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 JANUARY 2015
COMMISSION FILE NUMBER: 1-07628
HONDA GIKEN KOGYO KABUSHIKI KAISHA
(Name of registrant)
HONDA MOTOR CO., LTD.
(Translation of registrant’s name into English)
1-1, Minami-Aoyama 2-chome, Minato-ku, Tokyo 107-8556, Japan
(Address of principal executive offices)
Indicate by check mark whether the registrant files or will file annual reports under cover of Form 20-F or Form 40-F:
Form 20-F x Form 40-F ¨
Indicate by check mark if the registrant is submitting the Form 6-K in paper as permitted by Regulation S-T Rule 101(b)(1): ¨
Indicate by check mark if the registrant is submitting the Form 6-K in paper as permitted by Regulation S-T Rule 101(b)(7): ¨
Exhibit 1:
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/ Hideo Moroe |
| Hideo Moroe |
| General Manager |
| Finance Division |
| Honda Motor Co., Ltd. |
Date: January 30, 2015
HONDA MOTOR CO., LTD. REPORTS
CONSOLIDATED FINANCIAL RESULTS
FOR THE FISCAL THIRD QUARTER AND
THE FISCAL NINE-MONTH PERIOD ENDED DECEMBER 31, 2014
Tokyo, January 30, 2015 — Honda Motor Co., Ltd. today announced its consolidated financial results for the fiscal third quarter and the fiscal nine-month period ended December 31, 2014.
Third Quarter Results
Honda’s consolidated net income attributable to Honda Motor Co., Ltd. for the fiscal third quarter ended December 31, 2014 totaled JPY 136.5 billion (USD 1,132 million), a decrease of 15.1% from the same period last year. Basic net income attributable to Honda Motor Co., Ltd. per common share for the quarter amounted to JPY 75.75 (USD 0.63), a decrease of JPY 13.43 (USD 0.11) from JPY 89.18 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 3,289.9 billion (USD 27,291 million), an increase of 8.9% from the same period last year, due primarily to increased revenue in motorcycle business operations, as well as favorable foreign currency translation effects, despite decreased revenue in automobile business operations.
Consolidated operating income for the quarter amounted to JPY 177.2 billion (USD 1,470 million), a decrease of 22.5% from the same period last year, due primarily to a decrease in sales volume and model mix, as well as increased SG&A expenses including product warranty expenses, despite continuing cost reduction efforts and favorable foreign currency effects.
Consolidated income before income taxes and equity in income of affiliates for the quarter totaled JPY 194.1 billion (USD 1,610 million), a decrease of 10.4% from the same period last year.
Equity in income of affiliates amounted to JPY 28.5 billion (USD 237 million) for the quarter, a decrease of 9.7% from the corresponding period last year.
- 1 -
Business Segment
Motorcycle Business
For the three months ended December 31, 2013 and 2014
| Unit (Thousands) | ||||||||||||||||||||||||||||||||
| Honda Group Unit Sales | Consolidated Unit Sales | |||||||||||||||||||||||||||||||
| Three months ended Dec. 31, 2013 |
Three months ended Dec. 31, 2014 |
Change | % | Three months ended Dec. 31, 2013 |
Three months ended Dec. 31, 2014 |
Change | % | |||||||||||||||||||||||||
| Motorcycle business |
4,251 | 4,432 | 181 | 4.3 | 2,657 | 2,763 | 106 | 4.0 | ||||||||||||||||||||||||
| Japan |
52 | 49 | - 3 | - 5.8 | 52 | 49 | - 3 | - 5.8 | ||||||||||||||||||||||||
| North America |
63 | 69 | 6 | 9.5 | 63 | 69 | 6 | 9.5 | ||||||||||||||||||||||||
| Europe |
27 | 32 | 5 | 18.5 | 27 | 32 | 5 | 18.5 | ||||||||||||||||||||||||
| Asia |
3,678 | 3,872 | 194 | 5.3 | 2,084 | 2,203 | 119 | 5.7 | ||||||||||||||||||||||||
| Other Regions |
431 | 410 | - 21 | - 4.9 | 431 | 410 | - 21 | - 4.9 | ||||||||||||||||||||||||
Note: Honda Group Unit Sales is the total unit sales of completed products of Honda, its consolidated subsidiaries and its affiliates accounted for under the equity method. Consolidated Unit Sales is the total unit sales of completed products corresponding to consolidated net sales to external customers, which consists of unit sales of completed products of Honda and its consolidated subsidiaries.
With respect to Honda’s sales for the fiscal third quarter by business segment, in motorcycle business operations, revenue from sales to external customers increased 15.8%, to JPY 463.4 billion (USD 3,845 million) from the same period last year due mainly to increased consolidated unit sales, as well as favorable foreign currency translation effects. Operating income totaled JPY 53.5 billion (USD 444 million), an increase of 55.2% from the same period last year, due primarily to an increase in sales volume and model mix, as well as favorable foreign currency effects.
Automobile Business
For the three months ended December 31, 2013 and 2014
| Unit (Thousands) | ||||||||||||||||||||||||||||||||
| Honda Group Unit Sales | Consolidated Unit Sales | |||||||||||||||||||||||||||||||
| Three months ended Dec. 31, 2013 |
Three months ended Dec. 31, 2014 |
Change | % | Three months ended Dec. 31, 2013 |
Three months ended Dec. 31, 2014 |
Change | % | |||||||||||||||||||||||||
| Automobile business |
1,082 | 1,028 | - 54 | - 5.0 | 900 | 877 | - 23 | - 2.6 | ||||||||||||||||||||||||
| Japan |
216 | 162 | - 54 | - 25.0 | 215 | 159 | - 56 | - 26.0 | ||||||||||||||||||||||||
| North America |
465 | 470 | 5 | 1.1 | 465 | 470 | 5 | 1.1 | ||||||||||||||||||||||||
| Europe |
38 | 34 | - 4 | - 10.5 | 38 | 34 | - 4 | - 10.5 | ||||||||||||||||||||||||
| Asia |
287 | 295 | 8 | 2.8 | 106 | 147 | 41 | 38.7 | ||||||||||||||||||||||||
| Other Regions |
76 | 67 | - 9 | - 11.8 | 76 | 67 | - 9 | - 11.8 | ||||||||||||||||||||||||
Note: Honda Group Unit Sales is the total unit sales of completed products of Honda, its consolidated subsidiaries and its affiliates accounted for under the equity method. Consolidated Unit Sales is the total unit sales of completed products corresponding to consolidated net sales 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 by our Japanese finance subsidiaries and sold through our consolidated subsidiaries are accounted for as operating leases in conformity with U.S. generally accepted accounting principles and are not included in consolidated net sales to the external customers in our Automobile business. As a result, they are not included in Consolidated Unit Sales, but are included in Honda Group Unit Sales of our Automobile business.
In automobile business operations, revenue from sales to external customers increased 7.0%, to JPY 2,538.5 billion (USD 21,058 million) from the same period last year due mainly to favorable foreign currency translation effects, despite decreased consolidated unit sales. Operating income totaled JPY 76.4 billion (USD 634 million), a decrease of 50.4% from the same period last year, due primarily to a decrease in sales volume and model mix, as well as increased SG&A expenses including product warranty expenses, despite continuing cost reduction efforts and favorable foreign currency effects.
