No.1-7628
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 6-K
REPORT OF FOREIGN PRIVATE ISSUER
PURSUANT TO RULE 13a-16 OR 15d-16
UNDER THE SECURITIES EXCHANGE ACT OF 1934
FOR THE MONTH OF July 2010
COMMISSION FILE NUMBER: 1-07628
HONDA GIKEN KOGYO KABUSHIKI KAISHA
(Name of registrant)
HONDA MOTOR CO., LTD.
(Translation of registrant’s name into English)
1-1, Minami-Aoyama 2-chome, Minato-ku, Tokyo 107-8556, Japan
(Address of principal executive offices)
Indicate by check mark whether the registrant files or will file annual reports under cover of Form 20-F or Form 40-F:
Form 20-F x Form 40-F ¨
Indicate by check mark if the registrant is submitting the Form 6-K in paper as permitted by Regulation S-T Rule 101(b)(1): ¨
Indicate by check mark if the registrant is submitting the Form 6-K in paper as permitted by Regulation S-T Rule 101(b)(7): ¨
Exhibit 1:
Exhibit 2:
Exhibit 3:
Exhibit 4:
Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.
| HONDA GIKEN KOGYO KABUSHIKI KAISHA |
| ( HONDA MOTOR CO., LTD. ) |
| /s/ Yoichi Hojo |
| Yoichi Hojo |
| Director |
| Chief Operating Officer for |
| Business Management Operations |
| Honda Motor Co., Ltd. |
Date: August 3, 2010
HONDA MOTOR CO., LTD. REPORTS
CONSOLIDATED FINANCIAL RESULTS
FOR THE FISCAL FIRST QUARTER ENDED JUNE 30, 2010
Tokyo, July 30, 2010 — Honda Motor Co., Ltd. today announced its consolidated financial results for the fiscal first quarter ended June 30, 2010.
First Quarter Results
Honda’s consolidated net income attributable to Honda Motor Co., Ltd. for the fiscal first quarter ended June 30, 2010 totaled JPY 272.4 billion (USD 3,080 million), an increase of JPY 264.9 billion from the same period in 2009. Basic net income attributable to Honda Motor Co., Ltd. per common share for the quarter amounted to JPY 150.27 (USD 1.70), an increase of JPY 146.10 from JPY 4.17 for the corresponding period last year. One Honda American Depository Share represents one common share.
Consolidated net sales and other operating revenue (herein referred to as “revenue”) for the quarter amounted to JPY 2,361.4 billion (USD 26,689 million), an increase of 17.9% from the same period in 2009, due primarily to increased revenue in the automobile business, despite unfavorable currency translation effects. Honda estimates that if calculated at the same exchange rate as the corresponding period in 2009, revenue for the quarter would have increased by approximately 19.5%.
Consolidated operating income for the quarter totaled JPY 234.4 billion (USD 2,650 million), an increase of 831.7%, due primarily to the positive impact of increased revenue and model mix, reduction in vehicle costs as a result of increased production and continuing cost reduction efforts, despite increased R&D expenses and the unfavorable impact of currency effects.
Consolidated income before income taxes and equity in income of affiliates for the quarter totaled JPY 256.1 billion (USD 2,895 million), an increase of JPY 250.6 billion from the same period in 2009.
Equity in income of affiliates amounted to JPY 35.6 billion (USD 403 million) for the quarter, an increase of 150.6% from the corresponding period last year.
- 1 -
Business Segment
With respect to Honda’s sales for the fiscal first quarter by business segment, motorcycle unit sales totaled 2,887 thousand units, an increase of 28.2% from the same period last year. Unit sales in Japan totaled 45 thousand units, which is the same level compared to the same period last year. Outside of Japan, total unit sales was 2,842 thousand units, an increase of 28.8% from the same period in 2009*, due mainly to increased unit sales in Asia, especially in India, Indonesia and Thailand, and Other regions including South America. Revenue from sales to external customers increased 24.9%, to JPY 320.2 billion (USD 3,619 million) from the same period last year, due mainly to increased unit sales and favorable currency translation effects. Operating income increased 455.0% to JPY 31.3 billion (USD 354 million) from the same period last year, due primarily to the positive impact of increased sales volume and model mix and reduction in vehicle costs as a result of increased production.
| * | 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. Sales of such products amounted to approximately 1,780 thousand units for the period. |
Honda’s automobile unit sales totaled 899 thousand units, an increase of 17.4% from the same period last year. In Japan, unit sales amounted to 145 thousand units, an increase of 13.3% from the same period last year, led by favorable sales of the Step WGN, CR-Z and FIT models. Unit sales outside of Japan increased 18.2% to 754 thousand units from the corresponding period last year, due mainly to increased unit sales in Asia and North America, more than offsetting decreased unit sales in Europe. Revenue from sales to external customers increased 19.0% to JPY 1,813.0 billion (USD 20,491 million) from the same period in 2009, due mainly to increased unit sales despite the unfavorable currency translation effects. Operating income was JPY 148.9 billion (USD 1,683 million), an increase of JPY 170.3 billion from the same period last year, due primarily to the positive impact of increased sales volume and model mix, reduction in vehicle costs as a result of increased production and continuing cost reduction efforts, despite increased SG&A expenses and R&D expenses and the unfavorable impact of currency effects.
| * | 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. |
- 2 -
Revenue from customers in the financial services business decreased 4.1% to JPY 149.4 billion (USD 1,690 million) from the same period in 2009, due mainly to unfavorable currency translation effects. Operating income increased 16.6% to JPY 54.6 billion (USD 618 million) from the same period in 2009, due primarily to the decreased allowance for losses on credit and lease residual values, despite the unfavorable impact of currency effects.
Honda’s power product unit sales totaled 1,440 thousand units, an increase of 22.9% from the same period in 2009. In Japan, unit sales totaled 99 thousand units, an increase of 39.4% from the same period last year. Unit sales outside of Japan totaled 1,341 thousand units, an increase of 21.8% from the corresponding period last year, due to an increase of unit sales in all the regions. Revenue from sales to external customers in power product and other businesses increased by 18.3% to JPY 78.6 billion (USD 889 million) from the same period last year, due mainly to increased unit sales of power products despite the unfavorable currency translation effects. Honda reported operating loss of JPY 0.4 billion (USD 5 million), an improvement of JPY 5.4 billion from the same period last year, primarily due to the positive impact of increased sales volume and model mix of power products.
- 3 -
Geographical Information
With respect to Honda’s sales for the fiscal first quarter by geographic area, in Japan, revenue from domestic and exports sales amounted to JPY 926.0 billion (USD 10,467 million), up 25.7% compared to the same period last year, due mainly to increased revenue in automobile business. Operating income was JPY 53.2 billion (USD 602 million), an increase of JPY 57.9 billion from the same period last year, due primarily to the positive impact of increased revenue and model mix and reduction in vehicle costs as a result of increased production, despite increased SG&A expenses and R&D expenses and the unfavorable impact of currency effects.
In North America, revenue increased by 16.6% to JPY 1,137.8 billion (USD 12,860 million) from the same period in 2009 due mainly to increased revenue in automobile business despite the unfavorable impact of the currency translation effects. Operating income totaled JPY 110.7 billion (USD 1,252 million), an increase of JPY 103.6 billion from the corresponding period in 2009, due primarily to the positive impact of increased revenue and model mix and cost reduction efforts.
In Europe, revenue decreased by 13.0% to JPY 189.8 billion (USD 2,146 million), from the same period in 2009, due primarily to decreased revenue in automobile business and the unfavorable impact of currency translation effects. Operating income increased by 131.7% to JPY 4.0 billion (USD 46 million) from the corresponding period in 2009.
In Asia, revenue increased by 46.3% to JPY 470.2 billion (USD 5,315 million) from the same period last year due mainly to increased revenue in motorcycle business and automobile business. Operating income increased by 118.3% to JPY 44.4 billion (USD 502 million) from the corresponding period in 2009, due mainly to the positive impact of increased revenue and model mix and continuing cost reduction efforts, more than offsetting increased SG&A expenses.
In Asia, in addition to subsidiaries, many affiliates accounted for under the equity method manufacture and sell Honda-brand products. Operating income does not include income from these affiliates. Income from these affiliates is recorded as equity in income of affiliates and reflected in net income. Accounting terms of some of the affiliates differ from the Company’s.
- 4 -
In Other regions including South America, the Middle East, Africa and Oceania, revenue increased by 34.7% to JPY 236.3 billion (USD 2,671 million) compared to the same period last year, due mainly to increased revenue in motorcycle business and automobile business and the favorable impact of currency translation effects. Operating income was JPY 20.2 billion (USD 229 million), an increase of JPY 20.7 billion from the same period last year.
