business Total Items Adjustments Business BusinessesNet sales and otheroperating revenue: External 302,590 1,451,054 124,806 64,095 1,942,545 ― ― 1,942,545 customers Intersegment ― 4,578 2,760 3,951 11,289 (11,289) ― ― Total 302,590 1,455,632 127,566 68,046 1,953,834 (11,289) ― 1,942,545Segment income 25,866 (16,997) 37,597 (2,168) 44,298 ― ― 44,298(loss) - 21 -
  • 22. (B) As of and for the nine months ended December 31, 2010 Yen (millions) Financial Power Product Motorcycle Automobile Segment Reconciling Other Services & Other Consolidated Business Business Total Items Adjustments Business BusinessesNet sales and otheroperating revenue: External 935,082 5,148,743 427,346 212,617 6,723,788 ― ― 6,723,788 customers Intersegment ― 5,135 8,759 12,086 25,980 (25,980) ― ― Total 935,082 5,153,878 436,105 224,703 6,749,768 (25,980) ― 6,723,788Segment income 90,460 303,727 146,672 (3,167) 537,692 ― (14,123) 523,569(loss)Assets 944,662 4,764,066 5,427,253 283,030 11,419,011 (159,399) ― 11,259,612Depreciation and 30,542 221,922 161,287 8,536 422,287 ― ― 422,287amortizationCapital 21,086 171,191 587,981 7,198 787,456 ― ― 787,456expendituresAs of and for the nine months ended December 31, 2011 Yen (millions) Financial Power Product Motorcycle Automobile Segment Reconciling Other Services & Other Consolidated Business Business Total Items Adjustments Business BusinessesNet sales and otheroperating revenue: External 990,287 3,961,018 387,127 204,601 5,543,033 ― ― 5,543,033 customers Intersegment ― 10,587 8,231 9,516 28,334 (28,334) ― ― Total 990,287 3,971,605 395,358 214,117 5,571,367 (28,334) ― 5,543,033Segment income 109,733 (122,366) 134,043 (2,022) 119,388 ― ― 119,388(loss)Assets 965,325 4,448,203 5,290,548 292,342 10,996,418 (114,122) ― 10,882,296Depreciation and 29,914 190,295 155,165 7,128 382,502 ― ― 382,502amortizationCapital 39,447 203,771 500,553 6,012 749,783 ― ― 749,783expendituresExplanatory notes:1. Intersegment sales and revenues are generally made at values that approximate arm’s-length prices.2. Unallocated corporate assets, included in reconciling items, amounted to JPY 393,266 million as of December 31, 2010 and JPY 371,004 million as of December 31, 2011 respectively, which consist primarily of cash and cash equivalents, available-for-sale securities and held-to-maturity securities held by the Company. Reconciling items also include elimination of intersegment transactions.3. Depreciation and amortization of Financial Services Business include JPY 160,036 million for the nine months ended December 31, 2010 and JPY 154,054 million for the nine months ended December 31, 2011, respectively, of depreciation of property on operating leases.4. Capital expenditure of Financial Services Business includes JPY 586,391 million for the nine months ended December 31, 2010 and JPY 498,380 million for the nine months ended December 31, 2011 respectively, of purchase of operating lease assets.5. For further information on Other Adjustments, refer to “[8] Other 1.Out-of-period adjustments”. The amount of out-of-period adjustments are not used by the chief operating decision maker in deciding how to allocate resources and in assessing the Company’s operating performance. Therefore, the adjustments are not included in Power Product and Other Businesses but as Other Adjustments for the three months and nine months ended December 31, 2010.6. The amounts of Net sales and other operating revenue Intersegment for the three months and nine months ended December 31, 2010 have been corrected from the amounts previously disclosed. - 22 -
  • 23. In addition to the disclosure required by U.S. GAAP, Honda provides the following supplemental information in order to provide financial statements users with useful information:2. Supplemental geographical information based on the location of the Company and its subsidiaries (A) For the three months ended December 31, 2010 Yen (millions) North Other Reconciling Other Japan Europe Asia Total Consolidated America Regions Items AdjustmentsNet sales and otheroperating revenue: External 404,219 964,492 132,514 387,477 231,600 2,120,302 ― (9,888) 2,110,414 customers Transfers between 463,331 47,319 18,226 58,044 7,291 594,211 (594,211) ― ― geographic areas Total 867,550 1,011,811 150,740 445,521 238,891 2,714,513 (594,211) (9,888) 2,110,414Operating income 14,633 89,698 (9,436) 35,780 15,690 146,365 (6,309) (14,403) 125,653(loss)For the three months ended December 31, 2011 Yen (millions) North Other Reconciling Other Japan Europe Asia Total Consolidated America Regions Items AdjustmentsNet sales and otheroperating revenue: External 434,749 928,336 105,229 269,470 204,761 1,942,545 ― ― 1,942,545 customers Transfers between 428,450 57,956 14,233 48,210 1,373 550,222 (550,222) ― ― geographic areas Total 863,199 986,292 119,462 317,680 206,134 2,492,767 (550,222) ― 1,942,545Operating income (41,219) 74,865 (3,801) 13,350 12,525 55,720 (11,422) ― 44,298(loss) - 23 -
