SEC Form 6-K filed by Honda Motor Company Ltd.

 

 

SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, D.C. 20549

FORM 6-K

REPORT OF FOREIGN PRIVATE ISSUER

PURSUANT TO RULE 13a-16 OR 15d-16

UNDER THE SECURITIES EXCHANGE ACT OF 1934

FOR THE MONTH OF NOVEMBER 2024

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:

Honda Motor Co., Ltd. filed its consolidated interim financial statements ended September 30, 2024 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: November 15, 2024

 

HONDA MOTOR CO., LTD. AND SUBSIDIARIES

Condensed Consolidated Interim Financial Statements

September 30, 2024

HONDA MOTOR CO., LTD. AND SUBSIDIARIES

Consolidated Financial Results

Overview of Operating Performance

Honda’s consolidated sales revenue for the six months ended September 30, 2024 increased by 12.4%, to ¥10,797.6 billion from the same period last year, due mainly to increased sales revenue in Motorcycle business and Automobile business as well as positive foreign currency translation effects. Operating profit increased by 6.6%, to ¥742.6 billion from the same period last year, due mainly to increased profit attributable to price and cost impacts, which was partially offset by increased expenses. Profit before income taxes decreased by 15.6%, to ¥741.9 billion from the same period last year, due mainly to decreased share of profit (loss) of investments accounted for using the equity method. Profit for the period attributable to owners of the parent decreased by 19.7%, to ¥494.6 billion from the same period last year.

Business Segments

Motorcycle Business

For the six months ended September 30, 2023 and 2024

 

		Units (thousands)
		Honda Group Unit Sales*																Consolidated Unit Sales*
		Six months ended Sep. 30, 2023				Six months ended Sep. 30, 2024				Change				%				Six months ended Sep. 30, 2023				Six months ended Sep. 30, 2024				Change				%
Motorcycle Business			9,266				10,382				1,116				12.0				6,006				6,960				954				15.9
Japan			122				100				(22	)			(18.0	)			122				100				(22	)			(18.0	)
North America			255				269				14				5.5				255				269				14				5.5
Europe			229				265				36				15.7				229				265				36				15.7
Asia			7,874				8,861				987				12.5				4,614				5,439				825				17.9
Other Regions			786				887				101				12.8				786				887				101				12.8

 

*

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 15.1%, to ¥1,810.7 billion from the same period last year, due mainly to increased consolidated unit sales. Operating profit increased by 28.6%, to ¥325.8 billion from the same period last year, due mainly to an increase in profit attributable to price and cost impacts as well as sales impacts.

Automobile Business

For the six months ended September 30, 2023 and 2024

 

		Units (thousands)
		Honda Group Unit Sales*																Consolidated Unit Sales*
		Six months ended Sep. 30, 2023				Six months ended Sep. 30, 2024				Change				%				Six months ended Sep. 30, 2023				Six months ended Sep. 30, 2024				Change				%
Automobile Business			1,934				1,779				(155	)			(8.0	)			1,332				1,396				64				4.8
Japan			259				302				43				16.6				231				259				28				12.1
North America			778				836				58				7.5				778				836				58				7.5
Europe			43				48				5				11.6				43				48				5				11.6
Asia			789				521				(268	)			(34.0	)			215				181				(34	)			(15.8	)
Other Regions			65				72				7				10.8				65				72				7				10.8

 

*

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

Sales revenue from external customers increased by 11.6%, to ¥6,987.5 billion from the same period last year, due mainly to increased consolidated unit sales. Operating profit decreased by 14.4%, to ¥258.0 billion from the same period last year, due mainly to an increase in expenses as well as research and development expenses, which was partially offset by increased profit attributable to price and cost impacts.

Financial Services Business

Sales revenue from external customers increased by 14.9%, to ¥1,811.8 billion from the same period last year, due mainly to increased revenue from retail loans as well as positive foreign currency translation effects. Operating profit increased by 18.8%, to ¥162.7 billion from the same period last year, due mainly to an increase in profit attributable to increased sales revenue.