United States dollar amounts have been translated from yen solely for the convenience of the reader at the rate of JPY 88.48=U.S.$1, the mean of the telegraphic transfer selling exchange rate and the telegraphic transfer buying exchange rate prevailing on the Tokyo foreign exchange market on June 30, 2010.
- 5 -
Consolidated Statements of Balance Sheets for the Quarter Ended June 30, 2010
From March 31, 2010, total assets decreased JPY 128.8 billion (USD 1,456 million), to JPY 11,500.2 billion (USD 129,976 million) at June 30, 2010, mainly due to the currency translation effects, which more than offset increased finance subsidiaries-receivables primarily due to the consolidation of former qualifying special purpose entities (QSPEs) utilized in legacy off-balance sheet securitizations until the year ended March 31, 2010. From March 31, 2010, total liabilities decreased by JPY 210.9 billion (USD 2,384 million), to JPY 6,961.7 billion (USD 78,681 million) at June 30, 2010, mainly due to the currency translation effects, which more than offset increased current liabilities primarily due to the consolidation of former qualifying special purpose entities (QSPEs) utilized in legacy off-balance sheet securitizations until the year ended March 31, 2010. From March 31, 2010, total equity increased JPY 82.1 billion (USD 928 million), to JPY 4,538.5 billion (USD 51,294 million).
Consolidated Statements of Cash Flows for the Fiscal First Quarter
Consolidated cash and cash equivalents at June 30, 2010 increased by JPY 84.2 billion (USD 952 million) from March 31, 2010, to JPY 1,204.1 billion (USD 13,609 million). The reasons for the increases or decreases for each cash flow activity compared with the previous fiscal year are as follows.
Cash flows from operating activities
Net cash provided by operating activities amounted to JPY 337.9 billion (USD 3,820 million) of cash inflows for the fiscal three months ended June 30, 2010. Cash inflows from operating activities decreased by JPY 68.1 billion (USD 771 million) compared with the corresponding period in 2009, due mainly to increased payments for parts and raw materials primarily due to an increase in automobile production, which was partially offset by an increase in cash received from customers, primarily due to increased unit sales in the automobile business.
- 6 -
Cash flows from investing activities
Net cash used in investing activities amounted to JPY 176.2 billion (USD 1,992 million) of cash outflows. Cash outflows from investing activities decreased by JPY 29.3 billion (USD 332 million) compared with the corresponding period in 2009, due mainly to an increase in collections of finance subsidiaries-receivables, an increase in proceeds from sales of operating lease assets and a decrease in acquisitions of capital expenditures, which was partially offset by an increase in acquisitions of finance subsidiaries-receivables.
Cash flows from financing activities
Net cash used in financing activities amounted to JPY 34.5 billion (USD 391 million) of cash outflows. Cash outflows from financing activities decreased by JPY 52.1 billion (USD 589 million) compared with the corresponding period in 2009, due mainly to an increase in short-term debt, which was partially offset by repayments of long-term debts, purchases of the Company’s own shares and an increase in dividends paid.
- 7 -
Forecasts for the Fiscal Year Ending March 31, 2011
In regard to the forecasts of the financial results for the fiscal first half year ending September 30, 2010 and the fiscal year ending March 31, 2011, Honda projects consolidated results to be as shown below:
The forecasts are based on the assumption that the average exchange rates for the Japanese yen to the U.S. dollar and the Euro will be JPY 89 and JPY 114, respectively, for the first half of the year ending March 31, 2011, and JPY 87 and JPY 112, respectively, for the full year ending March 31, 2011.
Projected unit sales for the full year ending March 31, 2011 are shown below.
| Unit (thousands) | Changes from FY2010 (thousands) | |||
| Motorcycle business |
10,820 | +1,181 | ||
| Automobile business |
3,640 | +248 | ||
| Power product and Other businesses |
5,545 | +801 |
FY2011 Forecasts for Consolidated Results
First half ending September 30, 2010
| Yen (billions) | Changes from FY 2010 | ||||
| Net sales and other operating revenue |
4,600 | +13.3 | % | ||
| Operating income |
330 | +263.8 | % | ||
| Income before income taxes and equity in income of affiliates |
360 | +402.8 | % | ||
| Net income attributable to Honda Motor Co., Ltd. |
350 | +468.2 | % | ||
| Yen | |||||
| Basic net income attributable to Honda Motor Co., Ltd. per common share |
193.25 | ||||
- 8 -
Fiscal year ending March 31, 2011
| Yen (billions) | Changes from FY 2010 | ||||
| Net sales and other operating revenue |
9,100 | +6.1 | % | ||
| Operating income |
450 | +23.7 | % | ||
| Income before income taxes and equity in income of affiliates |
470 | +39.8 | % | ||
| Net income attributable to Honda Motor Co., Ltd. |
455 | +69.5 | % | ||
| Yen | |||||
| Basic net income attributable to Honda Motor Co., Ltd. per common share |
251.23 | ||||
The reasons for the increases or decreases for forecasts of the operating income, and income before income taxes and equity in income of affiliates for the fiscal year ending March 31, 2011 from the corresponding period last year are as follows.
| Yen (billions) | ||
| Revenue, model mix, etc., excluding currency effect |
280.9 | |
| Cost reduction, the effect of raw material cost fluctuations, etc. |
48.0 | |
| SG&A expenses, excluding currency effect |
- 81.0 | |
| R&D expenses |
- 36.7 | |
| Currency effect |
- 125.0 | |
| Operating income compared with fiscal year 2010 |
86.2 | |
| Fair value of derivative instruments |
- 12.0 | |
| Others |
59.5 | |
| Income before income taxes and equity in income of affiliates compared with fiscal year 2010 |
133.8 | |
- 9 -
Dividend per Share of Common Stock
The Board of Directors of Honda Motor Co., Ltd., at its meeting held on July 30, 2010, resolved to make the quarterly dividend JPY 12 per share of common stock, the record date of which is June 30, 2010. The total expected annual dividend per share of common stock for the fiscal year ending March 31, 2011, is JPY 48 per share.
This announcement contains “forward-looking statements” as defined in Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended. Such statements are based on management’s 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 in these forward-looking statements as a result of numerous factors, including general economic conditions in Honda’s principal markets and foreign exchange 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 income have been classified in accordance with a method that Honda considers reasonable.
- 10 -
Others
1. Changes in significant subsidiaries for the three months ended June 30, 2010 (i.e. changes in specific subsidiaries that caused a change in the scope of consolidated financial statements)
None
2. Accounting policies specifically applied for quarterly consolidated financial statements
(a) Income taxes
Honda computes interim income tax expense (benefit) by multiplying reasonably estimated annual effective tax rate, which includes the effects of deferred taxes, by year-to-date income before income taxes and equity in income of affiliates for the fiscal first quarter ended June 30, 2010. If a reliable estimate cannot be made, Honda utilizes the actual year-to-date effective tax rate.
3. Changes in accounting procedures for consolidated quarterly financial results
(a) Transfers of Financial Assets, and Consolidation of Variable Interest Entities
Honda adopted Accounting Standards Update (ASU) 2009-16 “Accounting for Transfers of Financial Assets”, and ASU 2009-17 “Improvements to Financial Reporting by Enterprises Involved with Variable Interest Entities”, effective April 1, 2010. These standards amend the FASB Accounting Standards Codification (ASC) 860 “Transfers and Servicing”, and ASC 810 “Consolidation”. ASU 2009-16 removes the concept of a qualifying special purpose entity (QSPE) and removes the exception from applying consolidation accounting standards to QSPEs. ASU 2009-17 requires reporting entities to evaluate former QSPEs for consolidation, changes the approach to determining a variable interest entity’s primary beneficiary from a mainly quantitative assessment to an exclusively qualitative assessment designed to identify a controlling financial interest, and increases the frequency of required reassessments to determine whether a company is the primary beneficiary of a variable interest entity.
Upon the adoption of these standards, former 10 QSPEs treated as legacy off-balance sheet prior to the year ended March 31, 2010 were consolidated by the Company as of April 1, 2010. As a result, previously derecognized assets held by former QSPEs including finance subsidiaries receivables of JPY 282,353 million and their related secured debt of JPY 274,329 million were included in the Company’s consolidated balance sheet as of April 1, 2010. The assets and liabilities associated with former legacy off-balance sheet securitizations including retained interests in securitizations and servicing assets were removed from the Company’s consolidated balance sheet from April 1, 2010. The cumulative effect adjustment upon the adoption of these standards increased the Company’s beginning retained earnings for the three months ended June 30, 2010 by JPY 1,432 million, net of tax effect.
