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 AUGUST 2021

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 August 6, 2021, Honda Motor Co., Ltd. filed its consolidated financial statements for the fiscal first quarter ended June 30, 2021 with Financial Services Agency in Japan.

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: August 24, 2021

HONDA MOTOR CO., LTD. AND SUBSIDIARIES

Condensed Consolidated Interim Financial Statements

June 30, 2021

HONDA MOTOR CO., LTD. AND SUBSIDIARIES

Consolidated Financial Results

Overview of Operating Performance

While the global economy which had slowed down due to the spread of coronavirus disease 2019 (COVID-19) has continued to be on a recovery track, it has still continued to affect Honda’s consolidated financial results for the three months ended June 30, 2021.

Resulting from travel restriction measures in certain countries or regions, the production activities of some of Honda’s production bases were also affected mainly due to restrictions on employees’ commute to the workplaces and delays in the supply of parts within the supply chain. Some dealers were obliged to suspend business, shorten business hours, or reduce services such as inspections and repairs. However, there is no significant impact on Honda’s consolidated financial results for the three months ended June 30, 2021.

Honda’s consolidated sales revenue for the three months ended June 30, 2021 increased by 68.7%, to ¥3,583.8 billion from the same period last year, due mainly to increased sales revenue in all business operations. Operating profit was ¥243.2 billion, an increase of ¥356.9 billion from the same period last year, due mainly to an increase in profit attributable to increased sales revenue and model mix. Profit before income taxes was ¥311.3 billion, an increase of ¥384.7 billion from the same period last year. Profit for the period attributable to owners of the parent was ¥222.5 billion, an increase of ¥303.3 billion from the same period last year.

Business Segments

Motorcycle Business

For the three months ended June 30, 2020 and 2021

 

		Units (thousands)
		Honda Group Unit Sales*																Consolidated Unit Sales*
		Three months ended Jun. 30, 2020				Three months ended Jun. 30, 2021												Three months ended Jun. 30, 2020				Three months ended Jun. 30, 2021
										Change				%												Change				%
Motorcycle Business			1,855				3,879				2,024				109.1				1,221				2,392				1,171				95.9
Japan			50				59				9				18.0				50				59				9				18.0
North America			61				101				40				65.6				61				101				40				65.6
Europe			61				108				47				77.0				61				108				47				77.0
Asia			1,572				3,245				1,673				106.4				938				1,758				820				87.4
Other Regions			111				366				255				229.7				111				366				255				229.7

 

*

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

Sales revenue from external customers increased by 89.0%, to ¥518.2 billion from the same period last year, due mainly to increased consolidated unit sales. Operating profit increased by 620.4%, to ¥80.6 billion from the same period last year, due mainly to an increase in profit attributable to increased sales volume and model mix.

Automobile Business

For the three months ended June 30, 2020 and 2021

 

		Units (thousands)
		Honda Group Unit Sales*																Consolidated Unit Sales*
		Three months ended Jun. 30, 2020				Three months ended Jun. 30, 2021												Three months ended Jun. 30, 2020				Three months ended Jun. 30, 2021
										Change				%												Change				%
Automobile Business			792				998				206				26.0				337				608				271				80.4
Japan			129				133				4				3.1				113				118				5				4.4
North America			159				346				187				117.6				159				346				187				117.6
Europe			16				28				12				75.0				16				28				12				75.0
Asia			473				462				(11	)			(2.3	)			34				87				53				155.9
Other Regions			15				29				14				93.3				15				29				14				93.3

 

*

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

Sales revenue from external customers increased by 82.4%, to ¥2,206.4 billion from the same period last year, due mainly to increased consolidated unit sales. Operating profit was ¥70.6 billion, an increase of ¥266.5 billion from the same period last year, due mainly to an increase in profit attributable to increased sales volume and model mix.

Financial Services Business

Sales revenue from external customers increased by 33.1%, to ¥766.5 billion from the same period last year, due mainly to increased revenues on disposition of lease vehicles. Operating profit increased by 28.9%, to ¥92.2 billion from the same period last year, due mainly to an increase in profit attributable to increased sales revenue.

