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January 31, 2012
HONDA MOTOR CO., LTD. REPORTS
CONSOLIDATED FINANCIAL RESULTS
FOR THE FISCAL THIRD QUARTER AND
THE FISCAL NINE-MONTH PERIOD ENDED DECEMBER 31, 2011
Tokyo, January 31, 2012--- Honda Motor Co., Ltd. today announced its consolidated
financial results for the fiscal third quarter and the fiscal nine month period ended
December 31, 2011.
Third Quarter Results
Honda’s consolidated net income attributable to Honda Motor Co., Ltd. for the fiscal third
quarter ended December 31, 2011 totaled JPY 47.6 billion (USD 613 million), a decrease
of 41.2% from the same period last year. Basic net income attributable to Honda Motor
Co., Ltd. per common share for the quarter amounted to JPY 26.45 (USD 0.34), a decrease
of JPY 18.56 (USD 0.24) from JPY 45.01 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 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 automobile
business due to the supply chain disruption mainly caused by Thailand flood and the
unfavorable foreign currency translation effects, despite increased revenue in the
motorcycle business. Honda estimates that if calculated at the same exchange rate as the
corresponding period last year, revenue for the quarter would have decreased by
approximately 1.7%
Consolidated operating income for the quarter amounted to JPY 44.2 billion (USD 570
million), a decrease of 64.7% from the same period last year, due primarily to a decrease
in sales volume and model mix, an increase in fixed costs per unit as production volume
decreased, the impact of raw material price increases and the unfavorable foreign currency
effect.
Consolidated income before income taxes and equity in income of affiliates for the quarter
totaled JPY 58.4 billion (USD 752 million), a decrease of 55.5% from the same period last
year.
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Equity in income of affiliates amounted to JPY 22.9 billion (USD 295 million) for the
quarter, a decrease of 47.3% from the corresponding period last year due mainly to
declined income in affiliated companies in China due to decreased sales and production
caused by supply-chain disruption after the Great East Japan Earthquake occurred on
March 11, 2011 (the “Earthquake”).
Business Segment
With respect to Honda’s sales for the fiscal third quarter by business segment, motorcycle
unit sales totaled 3,076 thousand units, an increase of 6.3% from the same period last
year* due mainly to increased unit sales in Asia and other regions including South
America. 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 JPY
25.8 billion (USD 333 million), a decrease of 11.2% from the same period last year, due
primarily to increased SG&A expenses and unfavorable foreign currency effects, despite
an increase in sales volume and model mix. *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 750 thousand units for the period.
Honda’s automobile unit sales totaled 830 thousand units**, a decrease of 2.9% from the
same period last year due to decreased unit sales mainly in Asia primarily caused by the
impact 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 to
a decrease in sales unit and unfavorable currency translation effects. Honda reported an
operating loss of JPY 16.9 billion (USD 219 million), a decrease of JPY 85.3 billion (USD
1,098 million) from the same period last year, due primarily to a decrease in sales volume
and model mix, the impact of raw material price increases, increased R&D expenses and
unfavorable currency effects, despite decreased SG&A expenses.
**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.
Revenue from customers in the financial services business decreased 8.5%, to JPY 124.8
billion (USD 1,605 million) from the same period last year due mainly to the unfavorable
foreign currency translation effects. Operating income decreased 15.7% to JPY 37.5
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billion (USD 484 million) from the same period last year due mainly to the unfavorable
foreign currency effects.
Honda’s power product unit sales totaled 1,021 thousand units, a decrease of 11.8% from
the same period last year due to decreased unit sales in all regions. Revenue from sales to
external customers in power product and other businesses decreased 5.8%, to JPY 64.0
billion (USD 824 million), from the same period last year, due mainly to decreased unit
sales in power products and the unfavorable currency translation effects. Honda reported
an operating loss of JPY 2.1 billion (USD 28 million), a deterioration of JPY 0.1 billion
from the same period last year due mainly to unfavorable foreign currency effects.
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Geographical Information
With 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 11,104
million), a decrease of 0.5% from the same period last year due mainly to decreased
revenue in the automobile business mainly impacted by the supply-chain disruptions
caused by the Thailand flood. Honda reported an operating loss of JPY 41.2 billion (USD
530 million), a decrease of JPY 55.8 billion (USD 718 million) from the same period last
year due mainly to increased R&D expenses, the impact of raw material price increases
and 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 translation
effects, despite increased revenue in the automobile business. Operating income totaled
JPY 74.8 billion (USD 963 million), a decrease of 16.5% from the same period last year
due mainly to the impact of raw material price increases and unfavorable foreign currency
effects.
In Europe, revenue decreased by 20.7%, to JPY 119.4 billion (USD 1,537 million), from
the same period last year mainly due to decreased revenue in the automobile business
impacted by Thailand flood and unfavorable foreign currency translation effects. Honda
reported an operating loss of JPY 3.8 billion (USD 49 million), an improvement of JPY
5.6 billion (USD 72 million) from the same period last year mainly due to decreased
SG&A expenses.
In Asia, revenue decreased by 28.7%, to JPY 317.6 billion (USD 4,086 million), from the
same period last year as revenue from the automobile business decreased mainly impacted
by Thailand flood and the unfavorable foreign currency translation effects, despite
increased revenue in the motorcycle business. Operating income decreased by 62.7%, to
JPY 13.3 billion (USD 172 million), from the same period last year due mainly to a
decrease in sales volume and model mix, an increase in fixed costs per unit as production
output has reduced and unfavorable foreign currency effects. 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.
