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 FEBRUARY 2020

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):  ☐

 

 

 

Contents

Exhibit 1:

On February  7, 2020, Honda Motor Co., Ltd. (the “Company”) announced its consolidated financial results for the fiscal third quarter and the fiscal nine-month ended December 31, 2019.

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.

 

Date: February 10, 2020

February 7, 2020

HONDA MOTOR CO., LTD. REPORTS

CONSOLIDATED FINANCIAL RESULTS

FOR THE FISCAL THIRD QUARTER AND

THE FISCAL NINE-MONTH PERIOD ENDED DECEMBER 31, 2019

Tokyo, February 7, 2020 — Honda Motor Co., Ltd. today announced its consolidated financial results for the fiscal third quarter and the fiscal nine-month period ended December 31, 2019.

Third Quarter Results

Honda’s consolidated sales revenue for the three months ended December 31, 2019 decreased by 5.7%, to JPY 3,747.5 billion from the same period last year, due mainly to decreased sales revenue in Automobile business operations as well as negative foreign currency translation effects, which was partially offset by increased sales revenue in Financial services business operations. Operating profit decreased by 2.1%, to JPY 166.6 billion from the same period last year, due mainly to a decrease in profit attributable to decreased sales revenue and model mix as well as negative foreign currency effects, which was partially offset by decreased selling, general and administrative expenses as well as continuing cost reduction. Profit before income taxes decreased by 8.9%, to JPY 206.7 billion from the same period last year. Profit for the period attributable to owners of the parent decreased by 30.8%, to JPY 116.4 billion from the same period last year.

Earnings per share attributable to owners of the parent for the quarter amounted to JPY 66.37, a decrease of JPY 29.24 from the corresponding period last year. One Honda American Depository Share represents one common share.

Nine Months Results

Consolidated sales revenue for the nine months ended December 31, 2019 decreased by 3.1%, to JPY 11,472.9 billion from the same period last year, due mainly to decreased sales revenue in Automobile business operations as well as negative foreign currency translation effects, which was partially offset by increased sales revenue in Financial services business operations. Operating profit decreased by 6.5%, to JPY 639.2 billion from the same period last year, due mainly to a decrease in profit attributable to decreased sales revenue and model mix as well as negative foreign currency effects, which was partially offset by continuing cost reduction as well as decreased selling, general and administrative expenses. Profit before income taxes decreased by 9.5%, to JPY 786.1 billion from the same period last year. Profit for the period attributable to owners of the parent decreased by 22.1%, to JPY 485.2 billion from the same period last year.

Earnings per share attributable to owners of the parent for the period amounted to JPY 276.13, a decrease of JPY 76.97 from the corresponding period last year.

 

- 1 -

Consolidated Statements of Financial Position for the Fiscal Nine Months Ended December 31, 2019

Total assets increased by JPY 69.5 billion, to JPY 20,488.7 billion from March 31, 2019 mainly due to an increase in equipment on operating leases as well as property, plant and equipment which includes right-of-use assets through the adoption of IFRS 16, despite decreased foreign currency translation effects. Total liabilities decreased by JPY 108.8 billion, to JPY 11,744.4 billion from March 31, 2019 mainly due to decreased trade payables and foreign currency translation effects, despite an increase in other financial liabilities which includes lease liabilities through the adoption of IFRS 16. Total equity increased by JPY 178.4 billion, to JPY 8,744.2 billion from March 31, 2019 due mainly to an increase in retained earnings attributable to profit for the period, despite decreased foreign currency translation effects.

Consolidated Statements of Cash Flows for the Fiscal Nine Months Ended December 31, 2019

Consolidated cash and cash equivalents on December 31, 2019 decreased by JPY 52.2 billion from March 31, 2019, to JPY 2,441.8 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 JPY 605.3 billion of cash inflows. Cash inflows from operating activities increased by JPY 106.7 billion from the same period last year, due mainly to a decrease in receivables from financial services, despite increased payments for purchase of equipment on operating leases.

Net cash used in investing activities amounted to JPY 435.9 billion of cash outflows. Cash outflows from investing activities decreased by JPY 60.1 billion from the same period last year, due mainly to decreased payments for additions to property, plant and equipment.

