Edgar Filing: HONDA MOTOR CO LTD

Form 6-K

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 NOVEMBER 2018

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 October 30, 2018, Honda Motor Co., Ltd. (the “Company”) announced its consolidated financial results for the fiscal second quarter and fiscal half year ended September 30, 2018.

Exhibit 2:

The Board of Directors of the Company, at its meeting held on October 30, 2018, resolved to make a distribution of surplus (quarterly dividends), the record date of which is September 30, 2018, and revised the amount of the projected dividend per share of common stock for the year ending March 31, 2019.

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.

HONDA GIKEN KOGYO KABUSHIKI KAISHA

(HONDA MOTOR CO., LTD.)

/s/ Eiji Fujimura

Eiji Fujimura

General Manager

Finance Division

Honda Motor Co., Ltd.

Date: November 2, 2018

October 30, 2018

HONDA MOTOR CO., LTD. REPORTS

CONSOLIDATED FINANCIAL RESULTS

FOR THE FISCAL SECOND QUARTER AND

THE FISCAL FIRST HALF YEAR ENDED SEPTEMBER 30, 2018

Tokyo, October 30, 2018 — Honda Motor Co., Ltd. today announced its consolidated financial results for the fiscal second quarter and the fiscal first half year ended September 30, 2018.

Second Quarter Results

Honda’s consolidated sales revenue for the fiscal second quarter ended September 30, 2018 amounted to JPY 3,841.7 billion, an increase of 1.7% from the same period last year, due primarily to increased sales revenue at motorcycle and financial services business operations.

Consolidated operating profit for the quarter amounted to JPY 214.4 billion, an increase of 40.2% from the same period last year, due primarily to positive impact from sales volume and model mix and the reverse effect from the loss related to the settlement of multidistrict class action litigation in the previous fiscal year.

Consolidated profit before income taxes for the quarter totaled JPY 283.0 billion, an increase of 16.7% from the corresponding period last year.

Consolidated profit for the period attributable to owners of the parent for the quarter totaled JPY 210.7billion, an increase of 21.1% from the same period last year. Earnings per share attributable to owners of the parent for the quarter amounted to JPY119.66, an increase of JPY 23.11 from the corresponding period last year. One Honda American Depository Share represents one common share.

First Half Year Results

Consolidated sales revenue for the fiscal first half year ended September 30, 2018 amounted to JPY 7,865.8 billion, an increase of 5.0% from the same period last year, due primarily to increased sales revenue in all business operations.

Consolidated operating profit for the period amounted to JPY 513.8 billion, an increase of 21.7% from the same period last year, due primarily to positive impact from sales volume and model mix and the reverse effect from the loss related to the settlement of multidistrict class action litigation in the previous fiscal year.

Consolidated profit before income taxes for the period totaled JPY 641.3 billion, an increase of 11.0% from the same period last year.

Consolidated profit for the period attributable to owners of the parent totaled JPY 455.1 billion, an increase of 19.3% from the same period last year. Earnings per share attributable to owners of the parent for the period amounted to JPY 257.44, an increase of JPY 45.85 from the same period last year.

- 1 -

Consolidated Statements of Financial Position for the Fiscal First Half Year Ended September 30, 2018

Total assets increased by JPY 918.5 billion, to JPY 20,267.7 billion from March 31, 2018, mainly due to increased Receivables from financial services as well as foreign currency translation effects. Total liabilities increased by JPY504.0 billion, to JPY 11,619.0 billion from March 31, 2018, mainly due to increased Financial liabilities and foreign currency translation effects despite a decrease in Trade payables. Total equity increased by JPY 414.5 billion, to JPY 8,648.6 billion from March 31, 2018 due mainly to an increase in Retained earnings attributable to increased Profit for the period, despite a decrease attributable to acquisition of the Company’s own shares.

Consolidated Statements of Cash Flows for the Fiscal First Half Year Ended September 30, 2018

Consolidated cash and cash equivalents on September 30, 2018 decreased by JPY 5.6 billion from March 31, 2018, to JPY 2,250.8 billion.

The reasons for the increases or decreases for each cash flow activity, when compared with the same period of the previous fiscal year, are as follows:

Cash flows from operating activities

Net cash provided by operating activities amounted to JPY 397.1 billion for the fiscal first half year ended September 30, 2018. Cash inflows from operating activities decreased by JPY 93.9 billion compared with the same period of the previous fiscal year, due mainly to increased payments for parts and raw materials, despite the increase in cash received from customers.

Cash flows from investing activities

Net cash used in investing activities amounted to JPY 376.8 billion. Cash outflows from investing activities increased by JPY 68.2 billion compared with the same period of the previous fiscal year, due mainly to an increase in Payments for acquisitions of other financial assets.

Cash flows from financing activities

Net cash used in financing activities amounted to JPY 63.9 billion. Cash outflows from financing activities decreased by JPY 50.4 billion compared with the same period of the previous fiscal year, due mainly to a decrease in repayments of financing liabilities, despite Purchases of treasury stock.