In Other regions including South America, the Middle East, Africa and Oceania, revenue
decreased by 13.7%, to JPY 206.1 billion (USD 2,652 billion) from the same period last
year as revenue from the automobile business decreased mainly impacted by Thailand
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flood and unfavorable foreign currency translation effects, despite increased revenue in
the 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 sales
volume 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 the
rate of JPY 77.74=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 December 31, 2011.
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Nine Months Results
Honda’s consolidated net income attributable to Honda Motor Co., Ltd. for the fiscal nine
months ended December 31, 2011 totaled JPY 139.8 billion, a decrease of 71.4% from the
same period last year. Basic net income attributable to Honda Motor Co., Ltd. per
common share for the fiscal nine months amounted to JPY 77.62, a decrease of JPY
193.20 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 automobile
business mainly led by decreased production attributable to the impact of the Earthquake
and Thailand flood, and unfavorable foreign currency translation effects, despite increased
revenue in the motorcycle business.
Consolidated operating income for the period totaled JPY 119.3 billion, a decrease of
77.2% from the same period last year, due primarily to a decrease in sales volume and
model mix, increase in fixed costs as volume of production decrease, the impact of raw
material price increases and unfavorable foreign currency effect, despite decreased SG&A
expenses.
Consolidated income before income taxes and equity in income of affiliates for the period
totaled 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 of
41.5% from the same period last year.
Business Segment
With respect to Honda’s sales for the fiscal nine months by business segment, unit sales of
motorcycles totaled 9,103 thousand units, an increase of 7.0% from the same period last
year*, due mainly to increased unit sales in Asia and Other regions including South
America. Revenue from sales to external customers increased 5.9%, to JPY 990.2 billion
from the same period last year, primarily due to increased unit sales, despite unfavorable
foreign currency translation effects. Operating income totaled to JPY 109.7 billion, an
increase of 21.3% from the previous fiscal year, due primarily to an increase in sales
volume and model mix, despite increased SG&A expenses and unfavorable foreign
currency effects.
*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
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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 2,130 thousand units for the 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 disruptions
in all regions resulting from the Earthquake and Thailand flood. Revenue from sales to
external customers decreased 23.1%, to JPY 3,961.0 billion, from the same period last
year**, due mainly to decreased unit sales and unfavorable foreign currency translation
effect. Honda reported an operating loss of JPY 122.3 billion, a decrease of JPY 426.0
billion from the same period last year, due primarily to a decrease in sales volume and
model mix, increase in fixed costs as volume of production decrease, the impact of raw
material price increases and unfavorable foreign currency effect, despite decreased SG&A
expenses. **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.
Revenue from the financial services business to external customers decreased 9.4%, to
JPY 387.1 billion, from the same period last year, primarily due to unfavorable foreign
currency translation effects. Operating income decreased 8.6%, to JPY 134.0 billion, from
the same period last year due mainly to unfavorable foreign currency effects, despite the
decreased 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, Europe
and Japan. Revenue from sales to external customers in power product and other
businesses decreased by 3.8%, to JPY 204.6 billion from the same period last year, due
mainly to unfavorable foreign currency translation effects, despite increased unit sales of
power products. Honda reported an operating loss of JPY 2.0 billion, an improvement of
JPY 1.1 billion from the same period last year due primarily to an increase in sales volume
and model mix of power products.
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Geographical Information
With 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 automobile
business mainly impacted by the Earthquake and Thailand flood. Honda reported an
operating loss of JPY 122.4 billion, a decrease of JPY 210.3 billion from the same period
last year, due mainly to a decrease in sales volume and model mix, increase in fixed costs
per unit as production output has reduced mainly caused by the Earthquake and Thailand
flood, 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 same
period last year mainly due to decreased revenue in the automobile business primarily due
to the impact of the Earthquake and Thailand flood, and unfavorable foreign currency
translation effects. Operating income totaled JPY 141.0 billion, a decrease of 49.0% from
the 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 material
price increases and unfavorable foreign currency effects, despite decreased SG&A
expenses.
In Europe, revenue decreased by 17.3%, to JPY 414.9 billion from the same period last
year mainly due to decreased revenue in the automobile business primarily due to the
impact of the Earthquake and Thailand flood, and unfavorable foreign currency translation
effects, despite increased revenue in the power product and other businesses. Honda
reported an operating loss of JPY 13.9 billion a deterioration of JPY 5.4 billion from the
same period last year due mainly to a decrease in sales volume and model mix and
increase 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 production
impacted by the Earthquake and Thailand flood and the unfavorable foreign currency
translation effects, despite increased revenue in the motorcycle business. Operating
income decreased by 49.1%, to JPY 60.3 billion from the same period last year due
mainly to a decrease in sales volume and model mix, an increase in fixed cost per unit as
production output has reduced, the impact of raw material price increases and unfavorable
foreign currency effects.
In Other Regions, revenue decreased by 5.2% to JPY 680.4 billion from the same period
last year as revenue from the automobile business decreased mainly due to decreased
production impacted by the Earthquake and Thailand flood and the unfavorable foreign
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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 last
year mainly due to increased SG&A expenses, despite an increase in sales volume and
model mix.
