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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 NOVEMBER 2022

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  ☒    Form 40-F  ☐    

Indicate by check mark if the registrant is submitting the Form 6-K in paper as permitted by Regulation S-T Rule 101(b)(1):  ☐

Indicate by check mark if the registrant is submitting the Form 6-K in paper as permitted by Regulation S-T Rule 101(b)(7):  ☐

 

 

 


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Contents

Exhibit 1:

Honda Motor Co., Ltd. filed its consolidated interim financial statements for the fiscal second quarter ended September 30, 2022 with Financial Services Agency in Japan.


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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/ Masaharu Hirose

Masaharu Hirose

General Manager
Finance Division
Honda Motor Co., Ltd.

Date: November 18, 2022


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HONDA MOTOR CO., LTD. AND SUBSIDIARIES

Condensed Consolidated Interim Financial Statements

September 30, 2022


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HONDA MOTOR CO., LTD. AND SUBSIDIARIES

Consolidated Financial Results

Overview of Operating Performance

Honda’s consolidated sales revenue for the six months ended September 30, 2022 increased by 15.7%, to ¥8,085.3 billion from the same period last year, due mainly to increased sales revenue in Motorcycle business as well as positive foreign currency translation effects. Operating profit increased by 2.5%, to ¥453.4 billion from the same period last year, due mainly to an increase in profit attributable to price and cost impacts as well as positive foreign currency effects, which was partially offset by decreased profit attributable to sales impacts. Profit before income taxes decreased by 8.0%, to ¥515.8 billion from the same period last year, due mainly to decreased share of profit of investments accounted for using the equity method. Profit for the period attributable to owners of the parent decreased by 13.0%, to ¥338.5 billion from the same period last year.

Business Segments

Motorcycle Business

For the six months ended September 30, 2021 and 2022

 

     Units (thousands)  
     Honda Group Unit Sales*     Consolidated Unit Sales*  
   Six months
ended
Sep. 30, 2021
     Six months
ended
Sep. 30, 2022
                 Six months
ended
Sep. 30, 2021
     Six months
ended
Sep. 30, 2022
              
   Change     %      Change     %  

Motorcycle Business

     8,173        9,202        1,029        12.6       5,087        6,343        1,256       24.7   

Japan

     126        114        (12     (9.5     126        114        (12     (9.5

North America

     214        220        6       2.8       214        220        6        2.8  

Europe

     184        144        (40     (21.7     184        144        (40     (21.7

Asia

     6,915        7,900        985        14.2        3,829        5,041        1,212       31.7  

Other Regions

     734        824        90       12.3       734        824        90       12.3  

 

*

Honda Group Unit Sales is the total unit sales of completed motorcycle, ATV and side-by-side products of Honda, its consolidated subsidiaries and its affiliates and joint ventures accounted for using the equity method. Consolidated Unit Sales is the total unit sales of completed products corresponding to consolidated sales revenue to external customers, which consists of unit sales of completed products of Honda and its consolidated subsidiaries.

Sales revenue from external customers increased by 38.0%, to ¥1,412.6 billion from the same period last year, due mainly to an increase in consolidated unit sales as well as positive foreign currency translation effects. Operating profit increased by 51.7%, to ¥224.7 billion from the same period last year, due mainly to an increase in profit attributable to price and cost impacts as well as positive foreign currency effects.


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Automobile Business

For the six months ended September 30, 2021 and 2022

 

     Units (thousands)  
     Honda Group Unit Sales*     Consolidated Unit Sales*  
   Six months
ended
Sep. 30, 2021
     Six months
ended
Sep. 30, 2022
                 Six months
ended
Sep. 30, 2021
     Six months
ended
Sep. 30, 2022
              
   Change     %      Change     %  

Automobile Business

     1,915        1,785        (130     (6.8     1,182        1,093        (89     (7.5

Japan

     248        241        (7     (2.8     215        212        (3     (1.4

North America

     667        542        (125     (18.7     667        542        (125     (18.7

Europe

     56        45        (11     (19.6     56        45        (11     (19.6

Asia

     882        898        16        1.8        182        235          53        29.1   

Other Regions

     62        59        (3     (4.8     62        59        (3     (4.8

 

*

Honda Group Unit Sales is the total unit sales of completed products of Honda, its consolidated subsidiaries and its affiliates and joint ventures accounted for using the equity method. Consolidated Unit Sales is the total unit sales of completed products corresponding to consolidated sales revenue to external customers, which consists of unit sales of completed products of Honda and its consolidated subsidiaries. Certain sales of automobiles that are financed with residual value type auto loans and others by our Japanese finance subsidiaries and provided through our consolidated subsidiaries are accounted for as operating leases in conformity with IFRS and are not included in consolidated sales revenue to the external customers in our Automobile business. Accordingly, they are not included in Consolidated Unit Sales, but are included in Honda Group Unit Sales of our Automobile business.

Sales revenue from external customers increased by 13.5%, to ¥4,920.1 billion from the same period last year, due mainly to positive foreign currency translation effects, which was partially offset by decreased consolidated unit sales. Operating profit decreased by 45.7%, to ¥63.5 billion from the same period last year, due mainly to decreased profit attributable to sales impacts, which was partially offset by positive foreign currency effects.

Financial Services Business

Sales revenue from external customers increased by 5.9%, to ¥1,527.9 billion from the same period last year, due mainly to positive foreign currency translation effects, which was partially offset by decreased operating lease revenues. Operating profit decreased by 13.4%, to ¥153.0 billion from the same period last year, due mainly to a decrease in profit attributable to decreased sales revenue, which was partially offset by positive foreign currency effects.

Power Product and Other Businesses

For the six months ended September 30, 2021 and 2022

 

     Units (thousands)  
     Honda Group Unit Sales / Consolidated Unit Sales*  
   Six months
ended
Sep. 30, 2021
     Six months
ended
Sep. 30, 2022
              
   Change     %  

Power Product Business

     3,230        2,935        (295     (9.1

Japan

     184        184        0       0.0  

North America

     1,597        1,306        (291     (18.2

Europe

     499        554        55       11.0  

Asia

     756        691        (65     (8.6

Other Regions

     194        200        6       3.1  

 

*

Honda Group Unit Sales is the total unit sales of completed power products of Honda, its consolidated subsidiaries and its affiliates and joint ventures accounted for using the equity method. Consolidated Unit Sales is the total unit sales of completed power products corresponding to consolidated sales revenue to external customers, which consists of unit sales of completed power products of Honda and its consolidated subsidiaries. In Power Product business, there is no discrepancy between Honda Group Unit Sales and Consolidated Unit Sales since no affiliate and joint venture accounted for using the equity method were involved in the sale of Honda power products.

Sales revenue from external customers increased by 20.3%, to ¥224.5 billion from the same period last year, due mainly to positive foreign currency translation effects. Operating profit was ¥12.0 billion, an increase of ¥11.9 billion from the same period last year, due mainly to decreased operating costs in Other businesses as well as positive foreign currency effects. In addition, operating loss of aircraft and aircraft engines included in Power product and other businesses was ¥12.0 billion, an improvement of ¥3.5 billion from the same period last year, due mainly to decreased operating costs, which was partially offset by decreased profit attributable to negative foreign currency translation effects.


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Cash Flows

Consolidated cash and cash equivalents on September 30, 2022 increased by ¥260.4 billion from March 31, 2022, to ¥3,935.3 billion. The reasons for the increases or decreases for each cash flow activity, when compared with the same period last year, are as follows:

Net cash provided by operating activities amounted to ¥1,341.3 billion of cash inflows. Cash inflows from operating activities increased by ¥1,043.2 billion from the same period last year, due mainly to increased cash received from customers, which was partially offset by increased payments for selling, general and administrative expenses.

Net cash used in investing activities amounted to ¥428.6 billion of cash outflows. Cash outflows from investing activities increased by ¥201.9 billion from the same period last year, due mainly to an increase in payments for additions to property, plant and equipment as well as for acquisitions of other financial assets.

