Honda-The Power of Dreams
Consolidated Financial Summary for the Fiscal 2nd Quarter ended September 30, 2009

TOKYO, Japan, October 27, 2009–Honda Motor Co., Ltd. announced its consolidated financial results for the fiscal second quarter ended September 30, 2009. 

♦ Consolidated Financial Summary:
Results for Fiscal 2nd Quarter (3 months ended September 30, 2009)
Consolidated net sales and other operating revenue for the fiscal second quarter ended September 30, 2009 amounted to JPY 2,056.6 billion, a decrease of 27.2% compared to the same period last year, primarily due to decreased sales in automobile business and the unfavorable impact of currency translation.

Consolidated operating income amounted to JPY 65.5 billion, a decrease of 56.0% compared to the same period last year, due to decreased profit from lower revenue, the unfavorable currency effects by the appreciation of the Japanese yen, and increased fixed costs per unit as a result of reduced production, offsetting decreased selling, general and administrative (SG&A) expenses and R&D expenses and continuing cost reduction efforts.

Consolidated income before income taxes amounted to JPY 66.1 billion, a decrease of 55.7% from the same period last year, and net income attributable to Honda Motor Co., Ltd. amounted to JPY 54.0 billion, a decrease of 56.2% compared to the same period last year .
Yen (billions) 2nd quarter ended Sep. 30, 2008 2nd quarter ended Sep. 30, 2009 Difference (% change)
Net sales and other operating revenue 2,826.8 2,056.6 -770.2 (-27.2)
Operating income 148.8 65.5 -83.3 (-56.0)
Income before income taxes 149.4 66.1 -83.3 (-55.7)
Equity in income of affiliates 27.2 22.3 -4.9 (-18.1)
Net income attributable to Honda Motor Co., Ltd. 123.3 54.0 -69.2 (-56.2)
Exchange rate: Honda’s average rates for this fiscal 2nd quarter: JPY 94=USD1 / JPY 134=Euro1
  Honda’s average rates for the previous fiscal 2nd quarter: JPY 108=USD1 / JPY 161=Euro1

Results for Fiscal Six Months (6 month period from April 1, 2009 through September 30, 2009)
Consolidated net sales and other operating revenue for the fiscal six months amounted to JPY 4,058.8 billion, a decrease of 28.7% compared to the same period last year, primarily due to decreased sales in automobile business and the unfavorable impact of currency translation.

Consolidated operating income amounted to JPY 90.7 billion, a decrease of 74.8% compared to the same period last year, due to decreased profit from lower revenue, the unfavorable currency effects by the appreciation of the Japanese yen, and increased fixed costs per unit as a result of reduced production, offsetting decreased SG&A expenses and R&D expenses and continuing cost reduction efforts.

Consolidated income before income taxes amounted to JPY 71.5 billion, a decrease of 80.8% from the same period last year, and net income attributable to Honda Motor Co., Ltd. amounted to JPY 61.5 billion, a decrease of 79.2% compared to the same period last year.

Yen (billions) Previous fiscal 6 months (*) Current fiscal 6 months Difference (% change)
Net sales and other operating revenue 5,694.0 4,058.8 -1,635.2 (-28.7)
Operating income 359.3 90.7 -268.6 (-74.8)
Income before income taxes 373.6 71.5 -302.0 (-80.8)
Equity in income of affiliates 65.4 36.5 -28.8 (-44.1)
Net income attributable to Honda Motor Co., Ltd. 296.7 61.5 -235.1 (-79.2)
Exchange rate: Honda’s average rates for the current fiscal 6 months: JPY95=USD1 / JPY133=Euro1
  Honda’s average rates for the previous fiscal 6 months: JPY106=USD1 / JPY163=Euro1


At the board of directors meeting held today, Honda resolved to make the quarterly dividend for the second quarter JPY 8 per share of the common stock with the record date of September 30, 2009. The total annual dividend per share of common stock to be paid for the fiscal year is expected to be JPY 32 per share.

♦ Consolidated Unit Sales
(Consolidated unit sales are the total of sales of completed products of Honda and its consolidated subsidiaries, and sales of parts for local production at Honda’s affiliates accounted for under the equity method.)