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Consolidated Statements of Balance Sheets for the Fiscal Nine Months Ended
December 31, 2011
Total 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 foreign
currency translation effects, despite an increase in property on operating leases. Total
liabilities 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 223.7
billion, to JPY 4,359.1 billion from March 31, 2011 due mainly to foreign currency
translation effects.
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Consolidated Statements of Cash Flows for the Fiscal Nine Months
Consolidated cash and cash equivalents at December 31, 2011 decreased by JPY 136.3
billion from March 31, 2011, to JPY 1,142.7 billion. 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 507.9 billion of cash inflows
for the fiscal nine months ended December 31, 2011. Cash inflows from operating
activities decreased by JPY 257.6 billion compared with the same period of the previous
fiscal year due mainly to a decrease in cash received from customers primarily caused by
decreased unit sales in the automobile business, despite decreased payments for parts and
raw materials primarily caused by a decrease in automobile production.
Cash flows from investing activities
Net cash used in investing activities amounted to JPY 457.5 billion of cash outflows. Cash
outflows from investing activities decreased by JPY 157.7 billion compared with the same
period of the previous fiscal year, due mainly to a decrease in payments for purchases of
held-to-maturity securities, a decrease in acquisitions of finance subsidiaries-receivables
and a decrease in purchase of operating lease assets, despite a decrease in collections of
finance subsidiaries-receivables.
Cash flows from financing activities Net cash used in financing activities amounted to JPY 95.0 billion of cash outflows. Cash
outflows from financing activities increased by JPY 74.1 billion, compared with the same
period of the previous fiscal year, due mainly to a decrease in proceeds from debts and an
increase in dividends paid, despite a decrease in purchases of treasury stock.
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Forecasts for the Fiscal Year Ending March 31, 2012 In 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 Japanese yen to the U.S. dollar and the Euro will be JPY 77 and JPY 97, respectively, for the fiscal fourth 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.
Unit (thousands) Changes from FY2011
(thousands) Motorcycle business 12,660 + 1,215Automobile business 3,150 - 362Power product and Other Businesses 5,850 + 341 FY2012 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
Honda Motor Co., Ltd. 215 - 59.7%
Yen
Basic net income attributable to
Honda Motor Co., Ltd. per common share 119.29
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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, 2012 from the corresponding period last year are as follows. Yen (billions)Revenue, model mix, etc., excluding currency effect - 171.2Cost reduction, the effect of raw material cost fluctuations, etc. - 79.0SG&A expenses, excluding currency effect + 46.0R&D expenses - 37.5Currency effect - 128.0
Operating income compared with fiscal year 2011 - 369.7Fair value of derivative instruments 17.0Others - 27.7
Income before income taxes and equity in income of affiliates compared with fiscal year 2011 - 380.5
Dividend per Share of Common Stock The 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 record date of which is December 31, 2011. The total expected annual dividend per share of common 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 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.
Others
Accounting policies specifically applied for quarterly consolidated financial statements ・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 nine months ended December 31, 2011. If a reliable estimate cannot be made, Honda utilizes the actual year-to-date effective tax rate.
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Consolidated Financial Summary For the three months and nine months ended December 31, 2010 and 2011 Financial Highlights
Yen (millions)
Three months ended
Dec. 31, 2010 unaudited
Three months Ended
Dec. 31, 2011 unaudited
Nine months ended
Dec. 31, 2010 unaudited
Nine months ended
Dec. 31, 2011 unaudited
Net sales and other operating revenue
2,110,414 1,942,545 6,723,788 5,543,033
Operating income 125,653 44,298 523,569 119,388
Income before income taxes and equity in income of affiliates
131,580 58,492 553,933 164,346
Net income attributable to Honda Motor Co., Ltd.
81,118 47,662 489,534 139,888
Yen Basic net income attributable to Honda Motor Co., Ltd per common share
45.01 26.45 270.82 77.62
U.S. Dollar (millions)
Three months ended
Dec. 31, 2011 unaudited
Nine months ended
Dec. 31, 2011 unaudited
Net sales and other operating revenue
24,988 71,302
Operating income 570 1,536
Income before income taxes and equity in income of affiliates
752 2,114
Net income attributable to Honda Motor Co., Ltd.
613 1,799
U.S. Dollar Basic net income attributable to Honda Motor Co., Ltd per common share
0.34 1.00
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[1] Consolidated Balance Sheets
Yen (millions)
Assets Mar. 31, 2011
audited
Dec. 31, 2011
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 5,216,840Less 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
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[1] Consolidated Balance Sheets – continued Yen (millions)
Liabilities and Equity Mar. 31, 2011
audited
Dec. 31, 2011
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 1,811,428,430 shares on Dec. 31, 2011
86,067 86,067
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
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[2] Consolidated Statements of Income (A) For the three months ended December 31, 2010 and 2011
Yen (millions)
Three months ended
Dec. 31, 2010 unaudited
Three months ended
Dec. 31, 2011 unaudited
Net sales and other operating revenue 2,110,414 1,942,545Operating costs and expenses:
Cost of sales 1,517,648 1,446,474Selling, general and administrative 343,003 317,354Research and development 124,110 134,419 1,984,761 1,898,247
Operating income 125,653 44,298Other income (expenses):
Interest income 6,069 8,775Interest expense (2,017) (2,445)Other, net 1,875 7,864 5,927 14,194
Income before income taxes and equity in income of affiliates
131,580 58,492
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 48,156Less: Net income attributable to
noncontrolling interests 6,869 494
Net income attributable to Honda Motor Co., Ltd.