- 11 -
Consolidated Financial Summary
For the three months ended June 30, 2009 and 2010
Financial Highlights
| Yen (millions) | ||||
| Three months ended Jun. 30, 2009 unaudited |
Three months ended Jun. 30, 2010 unaudited | |||
| Net sales and other operating revenue |
2,002,212 | 2,361,463 | ||
| Operating income |
25,164 | 234,443 | ||
| Income before income taxes and equity in income of affiliates |
5,458 | 256,149 | ||
| Net income attributable to Honda Motor Co., Ltd. |
7,560 | 272,487 | ||
| Yen | ||||
| Basic net income attributable to Honda Motor Co., Ltd. per common share |
4.17 | 150.27 | ||
| U.S. Dollar (millions) | ||||
| Three months ended Jun. 30, 2010 unaudited | ||||
| Net sales and other operating revenue |
26,689 | |||
| Operating income |
2,650 | |||
| Income before income taxes and equity in income of affiliates |
2,895 | |||
| Net income attributable to Honda Motor Co., Ltd. |
3,080 | |||
| U.S. Dollar | ||||
| Basic net income attributable to Honda Motor Co., Ltd. per common share |
1.70 | |||
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[1] Consolidated Balance Sheets
| Yen (millions) | ||||
| Jun. 30, 2010 unaudited |
March 31, 2010 audited | |||
| Assets |
||||
| Current assets: |
||||
| Cash and cash equivalents |
1,204,122 | 1,119,902 | ||
| Trade accounts and notes receivable |
813,415 | 883,476 | ||
| Finance subsidiaries-receivables, net |
1,149,190 | 1,100,158 | ||
| Inventories |
894,536 | 935,629 | ||
| Deferred income taxes |
152,603 | 176,604 | ||
| Other current assets |
349,289 | 397,955 | ||
| Total current assets |
4,563,155 | 4,613,724 | ||
| Finance subsidiaries-receivables, net |
2,362,362 | 2,361,335 | ||
| Investments and advances: |
||||
| Investments in and advances to affiliates |
482,890 | 457,834 | ||
| Other, including marketable equity securities |
176,856 | 184,847 | ||
| Total investments and advances |
659,746 | 642,681 | ||
| Property on operating leases: |
||||
| Vehicles |
1,624,208 | 1,651,672 | ||
| Less accumulated depreciation |
318,651 | 343,525 | ||
| Net property on operating leases |
1,305,557 | 1,308,147 | ||
| Property, plant and equipment, at cost: |
||||
| Land |
485,438 | 489,769 | ||
| Buildings |
1,485,072 | 1,509,821 | ||
| Machinery and equipment |
3,180,515 | 3,257,455 | ||
| Construction in progress |
141,909 | 143,862 | ||
| 5,292,934 | 5,400,907 | |||
| Less accumulated depreciation and amortization |
3,300,540 | 3,314,244 | ||
| Net property, plant and equipment |
1,992,394 | 2,086,663 | ||
| Other assets |
617,040 | 616,565 | ||
| Total assets |
11,500,254 | 11,629,115 | ||
- 13 -
[1] Consolidated Balance Sheets – continued
| Yen (millions) | ||||||
| Jun. 30, 2010 unaudited |
March 31, 2010 audited |
|||||
| Liabilities and Equity |
||||||
| Current liabilities: |
||||||
| Short-term debt |
1,087,362 | 1,066,344 | ||||
| Current portion of long-term debt |
868,432 | 722,296 | ||||
| Trade payables: |
||||||
| Notes |
21,108 | 24,704 | ||||
| Accounts |
704,715 | 802,464 | ||||
| Accrued expenses |
468,729 | 542,521 | ||||
| Income taxes payable |
63,563 | 23,947 | ||||
| Other current liabilities |
246,852 | 236,854 | ||||
| Total current liabilities |
3,460,761 | 3,419,130 | ||||
| Long-term debt, excluding current portion |
2,196,106 | 2,313,035 | ||||
| Other liabilities |
1,304,851 | 1,440,520 | ||||
| Total liabilities |
6,961,718 | 7,172,685 | ||||
| Equity: |
||||||
| Honda Motor Co., Ltd. shareholders’ equity: |
||||||
| Common stock, authorized 7,086,000,000 shares; issued 1,834,828,430 shares |
86,067 | 86,067 | ||||
| Capital surplus |
172,529 | 172,529 | ||||
| Legal reserves |
45,410 | 45,463 | ||||
| Retained earnings |
5,556,670 | 5,304,473 | ||||
| Accumulated other comprehensive income (loss), net |
(1,366,249 | ) | (1,208,162 | ) | ||
| Treasury stock, at cost 20,225,694 shares on Mar. 31, 2010 and 23,726,330 shares in Jun. 30, 2010 |
(81,539 | ) | (71,730 | ) | ||
| Total Honda Motor Co., Ltd. shareholders’ equity |
4,412,888 | 4,328,640 | ||||
| Noncontrolling interest |
125,648 | 127,790 | ||||
| Total equity |
4,538,536 | 4,456,430 | ||||
| Commitments and contingent liabilities |
||||||
| Total liabilities and equity |
11,500,254 | 11,629,115 | ||||
- 14 -
[2] Consolidated Statements of Income
For the three months ended June 30, 2009 and 2010
| Yen (millions) | ||||||
| Three months ended Jun. 30, 2009 unaudited |
Three months ended Jun. 30, 2010 unaudited |
|||||
| Net sales and other operating revenue |
2,002,212 | 2,361,463 | ||||
| Operating costs and expenses: |
||||||
| Cost of sales |
1,553,824 | 1,684,136 | ||||
| Selling, general and administrative |
321,632 | 324,609 | ||||
| Research and development |
101,592 | 118,275 | ||||
| Operating income |
25,164 | 234,443 | ||||
| Other income (expenses): |
||||||
| Interest income |
4,828 | 5,060 | ||||
| Interest expense |
(3,811 | ) | (2,174 | ) | ||
| Other, net |
(20,723 | ) | 18,820 | |||
| Income before income taxes and equity in income of affiliates |
5,458 | 256,149 | ||||
| Income tax (benefit) expense: |
||||||
| Current |
13,178 | 12,500 | ||||
| Deferred |
(2,679 | ) | (1,089 | ) | ||
| Income before equity in income of affiliates (loss) |
(5,041 | ) | 244,738 | |||
| Equity in income of affiliates |
14,243 | 35,691 | ||||
| Net income |
9,202 | 280,429 | ||||
| Less: Net income attributable to noncontrolling interest |
(1,642 | ) | (7,942 | ) | ||
| Net income attributable to Honda Motor Co., Ltd. |
7,560 | 272,487 | ||||
| Yen | ||||||
| Basic net income attributable to Honda Motor Co., Ltd. per common share |
4.17 | 150.27 | ||||
- 15 -
[3] Consolidated Statements of Cash Flows
| Yen (millions) | ||||||
| Three months ended Jun. 30, 2009 unaudited |
Three months ended Jun. 30, 2010 unaudited |
|||||
| Cash flows from operating activities: |
||||||
| Net income |
9,202 | 280,429 | ||||
| Adjustments to reconcile net income to net cash provided by operating activities: |
||||||
| Depreciation excluding property on operating leases |
100,707 | 89,452 | ||||
| Depreciation of property on operating leases |
59,738 | 55,934 | ||||
| Deferred income taxes |
(2,679 | ) | (1,089 | ) | ||
| Equity in income of affiliates |
(14,243 | ) | (35,691 | ) | ||
| Dividends from affiliates |
38,796 | 10,752 | ||||
| Provision for credit and lease residual losses on finance subsidiaries-receivables |
11,406 | 1,830 | ||||
| Impairment loss excluding property on operating leases |
— | 419 | ||||
| Impairment loss on property on operating leases |
1,413 | — | ||||
| Loss (gain) on derivative instruments, net |
(16,141 | ) | (34,770 | ) | ||
| Decrease (increase) in assets: |
||||||
| Trade accounts and notes receivable |
86,531 | 32,764 | ||||
| Inventories |
196,338 | 1,483 | ||||
| Other current assets |
(1,760 | ) | 49,005 | |||
| Other assets |
3,828 | 2,694 | ||||
| Increase (decrease) in liabilities: |
||||||
| Trade accounts and notes payable |
(28,732 | ) | (52,478 | ) | ||
| Accrued expenses |
(60,694 | ) | (24,742 | ) | ||
| Income taxes payable |
(15,081 | ) | 41,686 | |||
| Other current liabilities |
76,052 | 21,592 | ||||
| Other liabilities |
(26,211 | ) | (82,129 | ) | ||
| Other, net |
(12,337 | ) | (19,188 | ) | ||
| Net cash provided by operating activities |
406,133 | 337,953 | ||||
