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 2009
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): ¨
Note: Regulation S-T Rule 101(b)(1) only permits the submission in paper of a Form 6-K if submitted solely to provide an attached annual report to security holders.
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): ¨
Indicate by check mark whether by furnishing the information contained in this Form, the registrant is also thereby furnishing the information to the Commission pursuant to Rule 12g3-2(b) under the Securities Exchange Act of 1934.
Yes ¨ No ¨
If “Yes” is marked, indicate below the file number assigned to the registrant in connection with Rule 12g3-2(b):82-
Exhibit 1:
Exhibit 2:
Honda Motor Co., Ltd. issued its 11th Series of Unsecured Straight Bonds.
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 5, 2009
HONDA MOTOR CO., LTD. REPORTS
CONSOLIDATED FINANCIAL RESULTS
FOR THE FISCAL FIRST QUARTER ENDED JUNE 30, 2009
Tokyo, July 29, 2009 — Honda Motor Co., Ltd. today announced its consolidated financial results for the fiscal first quarter ended June 30, 2009.
First Quarter Results
Honda’s consolidated net income attributable to Honda Motor Co., Ltd. for the fiscal first quarter ended June 30, 2009 totaled JPY 7.5 billion (USD 79 million), a decrease of 95.6% from the same period in 2008. Basic net income attributable to Honda Motor Co., Ltd. per common share for the quarter amounted to JPY 4.17 (USD 0.04), a decrease of JPY 91.39 from JPY 95.56 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 2,002.2 billion (USD 20,854 million), a decrease of 30.2% from the same period in 2008, primarily due to decreased revenue in the automobile business and_ unfavorable currency translation effects. Honda estimates that if calculated at the same exchange rate as the corresponding period in 2008, revenue for the quarter would have decreased by approximately 20.7%.
Consolidated operating income for the quarter totaled JPY 25.1 billion (USD 262 million), a decrease of 88.0%, due primarily to decreased profit attributable to decreased revenue, the increase in fixed costs per unit as a result of reduced production and the unfavorable impact of currency effects caused by the appreciation of the Japanese yen, despite decreased SG&A expenses and R&D expenses and continuing cost reduction efforts.
Consolidated income before income taxes and equity in income of affiliates for the quarter totaled JPY 5.4 billion (USD 57 million), a decrease of 97.6% from the same period in 2008.
Equity in income of affiliates amounted to JPY 14.2 billion (USD 148 million) for the quarter, a decrease of 62.7% 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 2,252 thousand units, a decrease of 17.1% from the same period last year. Unit sales in Japan totaled 45 thousand units, a decrease of 22.4% compared to the same period last year. Outside of Japan, total unit sales was 2,207 thousand units, a decrease of 16.9% from the same period in 2008*, due mainly to a decrease in sales of motorcycle knocked-down parts for local production at Asian affiliates accounted for under the equity method and decreased unit sales in Other regions including South America, more than offsetting increased unit sales in India and Vietnam. Revenue from sales to external customers decreased 34.8%, to JPY 256.3 billion (USD 2,670 million) from the same period last year, due mainly to decreased unit sales and unfavorable currency translation effects. Operating income decreased 81.9% to JPY 5.6 billion (USD 59 million) from the same period last year, due primarily to decreased profit attributable to decreased revenue and the unfavorable impact of currency effects, more than offsetting decreased SG&A expenses and R&D expenses.
| * | 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 1,220 thousand units for the period. |
Honda’s automobile unit sales totaled 766 thousand units, a decrease of 20.4% from the same period last year. In Japan, unit sales amounted to 128 thousand units, the same level compared to the same period last year due mainly to favorable sales of Insight and FREED despite weak demand in the market. Unit sales outside of Japan decreased 23.5% to 638 thousand units from the corresponding period last year, due mainly to decreased unit sales in North America. Revenue from sales to external customers decreased 31.6% to JPY 1,523.4billion (USD 15,867 million) from the same period in 2008, due mainly to decreased unit sales and the unfavorable currency translation effects. Honda reported operating loss of JPY 21.3 billion (USD 223 million), a decrease of JPY 171.7 billion from the same period last year, due primarily to decreased revenue, the increase in fixed costs as a result of reduced production and the unfavorable impact of currency effects, more than offsetting decreased SG&A expenses and R&D expenses and continuing cost reduction efforts.
Revenue from customers in the financial services business increased 6.9% to JPY 155.9 billion (USD 1,624 million) from the same period in 2008, due mainly to an increase in operating lease revenues. Operating income increased 62.8% to JPY 46.8 billion (USD 488 million) from the same period in 2008, due primarily to the decreased allowance for losses on lease residual values and a decrease of funding cost.