81,118 47,662
Yen
Basic net income attributable to Honda Motor Co., Ltd. per common share
45.01 26.45
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(B) For the nine months ended December 31, 2010 and 2011 Yen (millions)
Nine months ended
Dec. 31, 2010 unaudited
Nine months ended
Dec. 31, 2011 unaudited
Net sales and other operating revenue 6,723,788 5,543,033Operating costs and expenses:
Cost of sales 4,849,409 4,141,925Selling, general and administrative 987,045 909,418Research and development 363,765 372,302 6,200,219 5,423,645
Operating income 523,569 119,388Other income (expenses):
Interest income 16,836 25,119Interest expense (6,264) (7,509)Other, net 19,792 27,348 30,364 44,958
Income before income taxes and equity in income of affiliates
553,933 164,346
Income tax expense: Current 40,511 57,346Deferred 117,165 29,451 157,676 86,797
Income before equity in income of affiliates 396,257 77,549
Equity in income of affiliates 114,742 67,111
Net income 510,999 144,660Less: Net income attributable to
noncontrolling interests 21,465 4,772
Net income attributable to Honda Motor Co., Ltd.
489,534 139,888
Yen
Basic net income attributable to Honda Motor Co., Ltd. per common share
270.82 77.62
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[3] Consolidated Statements of Cash Flows Yen (millions)
Nine months ended
Dec. 31, 2010 unaudited
Nine months ended
Dec. 31, 2011 unaudited
Cash flows from operating activities: Net income 510,999 144,660Adjustments to reconcile net income to net cash provided by operating activities:
Depreciation excluding property on operating leases 262,251 228,448Depreciation of property on operating leases 160,036 154,054Deferred income taxes 117,165 29,451Equity in income of affiliates (114,742) (67,111)Dividends from affiliates 44,156 47,261Provision for credit and lease residual losses on finance subsidiaries-receivables
11,328 7,905
Impairment loss on investments in securities 673 501Damaged and Impairment loss on long-lived assets and goodwill excluding property on operating leases
534 7,654
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 765,630 507,961
Cash flows from investing activities: Increase in investments and advances (7,432) (18,363)Decrease in investments and advances 10,759 10,458Payments 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 45,827Capital expenditures (204,193) (240,522)Proceeds from sales of property, plant and equipment 18,311 21,921Proceeds from insurance recoveries for damaged property, plant and equipment
4,944
Acquisitions of finance subsidiaries-receivables (1,629,600) (1,546,337)Collections of finance subsidiaries-receivables 1,567,415 1,504,989Purchases 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)
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[3] Consolidated Statements of Cash Flows – continued Yen (millions)
Nine months ended
Dec. 31, 2010 unaudited
Nine months ended
Dec. 31, 2011 unaudited
Cash flows from financing activities: Increase (decrease) in short-term debt, net 127,340 5,008Proceeds from long-term debt 579,844 707,736Repayment 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 cash equivalents
(90,704) (91,669)
Net change in cash and cash equivalents 38,767 (136,305)Cash and cash equivalents at beginning of the year 1,119,902 1,279,024Cash and cash equivalents at end of the period 1,158,669 1,142,719
- - 21
[4] Assumptions for Going Concern None [5] Significant changes in Honda Motor Co., Ltd. shareholders’ equity None [6] Segment Information Honda has four reportable segments: the Motorcycle business, the Automobile business, the Financial services business and the Power product & 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 (A) For the three months ended December 31, 2010 Yen (millions)
Motorcycle
Business
Automobile
Business
Financial Services Business
Power Product & Other
Businesses
Segment Total
Reconciling Items
Other
Adjustments Consolidated
Net sales and other operating revenue:
External customers
301,996 1,613,841 136,442 68,023 2,120,302 ― (9,888) 2,110,414
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) 2,110,414
Segment income (loss)
29,132 68,400 44,603 (2,079) 140,056 ― (14,403) 125,653
For the three months ended December 31, 2011 Yen (millions)
Motorcycle
Business
Automobile
Business
Financial Services Business
Power Product & Other
Businesses
Segment Total
Reconciling Items
Other
Adjustments Consolidated
Net sales and other operating revenue:
External customers
302,590
1,451,054 124,806 64,095 1,942,545 ― ― 1,942,545
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) ― 1,942,545
Segment income (loss)
25,866
(16,997) 37,597 (2,168) 44,298 ― ― 44,298
- - 22
(B) As of and for the nine months ended December 31, 2010 Yen (millions)
Motorcycle
Business
Automobile
Business
Financial Services Business
Power Product & Other
Businesses
Segment Total
Reconciling Items
Other
Adjustments Consolidated
Net sales and other operating revenue:
External customers
935,082 5,148,743 427,346 212,617 6,723,788 ― ― 6,723,788
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) ― 6,723,788
Segment income (loss)
90,460 303,727 146,672 (3,167) 537,692 ― (14,123) 523,569
Assets 944,662 4,764,066 5,427,253 283,030 11,419,011 (159,399) ― 11,259,612Depreciation and amortization
30,542 221,922 161,287 8,536 422,287 ― ― 422,287
Capital expenditures
21,086 171,191 587,981 7,198 787,456 ― ― 787,456
As of and for the nine months ended December 31, 2011 Yen (millions)
Motorcycle
Business
Automobile
Business
Financial Services Business
Power Product & Other
Businesses
Segment Total
Reconciling Items
Other
Adjustments Consolidated
Net sales and other operating revenue:
External customers
990,287 3,961,018 387,127 204,601 5,543,033 ― ― 5,543,033
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) ― 5,543,033
Segment income (loss)
109,733 (122,366) 134,043 (2,022) 119,388 ― ― 119,388
Assets 965,325 4,448,203 5,290,548 292,342 10,996,418 (114,122) ― 10,882,296Depreciation and amortization
29,914 190,295 155,165 7,128 382,502 ― ― 382,502
Capital expenditures
39,447 203,771 500,553 6,012 749,783 ― ― 749,783
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 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.
