Honda Motor (HMC) 6-K Current report (foreign)

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 FEBRUARY 2022

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

Honda Motor Co., Ltd. filed its consolidated interim financial statements for the fiscal third quarter ended December 31, 2021 with Financial Services Agency in Japan.

Notice Concerning Changes in Representative Executive Officers, Directors and Officers.

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/ Masao Kawaguchi

Masao Kawaguchi

General Manager

Finance Division

Honda Motor Co., Ltd.

Date: February 18, 2022

HONDA MOTOR CO., LTD. AND SUBSIDIARIES

Condensed Consolidated Interim Financial Statements

December 31, 2021

HONDA MOTOR CO., LTD. AND SUBSIDIARIES

Consolidated Financial Results

Overview of Operating Performance

While the global economy which had slowed down due to the spread of coronavirus disease 2019 (COVID-19) has continued to be on a recovery track, it has still continued to affect Honda’s consolidated financial results for the nine months ended December 31, 2021.

Resulting from travel restriction measures in certain countries or regions, the production activities of some of Honda’s production bases were also affected mainly due to restrictions on employees’ commute to the workplaces and delays in the supply of parts within the supply chain. Some dealers were obliged to suspend business, shorten business hours, or reduce services such as inspections and repairs. However, there is no significant impact on Honda’s consolidated financial results for the nine months ended December 31, 2021.

Honda’s consolidated sales revenue for the nine months ended December 31, 2021 increased by 11.8%, to ¥10,677.0 billion from the same period last year, due mainly to increased sales revenue in Motorcycle business and Financial services business operations as well as positive foreign currency translation effects. Operating profit increased by 50.3%, to ¥671.6 billion from the same period last year, due mainly to an increase in profit attributable to increased sales revenue and model mix as well as decreased selling, general and administrative expenses. Profit before income taxes increased by 28.3%, to ¥845.2 billion from the same period last year. Profit for the period attributable to owners of the parent increased by 31.1%, to ¥582.1 billion from the same period last year.

Business Segments

Motorcycle Business

For the nine months ended December 31, 2020 and 2021

	Units (thousands)
	Honda Group Unit Sales*								Consolidated Unit Sales*
	Nine months ended Dec. 31, 2020		Nine months ended Dec. 31, 2021						Nine months ended Dec. 31, 2020	Nine months ended Dec. 31, 2021
					Change		%				Change		%
Motorcycle Business		10,591		12,775		2,184		20.6	7,263	7,964		701		9.7
Japan		155		180		25		16.1	155	180		25		16.1
North America		240		332		92		38.3	240	332		92		38.3
Europe		159		240		81		50.9	159	240		81		50.9
Asia		9,257		10,902		1,645		17.8	5,929	6,091		162		2.7
Other Regions		780		1,121		341		43.7	780	1,121		341		43.7

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

Sales revenue from external customers increased by 27.3%, to ¥1,602.0 billion from the same period last year, due mainly to increased consolidated unit sales. Operating profit increased by 52.5%, to ¥232.3 billion from the same period last year, due mainly to an increase in profit attributable to increased sales volume and model mix.

Automobile Business

For the nine months ended December 31, 2020 and 2021

	Units (thousands)
	Honda Group Unit Sales*										Consolidated Unit Sales*
	Nine months ended Dec. 31, 2020		Nine months ended Dec. 31, 2021								Nine months ended Dec. 31, 2020	Nine months ended Dec. 31, 2021
					Change			%					Change			%
Automobile Business		3,425		3,000		(425	)		(12.4	)	1,899	1,792		(107	)		(5.6	)
Japan		418		385		(33	)		(7.9	)	366	335		(31	)		(8.5	)
North America		1,098		978		(120	)		(10.9	)	1,098	978		(120	)		(10.9	)
Europe		77		76		(1	)		(1.3	)	77	76		(1	)		(1.3	)
Asia		1,741		1,465		(276	)		(15.9	)	267	307		40			15.0
Other Regions		91		96		5			5.5		91	96		5			5.5

* 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 7.4%, to ¥6,668.6 billion from the same period last year, due mainly to positive foreign currency translation effects, which was partially offset by decreased consolidated unit sales. Operating profit increased by 258.3%, to ¥188.5 billion from the same period last year, due mainly to decreased selling, general and administrative expenses.