Net cash used in financing activities amounted to ¥952.7 billion of cash outflows. Cash outflows from financing activities increased by ¥740.0 billion from the same period last year, due mainly to decreased proceeds from financing liabilities and increased dividends paid.

Research and Development

The changes in research and development activities by Honda and its subsidiaries for the six months ended September 30, 2022 are as follows:

The Company has established Business Development Operations that consolidate functions to develop businesses and areas of software and core electrification technologies in order to strengthen new value creation by combining hardware with software and services. Some technology areas have been moved from their respective product-based business operations, such as motorcycle, automobile and power products, and combined under Business Development Operations. With this change, Honda will accelerate the speed at which it can move and enhance the synergy effect by integrating technology and business for multiple product domains.


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HONDA MOTOR CO., LTD. AND SUBSIDIARIES

Condensed Consolidated Statements of Financial Position

March 31, 2022 and September 30, 2022

 

            Yen (millions)  
Assets    Note          March 31,    
2022
    September 30,
2022
 
            unaudited     unaudited  

Current assets:

       

Cash and cash equivalents

      ¥   3,674,931     ¥   3,935,348  

Trade receivables

        896,768       912,679  

Receivables from financial services

        1,694,113       1,881,825  

Other financial assets

        217,743       263,709  

Inventories

        1,918,548       2,265,163  

Other current assets

        439,322       435,975  
     

 

 

   

 

 

 

Total current assets

        8,841,425       9,694,699  
     

 

 

   

 

 

 

Non-current assets:

       

Investments accounted for using the equity method

        967,404       1,118,036  

Receivables from financial services

        3,740,383       4,038,736  

Other financial assets

        819,654       931,357  

Equipment on operating leases

       5        5,159,129       5,314,541  

Property, plant and equipment

       6        3,079,407       3,287,862  

Intangible assets

        849,507       869,798  

Deferred tax assets

        91,592       98,920  

Other non-current assets

        424,652       473,944  
     

 

 

   

 

 

 

Total non-current assets

        15,131,728       16,133,194  
     

 

 

   

 

 

 

Total assets

      ¥ 23,973,153     ¥ 25,827,893  
     

 

 

   

 

 

 
            Yen (millions)  
Liabilities and Equity    Note          March 31,    
2022
    September 30,
2022
 
            unaudited     unaudited  

Current liabilities:

       

Trade payables

      ¥ 1,236,233     ¥ 1,295,080  

Financing liabilities

        3,118,304       3,524,876  

Accrued expenses

        375,601       341,137  

Other financial liabilities

        236,900       490,582  

Income taxes payable

        96,116       77,458  

Provisions

       7        268,388       287,019  

Other current liabilities

        672,857       731,657  
     

 

 

   

 

 

 

Total current liabilities

        6,004,399       6,747,809  
     

 

 

   

 

 

 

Non-current liabilities:

       

Financing liabilities

        4,984,252       4,768,693  

Other financial liabilities

        282,083       285,992  

Retirement benefit liabilities

        282,054       317,975  

Provisions

       7        253,625       265,801  

Deferred tax liabilities

        990,754       1,086,498  

Other non-current liabilities

        403,440       444,265  
     

 

 

   

 

 

 

Total non-current liabilities

        7,196,208       7,169,224  
     

 

 

   

 

 

 

Total liabilities

        13,200,607       13,917,033  
     

 

 

   

 

 

 

Equity:

       

Common stock

        86,067       86,067  

Capital surplus

        185,495       185,453  

Treasury stock

        (328,309     (357,050

Retained earnings

        9,539,133       9,766,346  

Other components of equity

        990,438       1,928,850  
     

 

 

   

 

 

 

Equity attributable to owners of the parent

        10,472,824       11,609,666  

Non-controlling interests

        299,722       301,194  
     

 

 

   

 

 

 

Total equity

        10,772,546       11,910,860  
     

 

 

   

 

 

 

Total liabilities and equity

      ¥   23,973,153     ¥   25,827,893  
     

 

 

   

 

 

 

See accompanying notes to condensed consolidated interim financial statements.


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HONDA MOTOR CO., LTD. AND SUBSIDIARIES

Condensed Consolidated Statements of Income

For the six months ended September 30, 2021 and 2022

 

          Yen (millions)  
     Note    September 30,
2021
    September 30,
2022
 
          unaudited     unaudited  

Sales revenue

     8    ¥   6,988,228     ¥   8,085,304  

Operating costs and expenses:

       

Cost of sales

        (5,561,775     (6,505,911

Selling, general and administrative

        (625,603     (744,778

Research and development

        (358,654     (381,163
     

 

 

   

 

 

 

Total operating costs and expenses

        (6,546,032     (7,631,852
     

 

 

   

 

 

 

Operating profit

        442,196       453,452  
     

 

 

   

 

 

 

Share of profit of investments accounted for using the equity method

        107,246       82,946  

Finance income and finance costs:

       

Interest income

        11,080       25,025  

Interest expense

        (6,428     (15,650

Other, net

        6,302       (29,942
     

 

 

   

 

 

 

Total finance income and finance costs

        10,954       (20,567
     

 

 

   

 

 

 

Profit before income taxes

        560,396       515,831  

Income tax expense

        (151,795     (147,092
     

 

 

   

 

 

 

Profit for the period

      ¥ 408,601     ¥ 368,739  
     

 

 

   

 

 

 

Profit for the period attributable to:

       

Owners of the parent

        389,209       338,514  

Non-controlling interests

        19,392       30,225  
          Yen  
          September 30,
2021
    September 30,
2022
 

Earnings per share attributable to owners of the parent

       

Basic and diluted

   11    ¥ 225.43     ¥ 198.08  

See accompanying notes to condensed consolidated interim financial statements.


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HONDA MOTOR CO., LTD. AND SUBSIDIARIES

Condensed Consolidated Statements of Comprehensive Income

For the six months ended September 30, 2021 and 2022

 

          Yen (millions)  
     Note    September 30,
2021
    September 30,
2022
 
          unaudited     unaudited  

Profit for the period

           ¥   408,601     ¥   368,739  

Other comprehensive income, net of tax:

       

Items that will not be reclassified to profit or loss

       

Remeasurements of defined benefit plans

        —         (11

Net changes in revaluation of financial assets measured at fair value through other comprehensive income

        58,018       (27,735

Share of other comprehensive income of investments accounted for using the equity method

        1,320       (1,109

Items that may be reclassified subsequently to profit or loss

       

Net changes in revaluation of financial assets measured at fair value through other comprehensive income

        (18     (893

Exchange differences on translating foreign operations

        37,049       917,707  

Share of other comprehensive income of investments accounted for using the equity method

        26,676       69,148  
     

 

 

   

 

 

 

Total other comprehensive income, net of tax

        123,045       957,107  
     

 

 

   

 

 

 

Comprehensive income for the period

      ¥      531,646     ¥   1,325,846  
     

 

 

   

 

 

 

Comprehensive income for the period attributable to:

       

Owners of the parent

        514,720       1,276,881  

Non-controlling interests

        16,926       48,965  

See accompanying notes to condensed consolidated interim financial statements.