- - 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)
Japan North
America Europe Asia
Other Regions
Total Reconciling
Items
Other Adjustments
Consolidated
Net sales and other operating revenue:
External customers
404,219
964,492 132,514 387,477 231,600 2,120,302 ― (9,888) 2,110,414
Transfers between geographic areas
463,331
47,319 18,226 58,044 7,291 594,211 (594,211) ― ―
Total 867,550
1,011,811 150,740 445,521 238,891 2,714,513 (594,211) (9,888) 2,110,414
Operating income (loss)
14,633
89,698 (9,436) 35,780 15,690 146,365 (6,309) (14,403) 125,653
For the three months ended December 31, 2011 Yen (millions)
Japan North
America Europe Asia
Other Regions
Total Reconciling
Items
Other Adjustments
Consolidated
Net sales and other operating revenue:
External customers
434,749 928,336 105,229 269,470 204,761 1,942,545 ― ― 1,942,545
Transfers between geographic areas
428,450 57,956 14,233 48,210 1,373 550,222 (550,222) ― ―
Total 863,199 986,292 119,462 317,680 206,134 2,492,767 (550,222) ― 1,942,545
Operating income (loss)
(41,219) 74,865 (3,801) 13,350 12,525 55,720 (11,422) ― 44,298
- - 24
(B) As of and for the nine months ended December 31, 2010 Yen (millions)
Japan North
America Europe Asia
Other Regions
Total Reconciling
Items
Other Adjustments
Consolidated
Net sales and other operating revenue:
External customers
1,377,539 3,017,225 447,418 1,189,687 691,919 6,723,788 ― ― 6,723,788
Transfers between geographic areas
1,339,789 154,054 54,521 179,068 25,858 1,753,290 (1,753,290) ― ―
Total 2,717,328 3,171,279 501,939 1,368,755 717,777 8,477,078 (1,753,290) ― 6,723,788
Operating income (loss)
87,919 276,364 (8,438) 118,530 56,389 530,764 6,928 (14,123) 523,569
Assets 2,895,405 6,025,463 492,882 1,046,431 663,111 11,123,292 136,320 ― 11,259,612
Long-lived assets 1,059,010 1,744,305 97,808 219,810 146,464 3,267,397 ― ― 3,267,397
As of and for the nine months ended December 31, 2011 Yen (millions)
Japan North
America Europe Asia
Other Regions
Total Reconciling
Items
Other Adjustments
Consolidated
Net sales and other operating revenue:
External customers
1,188,657 2,366,920 370,471 945,363 671,622 5,543,033 ― ― 5,543,033
Transfers between geographic areas
1,105,253 147,445 44,461 153,553 8,822 1,459,534 (1,459,534) ― ―
Total 2,293,910 2,514,365 414,932 1,098,916 680,444 7,002,567 (1,459,534) ― 5,543,033
Operating income (loss)
(122,422) 141,083 (13,934) 60,326 51,333 116,386 3,002 ― 119,388
Assets 2,956,920 5,809,611 437,391 938,207 601,543 10,743,672 138,624 ― 10,882,296
Long-lived assets 1,035,861 1,805,658 97,691 218,844 126,558 3,284,612 ― ― 3,284,612
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 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.
- - 25
[7] Income Taxes On November 30, 2011, the National Diet of Japan approved the laws for amendments to previous income tax laws. Upon the change in the laws, the statutory income tax rate in Japan will be changed to approximately 38% for fiscal years beginning on or after April 1, 2012, and to approximately 35% for fiscal years beginning on or after April 1, 2015. Thus, the Company and its Japanese consolidated subsidiaries measured deferred tax assets and liabilities based on the tax rates to be applied in the fiscal years in which 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, and income tax expenses increased JPY 16,072 million for the three months and nine months ended December 31, 2011. Due primarily to the impact of this tax rate change, the effective tax rates of Honda for the three months and nine months ended December 31, 2011 differ from Japanese (or the Company’s) statutory income tax rate, which is 40% for the fiscal year ending March 31, 2012. [8] Other
1.Out-of-period adjustments During the three months ended December 31, 2010, certain overstatements were found in trade accounts and notes receivable, inventories, net sales and other operating revenue, and cost of sales in previously issued consolidated financial statements, pertaining to the Company’s inventory management trading activities at a domestic subsidiary. This domestic subsidiary temporarily purchases sea food products from seafood companies with the promise that they will buy back such products after certain period, in order to bridge the gap between the purchasing period (the fishing season) and the sales period for sea food products. In the Company’s consolidated statements of income for the three months ended December 31, 2010, the Company adjusted net sales and other operating revenue amounted to JPY 9,888 million and operating income amounted to JPY 280 million overstated in the Company’s consolidated statements of income for the six months ended September 30, 2010, in conjunction with the related cumulative loss amounted to JPY14,123 million as of March 31, 2010. As a result, operating income for the three months and nine months ended December 31, 2010, decreased by JPY 14,403 million and 14,123 million, respectively. Honda believes that these adjustments are immaterial to the Company’s consolidated financial statements or results of operations in prior periods.