Honda’s power product unit sales totaled 1,158 thousand units, a decrease of 13.5% from the same period in 2008. In Japan, unit sales totaled 71 thousand units, a decrease of 55.3% from the same period last year. Unit sales outside of Japan totaled 1,087 thousand units, a decrease of 7.9% from the corresponding period last year, due primarily to a decline of unit sales in Europe. Revenue from sales to external customers in power product and other businesses decreased by 33.7% to JPY 66.5 billion (USD 693 million) from the same period last year, due mainly to decreased unit sales of power products and unfavorable currency translation effects. Honda reported operating loss of JPY 5.9 billion (USD 62 million), a decrease of JPY 6.1 billion from the same period in 2008. This was primarily due to decreased revenue, which more than offset decreased SG&A expenses.
- 2 -
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 736.5 billion (USD 7,672 million), down 35.9% compared to the same period last year, due primarily to a decrease of exports sales in automobile businesses. Honda reported JPY 4.6 billion (USD 49 million) of operating loss, a decrease of JPY 42.5 billion from the same period last year, due primarily to decreased profit attributable to decreased revenue and the unfavorable impact of the currency effects caused by the appreciation of the Japanese yen, more than offsetting decreased SG&A expenses and R&D expenses.
In North America, revenue decreased by 34.6% to JPY 975.7 billion (USD 10,163 million) from the same period in 2008 due mainly to decreased revenue in automobile business and the unfavorable impact of the currency translation effects. Operating income decreased by 92.4% to JPY 7.1 billion (USD 75 million) from the corresponding period in 2008, due mainly to decreased revenue, the increase in fixed costs per unit as a result of reduced production and the unfavorable impact of the currency effects, more than offsetting decreased SG&A expenses and continuing cost reduction efforts.
In Europe, revenue decreased by 40.1% to JPY 218.1 billion (USD 2,273 million), from the same period in 2008, due primarily to decreased revenue in all of the business segments and the unfavorable impact of currency translation effects. Operating income decreased by 84.4% to JPY 1.7 billion (USD 18 million) from the corresponding period in 2008, due mainly to the increase in fixed costs as production were reduced, the unfavorable impact of the currency effects, and decreased revenue, more than offsetting decreased SG&A expenses.
In Asia, revenue decreased by 26.3% to JPY 321.3 billion (USD 3,348 million) from the same period last year due mainly to decreased revenue in automobile business and the unfavorable impact of the currency translation effects. Operating income decreased by 45.7% to JPY 20.3 billion (USD 212 million) from the corresponding period in 2008, due mainly to decreased revenue and the unfavorable impact of the currency effects, more than offsetting decreased 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.
In Other regions such as Latin America, the Middle East, Africa and Oceania, revenue decreased by 40.3% to JPY 175.4 billion (USD 1,827 million) compared to the same period last year, due mainly to the unfavorable impact of currency translation effects and decreased revenue in motorcycle business. Honda reported JPY 0.4 billion (USD 5 million) operating loss, a decrease of JPY 36.7 billion from the same period last year, due primarily to decreased revenue and the unfavorable currency impacts.
United States dollar amounts have been translated from yen solely for the convenience of the reader at the rate of ¥ 96.01=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, 2009.
- 3 -
Consolidated Statements of Balance Sheets for the Quarter Ended June 30, 2009
From April 1, 2009, total assets decreased JPY 52.1 billion (USD 543 million), to JPY 11,766.7 billion (USD 122,558 million) at June 30, 2009, mainly due to decreased current assets, which more than offset increased property on operating leases and the favorable currency translation effects. From April 1, 2009, total liabilities decreased by JPY 103.5 billion (USD 1,079 million), to JPY 7,585.0 billion (USD 79,002 million) at June 30, 2009, mainly due to decreased current liabilities despite increased long-term debt. For the three months ended June 30, 2009, total equity increased JPY 51.3 billion (USD 535 million), to JPY 4,181.7 billion (USD 43,555 million), primarily due to the favorable currency translation effects.
Consolidated Statements of Cash Flows for the Fiscal First Quarter
Consolidated cash and cash equivalents at the end of the period from April 1, 2009 through June 30, 2009 increased by JPY 124.1 billion (USD 1,293 million) from March 31, 2009, to JPY 814.4 billion (USD 8,483 million). The reasons for the increases or decreases for each cash flow activity are as follows.
Cash flows from operating activities
Net cash provided by operating activities amounted to JPY 406.1 billion (USD 4,230 million) for the fiscal three months ended June 30, 2009, mainly attributable to a decrease in inventories and depreciation, despite a decrease in accrued expenses and trade accounts and notes payable. Cash inflows from operating activities increased by JPY 75.5 billion (USD 787 million) compared with the corresponding period in 2008.