Power Products and Other Businesses

For the six months ended September 30, 2023 and 2024

 

		Units (thousands)
		Honda Group Unit Sales / Consolidated Unit Sales*
		Six months ended Sep. 30, 2023				Six months ended Sep. 30, 2024				Change				%
Power Products Business			1,826				1,653				(173	)			(9.5	)
Japan			132				124				(8	)			(6.1	)
North America			594				482				(112	)			(18.9	)
Europe			356				252				(104	)			(29.2	)
Asia			602				652				50				8.3
Other Regions			142				143				1				0.7

 

*

Honda Group Unit Sales is the total unit sales of completed power products of Honda, its consolidated subsidiaries and its affiliates and joint ventures accounted for using the equity method. Consolidated Unit Sales is the total unit sales of completed power products corresponding to consolidated sales revenue to external customers, which consists of unit sales of completed power products of Honda and its consolidated subsidiaries. In Power products 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 decreased by 5.3%, to ¥187.3 billion from the same period last year, due mainly to decreased consolidated unit sales in Power products business. Operating loss was ¥3.9 billion, a decrease of ¥8.7 billion from the same period last year, due mainly to decreased profit attributable to sales impacts in Power products business. In addition, operating loss of aircraft and aircraft engines included in Power products and other businesses was ¥19.0 billion, an increase of ¥4.4 billion from the same period last year.

Cash Flows

Consolidated cash and cash equivalents on September 30, 2024 decreased by ¥332.2 billion from March 31, 2024, to ¥4,622.2 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 ¥68.6 billion of cash inflows. Cash inflows from operating activities decreased by ¥311.2 billion from the same period last year, due mainly to an increase in payments for parts and raw materials as well as in payments for purchase of equipment on operating leases, which was partially offset by increased cash received from customers.

Net cash used in investing activities amounted to ¥519.1 billion of cash outflows. Cash outflows from investing activities increased by ¥229.9 billion from the same period last year, due mainly to an increase in payments for additions to property, plant and equipment as well as in payments for additions to and internally developed intangible assets.

Net cash provided by financing activities amounted to ¥317.6 billion of cash inflows. Cash inflows from financing activities increased by ¥74.5 billion from the same period last year, due mainly to increased proceeds from financing liabilities.

HONDA MOTOR CO., LTD. AND SUBSIDIARIES

Condensed Consolidated Statements of Financial Position

March 31, 2024 and September 30, 2024

 

						Yen (millions)
Assets		Note				March 31,  2024				September 30, 2024
						unaudited				unaudited
Current assets:
Cash and cash equivalents						¥	4,954,565			¥	4,622,289
Trade receivables							1,240,090				973,934
Receivables from financial services							2,558,594				2,556,602
Other financial assets							229,583				345,217
Inventories							2,442,969				2,466,403
Other current assets							446,763				553,699
Total current assets							11,872,564				11,518,144
Non-current assets:
Investments accounted for using the equity method							1,206,968				1,193,010
Receivables from financial services							5,616,676				5,739,232
Other financial assets							968,142				926,554
Equipment on operating leases			5				5,202,768				5,201,844
Property, plant and equipment			6				3,234,413				3,058,780
Intangible assets							999,689				1,008,884
Deferred tax assets							170,856				139,278
Other non-current assets							502,074				488,153
Total non-current assets							17,901,586				17,755,735
Total assets						¥	29,774,150			¥	29,273,879
						Yen (millions)
Liabilities and Equity		Note				March 31,  2024				September 30, 2024
						unaudited				unaudited
Current liabilities:
Trade payables						¥	1,609,836			¥	1,410,382
Financing liabilities							4,105,590				4,227,562
Accrued expenses							638,319				581,151
Other financial liabilities							340,858				275,816
Income taxes payable							157,410				72,307
Provisions			7				566,722				588,174
Other current liabilities							904,757				896,089
Total current liabilities							8,323,492				8,051,481
Non-current liabilities:
Financing liabilities							6,057,967				6,257,401
Other financial liabilities							316,919				302,457
Retirement benefit liabilities							284,844				286,368
Provisions			7				385,001				351,436
Deferred tax liabilities							855,067				795,448
Other non-current liabilities							544,988				556,732
Total non-current liabilities							8,444,786				8,549,842
Total liabilities							16,768,278				16,601,323
Equity:
Common stock							86,067				86,067
Capital surplus							205,073				205,222
Treasury stock							(550,808	)			(775,202	)
Retained earnings							10,644,213				10,968,984
Other components of equity							2,312,450				1,906,373
Equity attributable to owners of the parent							12,696,995				12,391,444
Non-controlling interests							308,877				281,112
Total equity							13,005,872				12,672,556
Total liabilities and equity						¥	29,774,150			¥	29,273,879

See accompanying notes to condensed consolidated interim financial statements.