- 2 -
Financial Services Business
Revenue from customers in the financial services business operations increased 21.9%, to JPY 213.4 billion (USD 1,770 million) from the same period last year due mainly to an increase in revenue from operating leases and favorable foreign currency translation effects. Operating income increased 19.6% to JPY 51.0 billion (USD 424 million) from the same period last year due mainly to favorable foreign currency effects.
Power Product and Other Businesses
For the three months ended December 31, 2013 and 2014
| Unit (Thousands) | ||||||||||||||||
| Honda Group Unit Sales/ Consolidated Unit Sales | ||||||||||||||||
| Three months ended Dec. 31, 2013 |
Three months ended Dec. 31, 2014 |
Change | % | |||||||||||||
| Power product business |
1,162 | 1,148 | - 14 | - 1.2 | ||||||||||||
| Japan |
63 | 83 | 20 | 31.7 | ||||||||||||
| North America |
427 | 423 | - 4 | - 0.9 | ||||||||||||
| Europe |
198 | 197 | - 1 | - 0.5 | ||||||||||||
| Asia |
338 | 304 | - 34 | - 10.1 | ||||||||||||
| Other Regions |
136 | 141 | 5 | 3.7 | ||||||||||||
Note: Honda Group Unit Sales is the total unit sales of completed products of Honda, its consolidated subsidiaries and its affiliates accounted for under the equity method. Consolidated Unit Sales is the total unit sales of completed products corresponding to consolidated net sales to external customers, which consists of unit sales of completed products of Honda and its consolidated subsidiaries. In power product business, there is no discrepancy between Honda Group Unit Sales and Consolidated Unit Sales for the three months ended December 31, 2013 and for the three months ended December 31, 2014, since no affiliate accounted for under the equity method was involved in the sale of Honda power products.
Revenue from sales to external customers in power product and other businesses totaled to JPY 74.5 billion (USD 618 million), an increase of 1.8% from the same period last year, due mainly to favorable foreign currency translation effects, despite decreased revenue in other businesses operations. Honda reported an operating loss of JPY 3.8 billion (USD 32 million), a decline of 0.9 billion (USD 8 million) from the same period last year, due mainly to unfavorable foreign currency effects, despite decreased SG&A expenses.
- 3 -
Geographical Information
With respect to Honda’s sales for the fiscal third quarter by geographic segment, in Japan, revenue from domestic and export sales amounted to JPY 953.8 billion (USD 7,913 million), a decrease of 12.7% from the same period last year due mainly to decreased revenue in automobile business operations. Operating income totaled JPY 42.0 billion (USD 349 million), a decrease of 29.1% from the same period last year, due mainly to a decrease in sales volume and model mix, as well as increased SG&A expenses, despite favorable foreign currency effects.
In North America, revenue increased by 13.8%, to JPY 1,811.5 billion (USD 15,027 million) from the same period last year due mainly to favorable foreign currency translation effects. Operating income totaled JPY 82.1 billion (USD 681 million), a decrease of 37.4% from the same period last year due mainly to increased SG&A expenses including product warranty expenses.
In Europe, revenue decreased by 9.0%, to JPY 164.5 billion (USD 1,365 million) from the same period last year due mainly to decreased revenue in automobile business operations, despite favorable foreign currency translation effects. Honda reported an operating loss of JPY 4.0 billion (USD 34 million), an improvement of JPY 4.6 billion (USD 39 million) from the same period last year due mainly to decreased SG&A expenses.
In Asia, revenue increased by 23.2%, to JPY 835.1 billion (USD 6,928 million) from the same period last year mainly due to increased revenue in automobile business operations, as well as favorable foreign currency translation effects. Operating income increased by 46.5%, to JPY 73.3 billion (USD 608 million) from the same period last year due mainly to an increase in sales volume and model mix, continuing cost reduction efforts, as well as favorable foreign currency effects.
In Other regions, which includes South America, the Middle/Near East, Africa and Oceania, revenue decreased by 3.1%, to JPY 236.3 billion (USD 1,960 million) from the same period last year, mainly due to decreased revenue in automobile business operations, despite favorable foreign currency translation effects. Operating income totaled JPY 13.0 billion (USD 108 million), an increase of 64.4% from the same period last year, mainly due to continuing cost reduction efforts.
Explanatory note:
United States dollar amounts have been translated from yen solely for the convenience of the reader at the rate of JPY 120.55=USD 1, the mean of the telegraphic transfer selling exchange rate and the telegraphic transfer buying exchange rate prevailing on the Tokyo foreign exchange market on December 31, 2014.
- 4 -
Nine Months Results
Honda’s consolidated net income attributable to Honda Motor Co., Ltd. for the fiscal nine months ended December 31, 2014 totaled JPY 424.9 billion, an increase of 5.3% from the same period last year. Basic net income attributable to Honda Motor Co., Ltd. per common share for the fiscal nine months amounted to JPY 235.77, an increase of JPY 11.83 from JPY 223.94 for the same period last year.
Consolidated net sales and other operating revenue for the fiscal nine months amounted to JPY 9,293.0 billion, an increase of 6.3% from the same period last year, due primarily to increased revenue in motorcycle and automobile business operations, as well as favorable foreign currency translation effects.
Consolidated operating income for the fiscal nine months amounted to JPY 539.7 billion, a decrease of 7.7% from the same period last year, due primarily to increased SG&A expenses including product warranty expenses and increased R&D expenses, despite continuing cost reduction efforts and favorable foreign currency effects.
Consolidated income before income taxes and equity in income of affiliates for the fiscal nine months totaled JPY 572.7 billion, an increase of 3.3% from the same period last year.
Equity in income of affiliates amounted to JPY 89.9 billion for the fiscal nine months, a decrease of 5.5% from the same period last year.
- 5 -
Business Segment
Motorcycle Business
For the nine months ended December 31, 2013 and 2014
| Unit (Thousands) | ||||||||||||||||||||||||||||||||
| Honda Group Unit Sales | Consolidated Unit Sales | |||||||||||||||||||||||||||||||
| Nine months ended Dec. 31, 2013 |
Nine months ended Dec. 31, 2014 |
Change | % | Nine months ended Dec. 31, 2013 |
Nine months ended Dec. 31, 2014 |
Change | % | |||||||||||||||||||||||||
| Motorcycle business |
12,521 | 13,150 | 629 | 5.0 | 7,613 | 7,963 | 350 | 4.6 | ||||||||||||||||||||||||
| Japan |
169 | 147 | - 22 | - 13.0 | 169 | 147 | - 22 | - 13.0 | ||||||||||||||||||||||||
| North America |
193 | 200 | 7 | 3.6 | 193 | 200 | 7 | 3.6 | ||||||||||||||||||||||||
| Europe |
117 | 139 | 22 | 18.8 | 117 | 139 | 22 | 18.8 | ||||||||||||||||||||||||
| Asia |
10,693 | 11,463 | 770 | 7.2 | 5,785 | 6,276 | 491 | 8.5 | ||||||||||||||||||||||||
| Other Regions |
1,349 | 1,201 | - 148 | - 11.0 | 1,349 | 1,201 | - 148 | - 11.0 | ||||||||||||||||||||||||
Note: Honda Group Unit Sales is the total unit sales of completed products of Honda, its consolidated subsidiaries and its affiliates accounted for under the equity method. Consolidated Unit Sales is the total unit sales of completed products corresponding to consolidated net sales to external customers, which consists of unit sales of completed products of Honda and its consolidated subsidiaries.