Financial Services Business

Sales revenue from external customers increased by 14.1%, to ¥2,114.3 billion from the same period last year, due mainly to an increase in revenues on disposition of lease vehicles and operating lease revenues. Operating profit increased by 3.0%, to ¥258.1 billion from the same period last year, due mainly to an increase in profit attributable to increased sales revenue.

Life Creation and Other Businesses

For the nine months ended December 31, 2020 and 2021

	Units (thousands)
	Honda Group Unit Sales / Consolidated Unit Sales*
	Nine months ended Dec. 31, 2020		Nine months ended Dec. 31, 2021
					Change		%
Life Creation Business		3,855		4,500		645		16.7
Japan		233		266		33		14.2
North America		1,815		2,092		277		15.3
Europe		567		762		195		34.4
Asia		1,012		1,073		61		6.0
Other Regions		228		307		79		34.6

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

Sales revenue from external customers increased by 28.5%, to ¥291.9 billion from the same period last year, due mainly to increased consolidated unit sales in Life creation business. Operating loss was ¥7.4 billion, an improvement of ¥1.1 billion from the same period last year, due mainly to decreased operating costs in Other businesses. In addition, operating loss of aircraft and aircraft engines included in the Life creation and other businesses was ¥23.6 billion, an improvement of ¥0.8 billion from the same period last year.

Cash Flows

Consolidated cash and cash equivalents on December 31, 2021 decreased by ¥67.5 billion from March 31, 2021, to ¥2,690.4 billion. The reasons for the increases or decreases for each cash flow activity, when compared with the same period last year, are as follows:

Net cash provided by operating activities amounted to ¥947.8 billion of cash inflows. Cash inflows from operating activities increased by ¥121.6 billion from the same period last year, due mainly to increased cash received from customers, which was partially offset by increased payments for parts and raw materials.

Net cash used in investing activities amounted to ¥381.7 billion of cash outflows. Cash outflows from investing activities decreased by ¥281.8 billion from the same period last year, due mainly to decreased payments for acquisitions of investments accounted for using the equity method as well as increased proceeds from sales and redemptions of other financial assets.

Net cash used in financing activities amounted to ¥692.1 billion of cash outflows. Cash outflows from financing activities increased by ¥773.6 billion from the same period last year, due mainly to decreased proceeds from financing liabilities and increased dividends paid.

Changes in Major Consolidated Subsidiaries

Changes in major consolidated subsidiaries for the nine months ended December 31, 2021 are as follows:

Motorcycle Business, Automobile Business, Life Creation and Other Businesses

American Honda Motor Co., Inc. integrated certain functions of Honda R&D Americas, Inc. for the three months ended June 30, 2021.

Automobile Business

Honda of America Mfg., Inc. merged with Honda Manufacturing of Alabama, LLC, Honda Manufacturing of Indiana, LLC, Honda Transmission Mfg. of America, Inc., Honda R&D Americas, Inc. and three other companies and changed its name to “Honda Development and Manufacturing of America, LLC” for the three months ended June 30, 2021.

Honda of the U.K. Manufacturing Ltd. and Honda Turkiye A.S. ceased production of automobiles for the three months ended September 30, 2021.

Research and Development

The changes in research and development activities by Honda and its subsidiaries for the nine months ended December 31, 2021 are as follows:

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

Unit Production and Sales

Unit production in Honda and its subsidiaries for the nine months ended December 31, 2021 in Life creation business increased significantly from the same period last year. The increased unit production in Life creation business was due to suspended or reduced production in Honda’s production bases in Japan and overseas resulted from the spread of COVID-19 in the same period last year.