HONDA MOTOR CO., LTD. AND SUBSIDIARIES

Condensed Consolidated Statements of Income

For the six months ended September 30, 2023 and 2024

 

				Yen (millions)
		Note		September 30, 2023				September 30, 2024
				unaudited				unaudited
Sales revenue		8		¥	9,609,392			¥	10,797,613
Operating costs and expenses:
Cost of sales					(7,521,751	)			(8,451,364	)
Selling, general and administrative					(986,874	)			(1,125,099	)
Research and development					(404,194	)			(478,542	)
Total operating costs and expenses					(8,912,819	)			(10,055,005	)
Operating profit					696,573				742,608
Share of profit (loss) of investments accounted for using the equity method					66,724				(20,759	)
Finance income and finance costs:
Interest income					77,845				100,693
Interest expense					(19,895	)			(24,996	)
Other, net					58,038				(55,593	)
Total finance income and finance costs					115,988				20,104
Profit before income taxes					879,285				741,953
Income tax expense					(225,360	)			(215,106	)
Profit for the period				¥	653,925			¥	526,847
Profit for the period attributable to:
Owners of the parent					616,301				494,683
Non-controlling interests					37,624				32,164
				Yen
				September 30, 2023				September 30, 2024
Earnings per share attributable to owners of the parent
Basic and diluted		11		¥	124.63			¥	103.25

See accompanying notes to condensed consolidated interim financial statements.

HONDA MOTOR CO., LTD. AND SUBSIDIARIES

Condensed Consolidated Statements of Comprehensive Income

For the six months ended September 30, 2023 and 2024

 

				Yen (millions)
		Note		September 30, 2023				September 30, 2024
				unaudited				unaudited
Profit for the period				¥	653,925			¥	526,847
Other comprehensive income, net of tax:
Items that will not be reclassified to profit or loss
Remeasurements of defined benefit plans					4				(1	)
Net changes in revaluation of financial assets measured at fair value through other comprehensive income					753				10,627
Share of other comprehensive income of investments accounted for using the equity method					5,280				(5,134	)
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					(429	)			650
Exchange differences on translating foreign operations					768,426				(409,590	)
Share of other comprehensive income of investments accounted for using the equity method					51,933				18,547
Total other comprehensive income, net of tax					825,967				(384,901	)
Comprehensive income for the period				¥	1,479,892			¥	141,946
Comprehensive income for the period attributable to:
Owners of the parent					1,424,586				107,112
Non-controlling interests					55,306				34,834

See accompanying notes to condensed consolidated interim financial statements.

HONDA MOTOR CO., LTD. AND SUBSIDIARIES

Condensed Consolidated Statements of Changes in Equity

For the six months ended September 30, 2023 and 2024

 

						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, 2023 (unaudited)						¥	86,067			¥	185,589			¥	(484,931	)		¥	9,980,128			¥	1,417,397			¥	11,184,250			¥	318,041			¥	11,502,291
Comprehensive income for the period
Profit for the period																			616,301								616,301				37,624				653,925
Other comprehensive income, net of tax																							808,285				808,285				17,682				825,967
Total comprehensive income for the period																			616,301				808,285				1,424,586				55,306				1,479,892
Reclassification to retained earnings																			375				(375	)			—								—
Transactions with owners and other
Dividends paid			12																(99,915	)							(99,915	)			(59,549	)			(159,464	)
Purchases of treasury stock															(145,009	)											(145,009	)							(145,009	)
Disposal of treasury stock															394												394								394
Share-based payment transactions											(131	)															(131	)							(131	)
Total transactions with owners and other											(131	)			(144,615	)			(99,915	)							(244,661	)			(59,549	)			(304,210	)
Balance as of September 30, 2023 (unaudited)						¥	86,067			¥	185,458			¥	(629,546	)		¥	10,496,889			¥	2,225,307			¥	12,364,175			¥	313,798			¥	12,677,973

 

						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, 2024 (unaudited)						¥	86,067			¥	205,073			¥	(550,808	)		¥	10,644,213			¥	2,312,450			¥	12,696,995			¥	308,877			¥	13,005,872
Comprehensive income for the period
Profit for the period																			494,683								494,683				32,164				526,847
Other comprehensive income, net of tax																							(387,571	)			(387,571	)			2,670				(384,901	)
Total comprehensive income for the period																			494,683				(387,571	)			107,112				34,834				141,946
Reclassification to retained earnings																			18,506				(18,506	)			—								—
Transactions with owners and other
Dividends paid			12																(188,418	)							(188,418	)			(62,599	)			(251,017	)
Purchases of treasury stock															(224,716	)											(224,716	)							(224,716	)
Disposal of treasury stock															322												322								322
Share-based payment transactions											149																149								149
Total transactions with owners and other											149				(224,394	)			(188,418	)							(412,663	)			(62,599	)			(475,262	)
Balance as of September 30, 2024 (unaudited)						¥	86,067			¥	205,222			¥	(775,202	)		¥	10,968,984			¥	1,906,373			¥	12,391,444			¥	281,112			¥	12,672,556

See accompanying notes to condensed consolidated interim financial statements.