Cash flows from investing activities
Net cash used in investing activities amounted to JPY 205.5 billion (USD 2,141 million), due mainly to capital expenditures, the acquisitions of finance subsidiaries-receivables and the purchase of operating lease assets, which exceeded collections of finance subsidiaries-receivables and the sales of operating lease assets. Cash outflows from investing activities decreased by JPY 315.2 billion (USD 3,283 million) compared with the corresponding period in 2008.
Cash flows from financing activities
Net cash used in financing activities amounted to JPY 86.7 billion (USD 903 million), due mainly to repayment of long-term debt, decrease in short-term debt and dividends paid, which exceeded proceeds from long-term debt. Cash outflows from financing activities increased by JPY 293.2 billion (USD 3,055 million) compared with the corresponding period in 2008.
- 4 -
Forecasts for the Fiscal Year Ending March 31, 2010
In regard to the forecasts of the financial results for the fiscal year ending March 31, 2010, 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 93 and JPY 129, respectively, for the first half of the year ending March 31, 2010, and JPY 91 and JPY 127, respectively, for the full year ending March 31, 2010.
Projected unit sales for the full year ending March 31, 2010 are shown below.
| Unit (thousands) | Changes from FY2009 (thousands) | |||
| Motorcycle business |
8,950 | -1,164 | ||
| Automobile business |
3,295 | - 222 | ||
| Power product and Other businesses |
4,355 | - 832 |
FY2010 Forecasts for Consolidated Results
First half ending September 30, 2009
| Yen (billions) | Changes from FY 2009 | ||||
| Net sales and other operating revenue |
3,920 | -31.2 | % | ||
| Operating income |
- 10 | — | |||
| Income before income taxes and equity in income of affiliates |
- 25 | — | |||
| Net income attributable to Honda Motor Co., Ltd. |
- 10 | — | |||
| Yen | |||||
| Basic net income attributable to Honda Motor Co., Ltd. per common share |
-5.51 | ||||
- 5 -
Fiscal year ending March 31, 2010
| Yen (billions) | Changes from FY 2009 | ||||
| Net sales and other operating revenue |
8,280 | -17.3 | % | ||
| Operating income |
70 | -63.1 | % | ||
| Income before income taxes and equity in income of affiliates |
45 | -72.2 | % | ||
| Net income attributable to Honda Motor Co., Ltd. |
55 | -59.9 | % | ||
| Yen | |||||
| Basic net income attributable to Honda Motor Co., Ltd. per common share |
30.31 | ||||
Note: Certain revisions for misclassifications have been made to the prior years’ operating income, income before income taxes and equity in income of affiliates, net income attributable to Honda Motor Co., Ltd. and Basic net income attributable to Honda Motor Co., Ltd. per common share. Percentage changes are calculated based on the revised consolidated financial results of the prior years’. Please refer to “Others 3. Changes in accounting procedures for consolidated quarterly financial results”.
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, 2010 from the corresponding period last year are as follows.
| Yen (billions) | ||
| Revenue, model mix, etc., excluding currency effect |
-309.7 | |
| Cost reduction, the effect of raw material cost fluctuations, etc. |
- 13.0 | |
| SG&A expenses, excluding currency effect |
+364.0 | |
| R&D expenses |
+48.1 | |
| Currency effect |
-209.0 | |
| Operating income compared with fiscal year 2009 |
-119.6 | |
| Fair value of derivative instruments |
15.0 | |
| Others |
-12.1 | |
| Income before income taxes and equity in income of affiliates compared with fiscal year 2009 |
-116.7 | |
- 6 -
Dividend per Share of Common Stock
The Board of Directors of Honda Motor Co., Ltd., at its meeting held on July 29, 2009, resolved to make the quarterly dividend JPY 8 per share of common stock, the record date of which is June 30, 2009. The total expected annual dividend per share of common stock for the fiscal year ending March 31, 2010, is JPY 32 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.
- 7 -
Others
1. Changes in significant subsidiaries for the three months ended June 30, 2009 (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, 2009. 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) Noncontrolling Interests in Consolidated Financial Statements
In December 2007, the Financial Accounting Standards Board (FASB) issued Statement of Financial Accounting Standards (SFAS) No. 160, “Noncontrolling Interests in Consolidated Financial Statements - an amendment of ARB No. 51”. This statement requires that a noncontrolling interest in a subsidiary is an ownership interest in the consolidated entity that should be reported as equity in the consolidated financial statements, and requires that changes in a parent’s ownership interest while the parent retains its controlling financial interest in its subsidiary shall be accounted for as equity transactions. Honda adopted SFAS No. 160 effective April 1, 2009. Upon the adoption of SFAS No. 160, noncontrolling interests, which were previously referred to as minority interests and classified between total liabilities and stockholders’ equity on the consolidated balance sheets, are now included as a separate component of total equity. In addition, presentation of consolidated statements of income and cash flows has been changed. As the presentation and disclosure requirements of SFAS No. 160 have been applied retrospectively, Honda has made reclassifications to the prior consolidated financial statements to conform to the presentation used for the 3 months period ended June 2009. The adoption of SFAS No. 160 did not have a material impact on the Company’s consolidated financial position or results of operations.