- 2 -

Forecasts for the Fiscal Year Ending March 31, 2019

In regard to the forecasts of the financial results for the fiscal year ending March 31, 2019, Honda projects consolidated results to be as shown below:

Fiscal year ending March 31, 2019


	Yen (billions)		Changes from FY 2018
Sales revenue		15,800.0		+2.9	%
Operating profit		790.0		-5.2	%
Profit before income taxes		1,010.0		-9.4	%
Profit for the year		745.0		-34.0	%
Profit for the year attributable to owners of the parent		675.0		-36.3	%

	Yen
Earnings per share attributable to owners of the parent
Basic and diluted		382.66

Note: The forecasts are based on the assumption that the average exchange rates for the Japanese yen to the U.S. dollar will be JPY 110 for the full year ending March 31, 2019.

The reasons for the increases or decreases in the forecasts of the operating profit, and profit before income taxes for the fiscal year ending March 31, 2019 from the previous year are as follows.


	Yen (billions)
Revenue, model mix, etc.		+ 46.5
Cost reduction, the effect of raw material cost fluctuations, etc.		+ 109.0
SG&A expenses		- 33.0
R&D expenses		- 32.0
Currency effect		- 173.0
Settlement of multidistrict class action litigation*		+ 53.7
Restitution income*		-14.7

Operating profit compared with fiscal year ended March 31, 2018		- 43.5

Share of profit of investments accounted for using the equity method		- 32.6
Finance income and finance costs		- 28.7

Profit before income taxes compared with fiscal year ended March 31, 2018		- 104.9

*	Litigation settlement and restitution income related to airbag inflator included in SG&A expenses in fiscal year 2018

This announcement contains “forward-looking statements” as defined in Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended. Such statements are based on management’s assumptions and beliefs taking into account information currently available to it. Therefore, please be advised that the actual results of the Company could differ materially from those described in these forward-looking statements as a result of numerous factors, including general economic conditions in the principal markets of the Company, its consolidated subsidiaries and its affiliates accounted for by the equity-method, and fluctuation of foreign exchange rates, as well as other factors detailed from time to time. The various factors for increases and decreases in profit have been classified in accordance with a method that Honda considers reasonable.

- 3 -

Dividend per Share of Common Stock

Fiscal second quarter dividend is JPY 28 per share of common stock. The total expected annual dividend per share of common stock for the fiscal year ending March 31, 2019, is JPY 111 per share.

- 4 -

[1] Condensed Consolidated Statements of Financial Position


	Yen (millions)
	Mar. 31, 2018			Sep. 30, 2018
Assets
Current assets:
Cash and cash equivalents		2,256,488			2,250,879
Trade receivables		800,463			745,835
Receivables from financial services		1,840,699			1,894,428
Other financial assets		213,177			212,253
Inventories		1,523,455			1,604,121
Other current assets		291,006			363,476

Total current assets		6,925,288			7,070,992

Non-current assets:
Investments accounted for using the equity method		679,517			774,314
Receivables from financial services		3,117,364			3,462,999
Other financial assets		436,555			454,823
Equipment on operating leases		4,088,133			4,418,596
Property, plant and equipment		3,062,433			3,041,703
Intangible assets		741,514			747,992
Deferred tax assets		129,338			136,148
Other non-current assets		169,022			160,174

Total non-current assets		12,423,876			13,196,749

Total assets		19,349,164			20,267,741

Liabilities and Equity
Current liabilities:
Trade payables		1,224,627			1,102,927
Financing liabilities		2,917,261			3,166,869
Accrued expenses		404,719			402,147
Other financial liabilities		115,405			161,797
Income taxes payable		53,595			59,364
Provisions		305,994			308,206
Other current liabilities		602,498			592,743

Total current liabilities		5,624,099			5,794,053

Non-current liabilities:
Financing liabilities		3,881,749			4,118,490
Other financial liabilities		60,005			67,773
Retirement benefit liabilities		404,401			444,267
Provisions		220,625			205,814
Deferred tax liabilities		629,722			679,406
Other non-current liabilities		294,468			309,274

Total non-current liabilities		5,490,970			5,825,024

Total liabilities		11,115,069			11,619,077

Equity:
Common stock		86,067			86,067
Capital surplus		171,118			171,228
Treasury stock		(113,271	)		(177,822	)
Retained earnings		7,611,332			7,908,774
Other components of equity		178,292			374,800

Equity attributable to owners of the parent		7,933,538			8,363,047
Non-controlling interests		300,557			285,617

Total equity		8,234,095			8,648,664

Total liabilities and equity		19,349,164			20,267,741

- 5 -

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

Condensed Consolidated Statements of Income

For the three months ended September 30, 2017 and 2018


	Yen (millions)
	Three months ended Sep. 30, 2017			Three months ended Sep. 30, 2018
Sales revenue		3,776,199			3,841,712
Operating costs and expenses:
Cost of sales		(2,988,854	)		(3,004,708	)
Selling, general and administrative		(462,449	)		(438,289	)
Research and development		(171,951	)		(184,240	)

Total operating costs and expenses		(3,623,254	)		(3,627,237	)