  • 24. (B) As of and for the nine months ended December 31, 2010 Yen (millions) North Other Reconciling Other Japan Europe Asia Total Consolidated America Regions Items AdjustmentsNet sales and otheroperating revenue: External 1,377,539 3,017,225 447,418 1,189,687 691,919 6,723,788 ― ― 6,723,788 customers Transfers between 1,339,789 154,054 54,521 179,068 25,858 1,753,290 (1,753,290) ― ― geographic areas Total 2,717,328 3,171,279 501,939 1,368,755 717,777 8,477,078 (1,753,290) ― 6,723,788Operating income 87,919 276,364 (8,438) 118,530 56,389 530,764 6,928 (14,123) 523,569(loss)Assets 2,895,405 6,025,463 492,882 1,046,431 663,111 11,123,292 136,320 ― 11,259,612Long-lived assets 1,059,010 1,744,305 97,808 219,810 146,464 3,267,397 ― ― 3,267,397As of and for the nine months ended December 31, 2011 Yen (millions) North Other Reconciling Other Japan Europe Asia Total Consolidated America Regions Items AdjustmentsNet sales and otheroperating revenue: External 1,188,657 2,366,920 370,471 945,363 671,622 5,543,033 ― ― 5,543,033 customers Transfers between 1,105,253 147,445 44,461 153,553 8,822 1,459,534 (1,459,534) ― ― geographic areas Total 2,293,910 2,514,365 414,932 1,098,916 680,444 7,002,567 (1,459,534) ― 5,543,033Operating income (122,422) 141,083 (13,934) 60,326 51,333 116,386 3,002 ― 119,388(loss)Assets 2,956,920 5,809,611 437,391 938,207 601,543 10,743,672 138,624 ― 10,882,296Long-lived assets 1,035,861 1,805,658 97,691 218,844 126,558 3,284,612 ― ― 3,284,612Explanatory notes:1. Major countries or regions in each geographic area: North America United States, Canada, Mexico Europe United Kingdom, Germany, France, Italy, Belgium Asia Thailand, Indonesia, China, India, Vietnam Other Regions Brazil, Australia2. Sales and revenues between geographic areas are generally made at values that approximate arm’s-length prices.3. Unallocated corporate assets, included in reconciling items, amounted to JPY 393,266 million as of December 31, 2010 and JPY 371,004 million as of December 31, 2011 respectively, which consist primarily of cash and cash equivalents, available-for-sale securities and held-to-maturity securities held by the Company. Reconciling items also include elimination of transactions between geographic areas.4. For further information on Other Adjustments, refer to ”[8] Other 1.Out-of-period adjustments”. The adjustments are not included in Japan but as Other Adjustments for the three months and nine months periods ended December 31, 2010. - 24 -
  • 25. [7] Income TaxesOn November 30, 2011, the National Diet of Japan approved the laws for amendments to previousincome tax laws. Upon the change in the laws, the statutory income tax rate in Japan will be changed to approximately38% for fiscal years beginning on or after April 1, 2012, and to approximately 35% for fiscal yearsbeginning on or after April 1, 2015. Thus, the Company and its Japanese consolidated subsidiariesmeasured deferred tax assets and liabilities based on the tax rates to be applied in the fiscal years inwhich temporary differences are expected to be recovered or settled. As a result, net of deferred tax assets decreased JPY 16,072 million as of December 31, 2011, andincome tax expenses increased JPY 16,072 million for the three months and nine months endedDecember 31, 2011. Due primarily to the impact of this tax rate change, the effective tax rates of Honda for the threemonths and nine months ended December 31, 2011 differ from Japanese (or the Company’s) statutoryincome tax rate, which is 40% for the fiscal year ending March 31, 2012.