HONDA MOTOR CO., LTD. AND SUBSIDIARIES

Condensed Consolidated Statements of Cash Flows

For the six months ended September 30, 2023 and 2024

 

						Yen (millions)
		Note				September 30, 2023				September 30, 2024
						unaudited				unaudited
Cash flows from operating activities:
Profit before income taxes						¥	879,285			¥	741,953
Depreciation, amortization and impairment losses excluding equipment on operating leases							373,775				366,806
Share of (profit) loss of investments accounted for using the equity method							(66,724	)			20,759
Finance income and finance costs, net							(92,349	)			(37,677	)
Interest income and interest costs from financial services, net							(75,284	)			(84,567	)
Changes in assets and liabilities
Trade receivables							24,114				245,994
Inventories							(905	)			(128,762	)
Trade payables							(69,898	)			(50,094	)
Accrued expenses							(16,454	)			(45,638	)
Provisions and retirement benefit liabilities							65,507				46,916
Receivables from financial services							(728,165	)			(578,916	)
Equipment on operating leases							95,596				(260,142	)
Other assets and liabilities							6,255				(82,529	)
Other, net							(44,023	)			12,942
Dividends received							126,630				81,233
Interest received							255,998				362,299
Interest paid							(110,717	)			(213,162	)
Income taxes paid, net of refunds							(242,689	)			(328,724	)
Net cash provided by operating activities							379,952				68,691
Cash flows from investing activities:
Payments for additions to property, plant and equipment							(141,404	)			(222,043	)
Payments for additions to and internally developed intangible assets							(97,504	)			(142,576	)
Proceeds from sales of property, plant and equipment and intangible assets							4,239				2,058
Proceeds from sales of subsidiaries, net of cash and cash equivalents disposed of							(2,940	)			—
Payments for acquisitions of investments accounted for using the equity method							(38,734	)			(60,047	)
Proceeds from sales of investments accounted for using the equity method							—				8,858
Payments for acquisitions of other financial assets							(118,990	)			(249,330	)
Proceeds from sales and redemptions of other financial assets							106,207				143,974
Net cash used in investing activities							(289,126	)			(519,106	)
Cash flows from financing activities:
Proceeds from short-term financing liabilities							6,065,976				4,282,239
Repayments of short-term financing liabilities							(5,805,967	)			(4,188,493	)
Proceeds from long-term financing liabilities							1,498,319				1,840,856
Repayments of long-term financing liabilities							(1,185,750	)			(1,120,027	)
Dividends paid to owners of the parent							(99,915	)			(188,418	)
Dividends paid to non-controlling interests							(45,228	)			(46,947	)
Purchases and sales of treasury stock, net							(144,615	)			(224,394	)
Repayments of lease liabilities							(39,773	)			(37,215	)
Net cash provided by financing activities							243,047				317,601
Effect of exchange rate changes on cash and cash equivalents							303,626				(199,462	)
Net change in cash and cash equivalents							637,499				(332,276	)
Cash and cash equivalents at beginning of year							3,803,014				4,954,565
Cash and cash equivalents at end of period						¥	4,440,513			¥	4,622,289

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, China, India, Indonesia, Malaysia, Thailand, Vietnam 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, 2024, 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, 2024.

(3) Summary of Material 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, 2024.

 

2

 

HONDA MOTOR CO., LTD. AND SUBSIDIARIES

Notes to Condensed Consolidated Interim Financial Statements

 

(4) Segment Information

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

Principal products and services, and functions of each segment are as follows:

 

Segment		Principal products and services		Functions
Motorcycle Business		Motorcycles, all-terrain vehicles (ATVs), side-by-sides (SxS) and relevant parts		Research and development Manufacturing Sales and related services
Automobile Business		Automobiles and relevant parts		Research and development Manufacturing Sales and related services
Financial Services Business		Financial services		Retail loan and lease related to Honda products Others
Power Products and Other Businesses		Power products and relevant parts, and others		Research and development Manufacturing Sales and related services Others

