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CorporateJapanOctober 25, 2007

Consolidated Financial Summary for the Fiscal First Half Ended September 30, 2007

- Achieved all-time record first half performance with increased revenue in all business areas -


TOKYO, Japan, October 25, 2007 – Honda Motor Co., Ltd. announced that in the first half of the current fiscal year, it achieved its seventh consecutive all-time record for consolidated net sales and other operating revenue (herein referred to as “revenue”) due to increased sales revenue in all business areas. Operating income increased and set an all-time record for a first half result due to increased profit from higher revenue, cost reduction effects, and positive currency effects of the depreciation of the Japanese Yen, despite the soaring raw materials costs and higher depreciation expenses and an increase in selling, general and administrative (SG&A) expenses and research and development (R&D) expenses. Honda also achieved all-time record results for first half results for income before income taxes, equity in income of affiliates, and net income.

At the board of directors meeting held today, Honda resolved to pay 22 yen per share for the fiscal second quarter dividend with the record date of September 30, 2007. With the fiscal first quarter dividend of 20 yen and the planned third and fourth quarter dividend of 22 yen each, the total dividend to be paid for the entire fiscal year will be 86 yen per share.

Results for Fiscal 1st Half Ended September 30, 2007

  Yen ( billions )
  First Half ended
Sept. 30, 2006
First Half ended Sept. 30, 2007 Difference
(% change)
Net sales and other operating revenue 5,230.5 5,902.4* +671.8 (+12.8%)
Operating income 396.5 508.0* +111.4 (+28.1%)
Income before income taxes(*1) 355.0 488.2* +133.2 (+37.5%)
Equity in income of affiliates 57.6 63.2* +5.6 (+9.8%)
Net income 271.3 374.6* +103.2 (+38.1%)


Basic net income per common share JPY 148.52 JPY 206.26* JPY +57.74
(Hondafs average rates for the current first half: JPY 119= U.S. dollar 1, JPY162 = Euro1) (*) record high
(*1) Income before income taxes for the previous fiscal first half ended September 30, 2006 was adjusted to match the method used for the current fiscal first half.



· Details of consolidated unit sales; (The total includes fully finished products made by Honda and its subsidiaries as well as unit sales of fully finished products and parts for local production by affiliates accounted for under the equity method.)

  Motorcycles: 4.586 million units (-11.7%); the decrease was due to decreased sales of production parts for overseas affiliates mainly in Asia which are accounted for under the equity method. (Unit sales of approximately 2.12 million units of Honda-brand motorcycle products are not included in the total listed above, in conformity with U.S. generally accepted accounting principles, because they are manufactured and sold by overseas affiliates accounted for under the equity method, but do not use any parts supplied by Honda and its consolidated subsidiaries.)

Automobiles: 1.883 million units (+5.8%); the increase was due to increased sales in overseas markets. This is the ninth consecutive year for an increase in the fiscal half year and resulted in all time record unit sales.

PowerProducts: 2.787 million units (-4.3%); the decrease was due mainly to declined sales in North America. 

· Consolidated revenue increased in all business areas and totaled JPY 5,902.4 billion (+12.8%), realizing an all-time record for the fiscal first half for the seventh consecutive year.

· Consolidated operating income increased in the fiscal first half for the fourth consecutive year and totaled JPY 508.0 billion (+28.1%), due to increased profit from higher revenue, cost reduction effects, and positive currency effects of the depreciation of the Japanese Yen, which offset the soaring raw materials costs and higher depreciation expenses, selling, general and administrative (SG&A) expenses and research and development (R&D) expenses.

· Consolidated Income before income taxes totaled JPY 488.2 billion (+37.5%), increasing in the fiscal first half for the second consecutive year.
· Equity in income of affiliates totaled JPY 63.2 billion (+9.8%), increasing in the fiscal first half for the eighth consecutive year due mainly to the increased income of affiliates in China accounted for under the equity method.

· Consolidated Net income totaled JPY 374.6 billion (+38.1%), increasing in the fiscal first half for the seventh consecutive year.

Results for Fiscal 2nd Quarter of the fiscal year ending March 31, 2008

  Consolidated revenue for the fiscal second quarter totaled JPY@2,971.3 billion (+12.9%), a seventh consecutive all-time record. Consolidated operating income for the period was JPY 286.3 billion (+48.3%), consolidated income before income taxes was JPY 269.9 billion (+65.0%), and consolidated net income totaled JPY 208.4 billion (+63.0%).

Forecast for the Fiscal Year Ending March 31, 2008

· Honda is planning for unit sales totals of 9.58 million motorcycles, 3.935 million automobiles, and 6.335 million power products. (Unit sales of approximately 4.68 million units of Honda-brand motorcycle products are not included in this total, in conformity with U.S. generally accepted accounting principles, because they are manufactured and sold by overseas affiliates accounted for under the equity method, but do not use any parts supplied by Honda and its consolidated subsidiaries.)

· Honda will conduct its business operations based on the goals described in the following chart with assumption of the average currency exchange rate of JPY 113 = U.S. dollar 1 and JPY 148= Euro 1 for the second half of the fiscal year, and JPY 116 = U.S. dollar 1 and JPY 155 = Euro 1 for the entire year.  



  Yen (billions)
  Year ended March 31, 2007 Forecast for year ending March 31, 2008 Difference
(% change)
Reference:
Previous forecast made on July 25, 2007
Net sales and other operating revenue 11,087.1 12,300.0 +1,212.8 (+10.9%) 12,350.0
Operating income 851.8 880.0 +28.1 (+3.3%) 880.0
Income before income taxes 792.8 870.0 +77.1 (+9.7%) 885.0
Equity in income of affiliates 103.4 98.0 -5.4 (-5.2%) 97.0
Net income 592.3 640.0 +47.6 (+8.0%) 625.0

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