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HONDA MOTOR CO., LTD. AND SUBSIDIARIES

Condensed Consolidated Statements of Income

For the three months ended September 30, 2021 and 2022

 

          Yen (millions)  
     Note    September 30,
2021
    September 30,
2022
 
          unaudited     unaudited  

Sales revenue

     8    ¥   3,404,358     ¥   4,255,754  

Operating costs and expenses:

       

Cost of sales

        (2,715,355     (3,441,741

Selling, general and administrative

        (308,589     (383,205

Research and development

        (181,428     (199,572
     

 

 

   

 

 

 

Total operating costs and expenses

        (3,205,372     (4,024,518
     

 

 

   

 

 

 

Operating profit

        198,986       231,236  
     

 

 

   

 

 

 

Share of profit of investments accounted for using the equity method

        51,315       60,337  

Finance income and finance costs:

       

Interest income

        5,880       15,893  

Interest expense

        (3,503     (8,223

Other, net

        (3,642     (20,816
     

 

 

   

 

 

 

Total finance income and finance costs

        (1,265     (13,146
     

 

 

   

 

 

 

Profit before income taxes

        249,036       278,427  

Income tax expense

        (78,155     (73,268
     

 

 

   

 

 

 

Profit for the period

      ¥ 170,881     ¥ 205,159  
     

 

 

   

 

 

 

Profit for the period attributable to:

       

Owners of the parent

        166,697       189,295  

Non-controlling interests

        4,184       15,864  
          Yen  
          September 30,
2021
    September 30,
2022
 

Earnings per share attributable to owners of the parent

       

Basic and diluted

   11    ¥   96.56     ¥   110.85  

See accompanying notes to condensed consolidated interim financial statements.


Table of Contents

HONDA MOTOR CO., LTD. AND SUBSIDIARIES

Condensed Consolidated Statements of Comprehensive Income

For the three months ended September 30, 2021 and 2022

 

          Yen (millions)  
     Note    September 30,
2021
    September 30,
2022
 
          unaudited     unaudited  

Profit for the period

      ¥      170,881     ¥      205,159  

Other comprehensive income, net of tax:

            

Items that will not be reclassified to profit or loss

       

Remeasurements of defined benefit plans

        —         (8

Net changes in revaluation of financial assets measured at fair value through other comprehensive income

        (4,564     (40,167

Share of other comprehensive income of investments accounted for using the equity method

        372       (665

Items that may be reclassified subsequently to profit or loss

       

Net changes in revaluation of financial assets measured at fair value through other comprehensive income

        (48     (557

Exchange differences on translating foreign operations

        7,739       268,761  

Share of other comprehensive income of investments accounted for using the equity method

        7,368       22,592  
     

 

 

   

 

 

 

Total other comprehensive income, net of tax

        10,867       249,956  
     

 

 

   

 

 

 

Comprehensive income for the period

      ¥      181,748     ¥      455,115  
     

 

 

   

 

 

 

Comprehensive income for the period attributable to:

       

Owners of the parent

        178,448       435,831  

Non-controlling interests

        3,300       19,284  

See accompanying notes to condensed consolidated interim financial statements.


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HONDA MOTOR CO., LTD. AND SUBSIDIARIES

Condensed Consolidated Statements of Changes in Equity

For the six months ended September 30, 2021 and 2022

 

          Yen (millions)  
          Equity attributable to owners of the parent              
    Note     Common
stock
    Capital
surplus
    Treasury
stock
    Retained
earnings
    Other
components
of equity
    Total     Non-controlling
interests
    Total
equity
 

Balance as of April 1, 2021 (unaudited)

    ¥ 86,067     ¥ 172,049     ¥ (273,786   ¥ 8,901,266     ¥ 196,710     ¥ 9,082,306     ¥ 290,533     ¥ 9,372,839  
   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Comprehensive income for the period

                 

Profit for the period

            389,209         389,209       19,392       408,601  

Other comprehensive income, net of tax

              125,511       125,511       (2,466     123,045  
   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Total comprehensive income for the period

            389,209       125,511       514,720       16,926       531,646  

Reclassification to retained earnings

            (92     92       —           —    

Transactions with owners and other

                 

Dividends paid

    12             (93,272       (93,272     (39,975     (133,247

Purchases of treasury stock

          (19,470         (19,470       (19,470

Disposal of treasury stock

          443           443         443  

Share-based payment transactions

        (267           (267       (267

Equity transactions and others

        13,720       7,656           21,376       (21,384     (8
   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Total transactions with owners and other

        13,453       (11,371     (93,272       (91,190     (61,359     (152,549
   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Balance as of September 30, 2021 (unaudited)

    ¥ 86,067     ¥ 185,502     ¥ (285,157   ¥ 9,197,111     ¥ 322,313     ¥ 9,505,836     ¥ 246,100     ¥ 9,751,936  
   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 
          Yen (millions)  
          Equity attributable to owners of the parent              
    Note     Common
stock
    Capital
surplus
    Treasury
stock
    Retained
earnings
    Other
components
of equity
    Total     Non-controlling
interests
    Total
equity
 

Balance as of April 1, 2022 (unaudited)

    ¥ 86,067     ¥ 185,495     ¥ (328,309   ¥ 9,539,133     ¥ 990,438     ¥ 10,472,824     ¥ 299,722     ¥ 10,772,546  
   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Comprehensive income for the period

                 

Profit for the period

            338,514         338,514       30,225       368,739  

Other comprehensive income, net of tax

              938,367       938,367       18,740       957,107  
   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Total comprehensive income for the period

            338,514       938,367       1,276,881       48,965       1,325,846  

Reclassification to retained earnings

            (45     45       —           —    

Transactions with owners and other

                 

Dividends paid

    12             (111,256       (111,256     (47,493     (158,749

Purchases of treasury stock

          (29,004         (29,004       (29,004

Disposal of treasury stock

          263           263         263  

Share-based payment transactions

        (42           (42       (42
   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Total transactions with owners and other

        (42     (28,741     (111,256       (140,039     (47,493     (187,532
   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Balance as of September 30, 2022 (unaudited)

    ¥ 86,067     ¥ 185,453     ¥ (357,050   ¥ 9,766,346     ¥ 1,928,850     ¥ 11,609,666     ¥ 301,194     ¥ 11,910,860  
   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

See accompanying notes to condensed consolidated interim financial statements.


Table of Contents

HONDA MOTOR CO., LTD. AND SUBSIDIARIES

Condensed Consolidated Statements of Cash Flows

For the six months ended September 30, 2021 and 2022

 

            Yen (millions)  
     Note      September 30,
2021
    September 30,
2022
 
            unaudited     unaudited  

Cash flows from operating activities:

       

Profit before income taxes

               ¥        560,396     ¥        515,831  

Depreciation, amortization and impairment losses excluding equipment on operating leases

        307,990       357,304  

Share of profit of investments accounted for using the equity method

        (107,246     (82,946

Finance income and finance costs, net

        (21,478     (69,589

Interest income and interest costs from financial services, net

        (79,985     (75,593

Changes in assets and liabilities

       

Trade receivables

        137,863       32,586  

Inventories

        (204,437     (129,729

Trade payables

        (212,422     (49,839

Accrued expenses

        (136,849     (62,296

Provisions and retirement benefit liabilities

        (118,571     (8,720

Receivables from financial services

        148,032       302,319  

Equipment on operating leases

        (101,068     493,778  

Other assets and liabilities

        28,415       165,071  

Other, net

        (5,829     1,465  

Dividends received

        101,140       131,572  

Interest received

        118,940       143,741  

Interest paid

        (45,457     (68,304

Income taxes paid, net of refunds

        (71,348     (255,317
     

 

 

   

 

 

 

Net cash provided by operating activities

        298,086       1,341,334  

Cash flows from investing activities:

       

Payments for additions to property, plant and equipment

        (140,739     (249,421

Payments for additions to and internally developed intangible assets

        (81,649     (76,441

Proceeds from sales of property, plant and equipment and intangible assets

        6,554       13,623  

Payments for acquisitions of investments accounted for using the equity method

        —         (10,340

Payments for acquisitions of other financial assets

        (221,150     (322,025

Proceeds from sales and redemptions of other financial assets

        210,274       215,952  
     

 

 

   

 

 

 

Net cash used in investing activities

        (226,710     (428,652

Cash flows from financing activities:

       

Proceeds from short-term financing liabilities

        4,096,198       4,219,027  

Repayments of short-term financing liabilities

        (4,232,433     (4,152,744

Proceeds from long-term financing liabilities

        943,620       362,289  

Repayments of long-term financing liabilities

        (830,634     (1,165,699

Dividends paid to owners of the parent

        (93,272     (111,256

Dividends paid to non-controlling interests

        (38,155     (36,752

Purchases and sales of treasury stock, net

        (19,027     (28,741

Repayments of lease liabilities

        (38,988     (38,890

Other, net

        (2     —    
     

 

 

   

 

 

 

Net cash used in financing activities

        (212,693     (952,766

Effect of exchange rate changes on cash and cash equivalents

        2,574       300,501  
     

 

 

   

 

 

 

Net change in cash and cash equivalents

        (138,743     260,417  

Cash and cash equivalents at beginning of year

        2,758,020       3,674,931  
     

 

 

   

 

 

 

Cash and cash equivalents at end of period

      ¥ 2,619,277     ¥ 3,935,348  
     

 

 

   

 

 

 

See accompanying notes to condensed consolidated interim financial statements.