Net cash used in financing activities amounted to JPY 200.1 billion of cash outflows. Cash outflows from financing activities increased by JPY 145.9 billion from the same period last year, due mainly to increased repayments of financing liabilities.

 

- 2 -

Forecasts for the Fiscal Year Ending March 31, 2020

In regard to the forecasts of the financial results for the fiscal year ending March 31, 2020, Honda projects consolidated results to be as shown below:

Fiscal year ending March 31, 2020

 

		Yen (billions)				Changes from FY 2019
Sales revenue			15,150.0				-4.6	%
Operating profit			730.0				+0.5	%
Profit before income taxes			940.0				-4.0	%
Profit for the year			655.0				-3.1	%
Profit for the year attributable to owners of the parent			595.0				-2.5	%
		Yen
Earnings per share attributable to owners of the parent
Basic and diluted			339.64

Note: The forecasts are based on the assumption that the average exchange rates for the Japanese yen to the U.S. dollar will be JPY 108 for the full year ending March 31, 2020.

The reasons for the increases or decreases in the forecasts of the operating profit, and profit before income taxes for the fiscal year ending March 31, 2020 from the previous year are as follows.

 

		Yen (billions)
Revenue, model mix, etc.			- 140.0
Cost reduction, the effect of raw material cost fluctuations, etc.			+ 134.0
SG&A expenses			+ 118.0
R&D expenses			- 16.0
Currency effect			- 123.0
The impact related to changes of the global automobile production network and capability*			+ 30.6
Operating profit compared with fiscal year ended March 31, 2019			+ 3.6
Share of profit of investments accounted for using the equity method			- 18.8
Finance income and finance costs			- 24.1
Profit before income taxes compared with fiscal year ended March 31, 2019			- 39.3

 

*	The impact related to changes of the global automobile production network and capability in FY2019 was JPY 68.0 billion and the forecast for the FY2020 is JPY 37.4 billion

The impact related to the spread of novel coronavirus infections is not reflected to the forecasts for the FY2020.

Dividend per Share of Common Stock

Fiscal third quarter dividend is JPY 28 per share of common stock. The total expected annual dividend per share of common stock for the fiscal year ending March 31, 2020, is JPY 112 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 the actual results of the Company could differ materially from those described in these forward-looking statements as a result of numerous factors, including general economic conditions in the principal markets of the Company, its consolidated subsidiaries and its affiliates accounted for by the equity-method, and fluctuation of foreign exchange rates, as well as other factors detailed from time to time. The various factors for increases and decreases in profit have been classified in accordance with a method that Honda considers reasonable.

 

- 3 -

[1] Condensed Consolidated Statements of Financial Position

March 31, 2019 and December 31, 2019

 

		Yen (millions)
		Mar. 31, 2019				Dec. 31, 2019
Assets
Current assets:
Cash and cash equivalents			2,494,121				2,441,824
Trade receivables			793,245				635,473
Receivables from financial services			1,951,633				1,887,688
Other financial assets			163,274				253,814
Inventories			1,586,787				1,566,420
Other current assets			358,234				365,040
Total current assets			7,347,294				7,150,259
Non-current assets:
Investments accounted for using the equity method			713,039				649,568
Receivables from financial services			3,453,617				3,438,065
Other financial assets			417,149				446,910
Equipment on operating leases			4,448,849				4,645,895
Property, plant and equipment			2,981,840				3,081,531
Intangible assets			744,368				751,187
Deferred tax assets			150,318				133,991
Other non-current assets			162,648				191,300
Total non-current assets			13,071,828				13,338,447
Total assets			20,419,122				20,488,706
Liabilities and Equity
Current liabilities:
Trade payables			1,184,882				899,047
Financing liabilities			3,188,782				3,159,707
Accrued expenses			476,300				429,267
Other financial liabilities			132,910				155,086
Income taxes payable			49,726				52,046
Provisions			348,763				267,034
Other current liabilities			599,761				550,599
Total current liabilities			5,981,124				5,512,786
Non-current liabilities:
Financing liabilities			4,142,338				4,177,419
Other financial liabilities			63,689				304,096
Retirement benefit liabilities			398,803				420,436
Provisions			220,745				233,406
Deferred tax liabilities			727,411				764,279
Other non-current liabilities			319,222				332,028
Total non-current liabilities			5,872,208				6,231,664
Total liabilities			11,853,332				11,744,450
Equity:
Common stock			86,067				86,067
Capital surplus			171,460				171,790
Treasury stock			(177,827	)			(217,223	)
Retained earnings			7,973,637				8,312,797
Other components of equity			214,383				107,802
Equity attributable to owners of the parent			8,267,720				8,461,233
Non-controlling interests			298,070				283,023
Total equity			8,565,790				8,744,256
Total liabilities and equity			20,419,122				20,488,706