[8] Other 1.Out-of-period adjustmentsDuring the three months ended December 31, 2010, certain overstatements were found in tradeaccounts and notes receivable, inventories, net sales and other operating revenue, and cost of sales inpreviously issued consolidated financial statements, pertaining to the Company’s inventorymanagement trading activities at a domestic subsidiary. This domestic subsidiary temporarily purchasessea food products from seafood companies with the promise that they will buy back such products aftercertain period, in order to bridge the gap between the purchasing period (the fishing season) and thesales period for sea food products. In the Company’s consolidated statements of income for the threemonths ended December 31, 2010, the Company adjusted net sales and other operating revenueamounted to JPY 9,888 million and operating income amounted to JPY 280 million overstated in theCompany’s consolidated statements of income for the six months ended September 30, 2010, inconjunction with the related cumulative loss amounted to JPY14,123 million as of March 31, 2010. Asa result, operating income for the three months and nine months ended December 31, 2010, decreasedby JPY 14,403 million and 14,123 million, respectively. Honda believes that these adjustments areimmaterial to the Company’s consolidated financial statements or results of operations in prior periods. 2. Impact on the Companys consolidated financial position or results of operations of the flood in Thailand.Since October 2011, Thailand suffered from severe floods, which caused damage to inventories, andmachineries and equipments of certain consolidated subsidiaries and affiliates of the Company.Accordingly, production activities in plant facilities at Honda and its affiliates have been affected byfloods.As a result, Honda recognized JPY 17,348 million of costs and expenses, of which JPY 9,387 million isincluded in cost of sales and JPY 7,961 million is included in selling, general and administrativeexpenses in the accompanying consolidated statement of income for the period ended December 31,2011. These costs and expenses mainly consist of loss on inventories of JPY 7,330 million which areincluded in cost of sales, and loss on damaged property, plant and equipment of JPY 7,654 millionwhich is included in selling, general and administrative expenses.In addition, Honda recognized insurance recoveries of JPY 11,838 million which is included in selling,general and administrative expenses in the accompanying consolidated statement of income for theperiod ended December 31, 2011. The recognized insurance recovery is limited to the amount of therelated incurred losses and Honda will recognize insurance recoveries in excess of the incurred losseswhen final settlements with insurance companies are reached. - 25 -
  • 26. January 31, 2012 Honda Motor Co., Ltd. CONSOLIDATED FINANCIAL SUMMARY 1 FOR THE FISCAL THIRD QUARTER AND THE FISCAL NINE MONTHS ENDED DECEMBER 31, 2011 Third Quarter Results Nine Months Results Fiscal Year Results and Forecasts 3 months 3 months 9 months 9 months Year ended Year ending ended ended ended ended change % change % Mar. 31, 2011 Mar. 31, 2012 change %Yen (billions), Unit (thousands) Dec. 31, 2010 Dec. 31, 2011 Dec. 31, 2010 Dec. 31, 2011Net sales and other operating revenue 2,110.4 1,942.5 - 167.8 - 8.0% 6,723.7 5,543.0 - 1,180.7 - 17.6% 8,936.8 7,850.0 - 1,086.8 - 12.2%Operating income 125.6 44.2 - 81.3 - 64.7% 523.5 119.3 - 404.1 - 77.2% 569.7 200.0 - 369.7 - 64.9%<as a percentage of net sales> < 6.0% > < 2.3% > < 7.8% > < 2.2% > < 6.4% > < 2.5% >Income before income taxes and 131.5 58.4 - 73.0 - 55.5% 553.9 164.3 - 389.5 - 70.3% 630.5 250.0 - 380.5 - 60.4%equity in income of affiliates<as a percentage of net sales> < 6.2% > < 3.0% > < 8.2% > < 3.0% > < 7.1% > < 3.2% >Equity in income of affiliates 43.4 22.9 - 20.5 - 47.3% 114.7 67.1 - 47.6 - 41.5% 139.7 95.0 - 44.7 - 32.0%<as a percentage of net sales> < 2.1% > < 1.2% > < 1.7% > < 1.2% > < 1.6% > < 1.2% >Net income attributable to Honda Motor 81.1 47.6 - 33.4 - 41.2% 489.5 139.8 - 349.6 - 71.4% 534.0 215.0 - 319.0 - 59.7%Co., Ltd. <as a percentage of net sales> < 3.8% > < 2.5% > < 7.3% > < 2.5% > < 6.0% > < 2.7% >Change Factors in Operating income - 81.3 - 404.1 - 369.7 Change in revenue, model mix, etc., - 32.9 - 217.8 - 171.2 excluding currency effects Cost reduction, the effect of raw material cost - 16.1 - 133.3 - 79.0 fluctuations, etc. Change in SG&A expenses, 11.6 41.4 46.0 excluding currency effects Change in R&D expenses - 10.3 - 8.5 - 37.5 Currency effects - 33.6 - 85.8 - 128.0 Change in average rates ( - 22.4) ( - 54.0) ( - 79.0) Translation effects ( - 11.1) ( - 31.7) ( - 49.0)Change Factors in Other income/expenses 8.2 14.5 - 10.7 Unrealized gains and losses related 3.5 0.7 17.0 to derivative instruments