Table of Contents

 

1

 

HONDA MOTOR CO., LTD. AND SUBSIDIARIES

Notes to Condensed Consolidated Interim Financial Statements

(1) Reporting Entity

Honda Motor Co., Ltd. (the “Company”) is a public company domiciled in Japan. The Company and its subsidiaries (collectively “Honda”) develop, manufacture and distribute motorcycles, automobiles, power products and others throughout the world, and also provide financial services to customers and dealers for the sale of those products. Principal manufacturing facilities are located in Japan, the United States of America, Canada, Mexico, Italy, France, China, India, Indonesia, Malaysia, Philippines, Thailand, Vietnam, Argentina and Brazil.

(2) Basis of Preparation

   (a) Compliance with Interim Financial Reporting Standards

The condensed consolidated interim financial statements of the Company have been prepared in accordance with IAS 34 “Interim Financial Reporting”. The condensed consolidated interim financial statements should be read in conjunction with the Company’s consolidated financial statements for the fiscal year ended March 31, 2022, since the condensed consolidated interim financial statements do not include all the information required in the annual consolidated financial statements, which have been prepared in accordance with International Financial Reporting Standards (“IFRS”) as issued by the International Accounting Standards Board.

   (b) Functional Currency and Presentation Currency

The condensed consolidated interim financial statements are presented in Japanese yen, which is the functional currency of the Company. All financial information presented in Japanese yen has been rounded to the nearest million Japanese yen, except when otherwise indicated.

   (c) Use of Estimates and Judgments

The preparation of condensed consolidated interim financial statements requires management to make judgments, estimates and assumptions that affect the application of accounting policies, the reported amount of assets, liabilities, revenues and expenses, and the disclosure of contingent assets and liabilities. Actual results could differ from these estimates. These estimates and underlying assumptions are reviewed on a continuous basis. Changes in these accounting estimates are recognized in the period in which the estimates are revised and in any future periods affected.

The condensed consolidated interim financial statements are prepared based on the same judgments and estimations as those applied and described in the Company’s consolidated financial statements for the fiscal year ended March 31, 2022.

(3) Summary of Significant Accounting Policies

The condensed consolidated interim financial statements are prepared based on the same accounting policies as those applied and described in the Company’s consolidated financial statements for the fiscal year ended March 31, 2022.


Table of Contents

 

2

 

HONDA MOTOR CO., LTD. AND SUBSIDIARIES

Notes to Condensed Consolidated Interim Financial Statements

 

(4) Segment Information

Based on Honda’s organizational structure and characteristics of products and services, Honda discloses segment information in four categories: Reportable segments of Motorcycle business, Automobile business and Financial services business, and other segments that are not reportable. The other segments are combined and disclosed in Power product and other businesses. Segment information is based on the components of Honda for which separate financial information is available that is evaluated regularly by the chief operating decision maker in deciding how to allocate resources and in assessing performance. The accounting policies used for segment information are consistent with the accounting policies used in the Company’s condensed consolidated interim 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), side-by-sides (SxS) and relevant parts    Research and development
Manufacturing
Sales and related services

Automobile Business

   Automobiles and relevant parts    Research and development
Manufacturing
Sales and related services

Financial Services Business

   Financial services    Retail loan and lease related to
Honda products
Others

Power Product and Other Businesses

   Power products and relevant parts, and others    Research and development
Manufacturing
Sales and related services
Others

Explanatory note:

 

*

Life creation business has been renamed Power product business as a result of organizational changes effective April 1, 2022.

   (a) Segment Information

Segment information as of and for the six months ended September 30, 2021 and 2022 is as follows:

As of and for the six months ended September 30, 2021

 

     Yen (millions)  
     Motorcycle
Business
     Automobile
Business
    Financial
Services
Business
     Power Product
and Other
Businesses
     Segment
Total
     Reconciling
Items
    Consolidated  
                                                

Sales revenue:

                

External customers

   ¥ 1,023,730      ¥ 4,335,269      ¥ 1,442,558      ¥ 186,671      ¥ 6,988,228      ¥ —       ¥ 6,988,228  

Intersegment

     —          99,655       1,290        11,033        111,978        (111,978     —    
  

 

 

    

 

 

   

 

 

    

 

 

    

 

 

    

 

 

   

 

 

 

Total

     1,023,730        4,434,924       1,443,848        197,704        7,100,206        (111,978     6,988,228  
  

 

 

    

 

 

   

 

 

    

 

 

    

 

 

    

 

 

   

 

 

 

Segment profit (loss)

   ¥ 148,137      ¥ 117,104     ¥ 176,814      ¥ 141      ¥ 442,196      ¥ —       ¥ 442,196  
  

 

 

    

 

 

   

 

 

    

 

 

    

 

 

    

 

 

   

 

 

 

Segment assets

   ¥ 1,379,823      ¥   8,446,421     ¥ 10,902,969      ¥ 357,978      ¥ 21,087,191      ¥    817,075      ¥ 21,904,266  

Depreciation and amortization

     33,325        263,951       438,425        8,414        744,115        —         744,115  

Capital expenditures

     17,337        191,267       1,220,048        7,402        1,436,054        —         1,436,054  


Table of Contents

 

3

 

HONDA MOTOR CO., LTD. AND SUBSIDIARIES

Notes to Condensed Consolidated Interim Financial Statements

 

As of and for the six months ended September 30, 2022

 

     Yen (millions)  
     Motorcycle
Business
     Automobile
Business
    Financial
Services
Business
     Power Product
and Other
Businesses
     Segment
Total
     Reconciling
Items
    Consolidated  

Sales revenue:

                  

External customers

   ¥ 1,412,682      ¥ 4,920,192      ¥ 1,527,915      ¥ 224,515      ¥ 8,085,304      ¥ —       ¥ 8,085,304  

Intersegment

     —          83,742       1,181        11,575        96,498        (96,498     —    
  

 

 

    

 

 

   

 

 

    

 

 

    

 

 

    

 

 

   

 

 

 

Total

     1,412,682        5,003,934       1,529,096        236,090        8,181,802        (96,498     8,085,304  
  

 

 

    

 

 

   

 

 

    

 

 

    

 

 

    

 

 

   

 

 

 

Segment profit (loss)

   ¥ 224,775      ¥ 63,568     ¥ 153,049      ¥ 12,060      ¥ 453,452      ¥ —       ¥ 453,452  
  

 

 

    

 

 

   

 

 

    

 

 

    

 

 

    

 

 

   

 

 

 

Segment assets

   ¥ 1,614,071      ¥ 10,241,643     ¥ 12,041,882      ¥ 469,044      ¥ 24,366,640      ¥ 1,461,253      ¥ 25,827,893  

Depreciation and amortization

     33,600        282,801       465,827        9,615        791,843        —         791,843  

Capital expenditures

     20,451        304,206       712,321        5,779        1,042,757        —         1,042,757  

Segment information for the three months ended September 30, 2021 and 2022 is as follows:

For the three months ended September 30, 2021

 

     Yen (millions)  
     Motorcycle
Business
     Automobile
Business
    Financial
Services
Business
     Power Product
and Other
Businesses
     Segment
Total
     Reconciling
Items
    Consolidated  