 

- 4 -

[2] Condensed Consolidated Statements of Income and Condensed Consolidated Statements of Comprehensive Income

Condensed Consolidated Statements of Income

For the nine months ended December 31, 2018 and 2019

 

		Yen (millions)
		Nine months ended Dec. 31, 2018				Nine months ended Dec. 31, 2019
Sales revenue			11,839,500				11,472,949
Operating costs and expenses:
Cost of sales			(9,325,508	)			(9,090,126	)
Selling, general and administrative			(1,254,501	)			(1,163,591	)
Research and development			(575,486	)			(579,978	)
Total operating costs and expenses			(11,155,495	)			(10,833,695	)
Operating profit			684,005				639,254
Share of profit of investments accounted for using the equity method			169,631				149,731
Finance income and finance costs:
Interest income			36,172				38,565
Interest expense			(10,065	)			(15,125	)
Other, net			(11,492	)			(26,257	)
Total finance income and finance costs			14,615				(2,817	)
Profit before income taxes			868,251				786,168
Income tax expense			(187,436	)			(254,713	)
Profit for the period			680,815				531,455
Profit for the period attributable to:
Owners of the parent			623,339				485,288
Non-controlling interests			57,476				46,167
		Yen
Earnings per share attributable to owners of the parent
Basic and diluted			353.10				276.13

 

- 5 -

Condensed Consolidated Statements of Comprehensive Income

For the nine months ended December 31, 2018 and 2019

 

		Yen (millions)
		Nine months ended Dec. 31, 2018				Nine months ended Dec. 31, 2019
Profit for the period			680,815				531,455
Other comprehensive income, net of tax:
Items that will not be reclassified to profit or loss
Remeasurements of defined benefit plans			—				—
Net changes in revaluation of financial assets measured at fair value through other comprehensive income			(25,697	)			3,337
Share of other comprehensive income of investments accounted for using the equity method			(3,023	)			704
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			120				99
Exchange differences on translating foreign operations			29,817				(90,608	)
Share of other comprehensive income of investments accounted for using the equity method			(23,918	)			(23,331	)
Total other comprehensive income, net of tax			(22,701	)			(109,799	)
Comprehensive income for the period			658,114				421,656
Comprehensive income for the period attributable to:
Owners of the parent			606,702				378,667
Non-controlling interests			51,412				42,989

 

- 6 -

Condensed Consolidated Statements of Income

For the three months ended December 31, 2018 and 2019

 

		Yen (millions)
		Three months ended Dec. 31, 2018				Three months ended Dec. 31, 2019
Sales revenue			3,973,655				3,747,593
Operating costs and expenses:
Cost of sales			(3,158,104	)			(2,966,552	)
Selling, general and administrative			(444,556	)			(379,648	)
Research and development			(200,848	)			(234,744	)
Total operating costs and expenses			(3,803,508	)			(3,580,944	)
Operating profit			170,147				166,649
Share of profit of investments accounted for using the equity method			51,403				41,552
Finance income and finance costs:
Interest income			12,848				12,305
Interest expense			(4,108	)			(7,530	)
Other, net			(3,363	)			(6,243	)
Total finance income and finance costs			5,377				(1,468	)
Profit before income taxes			226,927				206,733
Income tax expense			(42,059	)			(75,043	)
Profit for the period			184,868				131,690
Profit for the period attributable to:
Owners of the parent			168,238				116,432
Non-controlling interests			16,630				15,258
		Yen
Earnings per share attributable to owners of the parent
Basic and diluted			95.61				66.37