(million
units)
2nd quarter ended Sep. 30, 2008 2nd quarter ended Sep. 30, 2009 Difference
(% change)
Major factors of increase/decrease
Motorcycles 2.893 2.407 (-16.8) Decreased sales mainly in Japan, Asia, and the Other region which includes South America
Automobiles 0.935 0.838 (-10.4) Decreased sales mainly in North America despite increased sales in Japan and Asia
Power Products 1.202 0.932 (-22.5) Decreased sales in all regions


(million
units)
Previous fiscal 6 months Current fiscal 6 months Difference
(% change)
Major factors of increase/decrease
Motorcycles 5.608 4.659 (-16.9) Decreased sales mainly in Japan, Asia, and the Other region which includes South America
Automobiles 1.897 1.604 (-15.4) Decreased sales mainly in North America despite increased sales in Japan and Asia
Power Products 2.541 2.090 (-17.7) Decreased sales in all regions

Unit sales of approximately 1.35 million units for the current fiscal 2nd quarter and 2.57 million units for the current fiscal six months of Honda-brand motorcycle products that are manufactured and sold by overseas affiliates accounted for under the equity method, but do not use any parts supplied from Honda and its consolidated subsidiaries, are not included in the total motorcycle sales described above, in conformity with U.S. generally accepted accounting principles.

♦ Forecast for the Fiscal Year Ending March 31, 2010
Honda will conduct its business operations based on the target forecasts for the fiscal year ending March 31, 2010 as described below, with assumption of the average currency exchange rates of JPY 90 = U.S. dollar 1 (Second half: 85) and JPY 129 = Euro 1 (Second half: 125) for the fiscal year.
Yen (billions) Results for fiscal year ended Mar. 31, 2009 Forecasts for fiscal year ending Mar. 31, 2010 Difference (% change)
Net sales and other operating revenue 10,011.2 8,450.0 -1,561.2 (-15.6)
Operating income 189.6 190.0 +0.3 (+ 0.2)
Income before income taxes 161.7 170.0 +8.2 (+ 5.1)
Equity in income of affiliates 99.0 78.0 -21.0 (-21.2)
Net income attributable to Honda Motor Co., Ltd. 137.0 155.0 +17.9 (+13.1)
Exchange rate: Honda’s average rates for the fiscal year ended March 31, 2009: JPY 101=USD1 / JPY 142=Euro1


Consolidated Unit Sales Forecast
(million units) Fiscal year ended Mar. 31, 2009 Fiscal year ending Mar. 31, 2010
Difference (% change)
Motorcycles 10.114 9.565
-0.549 (- 5.4)
Automobiles 3.517 3.400
-0.117 (-3.3)
Power Products 5.187 4.455
-0.732 (-14.1)
Unit sales of approximately 5.41 million units of Honda-brand motorcycle products that are manufactured and sold by overseas affiliates accounted for under the equity method, but do not use any parts supplied from Honda and its consolidated subsidiaries are not included in this total motorcycle sales described above, in conformity with U.S. generally accepted accounting principles.


<Reference: Changes in forecasts for the fiscal year ending March 31, 2010 compared to the previous forecast as of July 29, 2009>
Yen (billions) Previous forecasts (Jul. 29, 2009) Revised forecasts
(Oct. 27, 2009)
Difference (% change)
Net sales and other operating revenue 8,280.0 8,450.0 +170.0 (+2.1)
Operating income 70.0 190.0 +120.0 (+171.4)
Income before income taxes 45.0 170.0 +125.0 (+277.8)
Equity in income of affiliates 65.0 78.0 +13.0 (+20.0)
Net income attributable to Honda Motor Co., Ltd. 55.0 155.0 +100.0 (+181.8)
Exchange rate: Honda’s average rates used for the revised forecasts: JPY 90=USD1 / JPY129=Euro1
  Honda’s average rates used for the previous forecasts: JPY 91=USD1 / JPY127=Euro1


(million units) Previous forecasts (Jul. 29, 2009) Revised forecasts
(Oct. 27, 2009)
Difference (% change)
Motorcycles 8.950 9.565 +0.615 (+6.9)
Automobiles 3.295 3.400 +0.105 (+3.2)
Power Products 4.355 4.455 +0.100 (+2.3)

(*)
During the fiscal year ended March 31, 2009, a subsidiary of the Company changed its fiscal year-end from December 31 to March 31. As a result, the Company eliminated the previously existed 3-month difference between the reporting periods of the Company and the subsidiary in the consolidated financial statements. The elimination of the lag period which was adjusted in the three months ended March 31, 2009 represented a change in accounting principles and was reported by retrospective application. Honda adjusted its consolidated financial statements for the six months ended September 30, 2008 to conform to the presentation used for the fiscal year ended March 31, 2009.