(b) Adjustment resulting from change in fiscal year-end of a subsidiary
During fiscal year ended March 31, 2009, a subsidiary of the Company changed its fiscal year-end from December 31 to March 31. As a result, the Company eliminated the previously existing 3-month difference between the reporting periods of the Company and the subsidiary in the consolidated financial statements. The elimination of the lag period which was adjusted in the three months ended March 31, 2009 represented a change in accounting principle and was reported by retrospective application. The impact on the retained earnings balance as of April 1, 2008 was ¥6,214 million. Honda adjusted its consolidated financial statements as of and for the three months ended June 30, 2008 to conform to the presentation used for the fiscal year ended March 31, 2009.
- 8 -
Consolidated Financial Summary
For the three months ended June 30, 2008 and 2009
Financial Highlights
| Yen (millions) | ||||
| Three months ended Jun. 30, 2008 |
Three months ended Jun. 30, 2009 | |||
| Net sales and other operating revenue |
2,867,221 | 2,002,212 | ||
| Operating income |
210,476 | 25,164 | ||
| Income before income taxes and equity in income of affiliates |
224,224 | 5,458 | ||
| Net income attributable to Honda Motor Co., Ltd. |
173,397 | 7,560 | ||
| Yen | ||||
| Basic net income attributable to Honda Motor Co., Ltd. per common share |
95.56 | 4.17 | ||
| U.S. Dollar (millions) | ||||
| Three months ended Jun. 30, 2009 | ||||
| Net sales and other operating revenue |
20,854 | |||
| Operating income |
262 | |||
| Income before income taxes and equity in income of affiliates |
57 | |||
| Net income attributable to Honda Motor Co., Ltd. |
79 | |||
| U.S. Dollar | ||||
| Basic net income attributable to Honda Motor Co., Ltd. per common share |
0.04 | |||
Note: Certain revisions for misclassifications have been made to the prior years’ operating income, income before income taxes and equity in income of affiliates, net income attributable to Honda Motor Co., Ltd. and Basic net income attributable to Honda Motor Co., Ltd. per common share. Please refer to “Others 3. Changes in accounting procedures for consolidated quarterly financial results”.
- 9 -
[1] Consolidated Balance Sheets
| Yen (millions) | ||||
| Jun. 30, 2009 (Unaudited) |
March 31, 2009 | |||
| Assets |
||||
| Current assets: |
||||
| Cash and cash equivalents |
814,473 | 690,369 | ||
| Trade accounts and notes receivable |
799,068 | 854,214 | ||
| Finance subsidiaries-receivables, net |
1,093,851 | 1,172,030 | ||
| Inventories |
1,074,806 | 1,243,961 | ||
| Deferred income taxes |
172,797 | 198,158 | ||
| Other current assets |
496,189 | 462,446 | ||
| Total current assets |
4,451,184 | 4,621,178 | ||
| Finance subsidiaries-receivables, net |
2,415,620 | 2,400,282 | ||
| Investments and advances: |
||||
| Investments in and advances to affiliates |
500,149 | 505,835 | ||
| Other, including marketable equity securities |
152,385 | 133,234 | ||
| Total investments and advances |
652,534 | 639,069 | ||
| Property on operating leases: |
||||
| Vehicles |
1,614,744 | 1,557,060 | ||
| Less accumulated depreciation |
284,357 | 269,261 | ||
| Net property on operating leases |
1,330,387 | 1,287,799 | ||
| Property, plant and equipment, at cost: |
||||
| Land |
473,563 | 469,279 | ||
| Buildings |
1,480,607 | 1,446,090 | ||
| Machinery and equipment |
3,185,812 | 3,133,439 | ||
| Construction in progress |
177,150 | 159,567 | ||
| 5,317,132 | 5,208,375 | |||
| Less accumulated depreciation and amortization |
3,150,060 | 3,060,654 | ||
| Net property, plant and equipment |
2,167,072 | 2,147,721 | ||
| Other assets |
749,950 | 722,868 | ||
| Total assets |
11,766,747 | 11,818,917 | ||
- 10 -
[1] Consolidated Balance Sheets – continued
| Yen (millions) | ||||||
| Jun. 30, 2009 (Unaudited) |
March 31, 2009 | |||||
| Liabilities and Equity |
||||||
| Current liabilities: |
||||||
| Short-term debt |
1,567,767 | 1,706,819 | ||||
| Current portion of long-term debt |
796,061 | 977,523 | ||||
| Trade payables: |
||||||
| Notes |
30,591 | 31,834 | ||||
| Accounts |
637,336 | 674,498 | ||||
| Accrued expenses |
507,534 | 562,673 | ||||