Sales revenue:

                  

External customers

   ¥    505,527      ¥   2,128,833      ¥ 675,986      ¥   94,012      ¥   3,404,358      ¥           —       ¥   3,404,358  

Intersegment

     —          53,637       364        4,445        58,446        (58,446     —    
  

 

 

    

 

 

   

 

 

    

 

 

    

 

 

    

 

 

   

 

 

 

Total

     505,527        2,182,470       676,350        98,457        3,462,804          (58,446     3,404,358  
  

 

 

    

 

 

   

 

 

    

 

 

    

 

 

    

 

 

   

 

 

 

Segment profit (loss)

   ¥ 67,442      ¥ 46,415     ¥        84,597      ¥ 532      ¥ 198,986      ¥ —       ¥ 198,986  
  

 

 

    

 

 

   

 

 

    

 

 

    

 

 

    

 

 

   

 

 

 

For the three months ended September 30, 2022

 

     Yen (millions)  
     Motorcycle
Business
     Automobile
Business
    Financial
Services
Business
     Power Product
and Other
Businesses
     Segment
Total
     Reconciling
Items
    Consolidated  

Sales revenue:

                  

External customers

   ¥    736,632      ¥   2,628,707      ¥      778,531      ¥ 111,884      ¥   4,255,754      ¥           —       ¥   4,255,754  

Intersegment

     —          47,056       502        5,169        52,727        (52,727     —    
  

 

 

    

 

 

   

 

 

    

 

 

    

 

 

    

 

 

   

 

 

 

Total

     736,632        2,675,763       779,033        117,053        4,308,481          (52,727       4,255,754  
  

 

 

    

 

 

   

 

 

    

 

 

    

 

 

    

 

 

   

 

 

 

Segment profit (loss)

   ¥ 126,946      ¥ 25,306     ¥ 74,248      ¥ 4,736      ¥ 231,236      ¥ —       ¥ 231,236  
  

 

 

    

 

 

   

 

 

    

 

 

    

 

 

    

 

 

   

 

 

 

 

Explanatory notes:

 

1.

Segment profit (loss) of each segment is measured in a consistent manner with consolidated operating profit, which is profit before income taxes before share of profit of investments accounted for using the equity method and finance income and finance costs. Expenses not directly associated with specific segments are allocated based on the most reasonable measures applicable.

 

2.

Segment assets of each segment are defined as total assets including investments accounted for using the equity method, derivatives, and deferred tax assets. Segment assets are based on those directly associated with each segment and those not directly associated with specific segments are allocated based on the most reasonable measures applicable except for the corporate assets described below.

 

3.

Intersegment sales revenues are generally made at values that approximate arm’s-length prices.

 

4.

Reconciling items include elimination of intersegment transactions and balances as well as unallocated corporate assets. Unallocated corporate assets, included in reconciling items as of September 30, 2021 and 2022 amounted to ¥954,524 million and ¥1,569,670 million, respectively, which consist primarily of the Company’s cash and cash equivalents and financial assets measured at fair value through other comprehensive income.


Table of Contents

 

4

 

HONDA MOTOR CO., LTD. AND SUBSIDIARIES

Notes to Condensed Consolidated Interim Financial Statements

 

   (b) Supplemental Geographical Information

In addition to the disclosure required by IFRS, Honda provides the following supplemental information for the financial statements users:

Supplemental geographical information based on the location of the Company and its subsidiaries

As of and for the six months ended September 30, 2021

 

     Yen (millions)  
     Japan      North
America
     Europe      Asia      Other
Regions
     Total      Reconciling
Items
    Consolidated  

Sales revenue:

                      

External customers

   ¥ 1,106,802      ¥ 3,831,856      ¥ 318,011      ¥ 1,450,916      ¥ 280,643      ¥ 6,988,228      ¥ —       ¥ 6,988,228  

Inter-geographic areas

     992,233        236,406        80,288        309,897        5,139        1,623,963        (1,623,963     —    
  

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

   

 

 

 

Total

     2,099,035        4,068,262        398,299        1,760,813        285,782        8,612,191        (1,623,963     6,988,228  
  

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

   

 

 

 

Operating profit (loss)

   ¥ 15,049      ¥ 279,456      ¥ 12,867      ¥ 133,867      ¥ 17,067      ¥ 458,306      ¥ (16,110   ¥ 442,196  
  

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

   

 

 

 

Assets

   ¥ 5,042,889      ¥ 12,216,115      ¥ 535,349      ¥ 3,288,559      ¥ 517,500      ¥ 21,600,412      ¥ 303,854     ¥ 21,904,266  

Non-current assets other than financial instruments, deferred tax assets and net defined benefit assets

   ¥ 3,022,583      ¥ 5,175,359      ¥ 57,248      ¥ 637,098      ¥ 135,257      ¥ 9,027,545      ¥ —       ¥ 9,027,545  

 

As of and for the six months ended September 30, 2022

 

 

     Yen (millions)  
     Japan      North
America
     Europe      Asia      Other
Regions
     Total      Reconciling
Items
    Consolidated  

Sales revenue:

                      

External customers

   ¥ 1,144,602      ¥ 4,216,445      ¥ 305,943      ¥ 2,016,454      ¥ 401,860      ¥ 8,085,304      ¥ —       ¥ 8,085,304  

Inter-geographic areas

     1,040,290        246,029        13,529        379,282        2,679        1,681,809        (1,681,809     —    
  

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

   

 

 

 

Total

     2,184,892        4,462,474        319,472        2,395,736        404,539        9,767,113        (1,681,809     8,085,304  
  

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

   

 

 

 

Operating profit (loss)

   ¥ 80,735      ¥ 144,015      ¥ 7,690      ¥ 202,740      ¥ 29,536      ¥ 464,716      ¥ (11,264   ¥ 453,452  
  

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

   

 

 

 

Assets

   ¥ 5,226,252      ¥ 14,418,647      ¥ 597,755      ¥ 4,024,209      ¥ 682,278      ¥ 24,949,141      ¥ 878,752     ¥ 25,827,893  

Non-current assets other than financial instruments, deferred tax assets and net defined benefit assets

   ¥ 2,959,919      ¥ 5,836,560      ¥ 47,990      ¥ 711,424      ¥ 181,839      ¥ 9,737,732      ¥ —       ¥ 9,737,732  

 

For the three months ended September 30, 2021

 

 

     Yen (millions)  
     Japan      North
America
     Europe      Asia      Other
Regions
     Total      Reconciling
Items
    Consolidated  

Sales revenue:

                      

External customers

   ¥ 543,343      ¥   1,846,104      ¥ 147,768      ¥ 721,421      ¥ 145,722      ¥   3,404,358      ¥ —       ¥ 3,404,358  

Inter-geographic areas

     479,841        114,429        26,283        162,109        3,270        785,932        (785,932     —    
  

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

   

 

 

 

Total

     1,023,184        1,960,533        174,051           883,530        148,992        4,190,290           (785,932       3,404,358  
  

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

   

 

 

 

Operating profit (loss)

   ¥ 13,320      ¥ 126,088      ¥ 2,868      ¥ 52,432      ¥ 14,453      ¥ 209,161      ¥ (10,175   ¥ 198,986  
  

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

   

 

 

 

 


Table of Contents

 

5

 

HONDA MOTOR CO., LTD. AND SUBSIDIARIES

Notes to Condensed Consolidated Interim Financial Statements

 

 

For the three months ended September 30, 2022

 

 

     Yen (millions)  
     Japan      North
America
     Europe      Asia      Other
Regions
     Total      Reconciling
Items
    Consolidated  

Sales revenue:

                      

External customers

   ¥ 609,572      ¥    2,183,792      ¥ 145,207      ¥ 1,115,446      ¥ 201,737      ¥ 4,255,754      ¥ —       ¥ 4,255,754  

Inter-geographic areas

     559,064        134,138        6,689        211,486        2,213        913,590        (913,590     —    
  

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

   

 

 

 

Total

     1,168,636        2,317,930        151,896         1,326,932        203,950          5,169,344            (913,590       4,255,754  
  

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

   

 

 

 

Operating profit (loss)

   ¥ 55,991      ¥ 52,997      ¥ 4,274      ¥ 116,266      ¥ 15,762      ¥ 245,290      ¥ (14,054   ¥ 231,236  
  

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

   

 

 

 

 

Explanatory notes:

 

1.