HONDA MOTOR CO., LTD. AND SUBSIDIARIES

Condensed Consolidated Statements of Financial Position

March 31, 2021 and December 31, 2021

			Yen (millions)
Assets	Note		March 31,     2021			December 31, 2021
			unaudited			unaudited
Current assets:
Cash and cash equivalents			¥	2,758,020		¥	2,690,451
Trade receivables				801,814			716,296
Receivables from financial services				1,794,654			1,613,208
Other financial assets				295,307			407,358
Inventories				1,545,600			1,799,424
Other current assets				383,696			368,076
Total current assets				7,579,091			7,594,813
Non-current assets:
Investments accounted for using the equity method				891,002			902,008
Receivables from financial services				3,619,896			3,674,233
Other financial assets				628,533			765,484
Equipment on operating leases		6		4,919,916			5,075,682
Property, plant and equipment		7		3,021,514			2,971,461
Intangible assets				818,763			822,570
Deferred tax assets				99,552			100,540
Other non-current assets				342,763			342,988
Total non-current assets				14,341,939			14,654,966
Total assets			¥	21,921,030		¥	22,249,779
			Yen (millions)
Liabilities and Equity	Note		March 31,     2021			December 31, 2021
			unaudited			unaudited
Current liabilities:
Trade payables			¥	1,088,061		¥	1,033,941
Financing liabilities				3,005,624			3,103,481
Accrued expenses				415,106			297,558
Other financial liabilities				182,145			149,109
Income taxes payable				47,793			55,632
Provisions		8		362,151			262,373
Other current liabilities				614,577			616,044
Total current liabilities				5,715,457			5,518,138
Non-current liabilities:
Financing liabilities				4,715,361			4,486,260
Other financial liabilities				280,809			279,399
Retirement benefit liabilities				358,532			362,516
Provisions		8		278,890			252,876
Deferred tax liabilities				842,001			942,801
Other non-current liabilities				357,141			371,472
Total non-current liabilities				6,832,734			6,695,324
Total liabilities				12,548,191			12,213,462
Equity:
Common stock				86,067			86,067
Capital surplus				172,049			185,554
Treasury stock				(273,786	)		(328,443	)
Retained earnings				8,901,266			9,294,994
Other components of equity				196,710			532,690
Equity attributable to owners of the parent				9,082,306			9,770,862
Non-controlling interests				290,533			265,455
Total equity				9,372,839			10,036,317
Total liabilities and equity			¥	21,921,030		¥	22,249,779

See accompanying notes to condensed consolidated interim financial statements.

HONDA MOTOR CO., LTD. AND SUBSIDIARIES

Condensed Consolidated Statements of Income

For the nine months ended December 31, 2020 and 2021

		Yen (millions)
	Note	December 31, 2020			December 31, 2021
		unaudited			unaudited
Sales revenue	9	¥	9,546,713		¥	10,677,013
Operating costs and expenses:
Cost of sales			(7,594,521	)		(8,486,750	)
Selling, general and administrative			(1,004,211	)		(955,247	)
Research and development			(500,981	)		(563,371	)
Total operating costs and expenses			(9,099,713	)		(10,005,368	)
Operating profit			447,000			671,645
Share of profit of investments accounted for using the equity method	5		204,570			157,034
Finance income and finance costs:
Interest income			13,572			18,737
Interest expense			(8,563	)		(9,669	)
Other, net			2,128			7,491
Total finance income and finance costs			7,137			16,559
Profit before income taxes			658,707			845,238
Income tax expense			(186,809	)		(229,035	)
Profit for the period		¥	471,898		¥	616,203
Profit for the period attributable to:
Owners of the parent			444,102			582,169
Non-controlling interests			27,796			34,034
		Yen
		December 31, 2020			December 31, 2021
Earnings per share attributable to owners of the parent
Basic and diluted	12	¥	257.21		¥	337.92

See accompanying notes to condensed consolidated interim financial statements.