  Segment Information

Segment information as of and for the six months ended September 30, 2023 and 2024 is as follows:

As of and for the six months ended September 30, 2023

 

		Yen (millions)
		Motorcycle  Business				Automobile  Business				Financial   Services Business				Power Products  and Other Businesses				Segment  Total				Reconciling  Items				Consolidated
Sales revenue:
External customers		¥	1,572,558			¥	6,262,289			¥	1,576,608			¥	197,937			¥	9,609,392			¥	—			¥	9,609,392
Intersegment			—				84,816				1,256				16,387				102,459				(102,459	)			—
Total			1,572,558				6,347,105				1,577,864				214,324				9,711,851				(102,459	)			9,609,392
Segment profit (loss)		¥	253,384			¥	301,380			¥	137,002			¥	4,807			¥	696,573			¥	—			¥	696,573
Segment assets		¥	1,803,540			¥	10,962,398			¥	12,977,324			¥	511,240			¥	26,254,502			¥	1,422,101			¥	27,676,603
Depreciation and amortization			34,486				328,359				415,578				8,592				787,015				—				787,015
Capital expenditures			26,781				233,741				1,115,856				6,036				1,382,414				—				1,382,414

 

3

 

HONDA MOTOR CO., LTD. AND SUBSIDIARIES

Notes to Condensed Consolidated Interim Financial Statements

 

As of and for the six months ended September 30, 2024

 

		Yen (millions)
		Motorcycle  Business				Automobile  Business				Financial   Services Business				Power Products  and Other Businesses				Segment  Total				Reconciling  Items				Consolidated
Sales revenue:
External customers		¥	1,810,786			¥	6,987,551			¥	1,811,879			¥	187,397			¥	10,797,613			¥	—			¥	10,797,613
Intersegment			—				142,974				2,639				15,846				161,459				(161,459	)			—
Total			1,810,786				7,130,525				1,814,518				203,243				10,959,072				(161,459	)			10,797,613
Segment profit (loss)		¥	325,852			¥	258,037			¥	162,707			¥	(3,988	)		¥	742,608			¥	—			¥	742,608
Segment assets		¥	2,027,742			¥	11,357,893			¥	14,236,061			¥	540,716			¥	28,162,412			¥	1,111,467			¥	29,273,879
Depreciation and amortization			35,855				319,282				431,182				8,030				794,349				—				794,349
Capital expenditures			28,702				295,368				1,571,614				5,161				1,900,845				—				1,900,845

 

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 (loss) of investments accounted for using the equity method and finance income and finance costs. Expenses not directly associated with specific segments are allocated based on the most reasonable measures applicable.

 

2.

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

 

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

 

4.

Reconciling items include elimination of intersegment transactions and balances as well as unallocated corporate assets. Unallocated corporate assets, included in reconciling items as of September 30, 2023 and 2024 amounted to ¥1,605,913 million and ¥1,399,039 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

 

(5) Equipment on Operating Leases

The additions to equipment on operating leases for the six months ended September 30, 2023 and 2024 are ¥1,114,646 million and ¥1,576,466 million, respectively.

The sales or disposals of equipment on operating leases for the six months ended September 30, 2023 and 2024 are ¥791,879 million and ¥886,264 million, respectively.

(6) Property, Plant and Equipment

The additions to property, plant and equipment for the six months ended September 30, 2023 and 2024 are ¥171,606 million and ¥206,877 million, respectively.

The sales or disposals of property, plant and equipment for the six months ended September 30, 2023 and 2024 are ¥17,325 million and ¥18,448 million, respectively.

(7) Provisions

The components of and changes in provisions for the six months ended September 30, 2024 are as follows:

 

		Yen (millions)
		Product warranties*				Other				Total
Balance as of April 1, 2024		¥	815,190			¥	136,533			¥	951,723
Additional provisions		¥	189,021			¥	25,568			¥	214,589
Write-offs			(153,766	)			(29,144	)			(182,910	)
Reversal			(8,057	)			(1,121	)			(9,178	)
Exchange differences on translating foreign operations			(28,028	)			(6,586	)			(34,614	)
Balance as of September 30, 2024		¥	814,360			¥	125,250			¥	939,610

Current liabilities and non-current liabilities of provisions as of March 31, 2024 and September 30, 2024 are as follows:

 

		Yen (millions)
		As of March 31, 2024				As of September 30, 2024
Current liabilities		¥	566,722			¥	588,174
Non-current liabilities			385,001				351,436
Total		¥	951,723			¥	939,610

 

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, including current sales trends, the expected number of units to be affected and the estimated average repair cost per unit for warranty claims. Provisions for product warranties are utilized for expenditures based on the demand from customers and dealers. A portion of the product warranties is expected to be reimbursed by agreement with suppliers. The amount of expected reimbursement is ¥152,178 million as of September 30, 2024.