With respect to Honda’s sales for the fiscal nine months by business segment, in motorcycle business operations, revenue from sales to external customers increased 7.8%, to JPY 1,309.5 billion from the same period last year, due mainly to increased consolidated unit sales, as well as favorable foreign currency translation effects. Operating income totaled JPY 135.6 billion, an increase of 10.6% from the same period last year, due primarily to an increase in sales volume and model mix, as well as favorable foreign currency effects, despite increased SG&A expenses.
Automobile Business
For the nine months ended December 31, 2013 and 2014
| Unit (Thousands) | ||||||||||||||||||||||||||||||||
| Honda Group Unit Sales | Consolidated Unit Sales | |||||||||||||||||||||||||||||||
| Nine months ended Dec. 31, 2013 |
Nine months ended Dec. 31, 2014 |
Change | % | Nine months ended Dec. 31, 2013 |
Nine months ended Dec. 31, 2014 |
Change | % | |||||||||||||||||||||||||
| Automobile business |
3,128 | 3,160 | 32 | 1.0 | 2,627 | 2,652 | 25 | 1.0 | ||||||||||||||||||||||||
| Japan |
536 | 540 | 4 | 0.7 | 532 | 533 | 1 | 0.2 | ||||||||||||||||||||||||
| North America |
1,371 | 1,349 | - 22 | - 1.6 | 1,371 | 1,349 | - 22 | - 1.6 | ||||||||||||||||||||||||
| Europe |
118 | 119 | 1 | 0.8 | 118 | 119 | 1 | 0.8 | ||||||||||||||||||||||||
| Asia |
881 | 961 | 80 | 9.1 | 384 | 460 | 76 | 19.8 | ||||||||||||||||||||||||
| Other Regions |
222 | 191 | - 31 | - 14.0 | 222 | 191 | - 31 | - 14.0 | ||||||||||||||||||||||||
Note: Honda Group Unit Sales is the total unit sales of completed products of Honda, its consolidated subsidiaries and its affiliates accounted for under the equity method. Consolidated Unit Sales is the total unit sales of completed products corresponding to consolidated net sales 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 by our Japanese finance subsidiaries and sold through our consolidated subsidiaries are accounted for as operating leases in conformity with U.S. generally accepted accounting principles and are not included in consolidated net sales to the external customers in our Automobile business. As a result, they are not included in Consolidated Unit Sales, but are included in Honda Group Unit Sales of our Automobile business.
In automobile business operations, revenue from sales to external customers increased 5.4%, to JPY 7,168.5 billion from the same period last year due mainly to favorable foreign currency translation effects. Operating income totaled JPY 255.4 billion, a decrease of 22.8% from the same period last year, due primarily to increased SG&A expenses including product warranty expenses and increased R&D expenses, despite continuing cost reduction efforts and favorable foreign currency effects.
- 6 -
Financial Services Business
Revenue from customers in the financial services business operations increased 16.2%, to JPY 593.1 billion from the same period last year due mainly to an increase in revenue from operating leases and favorable foreign currency translation effects. Operating income increased 12.9% to JPY 151.1 billion from the same period last year due mainly to increased revenue, as well as favorable foreign currency effects.
Power Product and Other Businesses
For the nine months ended December 31, 2013 and 2014
| Unit (Thousands) | ||||||||||||||||
| Honda Group Unit Sales/ Consolidated Unit Sales | ||||||||||||||||
| Nine months ended Dec. 31, 2013 |
Nine months ended Dec. 31, 2014 |
Change | % | |||||||||||||
| Power product business |
4,046 | 3,944 | - 102 | - 2.5 | ||||||||||||
| Japan |
219 | 236 | 17 | 7.8 | ||||||||||||
| North America |
1,759 | 1,693 | - 66 | - 3.8 | ||||||||||||
| Europe |
591 | 628 | 37 | 6.3 | ||||||||||||
| Asia |
1,128 | 1,050 | - 78 | - 6.9 | ||||||||||||
| Other Regions |
349 | 337 | - 12 | - 3.4 | ||||||||||||
Note: Honda Group Unit Sales is the total unit sales of completed products of Honda, its consolidated subsidiaries and its affiliates accounted for under the equity method. Consolidated Unit Sales is the total unit sales of completed products corresponding to consolidated net sales to external customers, which consists of unit sales of completed products of Honda and its consolidated subsidiaries. In power product business, there is no discrepancy between Honda Group Unit Sales and Consolidated Unit Sales for the nine months ended December 31, 2013 and for the nine months ended December 31, 2014, since no affiliate accounted for under the equity method was involved in the sale of Honda power products.
Revenue from sales to external customers in power product and other businesses totaled to JPY 221.8 billion basically unchanged from the same period last year, due mainly to favorable foreign currency translation effects, despite decreased revenue in other businesses operations. Honda reported an operating loss of JPY 2.5 billion, a decline of JPY 0.1 billion from the same period last year, due mainly to unfavorable foreign currency effects, despite decreased R&D expenses and SG&A expenses.
- 7 -
Geographical Information
With respect to Honda’s sales for the fiscal nine months by geographic segment, in Japan, revenue from domestic and export sales amounted to JPY 2,917.3 billion, a decrease of 5.4% from the same period last year due mainly to decreased revenue in automobile business operations. Operating income totaled JPY 164.1 billion, a decrease of 3.9% from the same period last year due mainly to increased SG&A and R&D expenses, as well as a decrease in sales volume and model mix, despite continuing cost reduction efforts and favorable foreign currency effects.
In North America, revenue increased by 6.7%, to JPY 4,869.3 billion from the same period last year due mainly to favorable foreign currency translation effects, despite decreased revenue in automobile business operations. Operating income totaled JPY 188.5 billion, a decrease of 24.3% from the same period last year due mainly to a decrease in sales volume and model mix, as well as increased SG&A expenses including product warranty expenses, despite continuing cost reduction efforts.
In Europe, revenue increased by 2.4%, to JPY 543.9 billion from the same period last year mainly due to increased revenue in motorcycle business operations as well as favorable foreign currency translation effects, despite decreased revenue in automobile business operations. Honda reported an operating loss of JPY 13.0 billion, an improvement of JPY 18.9 billion from the same period last year mainly due to an increase in sales volume and model mix, as well as decreased SG&A expenses, despite unfavorable foreign currency effects.
In Asia, revenue increased by 13.4%, to JPY 2,357.5 billion from the same period last year mainly due to increased revenue in motorcycle and automobile business operations, as well as favorable foreign currency translation effects. Operating income increased by 26.4%, to JPY 207.1 billion from the same period last year due mainly to an increase in sales volume and model mix, continuing cost reduction efforts, as well as favorable foreign currency effects, despite increased SG&A expenses.
In Other regions, which includes South America, the Near/Middle East, Africa and Oceania, revenue decreased by 9.6%, to JPY 691.6 billion from the same period last year, mainly due to decreased revenue in automobile business operations, as well as unfavorable foreign currency translation effects. Operating income totaled JPY 26.7 billion, a decrease of 16.2% from the same period last year mainly due to unfavorable foreign currency effects.
- 8 -
Consolidated Statements of Balance Sheets for the Fiscal Nine Months Ended December 31, 2014
Total assets increased by JPY 2,202.8 billion, to JPY 17,824.8 billion from March 31, 2014, mainly due to increases in Property on operating lease and Property, plant and equipment, as well as foreign currency translation effects, despite a decrease in Trade accounts and notes receivables. Total liabilities increased by JPY 1,306.5 billion, to JPY 10,815.1 billion from March 31, 2014, mainly due to an increase in Short-term debt, as well as foreign currency translation effects, despite a decrease in Trade accounts payable. Total equity increased by JPY 896.2 billion, to JPY 7,009.6 billion from March 31, 2014 due mainly to increased Retained earnings attributable to net income, as well as foreign currency translation effects.