HONDA MOTOR CO., LTD. AND SUBSIDIARIES

Condensed Consolidated Statements of Comprehensive Income

For the nine months ended December 31, 2020 and 2021

		Yen (millions)
	Note	December 31, 2020			December 31, 2021
		unaudited			unaudited
Profit for the period		¥	471,898		¥	616,203
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			64,000			78,760
Share of other comprehensive income of investments accounted for using the equity method			613			113
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			127			(97	)
Exchange differences on translating foreign operations			(114,008	)		219,152
Share of other comprehensive income of investments accounted for using the equity method			5,772			43,385
Total other comprehensive income, net of tax			(43,496	)		341,313
Comprehensive income for the period		¥	428,402		¥	957,516
Comprehensive income for the period attributable to:
Owners of the parent			394,202			918,110
Non-controlling interests			34,200			39,406

See accompanying notes to condensed consolidated interim financial statements.

HONDA MOTOR CO., LTD. AND SUBSIDIARIES

Condensed Consolidated Statements of Income

For the three months ended December 31, 2020 and 2021

		Yen (millions)
	Note	December 31, 2020			December 31, 2021
		unaudited			unaudited
Sales revenue	9	¥	3,771,569		¥	3,688,785
Operating costs and expenses:
Cost of sales			(2,940,964	)		(2,924,975	)
Selling, general and administrative			(381,019	)		(329,644	)
Research and development			(171,851	)		(204,717	)
Total operating costs and expenses			(3,493,834	)		(3,459,336	)
Operating profit			277,735			229,449
Share of profit of investments accounted for using the equity method			102,274			49,788
Finance income and finance costs:
Interest income			4,695			7,657
Interest expense			(2,014	)		(3,241	)
Other, net			3,733			1,189
Total finance income and finance costs			6,414			5,605
Profit before income taxes			386,423			284,842
Income tax expense			(87,094	)		(77,240	)
Profit for the period		¥	299,329		¥	207,602
Profit for the period attributable to:
Owners of the parent			284,051			192,960
Non-controlling interests			15,278			14,642
		Yen
		December 31, 2020			December 31, 2021
Earnings per share attributable to owners of the parent
Basic and diluted	12	¥	164.51		¥	112.42

See accompanying notes to condensed consolidated interim financial statements.

HONDA MOTOR CO., LTD. AND SUBSIDIARIES

Condensed Consolidated Statements of Comprehensive Income

For the three months ended December 31, 2020 and 2021

		Yen (millions)
	Note	December 31, 2020			December 31, 2021
		unaudited			unaudited
Profit for the period		¥	299,329		¥	207,602
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			45,754			20,742
Share of other comprehensive income of investments accounted for using the equity method			1,040			(1,207	)
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			13			(79	)
Exchange differences on translating foreign operations			(36,418	)		182,103
Share of other comprehensive income of investments accounted for using the equity method			5,297			16,709
Total other comprehensive income, net of tax			15,686			218,268
Comprehensive income for the period		¥	315,015		¥	425,870
Comprehensive income for the period attributable to:
Owners of the parent			296,866			403,390
Non-controlling interests			18,149			22,480

See accompanying notes to condensed consolidated interim financial statements.