 

- 7 -

Condensed Consolidated Statements of Comprehensive Income

For the three months ended December 31, 2018 and 2019

 

		Yen (millions)
		Three months ended Dec. 31, 2018				Three months ended Dec. 31, 2019
Profit for the period			184,868				131,690
Other comprehensive income, net of tax:
Items that will not be reclassified to profit or loss
Remeasurements of defined benefit plans			—				—
Net changes in revaluation of financial assets measured at fair value through other comprehensive income			(26,131	)			8,030
Share of other comprehensive income of investments accounted for using the equity method			(2,278	)			1,308
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			161				(65	)
Exchange differences on translating foreign operations			(169,559	)			77,102
Share of other comprehensive income of investments accounted for using the equity method			(6,168	)			8,240
Total other comprehensive income, net of tax			(203,975	)			94,615
Comprehensive income for the period			(19,107	)			226,305
Comprehensive income for the period attributable to:
Owners of the parent			(28,313	)			205,575
Non-controlling interests			9,206				20,730

 

- 8 -

[3] Condensed Consolidated Statements of Changes in Equity

For the nine months ended December 31, 2018

 

		Yen (millions)
		Equity attributable to owners of the parent																								Non-controlling interests				Total equity
		Common stock				Capital surplus				Treasury stock				Retained earnings				Other components of equity				Total
Balance as of April 1, 2018			86,067				171,118				(113,271	)			7,611,332				178,292				7,933,538				300,557				8,234,095
Effect of changes in accounting policy															(46,833	)			(208	)			(47,041	)			6				(47,035	)
Effect of hyperinflation															(9,454	)			14,896				5,442								5,442
Adjusted balance as of April 1, 2018			86,067				171,118				(113,271	)			7,555,045				192,980				7,891,939				300,563				8,192,502
Comprehensive income for the period
Profit for the period															623,339								623,339				57,476				680,815
Other comprehensive income, net of tax																			(16,637	)			(16,637	)			(6,064	)			(22,701	)
Total comprehensive income for the period															623,339				(16,637	)			606,702				51,412				658,114
Reclassification to retained earnings															(1,906	)			1,906				—								—
Transactions with owners and other
Dividends paid															(144,983	)							(144,983	)			(65,039	)			(210,022	)
Purchases of treasury stock											(64,556	)											(64,556	)							(64,556	)
Disposal of treasury stock											1												1								1
Share-based payment transactions							225																225								225
Total transactions with owners and other							225				(64,555	)			(144,983	)							(209,313	)			(65,039	)			(274,352	)
Other changes															(2,788	)							(2,788	)			(2,713	)			(5,501	)
Balance as of December 31, 2018			86,067				171,343				(177,826	)			8,028,707				178,249				8,286,540				284,223				8,570,763
For the nine months ended December 31, 2019
		Yen (millions)
		Equity attributable to owners of the parent																								Non-controlling interests				Total equity
		Common stock				Capital surplus				Treasury stock				Retained earnings				Other components of equity				Total
Balance as of April 1, 2019			86,067				171,460				(177,827	)			7,973,637				214,383				8,267,720				298,070				8,565,790
Comprehensive income for the period
Profit for the period															485,288								485,288				46,167				531,455
Other comprehensive income, net of tax																			(106,621	)			(106,621	)			(3,178	)			(109,799	)
Total comprehensive income for the period															485,288				(106,621	)			378,667				42,989				421,656
Reclassification to retained earnings															(40	)			40				—								—
Transactions with owners and other
Dividends paid															(147,863	)							(147,863	)			(54,987	)			(202,850	)
Purchases of treasury stock											(39,475	)											(39,475	)							(39,475	)
Disposal of treasury stock											79												79								79
Share-based payment transactions							330																330								330
Equity transactions and others																											(3,049	)			(3,049	)
Total transactions with owners and other							330				(39,396	)			(147,863	)							(186,929	)			(58,036	)			(244,965	)
Other changes															1,775								1,775								1,775
Balance as of December 31, 2019			86,067				171,790				(217,223	)			8,312,797				107,802				8,461,233				283,023				8,744,256