- 9 -
Consolidated Statements of Cash Flow for the Fiscal Nine Months Ended December 31, 2014
Consolidated cash and cash equivalents on December 31, 2014 increased by JPY 162.7 billion from March 31, 2014, to JPY 1,331.6 billion. The reasons for the increases or decreases for each cash flow activity, when compared with the same period of the previous fiscal year, are as follows:
Cash flow from operating activities
Net cash provided by operating activities amounted to JPY 918.1 billion for the fiscal nine months ended December 31, 2014. Cash inflows from operating activities increased by JPY 47.6 billion compared with the same period of the previous fiscal year due mainly to an increase in cash received from customers as a result of increased unit sales, despite increased payments for parts and raw materials.
Cash flow from investing activities
Net cash used in investing activities amounted to JPY 981.4 billion. Cash outflows from investing activities decreased by JPY 363.0 billion compared with the same period of the previous fiscal year, due mainly to a decrease in acquisitions of finance subsidiaries-receivables, despite an increase in purchases of operating lease assets.
Cash flow from financing activities
Net cash provided by financing activities amounted to JPY 127.0 billion. Cash inflows from financing activities decreased by JPY 286.2 billion compared with the same period of the previous fiscal year, due mainly to a decrease in proceeds from debt, as well as an increase in cash outflow due to an increase in dividends paid.
- 10 -
Forecasts for the Fiscal Year Ending March 31, 2015
In regard to the forecasts of the financial results for the fiscal year ending March 31, 2015, Honda projects consolidated results to be as shown below:
Fiscal year ending March 31, 2015
| Yen (billions) | Changes from FY 2014 | |||||||
| Net sales and other operating revenue |
12,900.0 | + 8.9 | % | |||||
| Operating income |
720.0 | - 4.0 | % | |||||
| Income before income taxes and equity in income of affiliates |
745.0 | + 2.2 | % | |||||
| Net income attributable to Honda Motor Co., Ltd. |
545.0 | - 5.1 | % | |||||
| Yen | ||||||||
| Basic net income attributable to Honda Motor Co., Ltd. per common share |
302.39 | |||||||
Note: 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 109 and JPY 138, respectively, for the full year ending March 31, 2015.
The reasons for the increases or decreases in the forecasts of the operating income, and income before income taxes and equity in income of affiliates for the fiscal year ending March 31, 2015 from the previous year are as follows.
| Yen (billions) | ||||
| Revenue, model mix, etc. |
- 19.2 | |||
| Cost reduction, the effect of raw material cost fluctuations, etc. |
45.0 | |||
| SG&A expenses |
- 112.0 | |||
| R&D expenses |
- 12.0 | |||
| Currency effect |
68.0 | |||
|
|
|
|||
| Operating income compared with fiscal year 2014 |
- 30.2 | |||
|
|
|
|||
| Fair value of derivative instruments |
- 40.0 | |||
| Others |
86.3 | |||
|
|
|
|||
| Income before income taxes and equity in income of affiliates compared with fiscal year 2014 |
16.0 | |||
|
|
|
|||
- 11 -
Dividend per Share of Common Stock
The Board of Directors of Honda Motor Co., Ltd., at its meeting held on January 30, 2015, resolved to make the quarterly dividend JPY 22 per share of common stock, the record date of which is December 31, 2014. The total expected annual dividend per share of common stock for the fiscal year ending March 31, 2015, is JPY 88 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.
- 12 -
Other Information
1. Accounting policies specifically applied for quarterly consolidated financial statements
Income taxes
Honda computes interim income tax expense (benefit) by multiplying a 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 nine months ended December 31, 2014. If a reliable estimate cannot be made, Honda utilizes the actual year-to-date effective tax rate.
- 13 -
Consolidated Financial Summary
For the three months and nine months ended December 31, 2013 and 2014
Financial Highlights
| Yen (millions) | ||||||||||||||||
| Three months ended Dec. 31, 2013 |
Three months ended Dec. 31, 2014 |
Nine months ended Dec. 31, 2013 |
Nine months ended Dec. 31, 2014 |
|||||||||||||
| Net sales and other operating revenue |
3,020,889 | 3,289,964 | 8,745,205 | 9,293,019 | ||||||||||||
| Operating income |
228,574 | 177,253 | 584,988 | 539,738 | ||||||||||||
| Income before income taxes and equity in income of affiliates |
216,612 | 194,115 | 554,234 | 572,793 | ||||||||||||
| Net income attributable to Honda Motor Co., Ltd. |
160,732 | 136,516 | 403,599 | 424,926 | ||||||||||||
| Yen | ||||||||||||||||
| Basic net income attributable to Honda Motor Co., Ltd per common share |
89.18 | 75.75 | 223.94 | 235.77 | ||||||||||||
| U.S. Dollar (millions) | ||||||||||||||||
| Three months ended Dec. 31, 2014 |
Nine months ended Dec. 31, 2014 |
|||||||||||||||
| Net sales and other operating revenue |
27,291 | 77,089 | ||||||||||||||
| Operating income |
1,470 | 4,477 | ||||||||||||||
| Income before income taxes and equity in income of affiliates |
1,610 | 4,751 | ||||||||||||||
| Net income attributable to Honda Motor Co., Ltd. |
1,132 | 3,525 | ||||||||||||||
| U.S. Dollar | ||||||||||||||||
| Basic net income attributable to Honda Motor Co., Ltd per common share |
0.63 | 1.96 | ||||||||||||||
- 14 -
[1] Consolidated Balance Sheets
| Yen (millions) | ||||||||
| Mar. 31, 2014 | Dec. 31, 2014 | |||||||
| Assets |
||||||||
| Current assets: |
||||||||
| Cash and cash equivalents |
1,168,914 | 1,331,632 | ||||||
| Trade accounts and notes receivable |
1,158,671 | 1,101,426 | ||||||
| Finance subsidiaries-receivables, net |
1,464,215 | 1,690,457 | ||||||
| Inventories |
1,302,895 | 1,488,602 | ||||||
| Deferred income taxes |
202,123 | 157,595 | ||||||
| Other current assets |
474,448 | 569,595 | ||||||
|
|
|
|
|
|||||
| Total current assets |
5,771,266 | 6,339,307 | ||||||
|
|
|
|
|
|||||
| Finance subsidiaries-receivables, net |
3,317,553 | 3,727,525 | ||||||
| Investments and advances: |
||||||||
| Investments in and advances to affiliates |
564,266 | 656,293 | ||||||
| Other, including marketable equity securities |
253,661 | 311,237 | ||||||
|
|
|
|
|
|||||
| Total investments and advances |
817,927 | 967,530 | ||||||
|
|
|
|
|
|||||
| Property on operating leases: |
||||||||
| Vehicles |
2,718,131 | 3,556,758 | ||||||