HONDA MOTOR CO., LTD. AND SUBSIDIARIES

Condensed Consolidated Statements of Changes in Equity

For the nine months ended December 31, 2020 and 2021

			Yen (millions)
			Equity attributable to owners of the parent
	Note		Common stock		Capital surplus			Treasury stock			Retained earnings			Other components of equity			Total			Non-controlling interests			Total equity
Balance as of April 1, 2020 (unaudited)			¥	86,067	¥	171,823		¥	(273,940	)	¥	8,142,948		¥	(114,639	)	¥	8,012,259		¥	273,764		¥	8,286,023
Comprehensive income for the period
Profit for the period												444,102						444,102			27,796			471,898
Other comprehensive income, net of tax															(49,900	)		(49,900	)		6,404			(43,496	)
Total comprehensive income for the period												444,102			(49,900	)		394,202			34,200			428,402
Reclassification to retained earnings												353			(353	)		—						—
Transactions with owners and other
Dividends paid		13										(100,181	)					(100,181	)		(40,766	)		(140,947	)
Purchases of treasury stock									(4	)								(4	)					(4	)
Disposal of treasury stock									124									124						124
Share-based payment transactions						203												203						203
Equity transactions and others																					2,251			2,251
Total transactions with owners and other						203			120			(100,181	)					(99,858	)		(38,515	)		(138,373	)
Balance as of December 31, 2020 (unaudited)			¥	86,067	¥	172,026		¥	(273,820	)	¥	8,487,222		¥	(164,892	)	¥	8,306,603		¥	269,449		¥	8,576,052
			Yen (millions)
			Equity attributable to owners of the parent
	Note		Common stock		Capital surplus			Treasury stock			Retained earnings			Other components of equity			Total			Non-controlling interests			Total equity
Balance as of April 1, 2021 (unaudited)			¥	86,067	¥	172,049		¥	(273,786	)	¥	8,901,266		¥	196,710		¥	9,082,306		¥	290,533		¥	9,372,839
Comprehensive income for the period
Profit for the period												582,169						582,169			34,034			616,203
Other comprehensive income, net of tax															335,941			335,941			5,372			341,313
Total comprehensive income for the period												582,169			335,941			918,110			39,406			957,516
Reclassification to retained earnings												(39	)		39			—						—
Transactions with owners and other
Dividends paid		13										(188,402	)					(188,402	)		(43,148	)		(231,550	)
Purchases of treasury stock									(62,756	)								(62,756	)					(62,756	)
Disposal of treasury stock									442									442						442
Share-based payment transactions						(174	)											(174	)					(174	)
Equity transactions and others						13,679			7,657									21,336			(21,336	)		—
Total transactions with owners and other						13,505			(54,657	)		(188,402	)					(229,554	)		(64,484	)		(294,038	)
Balance as of December 31, 2021 (unaudited)			¥	86,067	¥	185,554		¥	(328,443	)	¥	9,294,994		¥	532,690		¥	9,770,862		¥	265,455		¥	10,036,317

See accompanying notes to condensed consolidated interim financial statements.

HONDA MOTOR CO., LTD. AND SUBSIDIARIES

Condensed Consolidated Statements of Cash Flows

For the nine months ended December 31, 2020 and 2021

		Yen (millions)
	Note	December 31, 2020			December 31, 2021
		unaudited			unaudited
Cash flows from operating activities:
Profit before income taxes		¥	658,707		¥	845,238
Depreciation, amortization and impairment losses excluding equipment on operating leases			444,545			457,989
Share of profit of investments accounted for using the equity method			(204,570	)		(157,034	)
Finance income and finance costs, net			52,741			(42,769	)
Interest income and interest costs from financial services, net			(99,425	)		(119,818	)
Changes in assets and liabilities
Trade receivables			6,927			100,704
Inventories			88,067			(200,804	)
Trade payables			78,928			(58,880	)
Accrued expenses			(72,394	)		(136,753	)
Provisions and retirement benefit liabilities			86,077			(131,115	)
Receivables from financial services			(11,553	)		321,333
Equipment on operating leases			(118,989	)		620
Other assets and liabilities			(151,391	)		(35,454	)
Other, net			(608	)		(7,053	)
Dividends received			119,642			110,049
Interest received			177,097			179,173
Interest paid			(83,502	)		(69,296	)
Income taxes paid, net of refunds			(144,107	)		(108,326	)
Net cash provided by operating activities			826,192			947,804
Cash flows from investing activities:
Payments for additions to property, plant and equipment			(227,151	)		(198,762	)
Payments for additions to and internally developed intangible assets			(165,830	)		(126,575	)
Proceeds from sales of property, plant and equipment and intangible assets			4,680			16,057
Payments for acquisitions of subsidiaries, net of cash and cash equivalents acquired			2,230			—
Payments for acquisitions of investments accounted for using the equity method			(110,747	)		—
Proceeds from sales of investments accounted for using the equity method			10,376			—
Payments for acquisitions of other financial assets			(311,873	)		(409,524	)
Proceeds from sales and redemptions of other financial assets			134,639			337,025
Net cash used in investing activities			(663,676	)		(381,779	)
Cash flows from financing activities:
Proceeds from short-term financing liabilities			6,992,681			5,863,983
Repayments of short-term financing liabilities			(6,781,179	)		(6,106,635	)
Proceeds from long-term financing liabilities			1,356,619			1,229,804
Repayments of long-term financing liabilities			(1,304,276	)		(1,328,446	)
Dividends paid to owners of the parent			(100,181	)		(188,402	)
Dividends paid to non-controlling interests			(34,134	)		(41,722	)
Purchases and sales of treasury stock, net			120			(62,314	)
Repayments of lease liabilities			(47,584	)		(58,406	)
Other, net			(555	)		—
Net cash provided by (used in) financing activities			81,511			(692,138	)
Effect of exchange rate changes on cash and cash equivalents			(43,091	)		58,544
Net change in cash and cash equivalents			200,936			(67,569	)
Cash and cash equivalents at beginning of year			2,672,353			2,758,020
Cash and cash equivalents at end of period		¥	2,873,289		¥	2,690,451