2. Impact on the Company's 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, and machineries 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 by floods. As a result, Honda recognized JPY 17,348 million of costs and expenses, of which JPY 9,387 million is included in cost of sales and JPY 7,961 million is included in selling, general and administrative expenses 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 are included in cost of sales, and loss on damaged property, plant and equipment of JPY 7,654 million which 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 the period ended December 31, 2011. The recognized insurance recovery is limited to the amount of the related incurred losses and Honda will recognize insurance recoveries in excess of the incurred losses when final settlements with insurance companies are reached.
Honda Motor Co., Ltd.
Third Quarter Results Nine Months Results Fiscal Year Results and Forecasts
Yen (billions), Unit (thousands) change % change % change %
Net 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% >
131.5 58.4 - 73.0 - 55.5% 553.9 164.3 - 389.5 - 70.3% 630.5 250.0 - 380.5 - 60.4%
<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
Change in R&D expenses
Currency effects
Change in average rates
Translation effects
Change Factors in Other income/expenses
Others
JPY 83 JPY 87 JPY 86
JPY 112 JPY 114 JPY 114
57.8 190.4 311.3
78.6 242.6 325.2
Research and development expenses 124.1 363.7 487.5
Unit 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: 12
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
5
Nine Months Results Fiscal Year Results and Forecasts
(Additional information) change % change % change %
Unit Sales (thousands) Automobile business - Japan 119 136 17 14.3% 442 361 - 81 - 18.3% 585 595 10 1.7%
3 monthsended
Dec. 31, 2011
Third Quarter Results9 months
endedDec. 31, 2010
Year endingMar. 31, 2012
9 monthsended
Dec. 31, 2011
Year endedMar. 31, 2011
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 management's 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.
46.0
- 133.3
134.4
Depreciation and amortization
Cost reduction, the effect of raw material costfluctuations, etc.
Honda's average rates EUR=
3 monthsended
Dec. 31, 2010
- 81.3
Change in revenue, model mix, etc.,excluding currency effects
Unrealized gains and losses relatedto derivative instruments
8.2
- 32.9
- 16.1
11.6
- 10.3
Change in SG&A expenses,excluding currency effects
4.7
3.5
- 33.6
( - 22.4)
( - 11.1)
JPY 105
USD=
In this chart, "change" is calculated on the comparison with the same period of previous year. 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.
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. Asa 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 isprovided below.
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 fromHonda 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 andforecasts.
372.3
13.8
JPY 78
JPY 110
239.7
212.1
Capital expenditures
14.5
0.7
295.0
JPY 77
70.9
107.6
JPY 78 (4Q : JPY 77)
JPY 106 (4Q : JPY 97)
( - 79.0)
- 128.0
( - 31.7)
- 85.8
January 31, 2012
CONSOLIDATED FINANCIAL SUMMARY 1FOR THE FISCAL THIRD QUARTER AND THE FISCAL NINE MONTHS ENDED DECEMBER 31, 2011
Income before income taxes andequity in income of affiliates
Year endingMar. 31, 2012
3 monthsended
Dec. 31, 2010
3 monthsended
Dec. 31, 2011
9 monthsended
Dec. 31, 2010
Year endedMar. 31, 2011
9 monthsended
Dec. 31, 2011
- 8.5
- 404.1
- 217.8
- 79.0
- 369.7
- 171.2
( - 54.0)
41.4
- 27.7
525.0
410.0
- 37.5
( - 49.0)
17.0
- 10.7
Honda Motor Co., Ltd.
CONSOLIDATED FINANCIAL SUMMARY 2 FOR THE FISCAL THIRD QUARTER AND THE FISCAL NINE MONTHS ENDED DECEMBER 31, 2011
Unit Sales and Net Sales Breakdown
For the nine months ended December 31
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 ― ― ― ―
8,511 935,082 9,103 990,287 592 7.0 55,205 5.9
Japan 138 52,473 166 54,596 28 20.3 2,123 4.0
(Motorcycles only)
North America 147 79,372 147 74,590 0 0.0 △4,782 △6.0
(Motorcycles only)
Europe 144 73,894 140 67,513 △4 △2.8 △6,381 △8.6
(Motorcycles only)
Asia 6,868 409,014 7,169 414,406 301 4.4 5,392 1.3
(Motorcycles only)
Other Regions 1,214 320,329 1,481 379,182 267 22.0 58,853 18.4
(Motorcycles only)
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
― 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
― ― ― ― ― ― ― ―
1 The geographical breakdown of unit sales and net sales is based on the location of external customers.
2
3
4
56
Net sales of Power product & Other businesses include revenue from sales of power products and relevant parts, leisure businesses and trading businesses.
Nine months ended
Dec. 31, 2010
Unit(thousands)
Yen(millions)
Unit(thousands)
Yen(millions)
(8,417)
(138)
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 affiliatesaccounted for under the equity method.