| Income taxes payable |
20,631 | 32,614 | ||||
| Other current liabilities |
289,519 | 251,407 | ||||
| Total current liabilities |
3,849,439 | 4,237,368 | ||||
| Long-term debt, excluding current portion |
2,227,631 | 1,932,637 | ||||
| Other liabilities |
1,507,954 | 1,518,568 | ||||
| Total liabilities |
7,585,024 | 7,688,573 | ||||
| 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 |
44,056 | 43,965 | ||||
| Retained earnings |
5,092,220 | 5,099,267 | ||||
| Accumulated other comprehensive income (loss), net |
(1,262,373 | ) | (1,322,828 | ) | ||
| Treasury stock, at cost 20,219,430 shares on Mar. 31, 2009 and 20,221,498 shares in Jun. 30, 2009 |
(71,717 | ) | (71,712 | ) | ||
| Total Honda Motor Co., Ltd. shareholders’ equity |
4,060,782 | 4,007,288 | ||||
| Noncontrolling interest |
120,941 | 123,056 | ||||
| Total equity |
4,181,723 | 4,130,344 | ||||
| Commitments and contingent liabilities |
||||||
| Total liabilities and equity |
11,766,747 | 11,818,917 | ||||
Note: Please refer to “Others 3. Changes in accounting procedures for consolidated quarterly financial results”.
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[2] Consolidated Statements of Income
For the three months ended June 30, 2008 and 2009
| Yen (millions) | ||||||
| Three months ended Jun. 30, 2008 |
Three months ended Jun. 30, 2009 |
|||||
| Net sales and other operating revenue |
2,867,221 | 2,002,212 | ||||
| Operating costs and expenses: |
||||||
| Cost of sales |
2,051,325 | 1,553,824 | ||||
| Selling, general and administrative |
468,273 | 321,632 | ||||
| Research and development |
137,147 | 101,592 | ||||
| Operating income |
210,476 | 25,164 | ||||
| Other income: |
||||||
| Interest |
10,841 | 4,828 | ||||
| Other |
19,401 | 686 | ||||
| Other expenses: |
||||||
| Interest |
6,152 | 3,811 | ||||
| Other |
10,342 | 21,409 | ||||
| Income before income taxes and equity in income of affiliates |
224,224 | 5,458 | ||||
| Income tax (benefit) expense: |
||||||
| Current |
37,718 | 13,178 | ||||
| Deferred |
44,552 | (2,679 | ) | |||
| Income before equity in income of affiliates (loss) |
141,954 | (5,041 | ) | |||
| Equity in income of affiliates |
38,193 | 14,243 | ||||
| Net income |
180,147 | 9,202 | ||||
| Less: Net income attributable to noncontrolling interest |
(6,750 | ) | (1,642 | ) | ||
| Net income attributable to Honda Motor Co., Ltd. |
173,397 | 7,560 | ||||
| Yen | ||||||
| Basic net income attributable to Honda Motor Co., Ltd. per common share |
95.56 | 4.17 | ||||
Note: Please refer to “Others 3. Changes in accounting procedures for consolidated quarterly financial results”.
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[3] Consolidated Statements of Cash Flows
| Yen (millions) | ||||||
| Three months ended Jun. 30, 2008 (Unaudited) |
Three months ended Jun. 30, 2009 (Unaudited) |
|||||
| Cash flows from operating activities: |
||||||
| Net income |
180,147 | 9,202 | ||||
| Adjustments to reconcile net income to net cash provided by operating activities: |
||||||
| Depreciation excluding property on operating leases |
100,720 | 100,707 | ||||
| Depreciation of property on operating leases |
39,728 | 59,738 | ||||
| Deferred income taxes |
44,552 | (2,679 | ) | |||
| Equity in income of affiliates |
(38,193 | ) | (14,243 | ) | ||
| Dividends from affiliates |
5,817 | 38,796 | ||||
| Provision for credit and lease residual losses on finance subsidiaries-receivables |
15,682 | 11,406 | ||||
| Impairment loss on investments in securities |
327 | — | ||||
| Impairment loss excluding property on operating leases |
3,577 | — | ||||
| Impairment loss on property on operating leases |
1,266 | 1,413 | ||||
| Loss (gain) on derivative instruments, net |
(11,346 | ) | (16,141 | ) | ||
| Decrease (increase) in assets: |
||||||
| Trade accounts and notes receivable |
88,139 | 86,531 | ||||
| Inventories |
(53,683 | ) | 196,338 | |||
| Other current assets |
38,062 | (1,760 | ) | |||
| Other assets |
1,923 | 3,828 | ||||
| Increase (decrease) in liabilities: |
||||||
| Trade accounts and notes payable |
(76,707 | ) | (28,732 | ) | ||
| Accrued expenses |
(66,141 | ) | (60,694 | ) | ||
| Income taxes payable |