 

- 9 -

[4] Consolidated Statements of Cash Flows

For the nine months ended December 31, 2018 and 2019

 

		Yen (millions)
		Nine months ended Dec. 31, 2018				Nine months ended Dec. 31, 2019
Cash flows from operating activities:
Profit before income taxes			868,251				786,168
Depreciation, amortization and impairment losses excluding equipment on operating leases			518,386				529,727
Share of profit of investments accounted for using the equity method			(169,631	)			(149,731	)
Finance income and finance costs, net			(68,087	)			(36,878	)
Interest income and interest costs from financial services, net			(92,655	)			(98,250	)
Changes in assets and liabilities
Trade receivables			105,991				144,006
Inventories			(105,008	)			(14,088	)
Trade payables			(85,229	)			(208,556	)
Accrued expenses			(34,658	)			(56,143	)
Provisions and retirement benefit liabilities			(22,445	)			(34,155	)
Receivables from financial services			(165,210	)			30,472
Equipment on operating leases			(141,291	)			(248,773	)
Other assets and liabilities			(101,717	)			(104,211	)
Other, net			108				3,782
Dividends received			98,624				104,657
Interest received			201,325				218,353
Interest paid			(105,418	)			(113,631	)
Income taxes paid, net of refunds			(202,677	)			(147,350	)
Net cash provided by operating activities			498,659				605,399
Cash flows from investing activities:
Payments for additions to property, plant and equipment			(316,581	)			(250,995	)
Payments for additions to and internally developed intangible assets			(136,115	)			(159,851	)
Proceeds from sales of property, plant and equipment and intangible assets			16,381				10,307
Payments for acquisitions of subsidiaries, net of cash and cash equivalents acquired			—				(3,047	)
Payments for acquisitions of investments accounted for using the equity method			(2,401	)			(4,802	)
Payments for acquisitions of other financial assets			(449,654	)			(240,295	)
Proceeds from sales and redemptions of other financial assets			389,553				214,102
Other, net			2,649				(1,404	)
Net cash used in investing activities			(496,168	)			(435,985	)
Cash flows from financing activities:
Proceeds from short-term financing liabilities			6,085,890				6,226,745
Repayments of short-term financing liabilities			(5,865,684	)			(6,348,745	)
Proceeds from long-term financing liabilities			1,290,354				1,398,797
Repayments of long-term financing liabilities			(1,256,400	)			(1,182,699	)
Dividends paid to owners of the parent			(144,983	)			(147,863	)
Dividends paid to non-controlling interests			(61,786	)			(47,043	)
Purchases and sales of treasury stock, net			(64,555	)			(39,396	)
Repayments of lease liabilities			(37,061	)			(55,689	)
Other, net			—				(4,237	)
Net cash used in financing activities			(54,225	)			(200,130	)
Effect of exchange rate changes on cash and cash equivalents			(10,681	)			(21,581	)
Net change in cash and cash equivalents			(62,415	)			(52,297	)
Cash and cash equivalents at beginning of year			2,256,488				2,494,121
Cash and cash equivalents at end of period			2,194,073				2,441,824

 

- 10 -

[5] Assumptions for Going Concern

None

[6] Notes to Consolidated Financial Statements

[A] Changes in accounting policies

IFRS 16 “Leases”

Honda has adopted IFRS 16 “Leases” with a date of initial application of April 1, 2019. Honda used the modified retrospective approach, under which the cumulative effect of initial application was recognized as an adjustment to the opening balance of equity at the date of initial application. Therefore, the comparative information has not been restated and continues to be reported under the previous accounting policy.

Previously, Honda determined at contract inception whether an arrangement was or contained a lease under IAS 17 “Leases” and IFRIC 4 “Determining whether an Arrangement contains a Lease”. Honda assesses whether a contract is or contains a lease under IFRS 16 on or after April 1, 2019. Honda applied the practical expedient to grandfather the assessment of which a contract was or contained a lease when applying IFRS 16. Therefore, Honda applied IFRS 16 to all contracts entered into prior to April 1, 2019 and identified as leases under IAS 17 and IFRIC 4.