Notes:
(69)
(138)
(6,868)
(1,204) (1,471)
(7,169)
Total
Motorcycle business(Motorcycles only)
Automobile business
(9,012)
Nine months ended
Dec. 31, 2011change
(7.1)(595)
Unit(thousands)
For further information on Other Adjustments, refer to FY2012 3rd Quarter Financial Results “[8] Other 1. Out-of-period adjustments”.
Of the net sales of Honda-brand motorcycle products that are manufactured and sold by overseas affiliates accounted for under the equity method, those withrespect to which parts for manufacturing were not 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 not included in the financial results.
(△2.2)
(2.9)
(135)
(71)
Other Adjustments
(301)
(267)
Certain sales of automobiles that are financed with residual value type auto loans by our Japanese finance subsidiaries are accounted for as operating leasesin conformity with U.S. generally accepted accounting principles. As a result, they are not included in total sales of our automobile segment or in ourmeasure of unit sales.
(28)
(2)
(△3)
(4.4)
(166) (20.3)
(22.2)
Financial service business
January 31, 2012
% %Yen
(millions)
Honda Motor Co., Ltd.
CONSOLIDATED FINANCIAL SUMMARY 2 FOR THE FISCAL THIRD QUARTER AND THE FISCAL NINE MONTHS ENDED DECEMBER 31, 2011
Unit Sales and Net Sales Breakdown
For the three months ended December 31
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
2,895 301,996 3,076 302,590 181 6.3 594 0.2
Japan 46 16,872 51 17,643 5 10.9 771 4.6
(Motorcycles only)
North America 44 20,904 48 21,234 4 9.1 330 1.6
(Motorcycles only)
Europe 39 18,650 31 13,755 △8 △20.5 △4,895 △26.2
(Motorcycles only)
Asia 2,341 136,672 2,450 130,155 109 4.7 △6,517 △4.8
(Motorcycles only)
Other Regions 425 108,898 496 119,803 71 16.7 10,905 10.0
(Motorcycles only)
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
― 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
― △9,888 ― ― ― ― 9,888 △100.0
1 The geographical breakdown of unit sales and net sales is based on the location of external customers.
2
3
4
56
%Unit
(thousands)Yen
(millions)
Certain sales of automobiles that are financed with residual value type auto loans by our Japanese finance subsidiaries are accounted for as operating leases inconformity 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 ofunit sales.
(5)
(△1)
(△8)
(4.7)
(51) (10.9)
(16.8)
Financial service business
%
For further information on Other Adjustments, refer to FY2012 3rd Quarter Financial Results “[8] Other 1. Out-of-period adjustments”.
Of the net sales of Honda-brand motorcycle products that are manufactured and sold by overseas affiliates accounted for under the equity method, those withrespect to which parts for manufacturing were not 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 not included in the financial results.
(△22.2)
(△4.8)
(28)
(20)
Other Adjustments
(109)
(71)
(3,042)
January 31, 2012
Three months ended
Dec. 31, 2011change
(6.1)(176)
Total
Motorcycle business(Motorcycles only)
Automobile business
(2,866)
(46)
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 affiliatesaccounted for under the equity method.
Notes:
(21)
(36)
(2,341)
(422) (493)
(2,450)
Three months ended
Dec. 31, 2010
Unit(thousands)
Yen(millions)
Unit(thousands)
Yen(millions)
Net sales of Power product & Other businesses include revenue from sales of power products and relevant parts, leisure businesses and trading businesses.
January 31, 2012Honda Motor Co., Ltd.
CONSOLIDATED FINANCIAL SUMMARY 3FOR THE FISCAL NINE MONTHS ENDED DECEMBER 31, 2011
Unaudited Consolidated Balance Sheets Divided into Non-financial Services Businesses and Finance Subsidiaries
Mar. 31,2011
Dec. 31,2011
Assets
< 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
1,136,791 1,051,818 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 10,882,296
Liabilities 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 4,359,168
Total liabilities and equity 11,570,874 10,882,296
Yen (millions)
Finance subsidiaries―short-term receivables, net Finance subsidiaries―long-term receivables, net
January 31, 2012Honda Motor Co., Ltd.