Others 4.7 13.8 - 27.7 USD= JPY 83 JPY 77 JPY 87 JPY 78 JPY 86 JPY 78 (4Q : JPY 77)Hondas average rates EUR= JPY 112 JPY 105 JPY 114 JPY 110 JPY 114 JPY 106 (4Q : JPY 97)Capital expenditures 57.8 107.6 190.4 239.7 311.3 410.0Depreciation and amortization 78.6 70.9 242.6 212.1 325.2 295.0Research and development expenses 124.1 134.4 363.7 372.3 487.5 525.0Unit Sales Motorcycle business 2,895 3,076 181 6.3% 8,511 9,103 592 7.0% 11,445 12,660 1,215 10.6% Japan 46 51 5 10.9% 138 166 28 20.3% 190 225 35 18.4% North America 44 48 4 9.1% 147 147 0 0.0% 185 200 15 8.1% Europe 39 31 -8 - 20.5% 144 140 -4 - 2.8% 202 205 3 1.5% Asia 2,341 2,450 109 4.7% 6,868 7,169 301 4.4% 9,178 10,040 862 9.4% Other Regions 425 496 71 16.7% 1,214 1,481 267 22.0% 1,690 1,990 300 17.8% Automobile business 855 830 - 25 - 2.9% 2,652 2,149 - 503 - 19.0% 3,512 3,150 -362 - 10.3% Japan 118 134 16 13.6% 440 356 - 84 - 19.1% 582 585 3 0.5% North America 364 366 2 0.5% 1,102 860 - 242 - 22.0% 1,458 1,320 - 138 - 9.5% Europe 41 38 -3 - 7.3% 142 113 - 29 - 20.4% 198 165 - 33 - 16.7% Asia 265 244 - 21 - 7.9% 770 669 - 101 - 13.1% 1,008 880 - 128 - 12.7% Other Regions 67 48 - 19 - 28.4% 198 151 - 47 - 23.7% 266 200 - 66 - 24.8% Power product business 1,157 1,021 - 136 - 11.8% 3,763 3,809 46 1.2% 5,509 5,850 341 6.2% Japan 89 68 - 21 - 23.6% 284 303 19 6.7% 388 380 -8 - 2.1% North America 350 330 - 20 - 5.7% 1,379 1,344 - 35 - 2.5% 2,085 2,365 280 13.4% Europe 254 200 - 54 - 21.3% 684 707 23 3.4% 1,174 1,090 - 84 - 7.2% Asia 307 289 - 18 - 5.9% 1,018 1,078 60 5.9% 1,325 1,485 160 12.1% Other Regions 157 134 - 23 - 14.6% 398 377 - 21 - 5.3% 537 530 -7 - 1.3%Notes:1 In this chart, "change" is calculated on the comparison with the same period of previous year.2 Capital expenditures exclude purchase of operating lease assets and acquisition of intangible assets, and depreciation and amortization exclude depreciation of property on operating leases and amortization of intangible assets.3 Unit sales are the total of sales of completed products of Honda and its consolidated subsidiaries, and sales of parts for local production at Hondas affiliates accounted for under the equity method.4 Of the net sales of Honda-brand motorcycle products that are manufactured and sold by overseas affiliates accounted for under the equity method, those with respect to which parts for manufacturing were not supplied from Honda or its subsidiaries are not included in net sales and other operating revenue, in conformity with U.S. generally accepted accounting principles. Accordingly, these unit sales are not included in the financial results and forecasts.5 Certain sales of automobiles that are financed with residual value type auto loans by our Japanese 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. Additional information about automobile unit sales - Japan including unit sales meet the condition presented above is provided below. Third Quarter Results Nine Months Results Fiscal Year Results and Forecasts 3 months 3 months 9 months 9 months Year ended Year ending ended ended ended ended change % change % Mar. 31, 2011 Mar. 31, 2012 change %(Additional information) Dec. 31, 2010 Dec. 31, 2011 Dec. 31, 2010 Dec. 31, 2011Unit Sales (thousands) Automobile business - Japan 119 136 17 14.3% 442 361 - 81 - 18.3% 585 595 10 1.7%The Company was unable to reasonably calculate forecasts for the consolidated financial results for the fiscal year ending March 31, 2012 due to the impact of flood damage in Thailand. However, it is possible to reasonablyestimate based on information available at the moment, the Company hereby announces its forecasts for the consolidated financial results for the fiscal year ending March 31, 2012, as above.This announcement contains "forward-looking statements" of Honda. Such statements are based on managements assumptions and beliefs taking into account information currently available to it. Therefore, please be advisedthat Honda’s actual results could differ materially from those described in these forward-looking statements as a result of numerous factors, including general economic conditions in Honda’s principal markets and foreignexchange rates between the Japanese yen and the U.S. dollar, the Euro and other major currencies, as well as other factors detailed from time to time. The various factors for increases and decreases in incomehave been classified in accordance with a method that Honda considers reasonable.