(5,333 | ) | (15,081 | ) | ||
| Other current liabilities |
38,488 | 76,052 | ||||
| Other liabilities |
32,727 | (26,211 | ) | |||
| Other, net |
(9,216 | ) | (12,337 | ) | ||
| Net cash provided by operating activities |
330,536 | 406,133 | ||||
| Cash flows from investing activities: |
||||||
| Increase in investments and advances |
(145 | ) | (10,180 | ) | ||
| Decrease in investments and advances |
726 | 162 | ||||
| Proceeds from sales of available-for-sale securities |
1,191 | 1,509 | ||||
| Payments for purchases of held-to-maturity securities |
(10,152 | ) | — | |||
| Proceeds from redemptions of held-to-maturity securities |
10,455 | — | ||||
| Capital expenditures |
(178,118 | ) | (128,946 | ) | ||
| Proceeds from sales of property, plant and equipment |
6,753 | 5,135 | ||||
| Acquisitions of finance subsidiaries-receivables |
(907,066 | ) | (316,417 | ) | ||
| Collections of finance subsidiaries-receivables |
624,750 | 392,612 | ||||
| Sales (purchases) of finance subsidiaries-receivables, net |
135,457 | (21,942 | ) | |||
| Purchase of operating lease assets |
(217,671 | ) | (158,517 | ) | ||
| Proceeds from sales of operating lease assets |
13,021 | 31,027 | ||||
| Net cash used in investing activities |
(520,799 | ) | (205,557 | ) | ||
- 13 -
[3] Consolidated Statements of Cash Flows – continued
| Yen (millions) | ||||||
| Three months ended Jun. 30, 2008 (Unaudited) |
Three months ended Jun. 30, 2009 (Unaudited) |
|||||
| Cash flows from financing activities: |
||||||
| Increase (decrease) in short-term debt, net |
78,433 | (172,379 | ) | |||
| Proceeds from long-term debt |
406,322 | 456,431 | ||||
| Repayment of long-term debt |
(234,790 | ) | (347,876 | ) | ||
| Dividends paid |
(39,921 | ) | (14,516 | ) | ||
| Dividends paid to noncontrolling interests |
(3,480 | ) | (8,366 | ) | ||
| Payment for purchase of treasury stock, net |
1 | (5 | ) | |||
| Net cash provided by (used in) financing activities |
206,565 | (86,711 | ) | |||
| Effect of exchange rate changes on cash and cash equivalents |
(17,327 | ) | 10,239 | |||
| Net change in cash and cash equivalents |
(1,025 | ) | 124,104 | |||
| Cash and cash equivalents at beginning of year |
1,050,902 | 690,369 | ||||
| Cash and cash equivalents at end of period |
1,049,877 | 814,473 | ||||
Note: Please refer to “Others 3. Changes in accounting procedures for consolidated quarterly financial results”.
- 14 -
[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), personal watercrafts 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, 2008
| 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 |
393,048 | 2,228,013 | 145,805 | 100,355 | 2,867,221 | — | 2,867,221 | ||||||||
| Intersegment |
— | — | 3,719 | 6,486 | 10,205 | (10,205 | ) | — | |||||||
| Total |
393,048 | 2,228,013 | 149,524 | 106,841 | 2,877,426 | (10,205 | ) | 2,867,221 | |||||||
| Segment income (loss) |
31,153 | 150,341 | 28,773 | 209 | 210,476 | — | 210,476 | ||||||||
| Assets |
1,190,452 | 5,881,184 | 6,472,006 | 317,344 | 13,860,986 | (620,599 | ) | 13,240,387 | |||||||
| Depreciation and amortization |
12,375 | 84,768 | 39,955 | 3,350 | 140,448 | — | 140,448 | ||||||||
| Capital expenditures |
22,961 | 124,140 | 217,872 | 3,197 | 368,170 | — | 368,170 | ||||||||
- 15 -
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 | ||||||||||
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 327,583 million as of June 30, 2008 and JPY 304,142 million as of June 30, 2009 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 39,728 million for the three months ended June 30, 2008 and JPY 59,738 million for the three months ended June 30, 2009, respectively, of depreciation of property on operating leases. |
| 4. | Capital expenditure of Financial Services Business includes JPY 217,671 million for the three months ended June 30, 2008 and JPY 158,517 million for the three months ended June 30, 2009 respectively, of purchase of operating lease assets. |
| 5. | Please refer to “Others 3. Changes in accounting procedures for consolidated quarterly financial results”. |
- 16 -
In addition to the disclosure required by U.S.GAAP, Honda provides the following supplemental information as required by Financial Instruments and Exchange Law:
2. Supplemental geographical information based on the location of the Company and its subsidiaries
As of and for the three months ended June 30, 2008
| Yen (millions) | |||||||||||||||||
| Japan | North America |
Europe | Asia | Other Regions |
Total | Reconciling Items |
Consolidated | ||||||||||
| Net sales and other operating revenue: |
|||||||||||||||||
| External customers |
465,279 | 1,435,035 | 332,731 | 360,481 | 273,695 | 2,867,221 | — | 2,867,221 | |||||||||
| Transfers between geographic areas |
684,323 | 58,143 | 31,807 | 75,762 | 20,099 | 870,134 | (870,134 | ) | — | ||||||||
| Total |
1,149,602 | 1,493,178 | 364,538 | 436,243 | 293,794 | 3,737,355 | (870,134 | ) | 2,867,221 | ||||||||
| Operating income |
37,910 | 94,583 | 11,293 | 37,462 | 36,307 | 217,555 | (7,079 | ) | 210,476 | ||||||||
| Assets |
3,104,187 | 7,491,284 | 994,795 | 1,139,981 | 584,657 | 13,314,904 | (74,517 | ) | 13,240,387 | ||||||||
| Long-lived assets |
1,082,792 | 1,872,357 | 173,941 | 259,924 | 125,495 | 3,514,509 | — | 3,514,509 | |||||||||
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 | |||||||||||
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 | |
| 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 327,583 million as of June 30, 2008 and JPY 304,142 million as of June 30, 2009 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. |
| 4. | Please refer to “Others 3. Changes in accounting procedures for consolidated quarterly financial results”. |
- 17 -
3. Overseas Sales and revenues based on the location of the customer
For the three months ended June 30, 2008
| Yen (millions) | |||||||||||||||
| North America |
Europe | Asia | Other Regions |
Total | |||||||||||
| Overseas sales |
1,428,063 | 330,123 | 436,531 | 320,841 | 2,515,558 | ||||||||||
| Consolidated sales |
2,867,221 | ||||||||||||||
| Overseas sales ratio to consolidated sales |
49.8 | % | 11.5 | % | 15.2 | % | 11.2 | % | 87.7 | % | |||||
For the three months ended June 30, 2009
| Yen (millions) | |||||||||||||||
| North America |
Europe | Asia | Other Regions |
Total | |||||||||||
| Overseas sales |
933,112 | 206,913 | 345,162 | 184,743 | 1,669,930 | ||||||||||
| Consolidated sales |
2,002,212 | ||||||||||||||
| Overseas sales ratio to consolidated sales |
46.6 | % | 10.3 | % | 17.2 | % | 9.3 | % | 83.4 | % | |||||
Explanatory note:
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 | |
| Other Regions | Brazil, Australia |
- 18 -
[6] Information Related to Honda Motor Co., Ltd. Shareholders’ Equity
As of and for the three months ended June 30, 2009
1. Information concerning dividends
| (a) | Dividends paid during the period |
Resolved at the General Meeting of Shareholders on June 23, 2009
| Total amount of dividends (million yen) |
14,516 | |
| Dividend per share of common stock (yen) |
8.00 | |
| Record date |
March 31, 2009 | |
| Effective date |
June 24, 2009 | |
| Resource for dividend |
Retained earnings |
| (b) | Dividends to be paid for the three months ended June 30, 2009, of which effective date is after June 30, 2009 |
Resolved by the Board of Directors at its meeting held on July 29, 2009
| Total amount of dividends (million yen) |
14,516 | |
| Dividend per share of common stock (yen) |
8.00 | |
| Record date |
June 30, 2009 | |
| Effective date |
August 24, 2009 | |
| Resource for dividend |
Retained earnings |
2. Significant changes in Honda Motor Co., Ltd. shareholders’ equity
None
[7] Income Taxes
Because of operating losses for the quarter ended June 30, 2009, certain subsidiaries of the Company have recorded valuation allowances over their deferred tax assets as of June 30, 2009. Due primarily to this accounting treatment, the effective tax rates of Honda for the quarter ended June 30, 2009 differs from Honda’s statutory income tax rate, which is 40% for the fiscal year ending March 31, 2010.
[8] Reclassifications
Certain revisions for misclassifications and reclassifications have been made to the consolidated financial statements for the three month ended June 30, 2008 and for the year ended March 31, 2009 to conform to the presentation used for the three month ended June 30, 2009.