Operating profit		152,945			214,475

Share of profit of investments accounted for using the equity method		82,263			63,926
Finance income and finance costs:
Interest income		9,816			11,411
Interest expense		(3,297	)		(2,994	)
Other, net		876			(3,776	)

Total finance income and finance costs		7,395			4,641

Profit before income taxes		242,603			283,042
Income tax expense		(50,958	)		(53,817	)

Profit for the period		191,645			229,225

Profit for the period attributable to:
Owners of the parent		174,006			210,771
Non-controlling interests		17,639			18,454

	Yen
Earnings per share attributable to owners of the parent
Basic and diluted		96.55			119.66

- 6 -

Condensed Consolidated Statements of Comprehensive Income

For the three months ended September 30, 2017 and 2018


	Yen (millions)
	Three months ended Sep. 30, 2017		Three months ended Sep. 30, 2018
Profit for the period		191,645		229,225
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		6,240		310
Share of other comprehensive income of investments accounted for using the equity method		1,084		539
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		—		(40	)
Exchange differences on translating foreign operations		79,642		127,842
Share of other comprehensive income of investments accounted for using the equity method		7,932		(3,909	)

Total other comprehensive income, net of tax		94,898		124,742

Comprehensive income for the period		286,543		353,967

Comprehensive income for the period attributable to:
Owners of the parent		264,831		332,427
Non-controlling interests		21,712		21,540

- 7 -

Condensed Consolidated Statements of Income

For the six months ended September 30, 2017 and 2018


	Yen (millions)
	Six months ended Sep. 30, 2017			Six months ended Sep. 30, 2018
Sales revenue		7,489,295			7,865,845
Operating costs and expenses:
Cost of sales		(5,863,643	)		(6,167,404	)
Selling, general and administrative		(857,272	)		(809,945	)
Research and development		(346,224	)		(374,638	)

Total operating costs and expenses		(7,067,139	)		(7,351,987	)

Operating profit		422,156			513,858

Share of profit of investments accounted for using the equity method		135,211			118,228
Finance income and finance costs:
Interest income		18,813			23,324
Interest expense		(6,151	)		(5,957	)
Other, net		7,599			(8,129	)

Total finance income and finance costs		20,261			9,238

Profit before income taxes		577,628			641,324
Income tax expense		(160,475	)		(145,377	)

Profit for the period		417,153			495,947

Profit for the period attributable to:
Owners of the parent		381,341			455,101
Non-controlling interests		35,812			40,846

	Yen
Earnings per share attributable to owners of the parent
Basic and diluted		211.59			257.44

- 8 -

Condensed Consolidated Statements of Comprehensive Income

For the six months ended September 30, 2017 and 2018


	Yen (millions)
	Six months ended Sep. 30, 2017			Six months ended Sep. 30, 2018
Profit for the period		417,153			495,947
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		12,057			434
Share of other comprehensive income of investments accounted for using the equity method		(98	)		(745	)
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		—			(41	)
Exchange differences on translating foreign operations		86,134			199,376
Share of other comprehensive income of investments accounted for using the equity method		11,281			(17,750	)

Total other comprehensive income, net of tax		109,374			181,274

Comprehensive income for the period		526,527			677,221

Comprehensive income for the period attributable to:
Owners of the parent		484,686			635,015
Non-controlling interests		41,841			42,206

- 9 -

[3] Condensed Consolidated Statements of Changes in Equity

As of and for the six months ended September 30, 2017


	Yen (millions)
	Equity attributable to owners of the parent																Non-controlling interests			Total equity
	Common stock		Capital surplus		Treasury stock			Retained earnings			Other components of equity			Total			Non-controlling interests			Total equity
Balance as of April 1, 2017		86,067		171,118		(26,189	)		6,712,894			351,406			7,295,296			274,330			7,569,626

Comprehensive income for the period
Profit for the period									381,341						381,341			35,812			417,153
Other comprehensive income, net of tax												103,345			103,345			6,029			109,374

Total comprehensive income for the period									381,341			103,345			484,686			41,841			526,527
Reclassification to retained earnings									739			(739	)		—						—
Transactions with owners and other
Dividends paid									(86,509	)					(86,509	)		(37,309	)		(123,818	)
Purchases of treasury stock						(4	)								(4	)					(4	)

Total transactions with owners and other						(4	)		(86,509	)					(86,513	)		(37,309	)		(123,822	)

Balance as of September 30, 2017		86,067		171,118		(26,193	)		7,008,465			454,012			7,693,469			278,862			7,972,331

As of and for the six months ended September 30, 2018
	Yen (millions)
	Equity attributable to owners of the parent																Non-controlling interests			Total equity
	Common stock		Capital surplus		Treasury stock			Retained earnings			Other components of equity			Total			Non-controlling interests			Total equity
Balance as of April 1, 2018		86,067		171,118		(113,271	)		7,611,332			178,292			7,933,538			300,557			8,234,095
Effect of changes in accounting policy									(46,833	)		(208	)		(47,041	)		6			(47,035	)
Effect of hyperinflation									(9,454	)		14,896			5,442						5,442