  • 27. January 31, 2012 Honda Motor Co., Ltd. CONSOLIDATED FINANCIAL SUMMARY 2FOR THE FISCAL THIRD QUARTER AND THE FISCAL NINE MONTHS ENDED DECEMBER 31, 2011Unit Sales and Net Sales BreakdownFor the nine months ended December 31 Nine months ended Nine months ended change Dec. 31, 2010 Dec. 31, 2011 Unit Yen Unit Yen Unit Yen (thousands) (millions) (thousands) (millions) (thousands) % (millions) % Total 6,723,788 5,543,033 △1,180,755 △17.6  Japan 1,139,223 998,067 △141,156 △12.4  North America 3,001,183 2,353,939 △647,244 △21.6  Europe 441,008 368,064 △72,944 △16.5  Asia 1,368,555 1,086,047 △282,508 △20.6  Other Regions 773,819 736,916 △36,903 △4.8  Other Adjustments ― ― ― ― Motorcycle business 8,511 935,082 9,103 990,287 592 7.0 55,205 5.9 (Motorcycles only) (8,417) (9,012) (595) (7.1)  Japan 138 52,473 166 54,596 28 20.3 2,123 4.0 (Motorcycles only) (138) (166) (28) (20.3)  North America 147 79,372 147 74,590 0 0.0 △4,782 △6.0 (Motorcycles only) (69) (71) (2) (2.9)  Europe 144 73,894 140 67,513 △4 △2.8 △6,381 △8.6 (Motorcycles only) (138) (135) (△3) (△2.2)  Asia 6,868 409,014 7,169 414,406 301 4.4 5,392 1.3 (Motorcycles only) (6,868) (7,169) (301) (4.4)  Other Regions 1,214 320,329 1,481 379,182 267 22.0 58,853 18.4 (Motorcycles only) (1,204) (1,471) (267) (22.2) Automobile business 2,652 5,148,743 2,149 3,961,018 △503 △19.0 △1,187,725 △23.1  Japan 440 992,515 356 852,350 △84 △19.1 △140,165 △14.1  North America 1,102 2,488,266 860 1,887,061 △242 △22.0 △601,205 △24.2  Europe 142 325,219 113 256,931 △29 △20.4 △68,288 △21.0  Asia 770 920,351 669 639,401 △101 △13.1 △280,950 △30.5  Other Regions 198 422,392 151 325,275 △47 △23.7 △97,117 △23.0 Financial service business ― 427,346 ― 387,127 ― ― △40,219 △9.4  Japan ― 19,723 ― 21,283 ― ― 1,560 7.9  North America ― 384,169 ― 341,672 ― ― △42,497 △11.1  Europe ― 7,004 ― 6,264 ― ― △740 △10.6  Asia ― 2,846 ― 2,227 ― ― △619 △21.7  Other Regions ― 13,604 ― 15,681 ― ― 2,077 15.3 Power product & Other businesses 3,763 212,617 3,809 204,601 46 1.2 △8,016 △3.8  Japan 284 74,512 303 69,838 19 6.7 △4,674 △6.3  North America 1,379 49,376 1,344 50,616 △35 △2.5 1,240 2.5  Europe 684 34,891 707 37,356 23 3.4 2,465 7.1  Asia 1,018 36,344 1,078 30,013 60 5.9 △6,331 △17.4  Other Regions 398 17,494 377 16,778 △21 △5.3 △716 △4.1 Other Adjustments ― ― ― ― ― ― ― ―Notes:1 The geographical breakdown of unit sales and net sales is based on the location of external customers.2 Unit sales are the total of sales of completed products of Honda and its consolidated subsidiaries, and sales of parts for local production at Hondas affiliates accounted for under the equity method.3 Of the net sales of Honda-brand motorcycle products that are manufactured and sold by overseas affiliates accounted for under the equity method, those with respect to which parts for manufacturing were not supplied from Honda or its subsidiaries are not included in net sales and other operating revenue, in conformity with U.S. generally accepted accounting principles. Accordingly, these unit sales are not included in the financial results.4 Certain sales of automobiles that are financed with residual value type auto loans by our Japanese 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.5 Net sales of Power product & Other businesses include revenue from sales of power products and relevant parts, leisure businesses and trading businesses.6 For further information on Other Adjustments, refer to FY2012 3rd Quarter Financial Results “[8] Other 1. Out-of-period adjustments”.