- 19 -
[9] Unit Sales Breakdown
| Unit (thousands) | ||||||
| Three months ended Jun. 30, 2008 |
Three months ended Jun. 30, 2009 |
|||||
| MOTORCYCLES |
||||||
| Japan |
58 | 45 | ||||
| (58 | ) | (45 | ) | |||
| North America |
80 | 54 | ||||
| (50 | ) | (31 | ) | |||
| Europe |
91 | 62 | ||||
| (88 | ) | (61 | ) | |||
| Asia |
2,050 | 1,819 | ||||
| (2,050 | ) | (1,819 | ) | |||
| Other Regions |
436 | 272 | ||||
| (433 | ) | (268 | ) | |||
| Total |
2,715 | 2,252 | ||||
| (2,679 | ) | (2,224 | ) | |||
| AUTOMOBILES |
||||||
| Japan |
128 | 128 | ||||
| North America |
460 | 323 | ||||
| Europe |
75 | 69 | ||||
| Asia |
221 | 189 | ||||
| Other Regions |
78 | 57 | ||||
| Total |
962 | 766 | ||||
| POWER PRODUCTS |
||||||
| Japan |
159 | 71 | ||||
| North America |
493 | 564 | ||||
| Europe |
319 | 214 | ||||
| Asia |
249 | 233 | ||||
| Other Regions |
119 | 76 | ||||
| Total |
1,339 | 1,158 | ||||
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. |
- 20 -
[10] Net Sales Breakdown
For the three months ended June 30, 2008 and 2009
| Yen (millions) | ||||
| Three months ended Jun. 30, 2008 |
Three months ended Jun. 30, 2009 | |||
| MOTORCYCLE BUSINESS |
||||
| Japan |
21,515 | 17,659 | ||
| North America |
51,409 | 32,156 | ||
| Europe |
64,682 | 38,134 | ||
| Asia |
127,676 | 105,063 | ||
| Other Regions |
127,766 | 63,354 | ||
| Total |
393,048 | 256,366 | ||
| AUTOMOBILE BUSINESS |
||||
| Japan |
288,543 | 287,247 | ||
| North America |
1,221,121 | 737,391 | ||
| Europe |
238,833 | 152,746 | ||
| Asia |
295,374 | 230,930 | ||
| Other Regions |
184,142 | 115,115 | ||
| Total |
2,228,013 | 1,523,429 | ||
| FINANCIAL SERVICES BUSINESS |
||||
| Japan |
5,977 | 6,125 | ||
| North America |
132,591 | 143,429 | ||
| Europe |
3,535 | 2,706 | ||
| Asia |
1,216 | 1,129 | ||
| Other Regions |
2,486 | 2,514 | ||
| Total |
145,805 | 155,903 | ||
| POWER PRODUCT & OTHER BUSINESSES |
||||
| Japan |
35,628 | 21,251 | ||
| North America |
22,942 | 20,136 | ||
| Europe |
23,073 | 13,327 | ||
| Asia |
12,265 | 8,040 | ||
| Other Regions |
6,447 | 3,760 | ||
| Total |
100,355 | 66,514 | ||
| TOTAL |
||||
| Japan |
351,663 | 332,282 | ||
| North America |
1,428,063 | 933,112 | ||
| Europe |
330,123 | 206,913 | ||
| Asia |
436,531 | 345,162 | ||
| Other Regions |
320,841 | 184,743 | ||
| Total |
2,867,221 | 2,002,212 | ||
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. |
- 21 -
June 10, 2009
Announcement of Unsecured Straight Bond Issue
Honda Motor Co., Ltd. (hereinafter referred to as the “Company”) issued its 11th Series of Unsecured Straight Bonds as outlined below.
Particulars
The terms and conditions for the issue of its 11th Series of Unsecured Straight Bonds (with limited inter-bond pari passu clause) are as follows:
| 1 | Aggregate amount of the bonds | 70 billion yen | ||
| 2 | Denomination of each bond | 100 million yen | ||
| 3 | Coupon rate (per annum) | 0.759% | ||
| 4 | Issue price | 100% of the principal amount | ||
| 5 | Interest payment dates | June 10 and December 10 of each year | ||
| 6 | Maturity date | June 8, 2012 | ||
| 7 | Payment date | June 10, 2009 | ||
| 8 | Joint lead managers | Nomura Securities Co., Ltd. | ||
| Mitsubishi UFJ Securities Co., Ltd. | ||||
| Nikko Citigroup Limited | ||||
| Mizuho Securities Co., Ltd. | ||||
| 9 | Fiscal agent | The Bank of Tokyo-Mitsubishi UFJ, Ltd. |
(Note)
The Company intends to use the proceeds from the bond issue to fund capital expenditures and repayment of loans.
| Note: | The purpose of this paper is to make a general public announcement concerning the domestic public offering of the Company’s 11th Series of Unsecured Straight Bonds (with limited inter-bond pari passu clause). It has not been prepared for the purpose of an offer of, or solicitation of an offer to buy or subscribe for, securities of the Company. |