Adjusted balance as of April 1, 2018		86,067		171,118		(113,271	)		7,555,045			192,980			7,891,939			300,563			8,192,502

Comprehensive income for the period
Profit for the period									455,101						455,101			40,846			495,947
Other comprehensive income, net of tax												179,914			179,914			1,360			181,274

Total comprehensive income for the period									455,101			179,914			635,015			42,206			677,221
Reclassification to retained earnings									(1,906	)		1,906			—						—
Transactions with owners and other
Dividends paid									(95,696	)					(95,696	)		(57,152	)		(152,848	)
Purchases of treasury stock						(64,552	)								(64,552	)					(64,552	)
Disposal of treasury stock						1									1						1
Share-based payment transactions				110											110						110

Total transactions with owners and other				110		(64,551	)		(95,696	)					(160,137	)		(57,152	)		(217,289	)

Other changes									(3,770	)					(3,770	)					(3,770	)

Balance as of September 30, 2018		86,067		171,228		(177,822	)		7,908,774			374,800			8,363,047			285,617			8,648,664

- 10 -

[4] Consolidated Statements of Cash Flows


	Yen (millions)
	Six months ended Sep. 30, 2017			Six months ended Sep. 30, 2018
Cash flows from operating activities:
Profit before income taxes		577,628			641,324
Depreciation, amortization and impairment losses excluding equipment on operating leases		351,815			352,269
Share of profit of investments accounted for using the equity method		(135,211	)		(118,228	)
Finance income and finance costs, net		18,208			(51,523	)
Interest income and interest costs from financial services, net		(62,832	)		(60,705	)
Changes in assets and liabilities
Trade receivables		19,816			30,775
Inventories		(38,027	)		(45,257	)
Trade payables		(63,482	)		(58,246	)
Accrued expenses		8,035			(68,534	)
Provisions and retirement benefit liabilities		(50,983	)		1,389
Receivables from financial services		(11,620	)		(106,677	)
Equipment on operating leases		(108,962	)		(94,718	)
Other assets and liabilities		(7,709	)		(30,181	)
Other, net		(2,690	)		2,343
Dividends received		62,090			84,022
Interest received		117,546			130,371
Interest paid		(54,613	)		(67,779	)
Income taxes paid, net of refunds		(127,905	)		(143,450	)

Net cash provided by operating activities		491,104			397,195
Cash flows from investing activities:
Payments for additions to property, plant and equipment		(236,063	)		(224,775	)
Payments for additions to and internally developed intangible assets		(72,710	)		(89,682	)
Proceeds from sales of property, plant and equipment and intangible assets		10,293			13,882
Payments for acquisitions of investments accounted for using the equity method		(2,450	)		(2,401	)
Payments for acquisitions of other financial assets		(92,946	)		(311,231	)
Proceeds from sales and redemptions of other financial assets		84,498			237,321
Other, net		719			—

Net cash used in investing activities		(308,659	)		(376,886	)
Cash flows from financing activities:
Proceeds from short-term financing liabilities		3,921,076			3,803,313
Repayments of short-term financing liabilities		(3,804,854	)		(3,778,832	)
Proceeds from long-term financing liabilities		695,549			851,623
Repayments of long-term financing liabilities		(784,848	)		(706,970	)
Dividends paid to owners of the parent		(86,509	)		(95,696	)
Dividends paid to non-controlling interests		(32,118	)		(47,423	)
Purchases and sales of treasury stock, net		(4	)		(64,551	)
Other, net		(22,691	)		(25,380	)

Net cash provided by (used in) financing activities		(114,399	)		(63,916	)
Effect of exchange rate changes on cash and cash equivalents		33,803			37,998

Net change in cash and cash equivalents		101,849			(5,609	)
Cash and cash equivalents at beginning of year		2,105,976			2,256,488

Cash and cash equivalents at end of period		2,207,825			2,250,879

- 11 -

[5] Assumptions for Going Concern

None

[6] Notes to Consolidated Financial Statements

[A] Changes in accounting policies

(a) IFRS 9 “Financial Instruments”

Honda was an early adopter of IFRS 9 “Financial Instruments” issued in November 2009, amended in October 2010 and November 2013 (“IFRS 9 (2013)”) prior to the year ended March 31, 2018 and has adopted IFRS 9 issued in July 2014 (“IFRS 9 (2014)”) with a date of initial application of April1, 2018. The adoption of IFRS 9 (2014) resulted in changes in accounting policies primarily for classification and impairment of financial assets. IFRS 9 (2014) has an exemption allowing comparative information for prior periods not to be restated with respect to classification and measurement (including impairment) changes. Therefore, the comparative information has not been restated and continues to be reported under IFRS 9 (2013). Instead, the cumulative effect of adopting IFRS 9 (2014) was recognized in the opening balance of equity as of the date of initial application on April 1, 2018. The following are primary changes and corresponding impacts of adopting IFRS 9 (2014).