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, Italy, France, China, India, Indonesia, Malaysia, Philippines, Thailand, Vietnam, Argentina and Brazil.

(2) Basis of Preparation

   (a) Compliance with Interim Financial Reporting Standards

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

   (b) Functional Currency and Presentation Currency

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

   (c) Use of Estimates and Judgments

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

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

(3) Summary of Significant Accounting Policies

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

2

HONDA MOTOR CO., LTD. AND SUBSIDIARIES

Notes to Condensed Consolidated Interim Financial Statements

(4) Segment Information

Honda has four reportable segments: Motorcycle business, Automobile business, Financial services business and Life creation and other businesses, which are based on Honda’s organizational structure and characteristics of products and services. Operating segments are defined as the components of Honda for which separate financial information is available that is evaluated regularly by the chief operating decision maker in deciding how to allocate resources and in assessing performance. The accounting policies used for these reportable segments are consistent with the accounting policies used in the Company’s condensed consolidated interim financial statements.

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

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

   (a) Segment Information

Segment information as of and for the nine months ended December 31, 2020 and 2021 is as follows:

As of and for the nine months ended December 31, 2020

	Yen (millions)
	Motorcycle Business		Automobile Business		Financial Services Business		Life Creation and Other Businesses			Segment Total		Reconciling Items			Consolidated
Sales revenue:
External customers	¥	1,258,173	¥	6,207,728	¥	1,853,641	¥	227,171		¥	9,546,713	¥	—		¥	9,546,713
Intersegment		—		153,209		9,520		14,270			176,999		(176,999	)		—
Total		1,258,173		6,360,937		1,863,161		241,441			9,723,712		(176,999	)		9,546,713
Segment profit (loss)	¥	152,379	¥	52,624	¥	250,581	¥	(8,584	)	¥	447,000	¥	—		¥	447,000
Segment assets	¥	1,382,083	¥	8,061,407	¥	10,280,529	¥	360,515		¥	20,084,534	¥	695,669		¥	20,780,203
Depreciation and amortization		50,324		378,524		617,238		11,484			1,057,570		—			1,057,570
Capital expenditures		28,358		348,446		1,485,375		7,004			1,869,183		—			1,869,183

3

HONDA MOTOR CO., LTD. AND SUBSIDIARIES

Notes to Condensed Consolidated Interim Financial Statements

As of and for the nine months ended December 31, 2021

	Yen (millions)
	Motorcycle Business		Automobile Business		Financial Services Business		Life Creation and Other Businesses			Segment Total		Reconciling Items			Consolidated
Sales revenue:
External customers	¥	1,602,096	¥	6,668,657	¥	2,114,335	¥	291,925		¥	10,677,013	¥	—		¥	10,677,013
Intersegment		—		155,020		2,124		17,041			174,185		(174,185	)		—
Total		1,602,096		6,823,677		2,116,459		308,966			10,851,198		(174,185	)		10,677,013
Segment profit (loss)	¥	232,395	¥	188,547	¥	258,149	¥	(7,446	)	¥	671,645	¥	—		¥	671,645
Segment assets	¥	1,465,871	¥	8,795,380	¥	10,914,940	¥	385,776		¥	21,561,967	¥	687,812		¥	22,249,779
Depreciation and amortization		49,127		381,128		661,252		12,728			1,104,235		—			1,104,235
Capital expenditures		30,189		287,082		1,639,003		10,501			1,966,775		—			1,966,775