Major countries in each geographic area:

 

North America    United States, Canada, Mexico
Europe    United Kingdom, Germany, Belgium, Italy, France
Asia    Thailand, China, India, Vietnam, Malaysia
Other Regions    Brazil, Australia

 

2.

Operating profit (loss) of each geographical region is measured in a consistent manner with consolidated operating profit, which is profit before income taxes before share of profit of investments accounted for using the equity method and finance income and finance costs.

 

3.

Assets of each geographical region are defined as total assets including investments accounted for using the equity method, derivatives, and deferred tax assets.

 

4.

Sales revenues between geographic areas are generally made at values that approximate arm’s-length prices.

 

5.

Reconciling items include elimination of inter-geographic transactions and balances as well as unallocated corporate assets. Unallocated corporate assets, included in reconciling items as of September 30, 2021 and 2022 amounted to ¥954,524 million and ¥1,569,670 million, respectively, which consist primarily of the Company’s cash and cash equivalents and financial assets measured at fair value through other comprehensive income.

(5) Equipment on Operating Leases

The additions to equipment on operating leases for the six months ended September 30, 2021 and 2022 are ¥1,218,678 million and ¥711,061 million, respectively.

The sales or disposals of equipment on operating leases for the six months ended September 30, 2021 and 2022 are ¥679,327 million and ¥740,391 million, respectively.

(6) Property, Plant and Equipment

The additions to property, plant and equipment for the six months ended September 30, 2021 and 2022 are ¥163,630 million and ¥274,667 million, respectively.

The sales or disposals of property, plant and equipment for the six months ended September 30, 2021 and 2022 are ¥17,464 million and ¥14,828 million, respectively.


Table of Contents

 

6

 

HONDA MOTOR CO., LTD. AND SUBSIDIARIES

Notes to Condensed Consolidated Interim Financial Statements

 

(7) Provisions

The components of and changes in provisions for the six months ended September 30, 2022 are as follows:

 

     Yen (millions)  
     Product
warranties*
    Other     Total  

Balance as of April 1, 2022

   ¥ 419,201     ¥ 102,812     ¥ 522,013  
  

 

 

   

 

 

   

 

 

 

Provision

   ¥ 79,360     ¥ 8,833     ¥ 88,193  

Write-offs

     (80,802     (17,285     (98,087

Reversal

     (6,892     (6,808     (13,700

Exchange differences on translating foreign operations

     40,882       13,519       54,401  
  

 

 

   

 

 

   

 

 

 

Balance as of September 30, 2022

   ¥ 451,749     ¥ 101,071     ¥ 552,820  
  

 

 

   

 

 

   

 

 

 

Current liabilities and non-current liabilities of provisions as of March 31, 2022 and September 30, 2022 are as follows:

 

     Yen (millions)  
     As of March 31,
2022
     As of September 30,
2022
 

Current liabilities

   ¥             268,388      ¥             287,019  

Non-current liabilities

     253,625        265,801  
  

 

 

    

 

 

 

Total

   ¥ 522,013      ¥ 552,820  
  

 

 

    

 

 

 

 

Explanatory note:

 

*

Honda recognizes provisions for product warranties to cover future product warranty expenses. Honda recognizes costs for general warranties on products Honda sells and for specific warranty programs, including product recalls. Honda recognizes general estimated warranty costs at the time products are sold to customers. Honda also recognizes specific estimated warranty program costs when it is probable that an outflow of resources embodying economic benefits will be required to settle the obligation, and a reliable estimate can be made of the amount of the obligation. These provisions are estimated based on historical warranty claim experience with consideration given to the expected level of future warranty costs as well as current information on repair costs. Provisions for product warranties are utilized for expenditures based on the demand from customers and dealers.


Table of Contents

 

7

 

HONDA MOTOR CO., LTD. AND SUBSIDIARIES

Notes to Condensed Consolidated Interim Financial Statements

 

(8) Sales Revenue

As stated in Note 4, Honda discloses segment information in four categories.

The sales revenue disaggregated by geographical markets based on the location of the customer and the reconciliation of the disaggregated revenue with each segment for the six months ended September 30, 2021 and 2022 are as follows:

For the six months ended September 30, 2021

 

     Yen (millions)  
     Motorcycle
Business
     Automobile
Business
     Financial
Services
Business
     Power Product
and Other
Businesses
     Total  

Revenue arising from Contracts with Customers

              

Japan

   ¥ 53,819      ¥ 622,315      ¥ 65,533      ¥ 34,383      ¥ 776,050  

North America

     114,332        2,418,363        681,622        79,064        3,293,381  

Europe

     112,986        171,356        —          34,443        318,785  

Asia

     579,029        984,207        13        27,644        1,590,893  

Other Regions

     163,199        134,661        —          11,035        308,895  
  

 

 

    

 

 

    

 

 

    

 

 

    

 

 

 

Total

   ¥ 1,023,365      ¥ 4,330,902      ¥ 747,168      ¥ 186,569      ¥ 6,288,004  
  

 

 

    

 

 

    

 

 

    

 

 

    

 

 

 

Revenue arising from the other sources*

     365        4,367        695,390        102        700,224  
  

 

 

    

 

 

    

 

 

    

 

 

    

 

 

 

Total

   ¥   1,023,730      ¥   4,335,269      ¥   1,442,558      ¥      186,671      ¥   6,988,228  
  

 

 

    

 

 

    

 

 

    

 

 

    

 

 

 

 

For the six months ended September 30, 2022

 

           
     Yen (millions)  
     Motorcycle
Business
     Automobile
Business
     Financial
Services
Business
     Power Product
and Other
Businesses
     Total  

Revenue arising from Contracts with Customers

              

Japan

   ¥ 50,609      ¥ 622,096      ¥ 68,645      ¥ 43,229      ¥ 784,579  

North America

     143,651        2,684,546        724,347        95,677        3,648,221  

Europe

     93,701        166,712        —          43,151        303,564  

Asia

     870,930        1,264,033        9        28,675        2,163,647  

Other Regions

     253,604        178,516        —          13,659        445,779  
  

 

 

    

 

 

    

 

 

    

 

 

    

 

 

 

Total

   ¥ 1,412,495      ¥ 4,915,903      ¥ 793,001      ¥ 224,391      ¥ 7,345,790  
  

 

 

    

 

 

    

 

 

    

 

 

    

 

 

 

Revenue arising from the other sources*

     187        4,289        734,914        124        739,514  
  

 

 

    

 

 

    

 

 

    

 

 

    

 

 

 

Total

   ¥   1,412,682      ¥   4,920,192      ¥   1,527,915      ¥ 224,515      ¥ 8,085,304  
  

 

 

    

 

 

    

 

 

    

 

 

    

 

 

 

 

Explanatory note:

 

*

Revenue arising from the other sources primarily includes lease revenues recognized under IFRS 16 and interest recognized under IFRS 9.