Life Creation and Other Businesses

For the three months ended June 30, 2020 and 2021

 

		Units (thousands)
		Honda Group Unit Sales / Consolidated Unit Sales*
		Three months ended Jun. 30, 2020				Three months ended Jun. 30, 2021
										Change				%
Life Creation Business			1,083				1,708				625				57.7
Japan			80				87				7				8.8
North America			524				880				356				67.9
Europe			170				279				109				64.1
Asia			257				362				105				40.9
Other Regions			52				100				48				92.3

 

*

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

Sales revenue from external customers increased by 45.2%, to ¥92.6 billion from the same period last year, due mainly to increased consolidated unit sales in Life creation business. Operating loss was ¥0.3 billion, an improvement of ¥0.1 billion from the same period last year, due mainly to an increase in profit attributable to increased sales volume and model mix, which was partially offset by increased operating costs in Other businesses. In addition, operating loss of aircraft and aircraft engines included in the Life creation and other businesses was ¥8.3 billion, an increase of ¥1.1 billion from the same period last year.

Cash Flows

Consolidated cash and cash equivalents on June 30, 2021 decreased by ¥254.5 billion from March 31, 2021, to ¥2,503.4 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 ¥7.2 billion of cash inflows. Cash inflows from operating activities increased by ¥79.0 billion from the same period last year, due mainly to increased cash received from customers, which was partially offset by increased payments for parts and raw materials.

Net cash used in investing activities amounted to ¥128.7 billion of cash outflows. Cash outflows from investing activities increased by ¥19.3 billion from the same period last year, due mainly to increased payments for acquisitions of other financial assets, which was partially offset by decreased payments for additions to and internally developed intangible assets.

Net cash used in financing activities amounted to ¥140.8 billion of cash outflows. Cash outflows from financing activities increased by ¥252.8 billion from the same period last year, due mainly to decreased proceeds from financing liabilities and increased dividends paid.

Changes in Major Consolidated Subsidiaries

Changes in major consolidated subsidiaries for the three months ended June 30, 2021 are as follows:

Motorcycle Business, Automobile Business, Life Creation and Other Businesses

American Honda Motor Co., Inc. integrated certain functions of Honda R&D Americas, Inc.

Automobile Business

Honda of America Mfg., Inc. merged with Honda Manufacturing of Alabama, LLC, Honda Manufacturing of Indiana, LLC, Honda Transmission Mfg. of America, Inc., Honda R&D Americas, Inc. and three other companies and changed its name to “Honda Development and Manufacturing of America, LLC”.

Research and Development

The changes in research and development activities by Honda and its subsidiaries for the three months ended June 30, 2021 are as follows:

American Honda Motor Co., Inc., our consolidated subsidiaries in the United States, made organizational changes to its automobile manufacturing-related companies and automobile development function in the United States on April 1, 2021. As a result of these changes, Honda R&D Americas, Inc. and Honda Engineering North America, Inc. were merged into Honda Development and Manufacturing of America, LLC. Additionally, in the motorcycle operations, Honda of South Carolina Mfg., Inc., which is responsible for manufacturing powersports products (PSPs), including ATV and side-by-side products, and the PSPs development function of Honda R&D Americas, Inc. were merged into the PSPs division of American Honda Motor Co., Inc. These organizational changes will advance integrated operations in all areas of sales, manufacturing, development and procurement, and strengthen our business structure in North America to respond more quickly to the needs of our customers and the market in light of the rapidly changing market environment.

Unit Production and Sales

Unit production and sales in Honda and its subsidiaries for the three months ended June 30, 2021 in Motorcycle business, Automobile business and Life creation business increased significantly from the same period last year. The increased unit production in each segment was due to suspended or reduced production in Honda’s production bases in Japan and overseas resulted from the spread of COVID-19 in the same period last year. For the increased unit sales in each segment, see “Business Segment” in “Consolidated Financial Results”.

HONDA MOTOR CO., LTD. AND SUBSIDIARIES

Condensed Consolidated Statements of Financial Position

March 31, 2021 and June 30, 2021

 