IFRS 16 introduced a single on-balance lease accounting model for lessees. A lessee recognizes a right-of-use asset representing its right to use the underlying asset and a lease liability representing its obligation to make lease payments. In addition, expenses related to leases change from straight-line operating lease expenses to depreciation charge for right-of-use assets and interest expense on lease liabilities. At transition, Honda recognized the lease liabilities for leases previously classified as an operating lease under IAS 17, and measured these liabilities at the present value of the remaining lease payments, discounted using Honda’s incremental borrowing rate as of April 1, 2019. The weighted average rate applied was 1.19%. The right-of-use assets were measured at the amount equal to the lease liability, adjusted by the amount of any prepaid or accrued lease payments relating to that lease recognized in the statement of financial position immediately before the date of initial application. In addition, Honda applied the following practical expedients when applying IFRS 16.

 

•

Applied a single discount rate to a portfolio of leases with reasonably similar characteristics;

 

•

Adjusted the right-of-use assets by the amount of any provision for onerous leases under IAS 37 “Provisions, Contingent Liabilities and Contingent Assets” recognized immediately before the date of initial application as an alternative to performing an impairment review; and

 

•

Excluded initial direct costs from the measurement of the right-of-use assets at the date of initial application.

In the condensed consolidated statements of financial position, lease liabilities are included in other financial liabilities and right-of-use assets are included in property, plant and equipment.

Honda recognized additional lease liabilities of JPY 272,232 million and total assets, mainly right-of-use assets were recognized approximately in the same amounts in the condensed consolidated statements of financial position as of April 1, 2019.

The difference between the future minimum lease payments under non-cancelable operating leases as of March 31, 2019 disclosed in the consolidated financial statements immediately before the date of initial application, and the lease liabilities recognized as of April 1, 2019, is as follows:

 

		Yen(millions)
Future minimum lease payments under non-cancelable operating leases as of March 31, 2019			115,634
Discounted using the incremental borrowing rate as of April 1, 2019			108,147
Add: Finance lease obligations			62,308
Add: Cancelable operating leases			11,612
Add: Extension options reasonably certain to be exercised			152,473
Lease liabilities recognized as of April 1, 2019			334,540

 

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[B] Segment Information

Honda has four reportable segments: Motorcycle business, Automobile business, Financial services business and Life creation and other businesses, which are based on Honda’s organizational structure and characteristics of products and services. Operating segments are defined as 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 these reportable segments 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 (S×S) 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
Life Creation and Other Businesses*		Power products and relevant parts, and others		Research and development Manufacturing Sales and related services Others

Explanatory note:

 

*

Power product business has been renamed Life creation business from April 1, 2019. Honda expands the concept of our Power product business and continues pursuing it under a new concept of “Life Creation Business”. This renaming of the business represents our intention to evolve our business as a function to create new value for “mobility” and “daily lives”, which includes our existing Power product business as well as new businesses for the future, including energy business.

Segment information based on products and services

As of and for the nine months ended December 31, 2018

 

		Yen (millions)
		Motorcycle Business				Automobile Business				Financial Services Business				Life Creation and Other Businesses				Segment Total				Reconciling Items				Consolidated
Sales revenue:
External customers			1,610,740				8,228,119				1,746,285				254,356				11,839,500				—				11,839,500
Intersegment			—				146,792				11,202				19,840				177,834				(177,834	)			—
Total			1,610,740				8,374,911				1,757,487				274,196				12,017,334				(177,834	)			11,839,500
Segment profit (loss)			246,711				262,734				176,746				(2,186	)			684,005				—				684,005
Segment assets			1,437,358				7,749,612				9,944,099				327,153				19,458,222				392,979				19,851,201
Depreciation and amortization			49,304				455,477				583,184				10,871				1,098,836				—				1,098,836
Capital expenditures			46,708				363,963				1,468,846				9,540				1,889,057				—				1,889,057
As of and for the nine months ended December 31, 2019
		Yen (millions)
		Motorcycle Business				Automobile Business				Financial Services Business				Life Creation and Other Businesses				Segment Total				Reconciling Items				Consolidated
Sales revenue:
External customers			1,585,770				7,691,119				1,961,952				234,108				11,472,949				—				11,472,949
Intersegment			—				164,786				10,626				19,317				194,729				(194,729	)			—
Total			1,585,770				7,855,905				1,972,578				253,425				11,667,678				(194,729	)			11,472,949
Segment profit (loss)			222,182				229,000				196,761				(8,689	)			639,254				—				639,254
Segment assets			1,519,250				7,837,663				10,373,083				362,483				20,092,479				396,227				20,488,706
Depreciation and amortization			50,147				417,950				615,663				10,777				1,094,537				—				1,094,537
Capital expenditures			52,849				328,282				1,730,700				10,574				2,122,405				—				2,122,405