  • 28. January 31, 2012 Honda Motor Co., Ltd. CONSOLIDATED FINANCIAL SUMMARY 2 FOR THE FISCAL THIRD QUARTER AND THE FISCAL NINE MONTHS ENDED DECEMBER 31, 2011Unit Sales and Net Sales BreakdownFor the three months ended December 31 Three months ended Three months ended change Dec. 31, 2010 Dec. 31, 2011 Unit Yen Unit Yen Unit Yen (thousands) (millions) (thousands) (millions) (thousands) % (millions) % Total 2,110,414 1,942,545 △167,869 △8.0  Japan 330,817 370,929 40,112 12.1  North America 958,111 922,848 △35,263 △3.7  Europe 130,231 104,172 △26,059 △20.0  Asia 443,487 313,807 △129,680 △29.2  Other Regions 257,656 230,789 △26,867 △10.4  Other Adjustments △9,888 ― 9,888 △100.0 Motorcycle business 2,895 301,996 3,076 302,590 181 6.3 594 0.2 (Motorcycles only) (2,866) (3,042) (176) (6.1)  Japan 46 16,872 51 17,643 5 10.9 771 4.6 (Motorcycles only) (46) (51) (5) (10.9)  North America 44 20,904 48 21,234 4 9.1 330 1.6 (Motorcycles only) (21) (20) (△1) (△4.8)  Europe 39 18,650 31 13,755 △8 △20.5 △4,895 △26.2 (Motorcycles only) (36) (28) (△8) (△22.2)  Asia 2,341 136,672 2,450 130,155 109 4.7 △6,517 △4.8 (Motorcycles only) (2,341) (2,450) (109) (4.7)  Other Regions 425 108,898 496 119,803 71 16.7 10,905 10.0 (Motorcycles only) (422) (493) (71) (16.8) Automobile business 855 1,613,841 830 1,451,054 △25 △2.9 △162,787 △10.1  Japan 118 280,345 134 319,595 16 13.6 39,250 14.0  North America 364 803,337 366 777,785 2 0.5 △25,552 △3.2  Europe 41 97,898 38 78,672 △3 △7.3 △19,226 △19.6  Asia 265 294,865 244 175,014 △21 △7.9 △119,851 △40.6  Other Regions 67 137,396 48 99,988 △19 △28.4 △37,408 △27.2 Financial service business ― 136,442 ― 124,806 ― ― △11,636 △8.5  Japan ― 6,735 ― 7,261 ― ― 526 7.8  North America ― 121,627 ― 109,924 ― ― △11,703 △9.6  Europe ― 2,245 ― 1,919 ― ― △326 △14.5  Asia ― 938 ― 679 ― ― △259 △27.6  Other Regions ― 4,897 ― 5,023 ― ― 126 2.6 Power product & Other businesses 1,157 68,023 1,021 64,095 △136 △11.8 △3,928 △5.8  Japan 89 26,865 68 26,430 △21 △23.6 △435 △1.6  North America 350 12,243 330 13,905 △20 △5.7 1,662 13.6  Europe 254 11,438 200 9,826 △54 △21.3 △1,612 △14.1  Asia 307 11,012 289 7,959 △18 △5.9 △3,053 △27.7  Other Regions 157 6,465 134 5,975 △23 △14.6 △490 △7.6 Other Adjustments ― △9,888 ― ― ― ― 9,888 △100.0Notes:1 The geographical breakdown of unit sales and net sales is based on the location of external customers.2 Unit sales are the total of sales of completed products of Honda and its consolidated subsidiaries, and sales of parts for local production at Hondas affiliates accounted for under the equity method.3 Of the net sales of Honda-brand motorcycle products that are manufactured and sold by overseas affiliates accounted for under the equity method, those with respect to which parts for manufacturing were not supplied from Honda or its subsidiaries are not included in net sales and other operating revenue, in conformity with U.S. generally accepted accounting principles. Accordingly, these unit sales are not included in the financial results.4 Certain sales of automobiles that are financed with residual value type auto loans by our Japanese 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.5 Net sales of Power product & Other businesses include revenue from sales of power products and relevant parts, leisure businesses and trading businesses.6 For further information on Other Adjustments, refer to FY2012 3rd Quarter Financial Results “[8] Other 1. Out-of-period adjustments”.