						Yen (millions)
Assets		Note				March 31, 2021				June 30, 2021
						unaudited				unaudited
Current assets:
Cash and cash equivalents						¥	2,758,020			¥	2,503,454
Trade receivables							801,814				703,623
Receivables from financial services							1,794,654				1,672,560
Other financial assets							295,307				274,957
Inventories							1,545,600				1,736,099
Other current assets							383,696				379,036
Total current assets							7,579,091				7,269,729
Non-current assets:
Investments accounted for using the equity method							891,002				960,595
Receivables from financial services							3,619,896				3,734,419
Other financial assets							628,533				733,355
Equipment on operating leases			5				4,919,916				5,018,034
Property, plant and equipment			6				3,021,514				2,987,702
Intangible assets							818,763				819,488
Deferred tax assets							99,552				108,540
Other non-current assets							342,763				350,974
Total non-current assets							14,341,939				14,713,107
Total assets						¥	21,921,030			¥	21,982,836
						Yen (millions)
Liabilities and Equity		Note				March 31, 2021				June 30, 2021
						unaudited				unaudited
Current liabilities:
Trade payables						¥	1,088,061			¥	1,021,390
Financing liabilities							3,005,624				3,266,072
Accrued expenses							415,106				337,264
Other financial liabilities							182,145				171,109
Income taxes payable							47,793				52,845
Provisions			7				362,151				323,286
Other current liabilities							614,577				587,405
Total current liabilities							5,715,457				5,759,371
Non-current liabilities:
Financing liabilities							4,715,361				4,453,295
Other financial liabilities							280,809				277,594
Retirement benefit liabilities							358,532				366,488
Provisions			7				278,890				273,102
Deferred tax liabilities							842,001				883,949
Other non-current liabilities							357,141				364,818
Total non-current liabilities							6,832,734				6,619,246
Total liabilities							12,548,191				12,378,617
Equity:
Common stock							86,067				86,067
Capital surplus							172,049				171,751
Treasury stock							(273,786	)			(273,396	)
Retained earnings							8,901,266				9,030,414
Other components of equity							196,710				310,562
Equity attributable to owners of the parent							9,082,306				9,325,398
Non-controlling interests							290,533				278,821
Total equity							9,372,839				9,604,219
Total liabilities and equity						¥	21,921,030			¥	21,982,836

See accompanying notes to condensed consolidated interim financial statements.

HONDA MOTOR CO., LTD. AND SUBSIDIARIES

Condensed Consolidated Statements of Income

For the three months ended June 30, 2020 and 2021

 

				Yen (millions)
		Note		June 30, 2020				June 30, 2021
				unaudited				unaudited
Sales revenue		8		¥	2,123,775			¥	3,583,870
Operating costs and expenses:
Cost of sales					(1,769,299	)			(2,846,420	)
Selling, general and administrative					(305,253	)			(317,014	)
Research and development					(162,914	)			(177,226	)
Total operating costs and expenses					(2,237,466	)			(3,340,660	)
Operating profit (loss)					(113,691	)			243,210
Share of profit of investments accounted for using the equity method					39,994				55,931
Finance income and finance costs:
Interest income					4,595				5,200
Interest expense					(1,833	)			(2,925	)
Other, net					(2,498	)			9,944
Total finance income and finance costs					264				12,219
Profit (loss) before income taxes					(73,433	)			311,360
Income tax expense					(6,546	)			(73,640	)
Profit (loss) for the period				¥	(79,979	)		¥	237,720
Profit (loss) for the period attributable to:
Owners of the parent					(80,871	)			222,512
Non-controlling interests					892				15,208
				Yen
				June 30, 2020				June 30, 2021
Earnings (loss) per share attributable to owners of the parent
Basic and diluted		11		¥	(46.84	)		¥	128.87

See accompanying notes to condensed consolidated interim financial statements.

HONDA MOTOR CO., LTD. AND SUBSIDIARIES

Condensed Consolidated Statements of Comprehensive Income

For the three months ended June 30, 2020 and 2021

 

				Yen (millions)
		Note		June 30, 2020				June 30, 2021
				unaudited				unaudited
Profit (loss) for the period				¥	(79,979	)		¥	237,720
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					4,209				62,582
Share of other comprehensive income of investments accounted for using the equity method					529				948
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					56				30
Exchange differences on translating foreign operations					8,819				29,310
Share of other comprehensive income of investments accounted for using the equity method					(5,193	)			19,308
Total other comprehensive income, net of tax					8,420				112,178
Comprehensive income for the period				¥	(71,559	)		¥	349,898
Comprehensive income for the period attributable to:
Owners of the parent					(79,767	)			336,272
Non-controlling interests					8,208				13,626

See accompanying notes to condensed consolidated interim financial statements.