| Less accumulated depreciation |
481,410 | 614,395 | ||||||
|
|
|
|
|
|||||
| Net property on operating leases |
2,236,721 | 2,942,363 | ||||||
|
|
|
|
|
|||||
| Property, plant and equipment, at cost: |
||||||||
| Land |
521,806 | 541,763 | ||||||
| Buildings |
1,895,140 | 2,091,190 | ||||||
| Machinery and equipment |
4,384,255 | 4,950,255 | ||||||
| Construction in progress |
339,093 | 359,698 | ||||||
|
|
|
|
|
|||||
| 7,140,294 | 7,942,906 | |||||||
| Less accumulated depreciation and amortization |
4,321,862 | 4,827,064 | ||||||
|
|
|
|
|
|||||
| Net property, plant and equipment |
2,818,432 | 3,115,842 | ||||||
|
|
|
|
|
|||||
| Other assets |
660,132 | 732,267 | ||||||
|
|
|
|
|
|||||
| Total assets |
15,622,031 | 17,824,834 | ||||||
|
|
|
|
|
|||||
- 15 -
[1] Consolidated Balance Sheets – continued
| Yen (millions) | ||||||||
| Mar. 31, 2014 | Dec. 31, 2014 | |||||||
| Liabilities and Equity |
||||||||
| Current liabilities: |
||||||||
| Short-term debt |
1,319,344 | 1,688,288 | ||||||
| Current portion of long-term debt |
1,303,464 | 1,401,026 | ||||||
| Trade payables: |
||||||||
| Notes |
28,501 | 28,958 | ||||||
| Accounts |
1,071,179 | 1,006,572 | ||||||
| Accrued expenses |
626,503 | 626,961 | ||||||
| Income taxes payable |
43,085 | 42,539 | ||||||
| Other current liabilities |
319,253 | 381,191 | ||||||
|
|
|
|
|
|||||
| Total current liabilities |
4,711,329 | 5,175,535 | ||||||
|
|
|
|
|
|||||
| Long-term debt, excluding current portion |
3,234,066 | 3,831,984 | ||||||
| Other liabilities |
1,563,238 | 1,807,655 | ||||||
|
|
|
|
|
|||||
| Total liabilities |
9,508,633 | 10,815,174 | ||||||
|
|
|
|
|
|||||
| Equity: |
||||||||
| Honda Motor Co., Ltd. shareholders’ equity: |
||||||||
| Common stock, authorized 7,086,000,000 shares; issued 1,811,428,430 shares on Mar. 31, 2014 and Dec. 31, 2014 |
86,067 | 86,067 | ||||||
| Capital surplus |
171,117 | 171,117 | ||||||
| Legal reserves |
49,276 | 50,951 | ||||||
| Retained earnings |
6,431,682 | 6,735,982 | ||||||
| Accumulated other comprehensive income (loss), net |
(793,014 | ) | (235,079 | ) | ||||
| Treasury stock, at cost 9,137,234 shares on Mar. 31, 2014 and 9,140,126 shares on Dec. 31, 2014 |
(26,149 | ) | (26,159 | ) | ||||
|
|
|
|
|
|||||
| Total Honda Motor Co., Ltd. shareholders’ equity |
5,918,979 | 6,782,879 | ||||||
|
|
|
|
|
|||||
| Noncontrolling interests |
194,419 | 226,781 | ||||||
|
|
|
|
|
|||||
| Total equity |
6,113,398 | 7,009,660 | ||||||
|
|
|
|
|
|||||
| Commitments and contingent liabilities |
||||||||
|
|
|
|
|
|||||
| Total liabilities and equity |
15,622,031 | 17,824,834 | ||||||
|
|
|
|
|
|||||
- 16 -
[2] Consolidated Statements of Income and Consolidated Statements of Comprehensive Income
Consolidated Statements of Income
For the three months ended December 31, 2013 and 2014
| Yen (millions) | ||||||||
| Three months ended Dec. 31, 2013 |
Three months ended Dec. 31, 2014 |
|||||||
| Net sales and other operating revenue |
3,020,889 | 3,289,964 | ||||||
| Operating costs and expenses: |
||||||||
| Cost of sales |
2,208,846 | 2,445,502 | ||||||
| Selling, general and administrative |
425,949 | 499,430 | ||||||
| Research and development |
157,520 | 167,779 | ||||||
|
|
|
|
|
|||||
| 2,792,315 | 3,112,711 | |||||||
|
|
|
|
|
|||||
| Operating income |
228,574 | 177,253 | ||||||
|
|
|
|
|
|||||
| Other income (expenses): |
||||||||
| Interest income |
5,620 | 6,702 | ||||||
| Interest expense |
(3,849 | ) | (4,796 | ) | ||||
| Other, net |
(13,733 | ) | 14,956 | |||||
|
|
|
|
|
|||||
| (11,962 | ) | 16,862 | ||||||
|
|
|
|
|
|||||
| Income before income taxes and equity in income of affiliates |
216,612 | 194,115 | ||||||
| Income tax expense: |
||||||||
| Current |
65,519 | (23,920 | ) | |||||
| Deferred |
14,592 | 98,007 | ||||||
|
|
|
|
|
|||||
| 80,111 | 74,087 | |||||||
|
|
|
|
|
|||||
| Income before equity in income of affiliates |
136,501 | 120,028 | ||||||
| Equity in income of affiliates |
31,631 | 28,562 | ||||||
|
|
|
|
|
|||||
| Net income |
168,132 | 148,590 | ||||||
| Less: Net income attributable to noncontrolling interests |
7,400 | 12,074 | ||||||
|
|
|
|
|
|||||
| Net income attributable to Honda Motor Co., Ltd. |
160,732 | 136,516 | ||||||
|
|
|
|
|
|||||
| Yen | ||||||||
| Basic net income attributable to Honda Motor Co., Ltd. per common share |
89.18 | 75.75 | ||||||
- 17 -
Consolidated Statements of Comprehensive Income
For the three months ended December 31, 2013 and 2014
| Yen (millions) | ||||||||
| Three months ended Dec. 31, 2013 |
Three months ended Dec. 31, 2014 |
|||||||
| Net income |
168,132 | 148,590 | ||||||
| Other comprehensive income (loss), net of tax: |
||||||||
| Adjustments from foreign currency translation |
190,374 | 383,778 | ||||||
| Unrealized gains (losses) on available-for-sale securities, net |
4,197 | 3,755 | ||||||
| Unrealized gains (losses) on derivative instruments, net |
(587 | ) | — | |||||
| Pension and other postretirement benefits adjustments |
(12,096 | ) | 1,162 | |||||
|
|
|
|
|
|||||
| Other comprehensive income (loss), net of tax |
181,888 | 388,695 | ||||||
|
|
|
|
|
|||||
| Comprehensive income (loss) |
350,020 | 537,285 | ||||||
| Less: Comprehensive income attributable to noncontrolling interests |
11,778 | 27,265 | ||||||
|
|
|
|
|
|||||
| Comprehensive income (loss) attributable to Honda Motor Co., Ltd. |
338,242 | 510,020 | ||||||
|
|
|
|
|
|||||
- 18 -
Consolidated Statements of Income
For the nine months ended December 31, 2013 and 2014
| Yen (millions) | ||||||||
| Nine months ended Dec. 31, 2013 |
Nine months ended Dec. 31, 2014 |
|||||||
| Net sales and other operating revenue |
8,745,205 | 9,293,019 | ||||||
| Operating costs and expenses: |
||||||||
| Cost of sales |
6,484,067 | 6,954,661 | ||||||
| Selling, general and administrative |
1,225,873 | 1,325,416 | ||||||
| Research and development |
450,277 | 473,204 | ||||||
|
|
|
|
|
|||||
| 8,160,217 | 8,753,281 | |||||||
|
|
|
|
|
|||||
| Operating income |
584,988 | 539,738 | ||||||
|
|
|
|
|
|||||
| Other income (expenses): |
||||||||
| Interest income |
17,540 | 18,311 | ||||||
| Interest expense |
(9,661 | ) | (13,595 | ) | ||||
| Other, net |
(38,633 | ) | 28,339 | |||||
|
|
|
|
|
|||||
| (30,754 | ) | 33,055 | ||||||
|
|
|
|
|
|||||
| Income before income taxes and equity in income of affiliates |
554,234 | 572,793 | ||||||
| Income tax expense: |
||||||||
| Current |