  • 29. January 31, 2012 Honda Motor Co., Ltd. CONSOLIDATED FINANCIAL SUMMARY 3 FOR THE FISCAL NINE MONTHS ENDED DECEMBER 31, 2011Unaudited Consolidated Balance SheetsDivided into Non-financial Services Businesses and Finance Subsidiaries Yen (millions) Mar. 31, Dec. 31, 2011 2011Assets < Non-financial services businesses > Current Assets: 3,587,110 3,198,764 Cash and cash equivalents 1,252,362 1,121,885 Trade accounts and notes receivable, net 459,120 356,761 Inventories 899,813 882,931 Other current assets 975,815 837,187 Investments and advances 866,809 813,064 Property, plant and equipment, net 1,924,014 1,833,422 Other assets 388,474 425,115 Total assets 6,766,407 6,270,365 < Finance Subsidiaries > Cash and cash equivalents 26,662 20,834 Finance subsidiaries―short-term receivables, net 1,136,791 1,051,818 Finance subsidiaries―long-term receivables, net 2,356,090 2,250,214 Net property on operating leases 1,352,863 1,353,116 Other assets 699,746 614,566 Total assets 5,572,152 5,290,548 Reconciling Items ( 767,685) ( 678,617)Total assets 11,570,874 10,882,296Liabilities and Equity < Non-financial services businesses > Current liabilities: 1,678,655 1,546,542 Short-term debt 212,428 198,402 Current portion of long-term debt 45,301 104,910 Trade payables 727,607 685,718 Accrued expenses 463,624 377,197 Other current liabilities 229,695 180,315 Long-term debt, excluding current portion 142,108 103,428 Other liabilities 880,778 831,183 Total liabilities 2,701,541 2,481,153 < Finance Subsidiaries > Short-term debt 1,369,485 1,239,340 Current portion of long-term debt 928,944 863,833 Accrued expenses 98,604 84,491 Long-term debt, excluding current portion 1,909,549 1,757,266 Other liabilities 536,161 568,442 Total liabilities 4,842,743 4,513,372 Reconciling Items ( 556,322) ( 471,397) Total liabilities 6,987,962 6,523,128 Honda Motor Co., Ltd. shareholders equity 4,449,975 4,245,383 Noncontrolling interests 132,937 113,785 Total equity 4,582,912 4,359,168Total liabilities and equity 11,570,874 10,882,296
  • 30. January 31, 2012 Honda Motor Co., Ltd. CONSOLIDATED FINANCIAL SUMMARY 4 FOR THE FISCAL NINE MONTHS ENDED DECEMBER 31, 2011Unaudited Consolidated Statements of Cash FlowsDivided into Non-financial Services Businesses and Finance Subsidiaries Yen (millions) Non-financial Finance ReconcilingFor the nine months ended December 31, 2010 services Consolidated subsidiaries Items businessesCash flows from operating activities: Net Income 423,413 87,586 ─ 510,999 Adjustments to reconcile net income000 to net cash provided by operating activities: Depreciation 261,000 161,287 ─ 422,287 Deferred income taxes 41,234 75,931 ─ 117,165 Equity in income of affiliates ( 114,742) ─ ─ ( 114,742) Dividends from affiliates 44,156 ─ ─ 44,156 Damaged and impairment loss on long-lived assets 534 ─ ─ 534 Loss (gain) on derivative instruments, net ( 14,453) ( 12,191) ─ ( 26,644) Decrease (increase) in trade accounts and 67,766 6,388 ( 438) 73,716 notes receivable Decrease (increase) in inventories000 ( 93,519) ─ ─ ( 93,519) Increase (decrease) in trade accounts and ( 59,020) ─ ( 2,320) ( 61,340) notes payable Other, net ( 86,867) ( 23,523) 3,408 ( 106,982) Net cash provided by operating activities000 469,502 295,478 650 765,630Cash flows from investing activities:* Decrease (increase) in investments and advances ( 96,029) 5,595 11,253 ( 79,181) Capital expenditures ( 202,603) ( 1,590) ─ ( 204,193) Proceeds from sales of property, plant and equipment 17,890 421 ─ 18,311 Decrease (increase) in finance subsidiaries-receivables ─ ( 65,266) 3,081 ( 62,185) Purchase of operating lease assets ─ ( 586,391) ─ ( 586,391) Proceeds from sales of operating lease assets ─ 298,308 ─ 298,308 Net cash used in investing activities ( 280,742) ( 348,923) 14,334 ( 615,331)Cash flows from financing activities:* Increase (decrease) in short-term debt, net 28,153 114,784 ( 15,597) 127,340* Proceeds from long-term debt 12,011 571,272 ( 3,439) 579,844* Repayment of long-term debt ( 18,659) ( 597,834) 4,052 ( 612,441) Dividends paid ( 65,136) ─ ─ ( 65,136) Dividends paid to noncontrolling interests ( 15,641) ─ ─ ( 15,641) Sales (purchases) of treasury stock, net ( 34,794) ─ ─ ( 34,794) Net cash provided ( 94,066) 88,222 ( 14,984) ( 20,828) by (used in) financing activitiesEffect of exchange rate changes ( 93,781) 3,077 ─ ( 90,704)on cash and cash equivalentsNet change in cash and cash equivalents 913 37,854 ─ 38,767Cash and cash equivalents at beginning of period 1,100,695 19,207 ─ 1,119,902Cash and cash equivalents at end of period 1,101,608 57,061 ─ 1,158,669