Table of Contents

 

8

 

HONDA MOTOR CO., LTD. AND SUBSIDIARIES

Notes to Condensed Consolidated Interim Financial Statements

 

For the three months ended September 30, 2021

 

     Yen (millions)  
     Motorcycle
Business
     Automobile
Business
     Financial
Services
Business
     Power Product
and Other
Businesses
     Total  

Revenue arising from Contracts with Customers

              

Japan

   ¥ 27,608      ¥ 300,274      ¥ 24,041      ¥ 19,432      ¥ 371,355  

North America

     58,564        1,179,255        303,028        37,857        1,578,704  

Europe

     46,908        86,023        —          16,824        149,755  

Asia

     288,357        488,659        11        14,292        791,319  

Other Regions

     84,084        72,755        —          5,549        162,388  
  

 

 

    

 

 

    

 

 

    

 

 

    

 

 

 

Total

   ¥ 505,521      ¥ 2,126,966      ¥ 327,080      ¥ 93,954      ¥ 3,053,521  
  

 

 

    

 

 

    

 

 

    

 

 

    

 

 

 

Revenue arising from the other sources*

     6        1,867        348,906        58        350,837  
  

 

 

    

 

 

    

 

 

    

 

 

    

 

 

 

Total

   ¥      505,527      ¥   2,128,833      ¥      675,986      ¥        94,012      ¥   3,404,358  
  

 

 

    

 

 

    

 

 

    

 

 

    

 

 

 

 

For the three months ended September 30, 2022

 

           
     Yen (millions)  
     Motorcycle
Business
     Automobile
Business
     Financial
Services
Business
     Power Product
and Other
Businesses
     Total  

Revenue arising from Contracts with Customers

              

Japan

   ¥ 25,606      ¥ 334,860      ¥ 36,554      ¥ 25,428      ¥ 422,448  

North America

     67,820        1,413,592        369,427        45,528          1,896,367  

Europe

     41,832        81,815        —          19,684        143,331  

Asia

     475,819        706,629        3        14,398        1,196,849  

Other Regions

     125,373        89,623        —          6,762        221,758  
  

 

 

    

 

 

    

 

 

    

 

 

    

 

 

 

Total

   ¥ 736,450      ¥ 2,626,519      ¥ 405,984      ¥ 111,800      ¥ 3,880,753  
  

 

 

    

 

 

    

 

 

    

 

 

    

 

 

 

Revenue arising from the other sources*

     182        2,188        372,547        84        375,001  
  

 

 

    

 

 

    

 

 

    

 

 

    

 

 

 

Total

   ¥    736,632      ¥   2,628,707      ¥      778,531      ¥ 111,884      ¥ 4,255,754  
  

 

 

    

 

 

    

 

 

    

 

 

    

 

 

 

 

Explanatory note:

 

*

Revenue arising from the other sources primarily includes lease revenues recognized under IFRS 16 and interest recognized under IFRS 9.


Table of Contents

 

9

 

HONDA MOTOR CO., LTD. AND SUBSIDIARIES

Notes to Condensed Consolidated Interim Financial Statements

 

(9) Fair Value

(a) Definition of Fair Value Hierarchy

Honda uses a three-level hierarchy when measuring fair value. The following is a description of the three hierarchy levels:

 

Level 1    Quoted prices (unadjusted) in active markets for identical assets or liabilities that the Company has the ability to access as of the measurement date
Level 2    Inputs other than quoted prices included within Level 1 that are observable for the assets or liabilities, either directly or indirectly
Level 3    Unobservable inputs for the assets or liabilities

The level in the fair value hierarchy within which a fair value measurement in its entirety falls is based on the lowest input that is significant to the fair value measurement in its entirety. Honda recognizes the transfers between the levels of the fair value hierarchy at the end of the reporting period during which the change has occurred.

(b) Method of Fair Value Measurement

The fair values of assets and liabilities are determined based on relevant market information and through the use of an appropriate valuation method.

The measurement methods and assumptions used in the measurement of assets and liabilities are as follows:

(Cash and cash equivalents, trade receivables and trade payables)

The fair values approximate their carrying amounts due to their short-term maturities.

(Receivables from financial services)

The fair value of receivables from financial services is measured primarily by discounting future cash flows using the current interest rates applicable for these receivables of similar remaining maturities. Fair value measurement for receivables from financial services is classified as Level 3.

(Debt securities)

Debt securities consist mainly of mutual funds, corporate bonds, local bonds and auction rate securities.

The fair value of mutual funds with an active market is measured by using quoted market prices. Fair value measurement for mutual funds with an active market is classified as Level 1.

The fair values of corporate bonds and local bonds are measured based on proprietary pricing models provided by specialists and/or market makers and the models obtain a wide array of market observable inputs such as credit ratings and discount rates. Fair value measurements for corporate bonds and local bonds are classified as Level 2.


Table of Contents

 

10

 

HONDA MOTOR CO., LTD. AND SUBSIDIARIES

Notes to Condensed Consolidated Interim Financial Statements

 

The subsidiary’s auction rate securities are A to AAA rated and are insured by qualified guarantee agencies, and reinsured by the Secretary of Education and the United States government, and guaranteed at approximately 95% by the United States government. To measure fair value of auction rate securities, Honda uses a third-party-developed valuation model which obtains a wide array of market observable inputs, as well as unobservable inputs including probability of passing or failing auction at each auction. Fair value measurement for auction rate securities is classified as Level 3.

(Equity securities)

The fair value of equity securities with an active market is measured by using quoted market prices. Fair value measurement for equity securities with an active market is classified as Level 1.

The fair value of equity securities with no active market is measured mainly by using a discounted cash flow method, a comparable company valuation method and other appropriate valuation methods. Fair value measurement for equity securities with no active market is classified as Level 3. In addition, in the case that cost represents the best estimate of fair value, fair value for the equity securities with no active market is measured at cost.

Cash flow forecasts and discount rate for the discounted cash flow model and price book-value ratio (PBR) of a comparable company for the comparable company valuation method are used as significant unobservable inputs in the fair value measurement of equity securities classified as Level 3. The fair value increases (decreases) as Cash flow forecasts increase (decrease), discount rate decline (rise) and PBR of a comparable company rise (decline). Such fair value measurements are conducted in accordance with the group accounting policy approved by the appropriate person of authority and based upon valuation methods determined by personnel in accounting divisions of Honda.

(Derivatives)

Derivatives consist mainly of foreign currency forward exchange contracts, foreign currency option contracts, currency swap agreements and interest rate swap agreements.

The fair values of foreign currency forward exchange contracts and foreign currency option contracts are measured by using market observable inputs such as spot exchange rates, discount rates and implied volatility. The fair values of currency swap agreements and interest rate swap agreements are measured by discounting future cash flows using market observable inputs such as interest rate benchmarks like U.S. dollar LIBOR, swap rates, and foreign exchange rates. Fair value measurements for these derivatives are classified as Level 2.

The credit risk of the counterparties is considered in the valuation of derivatives.

(Financing liabilities)

The fair value of financing liabilities is measured by discounting future cash flows using interest rates currently available for liabilities of similar terms and remaining maturities. Fair value measurement of financing liabilities is mainly classified as Level 2.


Table of Contents

 

11

 

HONDA MOTOR CO., LTD. AND SUBSIDIARIES

Notes to Condensed Consolidated Interim Financial Statements

 

(c) Assets and Liabilities Measured at Fair Value on a recurring basis

Assets and liabilities measured at fair value on a recurring basis as of March 31, 2022 and September 30, 2022 consist of the following:

 

     Yen (millions)  

As of March 31, 2022

   Level 1      Level 2      Level 3      Total  

Other financial assets:

           

Financial assets measured at fair value through profit or loss:

           

Derivatives

           

Foreign exchange instruments

   ¥ —        ¥ 15,674      ¥ —        ¥ 15,674  

Interest rate instruments

     —          114,016        —          114,016  

Other

     —          —          4,648        4,648  
  

 

 

    

 

 

    

 

 

    

 

 

 

Total

     —          129,690        4,648        134,338  
  

 

 

    

 

 

    

 

 

    

 

 

 

Debt securities

     42,837        54,641        4,773        102,251  

Financial assets measured at fair value through other comprehensive income:

           

Debt securities

     —          19,984        —          19,984  

Equity securities

     335,745        —          133,038        468,783  
  

 

 

    

 

 

    

 

 

    

 

 

 

Total

   ¥   378,582      ¥   204,315      ¥   142,459      ¥   725,356  
  

 

 

    

 

 

    

 

 

    

 

 

 

Other financial liabilities:

           

Financial liabilities measured at fair value through profit or loss:

           

Derivatives

           

Foreign exchange instruments

   ¥ —        ¥ 66,644      ¥ —        ¥ 66,644  

Interest rate instruments

     —          83,669        —          83,669  

Other

     —          1,629        —          1,629  
  

 

 

    

 

 

    

 

 

    

 

 

 

Total

     —          151,942        —          151,942  
  

 

 

    

 

 

    

 

 

    

 

 

 

Total

   ¥ —        ¥ 151,942      ¥ —        ¥ 151,942  
  

 

 

    

 

 

    

 

 

    

 

 

 

There were no transfers between Level 1 and Level 2 for the year ended March 31, 2022.