| Cash flows from investing activities: |
||||||
| Increase in investments and advances |
(10,180 | ) | (3,378 | ) | ||
| Decrease in investments and advances |
162 | 4,244 | ||||
| Proceeds from sales of available-for-sale securities |
1,509 | 18 | ||||
| Payments for purchases of held-to-maturity securities |
— | (13,800 | ) | |||
| Proceeds from redemptions of held-to-maturity securities |
— | 11,510 | ||||
| Capital expenditures |
(128,946 | ) | (53,230 | ) | ||
| Proceeds from sales of property, plant and equipment |
5,135 | 4,886 | ||||
| Acquisitions of finance subsidiaries-receivables |
(316,417 | ) | (575,150 | ) | ||
| Collections of finance subsidiaries-receivables |
392,612 | 563,213 | ||||
| Sales (purchases) of finance subsidiaries-receivables, net |
(21,942 | ) | — | |||
| Purchase of operating lease assets |
(158,517 | ) | (227,094 | ) | ||
| Proceeds from sales of operating lease assets |
31,027 | 112,572 | ||||
| Net cash used in investing activities |
(205,557 | ) | (176,209 | ) | ||
- 16 -
[3] Consolidated Statements of Cash Flows – continued
| Yen (millions) | ||||||
| Three months ended Jun. 30, 2009 unaudited |
Three months ended Jun. 30, 2010 unaudited |
|||||
| Cash flows from financing activities: |
||||||
| Increase (decrease) in short-term debt, net |
(172,379 | ) | 80,349 | |||
| Proceeds from long-term debt |
456,431 | 165,203 | ||||
| Repayment of long-term debt |
(347,876 | ) | (240,834 | ) | ||
| Dividends paid |
(14,516 | ) | (21,775 | ) | ||
| Dividends paid to noncontrolling interests |
(8,366 | ) | (7,704 | ) | ||
| Payment for purchase of treasury stock, net |
(5 | ) | (9,809 | ) | ||
| Net cash provided by (used in) financing activities |
(86,711 | ) | (34,570 | ) | ||
| Effect of exchange rate changes on cash and cash equivalents |
10,239 | (42,954 | ) | |||
| Net change in cash and cash equivalents |
124,104 | 84,220 | ||||
| Cash and cash equivalents at beginning of year |
690,369 | 1,119,902 | ||||
| Cash and cash equivalents at end of period |
814,473 | 1,204,122 | ||||
- 17 -
[4] Assumptions for Going Concern
None
[5] Segment Information
Honda has four reportable segments: the Motorcycle business, the Automobile business, the Financial services business and the Power product and other businesses, which are based on Honda’s organizational structure and characteristics of products and services. Operating segments are defined as components of Honda’s about which separate financial information is available that is evaluated regularly by management in deciding how to allocate resources and in assessing performance. The accounting policies used for these reportable segments are consistent with the accounting policies used in Honda’s consolidated financial statements.
Principal products and services, and functions of each segment are as follows:
| Segment |
Principal products and services |
Functions | ||
| Motorcycle business |
Motorcycles, all-terrain vehicles (ATVs) and relevant parts | Research & Development, Manufacturing, Sales and related services | ||
| Automobile business |
Automobiles and relevant parts | Research & Development, Manufacturing Sales and related services | ||
| Financial services business |
Financial, insurance services | Retail loan and lease related to Honda products, and Others | ||
| Power product & Other businesses |
Power products and relevant parts, and others | Research & Development, Manufacturing Sales and related services, and Others | ||
1. Segment information based on products and services
As of and for the three months ended June 30, 2009
| Yen (millions) | |||||||||||||||||
| Motorcycle Business |
Automobile Business |
Financial Services Business |
Power Product & Other Businesses |
Segment Total |
Reconciling Items |
Consolidated | |||||||||||
| Net sales and other operating revenue: |
|||||||||||||||||
| External customers |
256,366 | 1,523,429 | 155,903 | 66,514 | 2,002,212 | — | 2,002,212 | ||||||||||
| Intersegment |
— | — | 3,367 | 6,714 | 10,081 | (10,081 | ) | — | |||||||||
| Total |
256,366 | 1,523,429 | 159,270 | 73,228 | 2,012,293 | (10,081 | ) | 2,002,212 | |||||||||
| Segment income (loss) |
5,643 | (21,376 | ) | 46,846 | (5,949 | ) | 25,164 | — | 25,164 | ||||||||
| Assets |
1,041,238 | 5,094,396 | 5,704,501 | 295,929 | 12,136,064 | (369,317 | ) | 11,766,747 | |||||||||
| Depreciation and amortization |
11,567 | 84,876 | 60,692 | 3,310 | 160,445 | — | 160,445 | ||||||||||
| Capital expenditures |
11,581 | 75,617 | 159,054 | 15,833 | 262,085 | — | 262,085 | ||||||||||
- 18 -
As of and for the three months ended June 30, 2010
| Yen (millions) | ||||||||||||||||
| Motorcycle Business |
Automobile Business |
Financial Services Business |
Power Product & Other Businesses |
Segment Total |
Reconciling Items |
Consolidated | ||||||||||
| Net sales and other operating revenue: |
||||||||||||||||
| External customers |
320,244 | 1,813,033 | 149,487 | 78,699 | 2,361,463 | — | 2,361,463 | |||||||||
| Intersegment |
— | 1,401 | 3,081 | 7,081 | 11,563 | (11,563 | ) | — | ||||||||
| Total |
320,244 | 1,814,434 | 152,568 | 85,780 | 2,373,026 | (11,563 | ) | 2,361,463 | ||||||||
| Segment income (loss) |
31,317 | 148,937 | 54,642 | (453 | ) | 234,443 | — | 234,443 | ||||||||
| Assets |
972,499 | 4,894,088 | 5,558,046 | 307,209 | 11,731,842 | (231,588 | ) | 11,500,254 | ||||||||
| Depreciation and amortization |
10,377 | 75,689 | 56,319 | 3,001 | 145,386 | — | 145,386 | |||||||||
| Capital expenditures |
7,728 | 36,671 | 227,362 | 1,185 | 272,946 | — | 272,946 | |||||||||
Explanatory 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 304,142 million as of June 30, 2009 and JPY 348,160 million as of June 30, 2010 respectively, which consist primarily of cash and cash equivalents and marketable securities held by the Company. Reconciling items also include elimination of intersegment transactions. |
| 3. | Depreciation and amortization of Financial Services Business include JPY 59,738 million for the three months ended June 30, 2009 and JPY 55,934 million for the three months ended June 30, 2010, respectively, of depreciation of property on operating leases. |
| 4. | Capital expenditure of Financial Services Business includes JPY 158,517 million for the three months ended June 30, 2009 and JPY 227,094 million for the three months ended June 30, 2010 respectively, of purchase of operating lease assets. |
- 19 -
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
As of and for the three months ended June 30, 2009
| Yen (millions) | |||||||||||||||||||
| Japan | North America |
Europe | Asia | Other Regions |
Total | Reconciling Items |
Consolidated | ||||||||||||
| Net sales and other operating revenue: |
|||||||||||||||||||
| External customers |
405,470 | 935,891 | 207,929 | 283,666 | 169,256 | 2,002,212 | — | 2,002,212 | |||||||||||
| Transfers between geographic areas |
331,094 | 39,901 | 10,264 | 37,731 | 6,186 | 425,176 | (425,176 | ) | — | ||||||||||
| Total |
736,564 | 975,792 | 218,193 | 321,397 | 175,442 | 2,427,388 | (425,176 | ) | 2,002,212 | ||||||||||
| Operating income (loss) |
(4,672 | ) | 7,183 | 1,757 | 20,351 | (479 | ) | 24,140 | 1,024 | 25,164 | |||||||||
| Assets |
3,055,213 | 6,413,214 | 734,516 | 1,019,962 | 498,615 | 11,721,520 | 45,227 | 11,766,747 | |||||||||||