 

5

 

HONDA MOTOR CO., LTD. AND SUBSIDIARIES

Notes to Condensed Consolidated Interim Financial Statements

 

(8) Sales Revenue

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

The sales revenue disaggregated by geographical markets based on the location of the customer and the reconciliation of the disaggregated revenue with each segment for the six months ended September 30, 2023 and 2024 are as follows:

For the six months ended September 30, 2023

 

		Yen (millions)
		Motorcycle Business				Automobile Business				Financial Services Business				Power Products and Other Businesses				Total
Revenue arising from Contracts with Customers
Japan		¥	60,329			¥	682,875			¥	72,390			¥	46,395			¥	861,989
North America			172,045				3,968,522				744,269				74,534				4,959,370
Europe			179,962				219,229				—				40,232				439,423
Asia			866,823				1,144,738				3				25,558				2,037,122
Other Regions			293,308				235,719				—				11,179				540,206
Total		¥	1,572,467			¥	6,251,083			¥	816,662			¥	197,898			¥	8,838,110
Revenue arising from the other sources*			91				11,206				759,946				39				771,282
Total		¥	1,572,558			¥	6,262,289			¥	1,576,608			¥	197,937			¥	9,609,392
For the six months ended September 30, 2024
		Yen (millions)
		Motorcycle Business				Automobile Business				Financial Services Business				Power Products and Other Businesses				Total
Revenue arising from Contracts with Customers
Japan		¥	47,738			¥	850,997			¥	94,487			¥	45,730			¥	1,038,952
North America			189,571				4,701,983				816,027				64,000				5,771,581
Europe			204,482				233,567				—				33,915				471,964
Asia			1,021,441				924,488				12				31,409				1,977,350
Other Regions			347,554				267,248				—				12,339				627,141
Total		¥	1,810,786			¥	6,978,283			¥	910,526			¥	187,393			¥	9,886,988
Revenue arising from the other sources*			—				9,268				901,353				4				910,625
Total		¥	1,810,786			¥	6,987,551			¥	1,811,879			¥	187,397			¥	10,797,613

 

Explanatory note:

 

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

 

6

 

HONDA MOTOR CO., LTD. AND SUBSIDIARIES

Notes to Condensed Consolidated Interim Financial Statements

 

(9) Fair Value

(a) Definition of Fair Value Hierarchy

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

 

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

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

(b) Method of Fair Value Measurement

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

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

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

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

(Receivables from financial services)

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

(Debt securities)

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

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

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

 

7

 

HONDA MOTOR CO., LTD. AND SUBSIDIARIES

Notes to Condensed Consolidated Interim Financial Statements

 

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

(Equity securities)

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

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

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

(Derivatives)

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

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

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

(Financing liabilities)

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

 

8

 

HONDA MOTOR CO., LTD. AND SUBSIDIARIES

Notes to Condensed Consolidated Interim Financial Statements

 

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

Assets and liabilities measured at fair value on a recurring basis as of March 31, 2024 and September 30, 2024 consist of the following:

 

		Yen (millions)
As of March 31, 2024		Level 1				Level 2				Level 3				Total
Other financial assets:
Financial assets measured at fair value through profit or loss:
Derivatives
Foreign exchange instruments		¥	—			¥	80,347			¥	—			¥	80,347
Interest rate instruments			—				108,034				—				108,034
Other			—				—				5,806				5,806
Total			—				188,381				5,806				194,187
Debt securities			55,265				63,886				4,542				123,693
Financial assets measured at fair value through other comprehensive income:
Debt securities			—				30,567				—				30,567
Equity securities			407,489				—				115,214				522,703
Total		¥	462,754			¥	282,834			¥	125,562			¥	871,150
Other financial liabilities:
Financial liabilities measured at fair value through profit or loss:
Derivatives
Foreign exchange instruments		¥	—			¥	100,708			¥	—			¥	100,708
Interest rate instruments			—				133,381				—				133,381
Other			—				2,503				—				2,503
Total			—				236,592				—				236,592
Total		¥	—			¥	236,592			¥	—			¥	236,592

There were no transfers between Level 1 and Level 2 for the year ended March 31, 2024.