 

     Yen (millions)  

As of September 30, 2022

   Level 1      Level 2      Level 3      Total  

Other financial assets:

           

Financial assets measured at fair value through profit or loss:

           

Derivatives

           

Foreign exchange instruments

   ¥ —        ¥ 63,112      ¥ —        ¥ 63,112  

Interest rate instruments

     —          217,027        —          217,027  

Other

     —          —          5,948        5,948  
  

 

 

    

 

 

    

 

 

    

 

 

 

Total

     —          280,139        5,948        286,087  
  

 

 

    

 

 

    

 

 

    

 

 

 

Debt securities

     40,836        57,416        5,648        103,900  

Financial assets measured at fair value through other comprehensive income:

           

Debt securities

     —          26,225        —          26,225  

Equity securities

     295,261        —          155,562        450,823  
  

 

 

    

 

 

    

 

 

    

 

 

 

Total

   ¥   336,097      ¥   363,780      ¥   167,158      ¥   867,035  
  

 

 

    

 

 

    

 

 

    

 

 

 

Other financial liabilities:

           

Financial liabilities measured at fair value through profit or loss:

           

Derivatives

           

Foreign exchange instruments

   ¥ —        ¥ 213,731      ¥ —        ¥ 213,731  

Interest rate instruments

     —          181,132        —          181,132  

Other

     —          32        —          32  
  

 

 

    

 

 

    

 

 

    

 

 

 

Total

     —          394,895        —          394,895  
  

 

 

    

 

 

    

 

 

    

 

 

 

Total

   ¥ —        ¥ 394,895      ¥ —        ¥ 394,895  
  

 

 

    

 

 

    

 

 

    

 

 

 

There were no transfers between Level 1 and Level 2 for the six months ended September 30, 2022.


Table of Contents

 

12

 

HONDA MOTOR CO., LTD. AND SUBSIDIARIES

Notes to Condensed Consolidated Interim Financial Statements

 

There were no significant effects of the measurements on profit or loss or other comprehensive income in Level 3 assets and liabilities measured at fair value on a recurring basis for the six months ended September 30, 2022.

(d) Financial Assets and Financial Liabilities measured at amortized cost

The carrying amounts and fair values of financial assets and financial liabilities measured at amortized cost as of March 31, 2022 and September 30, 2022 are as follows:

 

     Yen (millions)  
     As of March 31,
2022
     As of September 30,
2022
 
     Carrying
amount
     Fair value      Carrying
amount
     Fair value  

Receivables from financial services

   ¥ 5,434,496      ¥ 5,374,754      ¥ 5,920,561      ¥ 5,706,412  

Debt securities

     79,176        79,176        192,228        192,228  

Financing liabilities

     8,102,556        7,984,057        8,293,569        7,963,727  

The table does not include financial assets and financial liabilities measured at amortized cost whose fair values approximate their carrying amounts.

(10) Contingent Liabilities

Claims and Lawsuits

Honda is subject to potential liability under various lawsuits and claims. Honda recognizes a provision for loss contingencies when it is probable that an outflow of resources embodying economic benefits will be required to settle the obligation, and a reliable estimate can be made of the amount of the obligation. Honda reviews these pending lawsuits and claims periodically and adjusts the amounts recognized for these contingent liabilities, if necessary, by considering the nature of lawsuits and claims, the progress of the case and the opinions of legal counsel.

With respect to product liability, personal injury claims or lawsuits, Honda believes that any judgment that may be recovered by any plaintiff for general and special damages and court costs will be adequately covered by Honda’s insurance and provision. Punitive damages are claimed in certain of these lawsuits.

After consultation with legal counsel, and taking into account all known factors pertaining to existing lawsuits and claims, Honda believes that the ultimate outcome of such lawsuits and pending claims should not result in liability to Honda that would be likely to have an adverse material effect on its consolidated financial position or results of operations.

Loss related to airbag inflators

Honda has been conducting market-based measures in relation to airbag inflators. Honda recognizes a provision for specific warranty costs when it is probable that an outflow of resources embodying economic benefits will be required to settle the obligation, and a reliable estimate can be made of the amount of the obligation. There is a possibility that Honda will need to recognize additional provisions when new evidence related to the product recalls arise, however, it is not possible for Honda to reasonably estimate the amount and timing of potential future losses as of the date of this report.


Table of Contents

 

13

 

HONDA MOTOR CO., LTD. AND SUBSIDIARIES

Notes to Condensed Consolidated Interim Financial Statements

 

(11) Earnings Per Share

Earnings per share attributable to owners of the parent for the six months ended September 30, 2021 and 2022 are calculated based on the following information. There were no significant dilutive potential common shares outstanding for the six months ended September 30, 2021 and 2022.

 

     2021      2022  

Profit for the period attributable to owners of the parent (millions of yen)

   ¥ 389,209      ¥ 338,514  

Weighted average number of common shares outstanding, basic (shares)

     1,726,515,744        1,708,957,348  

Basic earnings per share attributable to owners of the parent (yen)

   ¥ 225.43      ¥ 198.08  

Earnings per share attributable to owners of the parent for the three months ended September 30, 2021 and 2022 are calculated based on the following information. There were no significant dilutive potential common shares outstanding for the three months ended September 30, 2021 and 2022.

 

     2021      2022  

Profit for the period attributable to owners of the parent (millions of yen)

   ¥ 166,697      ¥ 189,295  

Weighted average number of common shares outstanding, basic (shares)

     1,726,411,255        1,707,725,187  

Basic earnings per share attributable to owners of the parent (yen)

   ¥ 96.56      ¥ 110.85  

(12) Dividend

(a) Dividend payout

For the six months ended September 30, 2021

 

Resolution

   The Board of Directors Meeting on May 14, 2021

Type of shares

   Common shares

Total amount of dividends (millions of yen)

   93,272

Dividend per share (yen)

   54.00

Record date

   March 31, 2021

Effective date

   June 7, 2021

For the six months ended September 30, 2022

 

Resolution

   The Board of Directors Meeting on May 13, 2022

Type of shares

   Common shares

Total amount of dividends (millions of yen)

   111,256

Dividend per share (yen)

   65.00

Record date

   March 31, 2022

Effective date

   June 6, 2022


Table of Contents

 

14

 

HONDA MOTOR CO., LTD. AND SUBSIDIARIES

Notes to Condensed Consolidated Interim Financial Statements

 

(b) Dividends payable of which record date was in the six months ended September 30, 2022, effective after the period

 

Resolution

   The Board of Directors Meeting on November 9, 2022

Type of shares

   Common shares

Resource for dividend

   Retained earnings

Total amount of dividends (millions of yen)

   102,219

Dividend per share (yen)

   60.00

Record date

   September 30, 2022

Effective date

   December 5, 2022

(13) Approval of Release of Condensed Consolidated Interim Financial Statements

The release of the condensed consolidated interim financial statements was approved by Toshihiro Mibe, Director, President and Representative Executive Officer and Kohei Takeuchi, Director, Executive Vice President and Representative Executive Officer and Chief Financial Officer on November 10, 2022.

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