HONDA MOTOR CO., LTD. AND SUBSIDIARIES

Condensed Consolidated Statements of Changes in Equity

For the three months ended June 30, 2020 and 2021

 

						Yen (millions)
						Equity attributable to owners of the parent
		Note				Common stock				Capital surplus				Treasury stock				Retained earnings				Other components of equity				Total				Non-controlling interests				Total equity
Balance as of April 1, 2020 (unaudited)						¥	86,067			¥	171,823			¥	(273,940	)		¥	8,142,948			¥	(114,639	)		¥	8,012,259			¥	273,764			¥	8,286,023
Comprehensive income for the period
Profit (loss) for the period																			(80,871	)							(80,871	)			892				(79,979	)
Other comprehensive income, net of tax																							1,104				1,104				7,316				8,420
Total comprehensive income for the period																			(80,871	)			1,104				(79,767	)			8,208				(71,559	)
Transactions with owners and other
Dividends paid			12																(48,363	)							(48,363	)			(31,555	)			(79,918	)
Purchases of treasury stock															(1	)											(1	)							(1	)
Disposal of treasury stock															124												124								124
Share-based payment transactions											(12	)															(12	)							(12	)
Equity transactions and others																															2,251				2,251
Total transactions with owners and other											(12	)			123				(48,363	)							(48,252	)			(29,304	)			(77,556	)
Balance as of June 30, 2020 (unaudited)						¥	86,067			¥	171,811			¥	(273,817	)		¥	8,013,714			¥	(113,535	)		¥	7,884,240			¥	252,668			¥	8,136,908
						Yen (millions)
						Equity attributable to owners of the parent
		Note				Common stock				Capital surplus				Treasury stock				Retained earnings				Other components of equity				Total				Non-controlling interests				Total equity
Balance as of April 1, 2021 (unaudited)						¥	86,067			¥	172,049			¥	(273,786	)		¥	8,901,266			¥	196,710			¥	9,082,306			¥	290,533			¥	9,372,839
Comprehensive income for the period
Profit (loss) for the period																			222,512								222,512				15,208				237,720
Other comprehensive income, net of tax																							113,760				113,760				(1,582	)			112,178
Total comprehensive income for the period																			222,512				113,760				336,272				13,626				349,898
Reclassification to retained earnings																			(92	)			92				—								—
Transactions with owners and other
Dividends paid			12																(93,272	)							(93,272	)			(25,338	)			(118,610	)
Purchases of treasury stock															(2	)											(2	)							(2	)
Disposal of treasury stock															392												392								392
Share-based payment transactions											(298	)															(298	)							(298	)
Total transactions with owners and other											(298	)			390				(93,272	)							(93,180	)			(25,338	)			(118,518	)
Balance as of June 30, 2021 (unaudited)						¥	86,067			¥	171,751			¥	(273,396	)		¥	9,030,414			¥	310,562			¥	9,325,398			¥	278,821			¥	9,604,219

See accompanying notes to condensed consolidated interim financial statements.

HONDA MOTOR CO., LTD. AND SUBSIDIARIES

Condensed Consolidated Statements of Cash Flows

For the three months ended June 30, 2020 and 2021

 