Classification of financial assets

Debt securities other than those classified into financial assets measured at amortized cost were classified into financial assets measured at fair value through profit or loss under IFRS 9 (2013). IFRS 9 (2014) newly established a classification in which financial assets are measured at fair value through other comprehensive income. Under IFRS 9 (2014), a financial asset shall be measured at fair value through other comprehensive income if both of the following conditions are met: 1) the financial asset is held within a business model whose objective is achieved by both collecting contractual cash flows and selling financial assets and 2) the contractual terms of the financial asset give rise on specified dates to cash flows that are solely payments of principal and interest on the principal amount outstanding.

Honda has evaluated the business models within which financial assets are held and contractual terms of financial assets. As a result, Honda has reclassified debt securities such as government bonds and municipal bonds held by certain subsidiaries from the financial assets measured at fair value through profit or loss to financial assets measured at fair value through other comprehensive income as of April 1, 2018.

The impact of this reclassification is as follows:


	Yen (millions)
	Carrying amounts as of March 31, 2018 under IFRS 9 (2013)		Reclassification			Carrying amounts as of April 1, 2018 under IFRS 9 (2014)
Other financial assets:
Financial assets measured at fair value through profit or loss:
Debt securities		69,829		(14,376	)		55,453
Financial assets measured at fair value through other comprehensive income:
Debt securities		—		14,376			14,376

- 12 -

Impairment of financial assets

IFRS 9 (2014) replaced the incurred loss model under IAS 39 with the expected credit loss (ECL) model. The ECL model requires the allowance for credit losses to be measured at amounts equal to either lifetime ECL for those financial assets which have experienced a significant increase in credit risk (SICR) since initial recognition or 12-month ECL for financial assets which have not experienced a SICR. Lifetime ECL represents ECL that results from all possible default events over the expected life of a financial asset. 12-month ECL is the portion of lifetime ECL that results from default events that are possible within 12 months after the reporting date. ECL is a probability-weighted estimate of the difference between the contractual cash flows and the cash flows that the entity expects to receive, discounted at the original effective interest rates.

When determining whether credit risk has increased significantly, Honda assesses financial assets either individually based primarily on delinquencies or collectively for groups of financial assets with shared risk characteristics such as the period of initial recognition, collateral type, original term and credit score considering relative changes in expected default rates since initial recognition.

The application of the ECL model resulted in an increase in the allowance for credit losses of ¥4,599 million as of April 1, 2018, which is on receivables from financial services.

- 13 -

(b) IFRS 15 “Revenue from Contracts with Customers”

Honda has adopted IFRS 15 ”Revenue from Contracts with Customers” with a date of initial application of April 1, 2018 by recognizing the cumulative effect of initially applying this standard as an adjustment to the opening balance of equity at the date of initial application. Therefore, the comparative information has not been restated and continues to be reported under the previous accounting policy.

Honda’s contracts with customers include promises to transfer goods or services without charges such as free inspections. Such promised goods or services are generally considered performance obligations and related sales revenue is deferred under IFRS15, if it is deemed material, while such sales was recognized at contract inception under the previous accounting policy.

Further, under IFRS 15, dealer incentives are considered variable consideration when determining the transaction price and sales revenue is recognized only to the extent that it is highly probable that a significant reversal will not occur when the uncertainty associated with the variable consideration is subsequently resolved, which results in higher deductions from sales revenue recognized when products are sold to dealers.

The impacts of adopting IFRS 15 on Honda’s condensed consolidated financial statements as of and for the six months and the three months ended September 30, 2018 are as follows:

(Condensed Consolidated Statements of Financial Position)

As of September 30, 2018


	Yen (millions)
	Balances without adoption of IFRS 15		Adjustments			As reported
Assets
Current assets:
Cash and cash equivalents		2,250,879		—			2,250,879
Trade receivables		747,596		(1,761	)		745,835
Receivables from financial services		1,894,428		—			1,894,428
Other financial assets		212,253		—			212,253
Inventories		1,604,121		—			1,604,121
Other current assets		362,670		806			363,476

Total current assets		7,071,947		(955	)		7,070,992

Non-current assets:
Investments accounted for using the equity method		774,303		11			774,314
Receivables from financial services		3,462,999		—			3,462,999
Other financial assets		454,823		—			454,823
Equipment on operating leases		4,418,596		—			4,418,596
Property, plant and equipment		3,041,703		—			3,041,703
Intangible assets		747,992		—			747,992
Deferred tax assets		135,864		284			136,148
Other non-current assets		159,368		806			160,174

Total non-current assets		13,195,648		1,101			13,196,749

Total assets		20,267,595		146			20,267,741

- 14 -


	Yen (millions)
	Balances without adoption of IFRS 15			Adjustments			As reported
Liabilities and Equity
Current liabilities:
Trade payables		1,102,927			—			1,102,927
Financing liabilities		3,166,869			—			3,166,869
Accrued expenses		384,249			17,898			402,147
Other financial liabilities		161,797			—			161,797
Income taxes payable		59,364			—			59,364
Provisions		312,122			(3,916	)		308,206
Other current liabilities		577,312			15,431			592,743