CONSOLIDATED FINANCIAL SUMMARY 4
Unaudited Consolidated Statements of Cash Flows Divided into Non-financial Services Businesses and Finance Subsidiaries
For the nine months ended December 31, 2010Non-financial
servicesbusinesses
Financesubsidiaries
ReconcilingItems
Consolidated
Cash flows from operating activities:423,413 87,586 ─ 510,999
261,000 161,287 ─ 422,287 41,234 75,931 ─ 117,165
( 114,742) ─ ─ ( 114,742)44,156 ─ ─ 44,156
534 ─ ─ 534 ( 14,453) ( 12,191) ─ ( 26,644)
67,766 6,388 ( 438) 73,716
( 93,519) ─ ─ ( 93,519)
( 59,020) ─ ( 2,320) ( 61,340)
( 86,867) ( 23,523) 3,408 ( 106,982)Net cash provided by operating activities000 469,502 295,478 650 765,630
Cash flows from investing activities:* ( 96,029) 5,595 11,253 ( 79,181)
( 202,603) ( 1,590) ─ ( 204,193)17,890 421 ─ 18,311
─ ( 65,266) 3,081 ( 62,185)─ ( 586,391) ─ ( 586,391)─ 298,308 ─ 298,308
Net cash used in investing activities ( 280,742) ( 348,923) 14,334 ( 615,331)
Cash flows from financing activities:* 28,153 114,784 ( 15,597) 127,340 * 12,011 571,272 ( 3,439) 579,844 * ( 18,659) ( 597,834) 4,052 ( 612,441)
( 65,136) ─ ─ ( 65,136)( 15,641) ─ ─ ( 15,641)
Sales (purchases) of treasury stock, net ( 34,794) ─ ─ ( 34,794)Net cash providedby (used in) financing activities
( 94,066) 88,222 ( 14,984) ( 20,828)
( 93,781) 3,077 ─ ( 90,704)
913 37,854 ─ 38,767 1,100,695 19,207 ─ 1,119,902 1,101,608 57,061 ─ 1,158,669
Cash and cash equivalents at beginning of periodCash and cash equivalents at end of period
Proceeds from sales of operating lease assets
Increase (decrease) in short-term debt, net
Yen (millions)
Dividends paid to noncontrolling interests
Effect of exchange rate changeson cash and cash equivalentsNet change in cash and cash equivalents
Proceeds from long-term debt Repayment of long-term debt Dividends paid
Decrease (increase) in finance subsidiaries-receivablesPurchase of operating lease assets
Decrease (increase) in investments and advancesCapital expenditures Proceeds from sales of property, plant and equipment
Increase (decrease) in trade accounts andnotes payableOther, net
Equity in income of affiliatesDividends from affiliates
Loss (gain) on derivative instruments, net Damaged and impairment loss on long-lived assets
FOR THE FISCAL NINE MONTHS ENDED DECEMBER 31, 2011
DepreciationDeferred income taxes
Net IncomeAdjustments to reconcile net income000to net cash provided by operating activities:
Decrease (increase) in trade accounts andnotes receivableDecrease (increase) in inventories000
January 31, 2012Honda Motor Co., Ltd.
Unaudited Consolidated Statements of Cash Flows Divided into Non-financial Services Businesses and Finance Subsidiaries
For the nine months ended December 31, 2011Non-financial
servicesbusinesses
Financesubsidiaries
ReconcilingItems
Consolidated
Cash flows from operating activities:51,847 92,813 ─ 144,660
227,337 155,165 ─ 382,502 ( 26,399) 55,850 ─ 29,451 ( 67,111) ─ ─ ( 67,111)
47,261 ─ ─ 47,261 7,654 ─ ─ 7,654
( 8,994) ( 18,386) ─ ( 27,380)
58,771 65,321 ( 380) 123,712
( 45,264) ─ ─ ( 45,264)
11,365 ─ 2,658 14,023
( 83,223) ( 5,604) ( 12,720) ( 101,547)Net cash provided by operating activities 173,244 345,159 ( 10,442) 507,961
Cash flows from investing activities:* 61,998 ( 6,320) ( 32,380) 23,298
( 238,349) ( 2,173) ─ ( 240,522)21,791 130 ─ 21,921
4,944 ─ ─ 4,944
─ ( 39,652) ( 1,696) ( 41,348)─ ( 498,380) ─ ( 498,380)─ 272,504 ─ 272,504
Net cash used in investing activities ( 149,616) ( 273,891) ( 34,076) ( 457,583)
Cash flows from financing activities:* 6,763 ( 41,176) 39,421 5,008 * 87,675 627,420 ( 7,359) 707,736 * ( 61,793) ( 662,253) 12,456 ( 711,590)
( 81,103) ─ ─ ( 81,103)( 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)
( 90,582) ( 1,087) ─ ( 91,669)
( 130,477) ( 5,828) ─ ( 136,305)1,252,362 26,662 ─ 1,279,024 1,121,885 20,834 ─ 1,142,719
Notes:1
2
Adjustments to reconcile net incometo net cash provided by operating activities:
Proceeds from sales of property, plant and equipment
Proceeds from sales of operating lease assets
DepreciationDeferred income taxes
Dividends from affiliates
Increase (decrease) in trade accounts andnotes payable
Proceeds from insurance recoveries for damaged property,plant and equipment
Decrease (increase) in trade accounts and notes receivable for finance subsidiaries is due to the reclassification of financesubsidiaries-receivables which relate to sales of inventory in the unaudited consolidated statements of cash flows presentedabove.
Increase (decrease) in short-term debt, net
Cash and cash equivalents at beginning of period
Dividends paid to noncontrolling interests
Effect of exchange rate changeson cash and cash equivalentsNet change in cash and cash equivalents
Cash and cash equivalents at end of period
Proceeds from long-term debt
Other, net
Decrease (increase) in investments and advancesCapital expenditures
Dividends paid
Decrease (increase) in finance subsidiaries-receivablesPurchase of operating lease assets
Repayment of long-term debt
Non-financial services businesses lend to finance subsidiaries. These cash flows are included in the decrease (increase) ininvestments and advances, increase (decrease) in short-term debt, proceeds from long-term debt, and repayment of long-termdebt (marked by *). The amount of the loans to finance subsidiaries is a JPY 11,253 million increase for the fiscal ninemonths ended December 31, 2010, and a JPY 32,380 million decrease for the fiscal nine months ended December 31, 2011,respectively.
Yen (millions)
Decrease (increase) in trade accounts andnotes receivableDecrease (increase) in inventories
Loss (gain) on derivative instruments, net
Equity in income of affiliates
Damaged and impairment loss on long-lived assets
CONSOLIDATED FINANCIAL SUMMARY 4FOR THE FISCAL NINE MONTHS ENDED DECEMBER 31, 2011
Net Income