						Yen (millions)
		Note				June 30, 2020				June 30, 2021
						unaudited				unaudited
Cash flows from operating activities:
Profit (loss) before income taxes						¥	(73,433	)		¥	311,360
Depreciation, amortization and impairment losses excluding equipment on operating leases							149,419				151,291
Share of profit of investments accounted for using the equity method							(39,994	)			(55,931	)
Finance income and finance costs, net							6,752				(2,066	)
Interest income and interest costs from financial services, net							(28,354	)			(38,508	)
Changes in assets and liabilities
Trade receivables							33,546				101,500
Inventories							(91,946	)			(178,826	)
Trade payables							(134,776	)			(67,565	)
Accrued expenses							(87,180	)			(88,578	)
Provisions and retirement benefit liabilities							9,395				(36,215	)
Receivables from financial services							199,194				21,798
Equipment on operating leases							16,833				(92,131	)
Other assets and liabilities							(35,335	)			(26,033	)
Other, net							(2,402	)			(439	)
Dividends received							5,468				21,961
Interest received							58,567				59,109
Interest paid							(27,577	)			(19,586	)
Income taxes paid, net of refunds							(29,945	)			(53,888	)
Net cash provided by (used in) operating activities							(71,768	)			7,253
Cash flows from investing activities:
Payments for additions to property, plant and equipment							(84,090	)			(80,310	)
Payments for additions to and internally developed intangible assets							(50,151	)			(41,026	)
Proceeds from sales of property, plant and equipment and intangible assets							3,231				4,749
Payments for acquisitions of subsidiaries, net of cash and cash equivalents acquired							2,230				—
Payments for acquisitions of other financial assets							(38,460	)			(125,511	)
Proceeds from sales and redemptions of other financial assets							57,920				113,382
Net cash used in investing activities							(109,320	)			(128,716	)
Cash flows from financing activities:
Proceeds from short-term financing liabilities							2,847,881				2,197,816
Repayments of short-term financing liabilities							(2,687,827	)			(2,157,665	)
Proceeds from long-term financing liabilities							405,004				289,144
Repayments of long-term financing liabilities							(376,788	)			(348,005	)
Dividends paid to owners of the parent							(48,363	)			(93,272	)
Dividends paid to non-controlling interests							(9,282	)			(10,879	)
Purchases and sales of treasury stock, net							123				390
Repayments of lease liabilities							(18,291	)			(18,428	)
Other, net							(555	)			—
Net cash provided by (used in) financing activities							111,902				(140,899	)
Effect of exchange rate changes on cash and cash equivalents							4,593				7,796
Net change in cash and cash equivalents							(64,593	)			(254,566	)
Cash and cash equivalents at beginning of year							2,672,353				2,758,020
Cash and cash equivalents at end of period						¥	2,607,760			¥	2,503,454

See accompanying notes to condensed consolidated interim financial statements.

 

1

 

HONDA MOTOR CO., LTD. AND SUBSIDIARIES

Notes to Condensed Consolidated Interim Financial Statements

(1) Reporting Entity

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

(2) Basis of Preparation

   (a) Compliance with Interim Financial Reporting Standards

The condensed consolidated interim financial statements of the Company have been prepared in accordance with IAS 34 “Interim Financial Reporting”. The condensed consolidated interim financial statements should be read in conjunction with the Company’s consolidated financial statements for the fiscal year ended March 31, 2021, since the condensed consolidated interim financial statements do not include all the information required in the annual consolidated financial statements, which have been prepared in accordance with International Financial Reporting Standards (“IFRS”) as issued by the International Accounting Standards Board.

   (b) Functional Currency and Presentation Currency

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

   (c) Use of Estimates and Judgments

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

The condensed consolidated interim financial statements are prepared based on the same judgments and estimations as those applied and described in the Company’s consolidated financial statements for the fiscal year ended March 31, 2021.

(3) Summary of Significant Accounting Policies

The condensed consolidated interim financial statements are prepared based on the same accounting policies as those applied and described in the Company’s consolidated financial statements for the fiscal year ended March 31, 2021.

 

2

 

HONDA MOTOR CO., LTD. AND SUBSIDIARIES

Notes to Condensed Consolidated Interim Financial Statements

 

(4) 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 (SxS) and relevant parts		Research and development Manufacturing Sales and related services
Automobile Business		Automobiles and relevant parts		Research and development Manufacturing Sales and related services
Financial Services Business		Financial services		Retail loan and lease related to Honda products Others
Life Creation and Other Businesses		Power products and relevant parts, and others		Research and development Manufacturing Sales and related services Others

   (a) Segment Information

Segment information as of and for the three months ended June 30, 2020 and 2021 is as follows:

As of and for the three months ended June 30, 2020

 

		Yen (millions)
		Motorcycle Business				Automobile Business				Financial Services Business				Life Creation and Other Businesses				Segment Total				Reconciling Items				Consolidated
Sales revenue:
External customers		¥	274,222			¥	1,209,923			¥	575,834			¥	63,796			¥	2,123,775			¥	—			¥	2,123,775
Intersegment			—				45,800				3,168				4,441				53,409				(53,409	)			—
Total			274,222				1,255,723				579,002				68,237				2,177,184				(53,409	)			2,123,775
Segment profit (loss)		¥	11,202			¥	(195,888	)		¥	71,568			¥	(573	)		¥	(113,691	)		¥	—			¥	(113,691	)
Segment assets		¥	1,386,342			¥	7,641,611			¥	10,202,227			¥	352,249			¥	19,582,429			¥	529,305			¥	20,111,734
Depreciation and amortization			16,775				126,793				206,150				3,888				353,606				—				353,606
Capital expenditures			8,550				89,371				396,701				2,082				496,704				—				496,704