168,527 | 114,224 | ||||||
| Deferred |
51,853 | 92,003 | ||||||
|
|
|
|
|
|||||
| 220,380 | 206,227 | |||||||
|
|
|
|
|
|||||
| Income before equity in income of affiliates |
333,854 | 366,566 | ||||||
| Equity in income of affiliates |
95,084 | 89,901 | ||||||
|
|
|
|
|
|||||
| Net income |
428,938 | 456,467 | ||||||
| Less: Net income attributable to noncontrolling interests |
25,339 | 31,541 | ||||||
|
|
|
|
|
|||||
| Net income attributable to Honda Motor Co., Ltd. |
403,599 | 424,926 | ||||||
|
|
|
|
|
|||||
| Yen | ||||||||
| Basic net income attributable to Honda Motor Co., Ltd. per common share |
223.94 | 235.77 | ||||||
- 19 -
Consolidated Statements of Comprehensive Income
For the nine months ended December 31, 2013 and 2014
| Yen (millions) | ||||||||
| Nine months ended Dec. 31, 2013 |
Nine months ended Dec. 31, 2014 |
|||||||
| Net income |
428,938 | 456,467 | ||||||
| Other comprehensive income (loss), net of tax: |
||||||||
| Adjustments from foreign currency translation |
356,124 | 564,559 | ||||||
| Unrealized gains (losses) on available-for-sale securities, net |
22,647 | 13,734 | ||||||
| Unrealized gains (losses) on derivative instruments, net |
(241 | ) | — | |||||
| Pension and other postretirement benefits adjustments |
69,298 | 1,058 | ||||||
|
|
|
|
|
|||||
| Other comprehensive income (loss), net of tax |
447,828 | 579,351 | ||||||
|
|
|
|
|
|||||
| Comprehensive income (loss) |
876,766 | 1,035,818 | ||||||
| Less: Comprehensive income attributable to noncontrolling interests |
34,917 | 52,957 | ||||||
|
|
|
|
|
|||||
| Comprehensive income (loss) attributable to Honda Motor Co., Ltd. |
841,849 | 982,861 | ||||||
|
|
|
|
|
|||||
- 20 -
[3] Consolidated Statements of Cash Flows
| Yen (millions) | ||||||||
| Nine months ended Dec. 31, 2013 |
Nine months ended Dec. 31, 2014 |
|||||||
| Cash flows from operating activities: |
||||||||
| Net income |
428,938 | 456,467 | ||||||
| Adjustments to reconcile net income to net cash provided by operating activities: |
||||||||
| Depreciation excluding property on operating leases |
327,932 | 362,269 | ||||||
| Depreciation of property on operating leases |
253,920 | 312,367 | ||||||
| Deferred income taxes |
51,853 | 92,003 | ||||||
| Equity in income of affiliates |
(95,084 | ) | (89,901 | ) | ||||
| Dividends from affiliates |
17,027 | 30,429 | ||||||
| Provision for credit and lease residual losses on finance subsidiaries-receivables |
15,828 | 13,751 | ||||||
| Impairment loss on property on operating leases |
2,798 | 3,111 | ||||||
| Loss (gain) on derivative instruments, net |
(24,656 | ) | (5,657 | ) | ||||
| Decrease (increase) in assets: |
||||||||
| Trade accounts and notes receivable |
42,855 | 137,318 | ||||||
| Inventories |
(9,686 | ) | (64,897 | ) | ||||
| Other current assets |
10,633 | (46,924 | ) | |||||
| Other assets |
(16,228 | ) | (48,732 | ) | ||||
| Increase (decrease) in liabilities: |
||||||||
| Trade accounts and notes payable |
(33,090 | ) | (136,846 | ) | ||||
| Accrued expenses |
(33,446 | ) | (39,927 | ) | ||||
| Income taxes payable |
(2,323 | ) | (3,632 | ) | ||||
| Other current liabilities |
56,701 | 20,140 | ||||||
| Other liabilities |
(47,431 | ) | 3,503 | |||||
| Other, net |
(76,044 | ) | (76,647 | ) | ||||
|
|
|
|
|
|||||
| Net cash provided by operating activities |
870,497 | 918,195 | ||||||
|
|
|
|
|
|||||
| Cash flows from investing activities: |
||||||||
| Increase in investments and advances |
(33,959 | ) | (26,495 | ) | ||||
| Decrease in investments and advances |
32,342 | 24,915 | ||||||
| Payments for purchases of available-for-sale securities |
(35,771 | ) | (17,122 | ) | ||||
| Proceeds from sales of available-for-sale securities |
6,614 | 17,098 | ||||||
| Payments for purchases of held-to-maturity securities |
(19,146 | ) | (31,489 | ) | ||||
| Proceeds from redemptions of held-to-maturity securities |
1,762 | 34,110 | ||||||
| Capital expenditures |
(519,034 | ) | (489,815 | ) | ||||
| Proceeds from sales of property, plant and equipment |
20,475 | 42,608 | ||||||
| Proceeds from insurance recoveries for damaged property, plant and equipment |
6,800 | — | ||||||
| Acquisitions of finance subsidiaries-receivables |
(2,159,681 | ) | (1,843,049 | ) | ||||
| Collections of finance subsidiaries-receivables |
1,748,239 | 1,891,745 | ||||||
| Purchases of operating lease assets |
(833,232 | ) | (1,078,016 | ) | ||||
| Proceeds from sales of operating lease assets |
440,102 | 493,730 | ||||||
| Other, net |
— | 328 | ||||||
|
|
|
|
|
|||||
| Net cash used in investing activities |
(1,344,489 | ) | (981,452 | ) | ||||
|
|
|
|
|
|||||
- 21 -
[3] Consolidated Statements of Cash Flows – continued
| Yen (millions) | ||||||||
| Nine months ended Dec. 31, 2013 |
Nine months ended Dec. 31, 2014 |
|||||||
| Cash flows from financing activities: |
||||||||
| Proceeds from short-term debt |
7,016,475 | 6,373,898 | ||||||
| Repayments of short-term debt |
(6,910,816 | ) | (6,174,781 | ) | ||||
| Proceeds from long-term debt |
1,348,115 | 1,073,303 | ||||||
| Repayments of long-term debt |
(897,783 | ) | (973,143 | ) | ||||
| Dividends paid |
(106,335 | ) | (118,951 | ) | ||||
| Dividends paid to noncontrolling interests |
(8,703 | ) | (17,755 | ) | ||||
| Sales (purchases) of treasury stock, net |
(21 | ) | (10 | ) | ||||
| Other, net |
(27,653 | ) | (35,547 | ) | ||||
|
|
|
|
|
|||||
| Net cash provided by financing activities |
413,279 | 127,014 | ||||||
|
|
|
|
|
|||||
| Effect of exchange rate changes on cash and cash equivalents |
69,179 | 98,961 | ||||||
|
|
|
|
|
|||||
| Net change in cash and cash equivalents |
8,466 | 162,718 | ||||||
|
|
|
|
|
|||||
| Cash and cash equivalents at beginning of year |
1,206,128 | 1,168,914 | ||||||
|
|
|
|
|
|||||
| Cash and cash equivalents at end of the period |
1,214,594 | 1,331,632 | ||||||
|
|
|
|
|
|||||
- 22 -
[4] Assumptions for Going Concern
None
[5] Significant changes in Honda Motor Co., Ltd. shareholders’ equity
None
- 23 -
[6] Segment Information
Honda has four reportable segments: Motorcycle business, Automobile business, Financial services business and 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 the chief operating decision maker in deciding how to allocate resources and in assessing performance. The accounting policies used for these reportable segments are consistent with the accounting policies used in Honda’s consolidated financial statements.