  • 31. January 31, 2012 Honda Motor Co., Ltd. CONSOLIDATED FINANCIAL SUMMARY 4 FOR THE FISCAL NINE MONTHS ENDED DECEMBER 31, 2011Unaudited Consolidated Statements of Cash FlowsDivided into Non-financial Services Businesses and Finance Subsidiaries Yen (millions) Non-financial Finance ReconcilingFor the nine months ended December 31, 2011 services Consolidated subsidiaries Items businessesCash flows from operating activities: Net Income 51,847 92,813 ─ 144,660 Adjustments to reconcile net income to net cash provided by operating activities: Depreciation 227,337 155,165 ─ 382,502 Deferred income taxes ( 26,399) 55,850 ─ 29,451 Equity in income of affiliates ( 67,111) ─ ─ ( 67,111) Dividends from affiliates 47,261 ─ ─ 47,261 Damaged and impairment loss on long-lived assets 7,654 ─ ─ 7,654 Loss (gain) on derivative instruments, net ( 8,994) ( 18,386) ─ ( 27,380) Decrease (increase) in trade accounts and 58,771 65,321 ( 380) 123,712 notes receivable Decrease (increase) in inventories ( 45,264) ─ ─ ( 45,264) Increase (decrease) in trade accounts and 11,365 ─ 2,658 14,023 notes payable Other, net ( 83,223) ( 5,604) ( 12,720) ( 101,547) Net cash provided by operating activities 173,244 345,159 ( 10,442) 507,961Cash flows from investing activities:* Decrease (increase) in investments and advances 61,998 ( 6,320) ( 32,380) 23,298 Capital expenditures ( 238,349) ( 2,173) ─ ( 240,522) Proceeds from sales of property, plant and equipment 21,791 130 ─ 21,921 Proceeds from insurance recoveries for damaged property, 4,944 ─ ─ 4,944 plant and equipment Decrease (increase) in finance subsidiaries-receivables ─ ( 39,652) ( 1,696) ( 41,348) Purchase of operating lease assets ─ ( 498,380) ─ ( 498,380) Proceeds from sales of operating lease assets ─ 272,504 ─ 272,504 Net cash used in investing activities ( 149,616) ( 273,891) ( 34,076) ( 457,583)Cash flows from financing activities:* Increase (decrease) in short-term debt, net 6,763 ( 41,176) 39,421 5,008* Proceeds from long-term debt 87,675 627,420 ( 7,359) 707,736* Repayment of long-term debt ( 61,793) ( 662,253) 12,456 ( 711,590) Dividends paid ( 81,103) ─ ─ ( 81,103) Dividends paid to noncontrolling interests ( 15,060) ─ ─ ( 15,060) Sales (purchases) of treasury stock, net ( 5) ─ ─ ( 5) Net cash used in financing activities ( 63,523) ( 76,009) 44,518 ( 95,014)Effect of exchange rate changes ( 90,582) ( 1,087) ─ ( 91,669)on cash and cash equivalentsNet change in cash and cash equivalents ( 130,477) ( 5,828) ─ ( 136,305)Cash and cash equivalents at beginning of period 1,252,362 26,662 ─ 1,279,024Cash and cash equivalents at end of period 1,121,885 20,834 ─ 1,142,719Notes: 1 Non-financial services businesses lend to finance subsidiaries. These cash flows are included in the decrease (increase) in investments and advances, increase (decrease) in short-term debt, proceeds from long-term debt, and repayment of long-term debt (marked by *). The amount of the loans to finance subsidiaries is a JPY 11,253 million increase for the fiscal nine months ended December 31, 2010, and a JPY 32,380 million decrease for the fiscal nine months ended December 31, 2011, respectively. 2 Decrease (increase) in trade accounts and notes receivable for finance subsidiaries is due to the reclassification of finance subsidiaries-receivables which relate to sales of inventory in the unaudited consolidated statements of cash flows presented above.