 

3

 

HONDA MOTOR CO., LTD. AND SUBSIDIARIES

Notes to Condensed Consolidated Interim Financial Statements

 

As of and for the three months ended June 30, 2021

 

		Yen (millions)
		Motorcycle Business				Automobile Business				Financial Services Business				Life Creation and Other Businesses				Segment Total				Reconciling Items				Consolidated
Sales revenue:
External customers		¥	518,203			¥	2,206,436			¥	766,572			¥	92,659			¥	3,583,870			¥	—			¥	3,583,870
Intersegment			—				46,018				926				6,588				53,532				(53,532	)			—
Total			518,203				2,252,454				767,498				99,247				3,637,402				(53,532	)			3,583,870
Segment profit (loss)		¥	80,695			¥	70,689			¥	92,217			¥	(391	)		¥	243,210			¥	—			¥	243,210
Segment assets		¥	1,495,553			¥	8,790,998			¥	10,862,394			¥	382,318			¥	21,531,263			¥	451,573			¥	21,982,836
Depreciation and amortization			17,205				128,726				219,269				4,160				369,360				—				369,360
Capital expenditures			7,765				89,142				685,033				2,584				784,524				—				784,524

 

Explanatory notes:

 

1.

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

 

2.

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

 

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

 

4.

Reconciling items include elimination of intersegment transactions and balances as well as unallocated corporate assets. Unallocated corporate assets, included in reconciling items as of June 30, 2020 and 2021 amounted to ¥820,941 million and ¥608,628 million, respectively, which consist primarily of the Company’s cash and cash equivalents and financial assets measured at fair value through other comprehensive income.

 

4

 

HONDA MOTOR CO., LTD. AND SUBSIDIARIES

Notes to Condensed Consolidated Interim Financial Statements

 

   (b) Supplemental Geographical Information

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

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

As of and for the three months ended June 30, 2020

 

		Yen (millions)
		Japan				North America				Europe				Asia				Other Regions				Total				Reconciling Items				Consolidated
Sales revenue:
External customers		¥	471,450			¥	1,061,689			¥	90,628			¥	444,317			¥	55,691			¥	2,123,775			¥	—			¥	2,123,775
Inter-geographic areas			295,730				78,816				14,109				89,674				524				478,853				(478,853	)			—
Total			767,180				1,140,505				104,737				533,991				56,215				2,602,628				(478,853	)			2,123,775
Operating profit (loss)		¥	(61,934	)		¥	(77,886	)		¥	4,854			¥	23,303			¥	(5,576	)		¥	(117,239	)		¥	3,548			¥	(113,691	)
Assets		¥	4,712,594			¥	11,123,120			¥	682,541			¥	2,799,058			¥	473,595			¥	19,790,908			¥	320,826			¥	20,111,734
Non-current assets other than financial instruments, deferred tax assets and net defined benefit assets		¥	2,991,617			¥	4,672,911			¥	57,515			¥	661,518			¥	106,492			¥	8,490,053			¥	—			¥	8,490,053
As of and for the three months ended June 30, 2021
		Yen (millions)
		Japan				North America				Europe				Asia				Other Regions				Total				Reconciling Items				Consolidated
Sales revenue:
External customers		¥	563,459			¥	1,985,752			¥	170,243			¥	729,495			¥	134,921			¥	3,583,870			¥	—			¥	3,583,870
Inter-geographic areas			512,392				121,977				54,005				147,788				1,869				838,031				(838,031	)			—
Total			1,075,851				2,107,729				224,248				877,283				136,790				4,421,901				(838,031	)			3,583,870
Operating profit (loss)		¥	1,729			¥	153,368			¥	9,999			¥	81,435			¥	2,614			¥	249,145			¥	(5,935	)		¥	243,210
Assets		¥	5,239,404			¥	12,268,704			¥	629,568			¥	3,370,027			¥	535,839			¥	22,043,542			¥	(60,706	)		¥	21,982,836
Non-current assets other than financial instruments, deferred tax assets and net defined benefit assets		¥	3,028,127			¥	5,132,967			¥	59,113			¥	653,655			¥	134,394			¥	9,008,256			¥	—			¥	9,008,256

 

Explanatory notes:

 

1.	Major countries in each geographic area:

 

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

 

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

 

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

 

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

 

5.