Principal products and services, and functions of each segment are as follows:
| Segment |
Principal products and services |
Functions | ||
| Motorcycle Business |
Motorcycles, all-terrain vehicles (ATVs) and relevant parts |
Research & Development, Manufacturing, Sales and related services | ||
| Automobile Business |
Automobiles and relevant parts | Research & Development, Manufacturing, Sales and related services | ||
| Financial Services Business |
Financial, insurance services | Retail loan and lease related to Honda products, and Others | ||
| Power Product and Other Businesses |
Power products and relevant parts, and others | Research & Development, Manufacturing, Sales and related services, and Others | ||
1. Segment information based on products and services
(A) For the three months ended December 31, 2013
| 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 |
400,149 | 2,372,498 | 175,016 | 73,226 | 3,020,889 | — | 3,020,889 | |||||||||||||||||||||
| Intersegment |
— | 5,213 | 2,590 | 5,380 | 13,183 | (13,183 | ) | — | ||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||
| Total |
400,149 | 2,377,711 | 177,606 | 78,606 | 3,034,072 | (13,183 | ) | 3,020,889 | ||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||
| Segment income (loss) |
34,520 | 154,242 | 42,709 | (2,897 | ) | 228,574 | — | 228,574 | ||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||
For the three months ended December 31, 2014
| 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 |
463,479 | 2,538,528 | 213,419 | 74,538 | 3,289,964 | — | 3,289,964 | |||||||||||||||||||||
| Intersegment |
— | 10,639 | 2,911 | 5,300 | 18,850 | (18,850 | ) | — | ||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||
| Total |
463,479 | 2,549,167 | 216,330 | 79,838 | 3,308,814 | (18,850 | ) | 3,289,964 | ||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||
| Segment income (loss) |
53,583 | 76,443 | 51,073 | (3,846 | ) | 177,253 | — | 177,253 | ||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||
- 24 -
(B) As of and for the nine months ended December 31, 2013
| 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 |
1,215,108 | 6,798,093 | 510,428 | 221,576 | 8,745,205 | — | 8,745,205 | |||||||||||||||||||||
| Intersegment |
— | 13,803 | 7,749 | 10,937 | 32,489 | (32,489 | ) | — | ||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||
| Total |
1,215,108 | 6,811,896 | 518,177 | 232,513 | 8,777,694 | (32,489 | ) | 8,745,205 | ||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||
| Segment income |
122,644 | 330,772 | 133,937 | (2,365 | ) | 584,988 | — | 584,988 | ||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||
| Segment assets |
1,255,574 | 6,218,830 | 8,082,774 | 347,236 | 15,904,414 | (357,495 | ) | 15,546,919 | ||||||||||||||||||||
| Depreciation and amortization |
34,171 | 284,338 | 255,567 | 7,776 | 581,852 | — | 581,852 | |||||||||||||||||||||
| Capital expenditures |
37,863 | 436,741 | 835,991 | 10,347 | 1,320,942 | — | 1,320,942 | |||||||||||||||||||||
As of and for the nine months ended December 31, 2014
| 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 |
1,309,590 | 7,168,524 | 593,102 | 221,803 | 9,293,019 | — | 9,293,019 | |||||||||||||||||||||
| Intersegment |
— | 20,886 | 8,213 | 10,474 | 39,573 | (39,573 | ) | — | ||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||
| Total |
1,309,590 | 7,189,410 | 601,315 | 232,277 | 9,332,592 | (39,573 | ) | 9,293,019 | ||||||||||||||||||||
|
|
|
|
|
|
|
|
|
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|
|
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| Segment income |
135,698 | 255,428 | 151,157 | (2,545 | ) | 539,738 | — | 539,738 | ||||||||||||||||||||
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| Segment assets |
1,437,196 | 6,956,367 | 9,457,478 | 333,706 | 18,184,747 | (359,913 | ) | 17,824,834 | ||||||||||||||||||||
| Depreciation and amortization |
36,588 | 315,446 | 314,516 | 8,086 | 674,636 | — | 674,636 | |||||||||||||||||||||
| Capital expenditures |
34,694 | 423,381 | 1,080,674 | 7,652 | 1,546,401 | — | 1,546,401 | |||||||||||||||||||||
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 305,906 million as of December 31, 2013 and JPY 290,623 million as of December 31, 2014 respectively, which consist primarily of cash and cash equivalents, available-for-sale securities and held-to-maturity securities held by the Company. Reconciling items also include elimination of intersegment transactions. |
| 3. | Depreciation and amortization of Financial Services Business include JPY 253,920 million for the nine months ended December 31, 2013 and JPY 312,367 million for the nine months ended December 31, 2014, respectively, of depreciation of property on operating leases. |
| 4. | Capital expenditure of Financial Services Business includes JPY 833,232 million for the nine months ended December 31, 2013 and JPY 1,078,016 million for the nine months ended December 31, 2014 respectively, of purchase of operating lease assets. |
- 25 -
In addition to the disclosure required by U.S. GAAP, Honda provides the following supplemental information in order to provide financial statements users with useful information:
2. Supplemental geographical information based on the location of the Company and its subsidiaries
(A) For the three months ended December 31, 2013
| Yen (millions) | ||||||||||||||||||||||||||||||||
| Japan | North America |
Europe | Asia | Other Regions |
Total | Reconciling Items |
Consolidated | |||||||||||||||||||||||||
| Net sales and other operating revenue: |
||||||||||||||||||||||||||||||||
| External customers |
587,390 | 1,486,584 | 153,428 | 552,569 | 240,918 | 3,020,889 | — | 3,020,889 | ||||||||||||||||||||||||
| Transfers between geographic areas |
505,413 | 104,848 | 27,332 | 125,439 | 3,068 | 766,100 | (766,100 | ) | — | |||||||||||||||||||||||
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| Total |
1,092,803 | 1,591,432 | 180,760 | 678,008 | 243,986 | 3,786,989 | (766,100 | ) | 3,020,889 | |||||||||||||||||||||||
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| Operating income (loss) |
59,366 | 131,128 | (8,751 | ) | 50,061 | 7,911 | 239,715 | (11,141 | ) | 228,574 | ||||||||||||||||||||||
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| For the three months ended December 31, 2014 | ||||||||||||||||||||||||||||||||
| Yen (millions) | ||||||||||||||||||||||||||||||||
| Japan | North America |
Europe | Asia | Other Regions |
Total | Reconciling Items |
Consolidated | |||||||||||||||||||||||||
| Net sales and other operating revenue: |
||||||||||||||||||||||||||||||||
| External customers |
501,515 | 1,726,984 | 145,506 | 680,829 | 235,130 | 3,289,964 | — | 3,289,964 | ||||||||||||||||||||||||
| Transfers between geographic areas |
452,337 | 84,568 | 19,024 | 154,327 | 1,197 | 711,453 | (711,453 | ) | — | |||||||||||||||||||||||
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| Total |
953,852 | 1,811,552 | 164,530 | 835,156 | 236,327 | 4,001,417 | (711,453 | ) | 3,289,964 | |||||||||||||||||||||||
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| Operating income (loss) |
42,099 | 82,133 | (4,060 | ) | 73,345 | 13,006 | 206,523 | (29,270 | ) | 177,253 | ||||||||||||||||||||||
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- 26 -
(B) As of and for the nine months ended December 31, 2013