Total current liabilities		5,764,640			29,413			5,794,053

Non-current liabilities:
Financing liabilities		4,118,490			—			4,118,490
Other financial liabilities		67,773			—			67,773
Retirement benefit liabilities		444,267			—			444,267
Provisions		206,817			(1,003	)		205,814
Deferred tax liabilities		686,050			(6,644	)		679,406
Other non-current liabilities		308,090			1,184			309,274

Total non-current liabilities		5,831,487			(6,463	)		5,825,024

Total liabilities		11,596,127			22,950			11,619,077

Equity:
Common stock		86,067			—			86,067
Capital surplus		171,228			—			171,228
Treasury stock		(177,822	)		—			(177,822	)
Retained earnings		7,929,606			(20,832	)		7,908,774
Other components of equity		376,711			(1,911	)		374,800

Equity attributable to owners of the parent		8,385,790			(22,743	)		8,363,047
Non-controlling interests		285,678			(61	)		285,617

Total equity		8,671,468			(22,804	)		8,648,664

Total liabilities and equity		20,267,595			146			20,267,741

- 15 -

(Condensed Consolidated Statements of Income)

For the three months ended September 30, 2018


	Yen (millions)
	Balances without adoption of IFRS 15			Adjustments			As reported
Sales revenue		3,828,310			13,402			3,841,712
Operating costs and expenses:
Cost of sales		(3,005,377	)		669			(3,004,708	)
Selling, general and administrative		(438,646	)		357			(438,289	)
Research and development		(184,240	)		—			(184,240	)

Total operating costs and expenses		(3,628,263	)		1,026			(3,627,237	)

Operating profit		200,047			14,428			214,475

Share of profit of investments accounted for using the equity method		63,925			1			63,926
Finance income and finance costs:
Interest income		11,411			—			11,411
Interest expense		(2,994	)		—			(2,994	)
Other, net		(3,776	)		—			(3,776	)

Total finance income and finance costs		4,641			—			4,641

Profit before income taxes		268,613			14,429			283,042
Income tax expense		(49,859	)		(3,958	)		(53,817	)

Profit for the period		218,754			10,471			229,225

Profit for the period attributable to:
Owners of the parent		199,849			10,922			210,771
Non-controlling interests		18,905			(451	)		18,454
For the six months ended September 30, 2018
	Yen (millions)
	Balances without adoption of IFRS 15			Adjustments			As reported
Sales revenue		7,833,991			31,854			7,865,845
Operating costs and expenses:
Cost of sales		(6,168,841	)		1,437			(6,167,404	)
Selling, general and administrative		(810,760	)		815			(809,945	)
Research and development		(374,638	)		—			(374,638	)

Total operating costs and expenses		(7,354,239	)		2,252			(7,351,987	)

Operating profit		479,752			34,106			513,858

Share of profit of investments accounted for using the equity method		118,227			1			118,228
Finance income and finance costs:
Interest income		23,324			—			23,324
Interest expense		(5,957	)		—			(5,957	)
Other, net		(8,129	)		—			(8,129	)

Total finance income and finance costs		9,238			—			9,238

Profit before income taxes		607,217			34,107			641,324
Income tax expense		(136,604	)		(8,773	)		(145,377	)

Profit for the period		470,613			25,334			495,947

Profit for the period attributable to:
Owners of the parent		429,291			25,810			455,101
Non-controlling interests		41,322			(476	)		40,846

- 16 -

[B] Segment Information

Honda has four reportable segments: Motorcycle business, Automobile business, Financial services business and Power Product 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 financial statements.

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


Segment	Principal products and services	Functions
Motorcycle Business	Motorcycles, all-terrain vehicles (ATVs), side-by-sides (S×S) and relevant parts	Research and development Manufacturing Sales and related services

Automobile Business	Automobiles and relevant parts	Research and development Manufacturing Sales and related services

Financial Services Business	Financial services	Retail loan and lease related to Honda products Others

Power Product and Other Businesses	Power products and relevant parts, and others	Research and development Manufacturing Sales and related services Others

1. Segment information based on products and services

For the three months ended September 30, 2017


	Yen (millions)
	Motorcycle Business		Automobile Business		Financial Services Business		Power Product and Other Businesses			Segment Total		Reconciling Items			Consolidated
Sales revenue:
External customers		510,109		2,647,865		535,235		82,990			3,776,199		—			3,776,199
Intersegment		—		45,219		4,329		4,814			54,362		(54,362	)		—

Total		510,109		2,693,084		539,564		87,804			3,830,561		(54,362	)		3,776,199

Segment profit (loss)		68,520		39,223		47,251		(2,049	)		152,945		—			152,945

For the three months ended September 30, 2018
	Yen (millions)
	Motorcycle Business		Automobile Business		Financial Services Business		Power Product and Other Businesses			Segment Total		Reconciling Items			Consolidated
Sales revenue:
External customers		539,319		2,624,635		596,085		81,673			3,841,712		—			3,841,712
Intersegment		—		45,529		4,196		5,289			55,014		(55,014	)		—