| Long-lived assets |
1,156,684 | 1,928,723 | 120,517 | 261,981 | 136,297 | 3,604,202 | — | 3,604,202 | |||||||||||
As of and for the three months ended June 30, 2010
| Yen (millions) | |||||||||||||||||
| Japan | North America |
Europe | Asia | Other Regions |
Total | Reconciling Items |
Consolidated | ||||||||||
| Net sales and other operating revenue: |
|||||||||||||||||
| External customers |
469,359 | 1,085,434 | 171,951 | 408,700 | 226,019 | 2,361,463 | — | 2,361,463 | |||||||||
| Transfers between geographic areas |
456,736 | 52,408 | 17,885 | 61,538 | 10,307 | 598,874 | (598,874 | ) | — | ||||||||
| Total |
926,095 | 1,137,842 | 189,836 | 470,238 | 236,326 | 2,960,337 | (598,874 | ) | 2,361,463 | ||||||||
| Operating income (loss) |
53,267 | 110,787 | 4,071 | 44,435 | 20,252 | 232,812 | 1,631 | 234,443 | |||||||||
| Assets |
2,953,975 | 6,234,090 | 517,653 | 1,080,229 | 636,244 | 11,422,191 | 78,063 | 11,500,254 | |||||||||
| Long-lived assets |
1,088,535 | 1,811,576 | 98,397 | 230,184 | 155,709 | 3,384,401 | — | 3,384,401 | |||||||||
Explanatory 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, Australia |
| 2. | 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 304,142 million as of June 30, 2009 and JPY 348,160 million as of June 30, 2010 respectively, which consist primarily of cash and cash equivalents and marketable securities held by the Company. Reconciling items also include elimination of transactions between geographic areas. |
- 20 -
[6] Information Related to Honda Motor Co., Ltd. Shareholders’ Equity
As of and for the three months ended June 30, 2010
1. Information concerning dividends
| (a) | Dividends paid during the period |
Resolved at the General Meeting of Shareholders on June 24, 2010
| Total amount of dividends (million yen) |
21,775 | |
| Dividend per share of common stock (yen) |
12.00 | |
| Record date |
March 31, 2010 | |
| Effective date |
June 25, 2010 | |
| Resource for dividend |
Retained earnings |
| (b) | Dividends to be paid for the three months ended June 30, 2010, of which effective date is after June 30, 2010 |
Resolved by the Board of Directors at its meeting held on July 30, 2010
| Total amount of dividends (million yen) |
21,733 | |
| Dividend per share of common stock (yen) |
12.00 | |
| Record date |
June 30, 2010 | |
| Effective date |
August 26, 2010 | |
| Resource for dividend |
Retained earnings |
2. Significant changes in Honda Motor Co., Ltd. shareholders’ equity
None
[7] Income Taxes
The Company has decreased a portion of unrecognized tax benefits related to transfer pricing matters of overseas transactions between the Company and foreign affiliates for the quarter ended June 30, 2010. Due primarily to this accounting treatment, the effective tax rates of Honda for the quarter ended June 30, 2010 differs from Honda’s statutory income tax rate, which is 40% for the fiscal year ending March 31, 2011.
- 21 -
[8] Subsequent Events
1. The Board of Directors, at its meeting held on July 30, 2010, resolved that the Company will purchase its own shares pursuant to Article 156 of the Company Law, which applies pursuant to Article 165, Paragraph 3, of that law. The main purpose for the acquisition are enhancing its capital efficiency and enabling greater flexibility in its capital policies.
| (1) | Type of shares and maximum number of shares to be acquired: |
Shares of Common Stock 12,000 thousand shares
| (2) | Maximum amount of acquisition: |
JPY 25 billion
| (3) | Period of acquisition: |
Starting on August 3, 2010 and ending on September 15, 2010
2. The Board of Directors, at its meeting held on July 30, 2010, resolved that the Company will retire its treasury stock pursuant to Article 178 of the Company Law.
| (1) | Type of shares and number of shares to be retired: |
Shares of Common Stock 23,400 thousand shares
| (2) | Total number of the shares outstanding after retirement |
1,811,428 thousand shares
| (3) | Scheduled date of retirement |
August 6, 2010
- 22 -
[9] Unit Sales Breakdown
| Unit (thousands) | ||||||
| Three months ended Jun. 30, 2009 |
Three months ended Jun. 30, 2010 |
|||||
| MOTORCYCLES |
||||||
| Japan |
45 | 45 | ||||
| (45 | ) | (45 | ) | |||
| North America |
54 | 60 | ||||
| (31 | ) | (30 | ) | |||
| Europe |
62 | 64 | ||||
| (61 | ) | (63 | ) | |||
| Asia |
1,819 | 2,374 | ||||
| (1,819 | ) | (2,374 | ) | |||
| Other Regions |
272 | 344 | ||||
| (268 | ) | (340 | ) | |||
| Total |
2,252 | 2,887 | ||||
| (2,224 | ) | (2,852 | ) | |||
| AUTOMOBILES |
||||||
| Japan |
128 | 145 | ||||
| North America |
323 | 370 | ||||
| Europe |
69 | 53 | ||||
| Asia |
189 | 261 | ||||
| Other Regions |
57 | 70 | ||||
| Total |
766 | 899 | ||||
| POWER PRODUCTS |
||||||
| Japan |
71 | 99 | ||||
| North America |
564 | 662 | ||||
| Europe |
214 | 230 | ||||
| Asia |
248 | 344 | ||||
| Other Regions |
75 | 105 | ||||
| Total |
1,172 | 1,440 | ||||
Explanatory notes:
| 1. | The geographical breakdown of unit 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 Honda’s affiliates accounted for under the equity method. |
| 3. | Figures in brackets represent unit sales of motorcycles only. |
| 4. | 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. |
| 5. | Unit sales of Power product business include all trilateral trade transactions from the fiscal year ended March 31, 2010. This change was made and reported by retrospective application in the three months ended March 31, 2010. Honda adjusted unit sales of Power product business for the three months ended June 30, 2009 to conform to the presentation used for the three months ended June 30, 2010. |
- 23 -
[10] Net Sales Breakdown
For the three months ended June 30, 2009 and 2010
| Yen (millions) | ||||
| Three months ended Jun. 30, 2009 |
Three months ended Jun. 30, 2010 | |||
| MOTORCYCLE BUSINESS |
||||
| Japan |
17,659 | 18,449 | ||
| North America |
32,156 | 37,549 | ||
| Europe |
38,134 | 33,645 | ||
| Asia |
105,063 | 139,296 | ||
| Other Regions |
63,354 | 91,305 | ||
| Total |
256,366 | 320,244 | ||
| AUTOMOBILE BUSINESS |
||||
| Japan |
287,247 | 327,196 | ||
| North America |
737,391 | 886,894 | ||
| Europe |
152,746 | 120,689 | ||
| Asia |
230,930 | 325,643 | ||
| Other Regions |
115,115 | 152,611 | ||
| Total |
1,523,429 | 1,813,033 | ||
| FINANCIAL SERVICES BUSINESS |
||||
| Japan |
6,125 | 6,398 | ||
| North America |
143,429 | 135,550 | ||
| Europe |
2,706 | 2,434 | ||
| Asia |
1,129 | 995 | ||
| Other Regions |
2,514 | 4,110 | ||
| Total |
155,903 | 149,487 | ||
| POWER PRODUCT & OTHER BUSINESSES |
||||
| Japan |
21,251 | 22,755 | ||
| North America |
20,136 | 20,820 | ||
| Europe |
13,327 | 12,811 | ||
| Asia |
8,040 | 16,856 | ||
| Other Regions |
3,760 | 5,457 | ||
| Total |
66,514 | 78,699 | ||
| TOTAL |
||||
| Japan |
332,282 | 374,798 | ||
| North America |
933,112 | 1,080,813 | ||
| Europe |
206,913 | 169,579 | ||
| Asia |
345,162 | 482,790 | ||
| Other Regions |
184,743 | 253,483 | ||
| Total |
2,002,212 | 2,361,463 | ||
Explanatory notes:
| 1. | The geographical breakdown of net sales is based on the location of external customers. |
| 2. | Net sales of power product & other businesses include revenue from sales of power products and relevant parts, leisure businesses and trading businesses. |
- 24 -
July 30, 2010
Honda Motor Co., Ltd.