Reconciling items include elimination of inter-geographic transactions and balances as well as unallocated corporate assets. Unallocated corporate assets, included in reconciling items as of June 30, 2020 and 2021 amounted to ¥820,941 million and ¥608,628 million, respectively, which consist primarily of the Company’s cash and cash equivalents and financial assets measured at fair value through other comprehensive income.

 

5

 

HONDA MOTOR CO., LTD. AND SUBSIDIARIES

Notes to Condensed Consolidated Interim Financial Statements

 

(5) Equipment on Operating Leases

The additions to equipment on operating leases for the three months ended June 30, 2020 and 2021 are ¥395,691 million and ¥684,336 million, respectively.

The sales or disposals of equipment on operating leases for the three months ended June 30, 2020 and 2021 are ¥211,419 million and ¥373,036 million, respectively.

(6) Property, Plant and Equipment

The additions to property, plant and equipment for the three months ended June 30, 2020 and 2021 are ¥60,844 million and ¥76,723 million, respectively.

The sales or disposals of property, plant and equipment for the three months ended June 30, 2020 and 2021 are ¥9,441 million and ¥10,269 million, respectively.

(7) Provisions

The components of and changes in provisions for the three months ended June 30, 2021 are as follows:

 

		Yen (millions)
		Product warranties*				Other				Total
Balance as of April 1, 2021		¥	481,023			¥	160,018			¥	641,041
Provision		¥	24,508			¥	888			¥	25,396
Write-offs			(51,097	)			(16,942	)			(68,039	)
Reversal			(4,289	)			(558	)			(4,847	)
Exchange differences on translating foreign operations			1,537				1,300				2,837
Balance as of June 30, 2021		¥	451,682			¥	144,706			¥	596,388

Current liabilities and non-current liabilities of provisions as of March 31, 2021 and June 30, 2021 are as follows:

 

		Yen (millions)
		As of March 31, 2021				As of June 30, 2021
Current liabilities		¥	362,151			¥	323,286
Non-current liabilities			278,890				273,102
Total		¥	641,041			¥	596,388

 

Explanatory note:

 

*

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

 

6

 

HONDA MOTOR CO., LTD. AND SUBSIDIARIES

Notes to Condensed Consolidated Interim Financial Statements

 

(8) Sales Revenue

As stated in Note 4, Honda has four reportable segments: Motorcycle business, Automobile business, Financial services business and Life creation and other businesses.

The sales revenue disaggregated by geographical markets based on the location of the customer and the reconciliation of the disaggregated revenue with the four reportable segments for the three months ended June 30, 2020 and 2021 are as follows:

For the three months ended June 30, 2020

 

		Yen (millions)
		Motorcycle Business				Automobile Business				Financial Services Business				Life Creation and Other Businesses				Total
Revenue arising from Contracts with Customers
Japan		¥	19,353			¥	284,078			¥	31,544			¥	10,321			¥	345,296
North America			45,505				509,750				217,750				28,939				801,944
Europe			34,767				42,609				—				11,928				89,304
Asia			146,625				337,874				1				9,681				494,181
Other Regions			27,083				30,690				—				2,879				60,652
Total		¥	273,333			¥	1,205,001			¥	249,295			¥	63,748			¥	1,791,377
Revenue arising from the other sources*			889				4,922				326,539				48				332,398
Total		¥	274,222			¥	1,209,923			¥	575,834			¥	63,796			¥	2,123,775
For the three months ended June 30, 2021
		Yen (millions)
		Motorcycle Business				Automobile Business				Financial Services Business				Life Creation and Other Businesses				Total
Revenue arising from Contracts with Customers
Japan		¥	26,211			¥	322,041			¥	41,492			¥	14,951			¥	404,695
North America			55,768				1,239,108				378,594				41,207				1,714,677
Europe			66,078				85,333				—				17,619				169,030
Asia			290,672				495,548				2				13,352				799,574
Other Regions			79,115				61,906				—				5,486				146,507
Total		¥	517,844			¥	2,203,936			¥	420,088			¥	92,615			¥	3,234,483
Revenue arising from the other sources*			359				2,500				346,484				44				349,387
Total		¥	518,203			¥	2,206,436			¥	766,572			¥	92,659			¥	3,583,870

 

Explanatory note:

 

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