Total		539,319		2,670,164		600,281		86,962			3,896,726		(55,014	)		3,841,712

Segment profit (loss)		85,044		69,825		59,193		413			214,475		—			214,475

- 17 -

As of and for the six months ended September 30, 2017


	Yen (millions)
	Motorcycle Business		Automobile Business		Financial Services Business		Power Product and Other Businesses			Segment Total		Reconciling Items			Consolidated
Sales revenue:
External customers		1,018,649		5,237,800		1,072,192		160,654			7,489,295		—			7,489,295
Intersegment		—		79,854		7,061		10,263			97,178		(97,178	)		—

Total		1,018,649		5,317,654		1,079,253		170,917			7,586,473		(97,178	)		7,489,295

Segment profit (loss)		147,362		179,567		97,115		(1,888	)		422,156		—			422,156

Segment assets		1,456,075		7,845,059		9,688,731		314,363			19,304,228		222,851			19,527,079
Depreciation and amortization		37,138		304,915		367,541		7,610			717,204		—			717,204
Capital expenditures		22,047		251,843		938,163		4,445			1,216,498		—			1,216,498
As of and for the six months ended September 30, 2018
	Yen (millions)
	Motorcycle Business		Automobile Business		Financial Services Business		Power Product and Other Businesses			Segment Total		Reconciling Items			Consolidated
Sales revenue:
External customers		1,094,226		5,421,971		1,185,980		163,668			7,865,845		—			7,865,845
Intersegment		—		93,384		7,486		11,136			112,006		(112,006	)		—

Total		1,094,226		5,515,355		1,193,466		174,804			7,977,851		(112,006	)		7,865,845

Segment profit (loss)		177,174		221,506		116,372		(1,194	)		513,858		—			513,858

Segment assets		1,458,540		7,984,546		10,153,832		316,353			19,913,271		354,470			20,267,741
Depreciation and amortization		33,942		309,249		384,060		7,227			734,478		—			734,478
Capital expenditures		23,957		238,173		1,000,337		5,493			1,267,960		—			1,267,960

Explanatory notes:

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

Unallocated corporate assets, included in reconciling items, amounted to JPY 581,929 million as of September 30, 2017 and JPY 633,623 million as of September 30, 2018 respectively, which consist primarily of cash and cash equivalents and financial assets measured at fair value through other comprehensive income.

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

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

For the three months ended September 30, 2017


	Yen (millions)
	Japan		North America			Europe		Asia		Other Regions		Total		Reconciling Items			Consolidated
Sales revenue:
External customers		547,386		1,936,664			158,081		933,264		200,804		3,776,199		—			3,776,199
Inter-geographic areas		510,878		131,319			50,885		160,950		1,837		855,869		(855,869	)		—

Total		1,058,264		2,067,983			208,966		1,094,214		202,641		4,632,068		(855,869	)		3,776,199

Operating profit (loss)		34,324		(660	)		2,529		110,313		12,001		158,507		(5,562	)		152,945

For the three months ended September 30, 2018
	Yen (millions)
	Japan		North America			Europe		Asia		Other Regions		Total		Reconciling Items			Consolidated
Sales revenue:
External customers		575,806		2,015,472			145,853		929,374		175,207		3,841,712		—			3,841,712
Inter-geographic areas		629,840		115,747			64,937		184,275		1,256		996,055		(996,055	)		—

Total		1,205,646		2,131,219			210,790		1,113,649		176,463		4,837,767		(996,055	)		3,841,712

Operating profit (loss)		27,402		53,483			236		127,595		7,990		216,706		(2,231	)		214,475

- 18 -

As of and for the six months ended September 30, 2017


	Yen (millions)
	Japan		North America		Europe		Asia		Other Regions		Total		Reconciling Items			Consolidated
Sales revenue:
External customers		1,055,330		3,945,541		324,829		1,760,360		403,235		7,489,295		—			7,489,295
Inter-geographic areas		1,027,958		252,567		97,404		315,556		3,268		1,696,753		(1,696,753	)		—

Total		2,083,288		4,198,108		422,233		2,075,916		406,503		9,186,048		(1,696,753	)		7,489,295

Operating profit (loss)		55,860		100,929		9,182		208,146		26,731		400,848		21,308			422,156

Assets		4,175,437		10,988,524		685,662		2,901,384		677,984		19,428,991		98,088			19,527,079
Non-current assets other than financial instruments and deferred tax assets		2,482,510		4,914,567		108,873		701,566		178,159		8,385,675		—			8,385,675
As of and for the six months ended September 30, 2018
	Yen (millions)
	Japan		North America		Europe		Asia		Other Regions		Total		Reconciling Items			Consolidated
Sales revenue:
External customers		1,129,949		4,192,771		318,832		1,848,097		376,196		7,865,845		—			7,865,845
Inter-geographic areas		1,215,912		251,798		129,199		361,264		3,602		1,961,775		(1,961,775	)		—

Total		2,345,861		4,444,569		448,031		2,209,361		379,798		9,827,620		(1,961,775	)		7,865,845