 

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For the three months ended December 31, 2018

 

		Yen (millions)
		Motorcycle Business				Automobile Business				Financial Services Business				Life Creation and Other Businesses				Segment Total				Reconciling Items				Consolidated
Sales revenue:
External customers			516,514				2,806,148				560,305				90,688				3,973,655				—				3,973,655
Intersegment			—				53,408				3,716				8,704				65,828				(65,828	)			—
Total			516,514				2,859,556				564,021				99,392				4,039,483				(65,828	)			3,973,655
Segment profit (loss)			69,537				41,228				60,374				(992	)			170,147				—				170,147
For the three months ended December 31, 2019
		Yen (millions)
		Motorcycle Business				Automobile Business				Financial Services Business				Life Creation and Other Businesses				Segment Total				Reconciling Items				Consolidated
Sales revenue:
External customers			530,227				2,523,149				616,318				77,899				3,747,593				—				3,747,593
Intersegment			—				51,736				3,470				8,471				63,677				(63,677	)			—
Total			530,227				2,574,885				619,788				86,370				3,811,270				(63,677	)			3,747,593
Segment profit (loss)			74,527				33,707				64,599				(6,184	)			166,649				—				166,649

Explanatory notes:

 

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

 

2.

Reconciling items include elimination of intersegment transactions and balances as well as unallocated corporate assets. Unallocated corporate assets, included in reconciling items as of December 31, 2018 and 2019 amounted to JPY 654,744 million and JPY 650,927 million, respectively, which consist primarily of the Company’s cash and cash equivalents and financial assets measured at fair value through other comprehensive income.

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 nine months ended December 31, 2018

 

		Yen (millions)
		Japan				North America				Europe				Asia				Other Regions				Total				Reconciling Items				Consolidated
Sales revenue:
External customers			1,750,679				6,319,470				462,264				2,738,003				569,084				11,839,500				—				11,839,500
Inter-geographic areas			1,891,295				375,358				204,574				537,150				5,418				3,013,795				(3,013,795	)			—
Total			3,641,974				6,694,828				666,838				3,275,153				574,502				14,853,295				(3,013,795	)			11,839,500
Operating profit (loss)			85,496				213,839				8,582				343,271				32,745				683,933				72				684,005
Assets			4,510,933				11,104,584				664,122				2,891,842				610,717				19,782,198				69,003				19,851,201
Non-current assets other than financial instruments, deferred tax assets and net defined benefit assets			2,617,310				4,694,949				90,489				665,401				145,342				8,213,491				—				8,213,491
As of and for the nine months ended December 31, 2019
		Yen (millions)
		Japan				North America				Europe				Asia				Other Regions				Total				Reconciling Items				Consolidated
Sales revenue:
External customers			1,714,572				6,259,055				426,596				2,532,782				539,944				11,472,949				—				11,472,949
Inter-geographic areas			1,623,743				285,634				156,462				500,784				5,239				2,571,862				(2,571,862	)			—
Total			3,338,315				6,544,689				583,058				3,033,566				545,183				14,044,811				(2,571,862	)			11,472,949
Operating profit (loss)			38,066				280,736				11,004				274,911				35,555				640,272				(1,018	)			639,254
Assets			4,812,390				11,366,463				652,222				2,966,416				625,857				20,423,348				65,358				20,488,706
Non-current assets other than financial instruments, deferred tax assets and net defined benefit assets			2,936,823				4,816,100				59,005				687,869				133,830				8,633,627				—				8,633,627

 

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