CONSOLIDATED FINANCIAL SUMMARY 1
FOR THE FISCAL FIRST QUARTER ENDED JUNE 30, 2010
| First Quarter Results | Fiscal Year Results and Forecasts | |||||||||||||||||||||||||
| Yen (billions), Unit (thousands) |
3 months ended June. 30, 2009 |
3 months ended June. 30, 2010 |
changeNote 1 | % | Year ended Mar. 31, 2010 |
Year ending Mar. 31, 2011 |
changeNote 1 | % | ||||||||||||||||||
| Net sales and other operating revenue |
2,002.2 | 2,361.4 | 359.2 | 17.9 | % | 8,579.1 | 9,100.0 | 520.8 | 6.1 | % | ||||||||||||||||
| Operating income <as a percentage of net sales> |
25.1 <1.3 |
%> |
234.4 <9.9 |
%> |
209.2 |
|
831.7 |
% |
363.7 <4.2 |
%> |
450.0 <4.9 |
%> |
86.2 |
|
23.7 |
% | ||||||||||
| Income before income taxes and equity in income of affiliates <as a percentage of net sales> |
5.4
<0.3 |
%> |
256.1
<10.8 |
%> |
250.6 | — | 336.1
<3.9 |
%> |
470.0
<5.2 |
%> |
133.8 | 39.8 | % | |||||||||||||
| Equity in income of affiliates <as a percentage of net sales> |
14.2 <0.7 |
%> |
35.6 <1.5 |
%> |
21.4 | 150.6 | % | 93.2 <1.1 |
%> |
98.0 <1.1 |
%> |
4.7 | 5.1 | % | ||||||||||||
| Net income attributable to Honda Motor Co., Ltd. <as a percentage of net sales> |
7.5
<0.4 |
%> |
272.4
<11.5 |
%> |
264.9 | — | 268.4
<3.1 |
%> |
455.0
<5.0 |
%> |
186.6 | 69.5 | % | |||||||||||||
| Change Factors in Operating income |
209.2 | 86.2 | ||||||||||||||||||||||||
| Change in revenue, model mix, etc., excluding currency effects |
175.1 | 280.9 | ||||||||||||||||||||||||
| Cost reduction, the effect of raw material cost fluctuations, etc. |
70.7 | 48.0 | ||||||||||||||||||||||||
| Change in SG&A expenses, excluding currency effects |
-5.4 | -81.0 | ||||||||||||||||||||||||
| Change in R&D expenses |
-16.6 | -36.7 | ||||||||||||||||||||||||
| Currency effects |
-14.4 | -125.0 | ||||||||||||||||||||||||
| Change in average rates |
(-9.3 | ) | (-92.0 | ) | ||||||||||||||||||||||
| Translation effects |
(-5.1 | ) | (-33.0 | ) | ||||||||||||||||||||||
| Change Factors in Other income/expenses |
41.4 | 47.5 | ||||||||||||||||||||||||
| Unrealized gains and losses related to derivative instruments |
18.6 | -12.0 | ||||||||||||||||||||||||
| Others |
22.7 | 59.5 | ||||||||||||||||||||||||
| Honda’s average rates |
USD= | JPY 97 | JPY 92 | JPY 93 | JPY 87 (1H : JPY 89, 2H : JPY 85) | |||||||||||||||||||||
| EUR= | JPY 132 | JPY 118 | JPY 130 | JPY 112 (1H : JPY 114, 2H : JPY 110) | ||||||||||||||||||||||
| Capital expendituresNote 2 |
98.8 | 42.8 | 329.7 | 380.0 | ||||||||||||||||||||||
| Depreciation and amortizationNote 2 |
92.9 | 82.5 | 366.6 | 350.0 | ||||||||||||||||||||||
| Research and development expenses |
101.5 | 118.2 | 463.3 | 500.0 | ||||||||||||||||||||||
| Unit SalesNote 3 |
||||||||||||||||||||||||||
| Motorcycle businessNote 4 |
2,252 | 2,887 | 635 | 28.2 | % | 9,639 | 10,820 | 1,181 | 12.3 | % | ||||||||||||||||
| Japan |
45 | 45 | 0 | 0.0 | % | 190 | 190 | 0 | 0.0 | % | ||||||||||||||||
| North America |
54 | 60 | 6 | 11.1 | % | 189 | 185 | -4 | -2.1 | % | ||||||||||||||||
| Europe |
62 | 64 | 2 | 3.2 | % | 199 | 190 | -9 | -4.5 | % | ||||||||||||||||
| Asia |
1,819 | 2,374 | 555 | 30.5 | % | 7,628 | 8,630 | 1,002 | 13.1 | % | ||||||||||||||||
| Other Regions |
272 | 344 | 72 | 26.5 | % | 1,433 | 1,625 | 192 | 13.4 | % | ||||||||||||||||
|
Automobile businessNote 5 |
766 | 899 | 133 | 17.4 | % | 3,392 | 3,640 | 248 | 7.3 | % | ||||||||||||||||
| Japan |
128 | 145 | 17 | 13.3 | % | 646 | 630 | -16 | -2.5 | % | ||||||||||||||||
| North America |
323 | 370 | 47 | 14.6 | % | 1,297 | 1,480 | 183 | 14.1 | % | ||||||||||||||||
| Europe |
69 | 53 | -16 | -23.2 | % | 249 | 230 | -19 | -7.6 | % | ||||||||||||||||
| Asia |
189 | 261 | 72 | 38.1 | % | 950 | 1,015 | 65 | 6.8 | % | ||||||||||||||||
| Other Regions |
57 | 70 | 13 | 22.8 | % | 250 | 285 | 35 | 14.0 | % | ||||||||||||||||
| Power product businessNote 6 |
1,172 | 1,440 | 268 | 22.9 | % | 4,744 | 5,545 | 801 | 16.9 | % | ||||||||||||||||
| Japan |
71 | 99 | 28 | 39.4 | % | 322 | 390 | 68 | 21.1 | % | ||||||||||||||||
| North America |
564 | 662 | 98 | 17.4 | % | 1,818 | 2,235 | 417 | 22.9 | % | ||||||||||||||||
| Europe |
214 | 230 | 16 | 7.5 | % | 1,066 | 1,105 | 39 | 3.7 | % | ||||||||||||||||
| Asia |
248 | 344 | 96 | 38.7 | % | 1,069 | 1,315 | 246 | 23.0 | % | ||||||||||||||||
| Other Regions |
75 | 105 | 30 | 40.0 | % | 469 | 500 | 31 | 6.6 | % | ||||||||||||||||
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 Honda’s 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 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. |
| 6 | Unit sales of Power product business include all trilateral trade transactions from the fiscal year ended March 31, 2010. This change was made and reported by retrospective application in the three months ended March 31, 2010. Honda adjusted unit sales of Power product business for the three months ended June 30, 2009 to conform to the presentation used for the three months ended June 30, 2010. |
This announcement contains “forward-looking statements” of Honda. Such statements are based on management’s 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 in these forward-looking statements as a result of numerous factors, including general economic conditions in Honda’s principal markets and foreign exchange 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 income have been classified in accordance with a method that Honda considers reasonable.
July 30, 2010
Honda Motor Co., Ltd.
CONSOLIDATED FINANCIAL SUMMARY 2
FOR THE FISCAL FIRST QUARTER ENDED JUNE 30, 2010
Unaudited Consolidated Balance Sheets
Divided into Non-financial Services Businesses and Finance Subsidiaries
| Yen (millions) | ||||||
| Jun. 30, 2010 | Mar. 31, 2010 | |||||
| Assets |
||||||
| <Non-financial services businesses> |
||||||
| Current Assets: |
3,448,322 | 3,535,061 | ||||
| Cash and cash equivalents |
1,179,027 | 1,100,695 | ||||
| Trade accounts and notes receivable, net |
471,418 | 525,768 | ||||
| Inventories |
894,536 | 935,629 | ||||
| Other current assets |
903,341 | 972,969 | ||||
| Investments and advances |
879,090 | 880,721 | ||||
| Property, plant and equipment, net |
1,973,409 | 2,068,119 | ||||
| Other assets |
440,784 | 446,218 | ||||
| Total assets |
6,741,605 | 6,930,119 | ||||
| <Finance Subsidiaries> |
||||||
| Cash and cash equivalents |
25,095 | 19,207 | ||||
| Finance subsidiaries—short-term receivables, net |
1,159,338 | 1,112,984 | ||||
| Finance subsidiaries—long-term receivables, net |
2,365,124 | 2,362,813 | ||||
| Net property on operating leases |
1,305,557 | 1,308,147 | ||||
| Other assets |
702,932 | 738,637 | ||||
| Total assets |
5,558,046 | 5,541,788 | ||||
| Reconciling Items |
(799,397 | ) | (842,792 | ) | ||
| Total assets |
11,500,254 | 11,629,115 | ||||
| Liabilities and Equity |
||||||
| <Non-financial services businesses> |
||||||
| Current liabilities: |
1,589,427 | 1,736,752 | ||||
| Short-term debt |
190,399 | 211,325 | ||||
| Current portion of long-term debt |
21,123 | 24,795 | ||||
| Trade payables |
731,540 | 833,326 | ||||
| Accrued expenses |
407,569 | 457,146 | ||||
| Other current liabilities |
238,796 | 210,160 | ||||
| Long-term debt, excluding current portion |
179,684 | 174,197 | ||||
| Other liabilities |
907,690 | 1,024,017 | ||||
| Total liabilities |
2,676,801 | 2,934,966 | ||||
| <Finance Subsidiaries> |
||||||
| Short-term debt |
1,407,020 | 1,385,032 | ||||
| Current portion of long-term debt |
858,001 | 703,434 | ||||
| Accrued expenses |
99,234 | 125,788 | ||||
| Long-term debt, excluding current portion |
2,025,865 | 2,155,243 | ||||
| Other liabilities |
481,998 | 488,970 | ||||
| Total liabilities |
4,872,118 | 4,858,467 | ||||
| Reconciling Items |
(587,201 | ) | (620,748 | ) | ||
| Total liabilities |
6,961,718 | 7,172,685 | ||||
| Honda Motor Co., Ltd. shareholders’ equity |
4,412,888 | 4,328,640 | ||||
| Noncontrolling interests |
125,648 | 127,790 | ||||
| Total equity |
4,538,536 | 4,456,430 | ||||
| Total liabilities and equity |
11,500,254 | 11,629,115 | ||||
July 30, 2010
Honda Motor Co., Ltd.