| Yen (millions) | ||||||||||||||||||||||||||||||||
| Japan | North America |
Europe | Asia | Other Regions |
Total | Reconciling Items |
Consolidated | |||||||||||||||||||||||||
| Net sales and other operating revenue: |
||||||||||||||||||||||||||||||||
| External customers |
1,525,930 | 4,276,802 | 467,107 | 1,719,827 | 755,539 | 8,745,205 | — | 8,745,205 | ||||||||||||||||||||||||
| Transfers between geographic areas |
1,557,227 | 287,851 | 64,110 | 358,802 | 9,615 | 2,277,605 | (2,277,605 | ) | — | |||||||||||||||||||||||
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| Total |
3,083,157 | 4,564,653 | 531,217 | 2,078,629 | 765,154 | 11,022,810 | (2,277,605 | ) | 8,745,205 | |||||||||||||||||||||||
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| Operating income (loss) |
170,834 | 249,015 | (32,065 | ) | 163,836 | 31,977 | 583,597 | 1,391 | 584,988 | |||||||||||||||||||||||
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| Assets |
3,358,668 | 8,971,157 | 680,265 | 1,901,843 | 754,394 | 15,666,327 | (119,408 | ) | 15,546,919 | |||||||||||||||||||||||
| Long-lived assets |
1,231,875 | 2,987,988 | 136,349 | 545,648 | 155,123 | 5,056,983 | — | 5,056,983 | ||||||||||||||||||||||||
| As of and for the nine months ended December 31, 2014 | ||||||||||||||||||||||||||||||||
| Yen (millions) | ||||||||||||||||||||||||||||||||
| Japan | North America |
Europe | Asia | Other Regions |
Total | Reconciling Items |
Consolidated | |||||||||||||||||||||||||
| Net sales and other operating revenue: |
||||||||||||||||||||||||||||||||
| External customers |
1,563,492 | 4,609,755 | 489,251 | 1,941,293 | 689,228 | 9,293,019 | — | 9,293,019 | ||||||||||||||||||||||||
| Transfers between geographic areas |
1,353,842 | 259,629 | 54,713 | 416,297 | 2,386 | 2,086,867 | (2,086,867 | ) | — | |||||||||||||||||||||||
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| Total |
2,917,334 | 4,869,384 | 543,964 | 2,357,590 | 691,614 | 11,379,886 | (2,086,867 | ) | 9,293,019 | |||||||||||||||||||||||
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| Operating income (loss) |
164,139 | 188,567 | (13,074 | ) | 207,118 | 26,788 | 573,538 | (33,800 | ) | 539,738 | ||||||||||||||||||||||
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| Assets |
3,551,995 | 10,592,574 | 678,318 | 2,408,953 | 769,181 | 18,001,021 | (176,187 | ) | 17,824,834 | |||||||||||||||||||||||
| Long-lived assets |
1,304,912 | 3,906,777 | 143,513 | 682,699 | 181,693 | 6,219,594 | — | 6,219,594 | ||||||||||||||||||||||||
Explanatory notes:
| 1. | Major countries or regions in each geographic area: |
| North America |
United States, Canada, Mexico | |
| Europe |
United Kingdom, Germany, France, Belgium, Russia | |
| Asia |
Thailand, Indonesia, China, India, Vietnam | |
| Other Regions |
Brazil, Australia |
| 2. | Sales and revenues between geographic areas are generally made at values that approximate arm’s-length prices. |
| 3. | Unallocated corporate assets, included in reconciling items, amounted to JPY 305,906 million as of December 31, 2013 and JPY 290,623 million as of December 31, 2014 respectively, which consist primarily of cash and cash equivalents, available-for-sale securities and held-to-maturity securities held by the Company. Reconciling items also include elimination of transactions between geographic areas. |
- 27 -
[7] Other
1. Impact of the plan amendment and curtailment in consolidated subsidiaries on the Company’s consolidated financial position and results of operations
In September 2013, certain consolidated subsidiaries in North America amended their defined benefit pension plans, effective January 1, 2014.
This plan amendment resulted in a reduction of the projected benefit obligation and recognition of the prior service benefit at the date of the plan amendment which is amortized over the average remaining service period from the date of the plan amendment. The consolidated subsidiaries also remeasured their projected benefit obligation and the fair value of related plan assets at the date of the plan amendment. The effects of the plan amendment and the remeasurement are recorded in other comprehensive income (loss), net of tax during the three months ended September 30, 2013.
Following this plan amendment, certain employees elected to move to the defined contribution pension plan in October 2013, resulting in a curtailment in the defined benefit pension plans. As a result, Honda recognized JPY 21,368 million of the prior service benefit included in accumulated other comprehensive income (loss) as a curtailment gain, of which JPY 15,407 million is included in cost of sales and JPY 5,961 million is included in selling, general and administrative expense in the accompanying consolidated statements of income for the three months ended December 31, 2013. The consolidated subsidiaries also remeasured their projected benefit obligation and the fair value of plan assets in the defined benefit pension plans at the date of the curtailment. The effect of the remeasurement is recorded in other comprehensive income (loss), net of tax during the three months ended December 31, 2013.
2. Impairment loss on investments in affiliates
For the nine months ended December 31, 2014, Honda recognized impairment loss of JPY 15,901 million on certain investments in affiliates which have quoted market values because of other-than-temporary decline in fair value below their carrying values. The fair values of the investments were based on quoted market price. The impairment loss is included in equity in income of affiliates in the accompanying consolidated statement of income. For the three months ended December 31, 2014, Honda did not recognize any significant impairment losses.
3. Loss related to defects of airbag inflators
Honda is expanding warranty programs with regard to the product recalls and SIC (Safety Improvement Campaign) related to defects of airbag inflators.
Honda recognizes an accrued warranty liability for specific warranty costs we deem probable and which can be reasonably estimated related to the product recalls and SIC.
In the North America, various lawsuits related to the above mentioned product recalls and SIC have been filed against Honda. Honda recognizes an accrued liability for loss contingencies when it is probable that an obligation has incurred and the amount of loss can be reasonably estimated. Regarding the above, Honda does not recognize an accrued liability for loss contingencies because the conditions have not been met as of the date of this report. Also, it is not possible to reasonably estimate the amount of a possible future loss at this time.
- 28 -
4. National Highway Traffic Safety Administration (NHTSA) Inquiry Regarding Early Warning Reporting
Honda’s consolidated subsidiary in North America has entered into an agreement with NHTSA, to resolve the government’s inquiry into Honda’s early warning reporting as required by the Transportation Recall Enhancement, Accountability and Documentation (TREAD) Act.
As part of the Consent Order, Honda will pay a JPY 8.0 billion (USD 70 million) civil penalty and continue to implement a series of corrective measures among other requirements. This penalty is included in selling, general and administrative expense in the accompanying consolidated statements of income for the nine months ended December 31, 2014.
- 29 -