Operating profit (loss)		42,114		163,843		7,271		250,109		30,625		493,962		19,896			513,858

Assets		4,373,170		11,496,432		683,043		3,039,075		620,567		20,212,287		55,454			20,267,741
Non-current assets other than financial instruments and deferred tax assets		2,596,051		4,857,844		97,064		671,714		145,792		8,368,465		—			8,368,465

Explanatory notes:

1.	Major countries or regions in each geographic area:


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

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

- 19 -

[C] Other

1. Loss related to airbag inflators

Honda has been conducting market-based measures in relation to airbag inflators. Honda recognizes a provision for specific warranty 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. There is a possibility that Honda will need to recognize additional provisions when new evidence related to the product recalls arise, however, it is not possible for Honda to reasonably estimate the amount and timing of potential future losses as of the date of this report.

In the United States and Canada, various class action lawsuits and civil lawsuits related to the above mentioned market-based measures was filed against Honda. The plaintiffs claimed for properly functioning airbag inflators, compensation of economic losses including incurred costs and the decline in the value of vehicles, as well as punitive damages.

Most of the class action lawsuits in the United States were transferred to the United States District Court for the Southern District of Florida and consolidated into a multidistrict class action litigation. For the three months ended September 30, 2017, Honda has reached a settlement with the plaintiffs of the multidistrict class action litigation in the United States. Honda recognized the settlement of JPY 53,739 million as selling, general and administrative expenses, which includes funds contributed to enhance airbag inflator recall activities. The final approval of the settlement from court was completed as July 31, 2018 (U.S. local time).

For the class action lawsuits and civil lawsuits other that the above, Honda did not recognize a provision for loss contingencies because the conditions for a provision have not been met as of the date of this report. Therefore, it is not possible for Honda to reasonably estimate the amount and timing of potential future losses as of the date of this report because there are some uncertainties, such as the period when these lawsuits will be concluded.

2. Reversal of impairment loss on investments accounted for using the equity method

For the six months ended September 30, 2017, the Company recognized reversal of impairment losses of JPY 15,782 million, which had been previously recognized, on certain investments accounted for using the equity method mainly due to the recovery of quoted market values. The reversal of impairment losses is included in share of profit of investments accounted for using the equity method in the condensed consolidated statement of income. For the six months ended September 30, 2018, the Company did not recognize any significant impairment losses.

- 20 -

[Translation]

October 30, 2018

To:

From:

Shareholdersof Honda Motor Co., Ltd.

HondaMotor Co., Ltd.

1-1, Minami-Aoyama 2-chome,

Minato-ku,Tokyo, 107-8556

TakahiroHachigo

Presidentand Representative Director

Notice of Resolution by the Board of Directors

Concerning Distribution of Surplus (Quarterly Dividends)

and Revision of Dividend Forecast for the Fiscal Year Ending March 31, 2019

The Board of Directors of Honda Motor Co., Ltd. (the “Company”), at its meeting held on October 30, 2018, resolved to make a distribution of surplus (quarterly dividends), the record date of which is September 30, 2018, and revised the amount of the projected dividend per share of common stock for the year ending March 31, 2019 as follows:

Particulars

1.	Details of Distribution of Surplus (Quarterly Dividends)


	Resolution	Previous Dividends Forecast (Announced on April 27, 2018)	Dividends Paid for the Second Quarter in Fiscal 2018
Record Date	September 30, 2018	September 30, 2018	September 30, 2017
Dividends per Share of Common Stock (yen)	28	27	24
Total Amount of Dividends (million yen)	49,287	—	43,254
Effective Date	November 28, 2018	—	November 29, 2017
Source of Funds for Dividends	Retained Earnings	—	Retained Earnings

2.	Details of the Revised Dividend Payments


	Dividends per Share (yen)
Record Date	End of First Quarter		End of Second Quarter		End of Third Quarter		Fiscal Year-end		Total
Latest Dividend Forecast (Announced on April 27, 2018)		—		—		27		27		108
Projected Dividends		—		—		28		28		111
Dividends Paid in Fiscal 2019		27		28		—		—		—
Dividends Paid in Fiscal 2018		24		24		25		27		100

3.	Basis of the Distribution of Surplus

The Company considers the redistribution of profits to its shareholders to be one of its most important management issues, and makes distributions after taking into account, among others, its retained earnings for future growth and consolidated earnings performance based on a long-term perspective. The Company resolved that a second quarter dividend payment of ¥28 per share of common stock is to be paid considering its forecast for consolidated financial results for the fiscal year ending March 31, 2019. The Company also revised the amount of the projected dividend per share of common stock for the year ending March 31, 2019 that was announced on April 27, 2018.

Table of Contents

Table of Contents

Table of Contents

Table of Contents

Table of Contents

Table of Contents

Table of Contents

Table of Contents

Table of Contents

Table of Contents

Table of Contents

Table of Contents

Table of Contents

Table of Contents

Table of Contents

Table of Contents

Table of Contents

Table of Contents

Table of Contents

Table of Contents

Table of Contents

Table of Contents

Table of Contents

Table of Contents

Table of Contents