CONSOLIDATED FINANCIAL SUMMARY 3
FOR THE FISCAL FIRST QUARTER ENDED JUNE 30, 2010
Unaudited Consolidated Statements of Cash Flows
Divided into Non-financial Services Businesses and Finance Subsidiaries
| Yen (millions) | ||||||||||||
| For the three months ended June 30, 2009 |
Non-financial services businesses |
Finance subsidiaries |
Reconciling Items |
Consolidated | ||||||||
| Cash flows from operating activities: |
||||||||||||
| Net Income |
(12,438 | ) | 21,640 | — | 9,202 | |||||||
| Adjustments to reconcile net income to net cash provided by operating activities: |
||||||||||||
| Depreciation |
99,753 | 60,692 | — | 160,445 | ||||||||
| Deferred income taxes |
(7,081 | ) | 4,402 | — | (2,679 | ) | ||||||
| Equity in income of affiliates |
(14,243 | ) | — | — | (14,243 | ) | ||||||
| Dividends from affiliates |
38,796 | — | — | 38,796 | ||||||||
| Impairment loss on long-lived assets and goodwill |
— | 1,413 | — | 1,413 | ||||||||
| Loss (gain) on derivative instruments, net |
(10,896 | ) | (5,245 | ) | — | (16,141 | ) | |||||
| Decrease (increase) in trade accounts and notes receivable |
53,505 | 34,233 | (1,207 | ) | 86,531 | |||||||
| Decrease (increase) in inventories |
196,338 | — | — | 196,338 | ||||||||
| Increase (decrease) in trade accounts and notes payable |
(25,602 | ) | — | (3,130 | ) | (28,732 | ) | |||||
| Other, net |
(27,985 | ) | (1,430 | ) | 4,618 | (24,797 | ) | |||||
| Net cash provided by operating activities |
290,147 | 115,705 | 281 | 406,133 | ||||||||
| Cash flows from investing activities: |
||||||||||||
| * Decrease (increase) in investments and advances |
39,753 | — | (48,262 | ) | (8,509 | ) | ||||||
| Capital expenditures |
(128,409 | ) | (537 | ) | — | (128,946 | ) | |||||
| Proceeds from sales of property, plant and equipment |
5,007 | 128 | — | 5,135 | ||||||||
| Decrease (increase) in finance subsidiaries-receivables |
— | 49,050 | 5,203 | 54,253 | ||||||||
| Purchase of operating lease assets |
— | (158,517 | ) | — | (158,517 | ) | ||||||
| Proceeds from sales of operating lease assets |
— | 31,027 | — | 31,027 | ||||||||
| Net cash used in investing activities |
(83,649 | ) | (78,849 | ) | (43,059 | ) | (205,557 | ) | ||||
| Cash flows from financing activities: |
||||||||||||
| * Increase (decrease) in short-term debt, net |
(156,836 | ) | (58,477 | ) | 42,934 | (172,379 | ) | |||||
| * Proceeds from long-term debt |
92,766 | 365,119 | (1,454 | ) | 456,431 | |||||||
| * Repayment of long-term debt |
(4,351 | ) | (344,823 | ) | 1,298 | (347,876 | ) | |||||
| Dividends paid |
(14,516 | ) | — | — | (14,516 | ) | ||||||
| Dividends paid to noncontrolling interests |
(8,366 | ) | — | — | (8,366 | ) | ||||||
| Sales (purchases) of treasury stock, net |
(5 | ) | — | — | (5 | ) | ||||||
| Net cash provided by (used in) financing activities |
(91,308 | ) | (38,181 | ) | 42,778 | (86,711 | ) | |||||
| Effect of exchange rate changes on cash and cash equivalents |
10,310 | (71 | ) | — | 10,239 | |||||||
| Net change in cash and cash equivalents |
125,500 | (1,396 | ) | — | 124,104 | |||||||
| Cash and cash equivalents at beginning of period |
668,114 | 22,255 | — | 690,369 | ||||||||
| Cash and cash equivalents at end of period |
793,614 | 20,859 | — | 814,473 | ||||||||
July 30, 2010
Honda Motor Co., Ltd.
CONSOLIDATED FINANCIAL SUMMARY 3
FOR THE FISCAL FIRST QUARTER ENDED JUNE 30, 2010
Unaudited Consolidated Statements of Cash Flows
Divided into Non-financial Services Businesses and Finance Subsidiaries
| Yen (millions) | ||||||||||||
| For the three months ended June 30, 2010 |
Non-financial services businesses |
Finance subsidiaries |
Reconciling Items |
Consolidated | ||||||||
| Cash flows from operating activities: |
||||||||||||
| Net Income |
242,454 | 37,975 | — | 280,429 | ||||||||
| Adjustments to reconcile net income to net cash provided by operating activities: |
||||||||||||
| Depreciation |
89,067 | 56,319 | — | 145,386 | ||||||||
| Deferred income taxes |
(1,108 | ) | 19 | — | (1,089 | ) | ||||||
| Equity in income of affiliates |
(35,691 | ) | — | — | (35,691 | ) | ||||||
| Dividends from affiliates |
10,752 | — | — | 10,752 | ||||||||
| Impairment loss on long-lived assets and goodwill |
419 | — | — | 419 | ||||||||
| Loss (gain) on derivative instruments, net |
(21,761 | ) | (13,009 | ) | — | (34,770 | ) | |||||
| Decrease (increase) in trade accounts and notes receivable |
23,978 | 9,151 | (365 | ) | 32,764 | |||||||
| Decrease (increase) in inventories |
1,483 | — | — | 1,483 | ||||||||
| Increase (decrease) in trade accounts and notes payable |
(52,919 | ) | — | 441 | (52,478 | ) | ||||||
| Other, net |
(31,485 | ) | 21,242 | 991 | (9,252 | ) | ||||||
| Net cash provided by operating activities |
225,189 | 111,697 | 1,067 | 337,953 | ||||||||
| Cash flows from investing activities: |
||||||||||||
| * Decrease (increase) in investments and advances |
(14,012 | ) | 3,045 | 9,561 | (1,406 | ) | ||||||
| Capital expenditures |
(52,962 | ) | (268 | ) | — | (53,230 | ) | |||||
| Proceeds from sales of property, plant and equipment |
4,514 | 372 | — | 4,886 | ||||||||
| Decrease (increase) in finance subsidiaries-receivables |
— | (9,505 | ) | (2,432 | ) | (11,937 | ) | |||||
| Purchase of operating lease assets |
— | (227,094 | ) | — | (227,094 | ) | ||||||
| Proceeds from sales of operating lease assets |
— | 112,572 | — | 112,572 | ||||||||
| Net cash used in investing activities |
(62,460 | ) | (120,878 | ) | 7,129 | (176,209 | ) | |||||
| Cash flows from financing activities: |
||||||||||||
| * Increase (decrease) in short-term debt, net |
(6,158 | ) | 95,874 | (9,367 | ) | 80,349 | ||||||
| * Proceeds from long-term debt |
11,690 | 153,694 | (181 | ) | 165,203 | |||||||
| * Repayment of long-term debt |
(6,885 | ) | (235,301 | ) | 1,352 | (240,834 | ) | |||||
| Dividends paid |
(21,775 | ) | — | — | (21,775 | ) | ||||||
| Dividends paid to noncontrolling interests |
(7,704 | ) | — | — | (7,704 | ) | ||||||
| Sales (purchases) of treasury stock, net |
(9,809 | ) | — | — | (9,809 | ) | ||||||
| Net cash provided by (used in) financing activities |
(40,641 | ) | 14,267 | (8,196 | ) | (34,570 | ) | |||||
| Effect of exchange rate changes on cash and cash equivalents |
(43,756 | ) | 802 | — | (42,954 | ) | ||||||
| Net change in cash and cash equivalents |
78,332 | 5,888 | — | 84,220 | ||||||||
| Cash and cash equivalents at beginning of period |
1,100,695 | 19,207 | — | 1,119,902 | ||||||||
| Cash and cash equivalents at end of period |
1,179,027 | 25,095 | — | 1,204,122 | ||||||||
Notes:
| 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 48,262 million decrease for the fiscal first quarter ended June 30, 2009, and a JPY 9,561 million increase for the fiscal first quarter ended June 30, 2010, 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. |
July 30, 2010
| To: | Shareholders of Honda Motor Co., Ltd. |
| From: | Honda Motor Co., Ltd. |
| 1-1, Minami-Aoyama 2-chome, |
| Minato-ku, 107-8556 Tokyo |
| Takanobu Ito |
| President and Representative Director |
Notice Concerning Acquisition of the Company’s Own Shares
(Acquisition of the Company’s own shares as set forth in the Articles of Incorporation of the Company
pursuant to Article 165, Paragraph 2, of the Company Law)
The Board of Directors of Honda Motor Co., Ltd. (the “Company”), at its meeting held on July 30, 2010, resolved that the Company will purchase its own shares pursuant to Article 156 of the Company Law, which applies pursuant to Article 165, Paragraph 3, of that law.
Particulars
| 1. | Basis for acquisition of the Company’s own shares |
The Company resolved to acquire its own shares for the purpose of enhancing its capital efficiency and enabling greater flexibility in its capital policies.
| 2. | Details of the acquisition |
| (1) | Type of shares to be acquired: |
Shares of Common Stock
| (2) | Maximum number of shares to be acquired: |
12,000,000 shares (0.66% of the shares understanding (excluding treasury stock))
| (3) | Maximum amount of acquisition: |
25 billion yen
| (4) | Period of acquisition: |
Starting on August 3, 2010 and ending on September 15, 2010
| Reference: |
The Company’s treasury stock held as of July 30, 2010 | |||
| Total number of shares outstanding (excluding treasury stock): | 1,811,332,896 shares | |||
| Total number of treasury stock: | 23,495,534 shares |
July 30, 2010
| To: | Shareholders of Honda Motor Co., Ltd. |
| From: | Honda Motor Co., Ltd. |
| 1-1, Minami-Aoyama 2-chome, |
| Minato-ku, 107-8556 Tokyo |
| Takanobu Ito |
| President and Representative Director |
Notice Concerning the Retirement of the Treasury Stock
(Retirement of the Company’s treasury stock pursuant to Article 178, of the Company Law)
The Board of Directors of Honda Motor Co., Ltd. (the “Company”), at its meeting held on July 30, 2010, resolved that the Company will retire its treasury stock pursuant to Article 178 of the Company Law.
Particulars
| 1. | Types of Shares to be Retired |
Shares of Common Stock
| 2. | Number of Shares to be Retired |
23,400,000 shares
(1.3% of the issued shares, before retirement)
| 3. | Scheduled Date of Retirement |
August 6, 2010
| Reference: | Total number of the shares outstanding after retirement |
| 1,811,428,430 shares |
July 30, 2010
| To: | Shareholders of Honda Motor Co., Ltd. |
| From: | Honda Motor Co., Ltd. |
| 1-1, Minami-Aoyama 2-chome, |
| Minato-ku, Tokyo, 107-8556 |
| Takanobu Ito |
| President and Representative Director |
Notice Concerning Revision of Forecasts for Consolidated Financial Results of the
Fiscal First Half Ending September 30, 2010 and the Fiscal Year Ending March 31, 2011
Honda Motor Co., Ltd. (the “Company”) revised its forecasts for consolidated financial results of the fiscal first half ending September 30, 2010 and the fiscal year ending March 31, 2011 that were announced on April 28, 2010, based on various factors such as recent trends in the Company’s financial results.
Particulars
Revision of Forecast for Consolidated Financial Results of the Fiscal First Half Ending September 30, 2010
| (Millions of Yen, except Basic net income attributable to Honda Motor Co., Ltd. per common share) |
Net sales and other operating revenue |
Operating income |
Income before income taxes and equity in income of affiliates |
Net income attributable to Honda Motor Co., Ltd. |
Basic net income attributable to Honda Motor Co., Ltd. per common share (Yen) | |||||
| Forecast announced on April 28, 2010 (A) |
4,660,000 | 235,000 | 240,000 | 195,000 | 107.46 | |||||
| Forecast revised on July 30, 2010 (B) |
4,600,000 | 330,000 | 360,000 | 350,000 | 193.25 | |||||
| Change (B-A) |
-60,000 | 95,000 | 120,000 | 155,000 | — | |||||
| Percentage change (%) |
-1.3 | 40.4 | 50.0 | 79.5 | — | |||||
| (Reference) Results of the fiscal first half ended September 30, 2009 |
4,058,867 | 90,707 | 71,598 | 61,597 | 33.95 |
Basis for Revision of Forecast for Financial Results of the Fiscal Half Ending September 30, 2010
Due mainly to changes in revenue, model mix, etc., a decrease in SG&A expenses and continuing cost reduction efforts, which more than offset unfavorable currency impact due to appreciation of the Japanese yen, consolidated operating income, and income before income taxes and equity in income of affiliates are now expected to exceed the forecasts announced on April 28, 2010. On top of the factors that contributed to revision of income before income taxes and equity in income of affiliates, the Company has decreased a portion of unrecognized tax benefits related to transfer pricing matters of overseas transactions between the Company and foreign affiliates for the quarter ended June 30, 2010. Due primarily to this accounting treatment, net income attributable to Honda Motor Co., Ltd. is now expected to exceed the forecast announced on April 28, 2010.
Revision of Forecast for Consolidated Financial Results of the Fiscal Year Ending March 31, 2011
| (Millions of Yen, except Basic net income attributable to Honda Motor Co., Ltd. per common share) |
Net sales and other operating revenue |
Operating income |
Income before income taxes and equity in income of affiliates |
Net income attributable to Honda Motor Co., Ltd. |
Basic net income attributable to Honda Motor Co., Ltd. per common share (Yen) | |||||
| Forecast announced on April 28, 2010 (A) |
9,340,000 | 400,000 | 410,000 | 340,000 | 187.37 | |||||
| Forecast revised on July 30, 2010 (B) |
9,100,000 | 450,000 | 470,000 | 455,000 | 251.23 | |||||
| Change (B-A) |
-240,000 | 50,000 | 60,000 | 115,000 | — | |||||
| Percentage change (%) |
-2.6 | 12.5 | 14.6 | 33.8 | — | |||||
| (Reference) Results of the fiscal year ended March 31, 2010 |
8,579,174 | 363,775 | 336,198 | 268,400 | 147.91 |
Basis for Revision of Forecast for Financial Results of the Fiscal Year Ending March 31, 2011
Due mainly to changes in revenue, model mix, etc. and continuing cost reduction efforts, which more than offset unfavorable currency impact caused by the appreciation of the Japanese yen, consolidated operating income, and income before income taxes and equity in income of affiliates are now expected to exceed the forecasts announced on April 28, 2010. On top of the factors that contributed to revision of income before income taxes and equity in income of affiliates, the Company has decreased a portion of unrecognized tax benefits related to transfer pricing matters of overseas transactions between the Company and foreign affiliates for the quarter ended June 30, 2010. Due primarily to this accounting treatment, net income attributable to Honda Motor Co., Ltd. is now expected to exceed the forecast announced on April 28, 2010.
| * | For more detail, please refer to the “Presentation” and “Consolidated financial summary for the fiscal first quarter ended June 30, 2010” included in the “Financial Results” (URL http://world.honda.com/investors/event/) announced by the Company on the same date hereof. |
| * | These “forward-looking statements” of Honda are based on management’s assumptions and beliefs taking into account information currently available to it. Therefore, please be advised that Honda’s actual results could materially differ from those described in these forward-looking statements as a result of numerous factors, including general economic conditions in Honda’s principal markets and foreign exchange 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. |