Segment information for the three months ended December 31, 2020 and 2021 is as follows:

For the three months ended December 31, 2020

	Yen (millions)
	Motorcycle Business		Automobile Business		Financial Services Business		Life Creation and Other Businesses			Segment Total		Reconciling Items			Consolidated
Sales revenue:
External customers	¥	490,857	¥	2,585,190	¥	614,549	¥	80,973		¥	3,771,569	¥	—		¥	3,771,569
Intersegment		—		52,925		3,097		5,434			61,456		(61,456	)		—
Total		490,857		2,638,115		617,646		86,407			3,833,025		(61,456	)		3,771,569
Segment profit (loss)	¥	72,715	¥	123,127	¥	85,715	¥	(3,822	)	¥	277,735	¥	—		¥	277,735

For the three months ended December 31, 2021

	Yen (millions)
	Motorcycle Business		Automobile Business		Financial Services Business		Life Creation and Other Businesses			Segment Total		Reconciling Items			Consolidated
Sales revenue:
External customers	¥	578,366	¥	2,333,388	¥	671,777	¥	105,254		¥	3,688,785	¥	—		¥	3,688,785
Intersegment		—		55,365		834		6,008			62,207		(62,207	)		—
Total		578,366		2,388,753		672,611		111,262			3,750,992		(62,207	)		3,688,785
Segment profit (loss)	¥	84,258	¥	71,443	¥	81,335	¥	(7,587	)	¥	229,449	¥	—		¥	229,449

Explanatory notes:

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

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

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

4. Reconciling items include elimination of intersegment transactions and balances as well as unallocated corporate assets. Unallocated corporate assets, included in reconciling items as of December 31, 2020 and 2021 amounted to ¥931,069 million and ¥847,711 million, respectively, which consist primarily of the Company’s cash and cash equivalents and financial assets measured at fair value through other comprehensive income.

4

HONDA MOTOR CO., LTD. AND SUBSIDIARIES

Notes to Condensed Consolidated Interim Financial Statements

   (b) Supplemental Geographical Information

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

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

As of and for the nine months ended December 31, 2020

	Yen (millions)
	Japan			North America		Europe		Asia		Other Regions			Total		Reconciling Items			Consolidated
Sales revenue:
External customers	¥	1,559,844		¥	5,200,322	¥	350,963	¥	2,124,773	¥	310,811		¥	9,546,713	¥	—		¥	9,546,713
Inter-geographic areas		1,189,865			270,594		121,711		329,638		4,509			1,916,317		(1,916,317	)		—
Total		2,749,709			5,470,916		472,674		2,454,411		315,320			11,463,030		(1,916,317	)		9,546,713
Operating profit (loss)	¥	(31,386	)	¥	269,236	¥	18,352	¥	170,069	¥	421		¥	426,692	¥	20,308		¥	447,000
Assets	¥	5,048,475		¥	11,271,264	¥	666,494	¥	2,996,726	¥	484,914		¥	20,467,873	¥	312,330		¥	20,780,203
Non-current assets other than financial instruments, deferred tax assets and net defined benefit assets	¥	3,038,243		¥	4,637,887	¥	58,660	¥	643,185	¥	114,368		¥	8,492,343	¥	—		¥	8,492,343
As of and for the nine months ended December 31, 2021
	Yen (millions)
	Japan			North America		Europe		Asia		Other Regions			Total		Reconciling Items			Consolidated
Sales revenue:
External customers	¥	1,713,992		¥	5,681,155	¥	440,255	¥	2,400,719	¥	440,892		¥	10,677,013	¥	—		¥	10,677,013
Inter-geographic areas		1,506,703			341,172		89,067		491,398		7,479			2,435,819		(2,435,819	)		—
Total		3,220,695			6,022,327		529,322		2,892,117		448,371			13,112,832		(2,435,819	)		10,677,013
Operating profit (loss)	¥	26,663		¥	414,075	¥	17,764	¥	232,250	¥	18,642		¥	709,394	¥	(37,749	)	¥	671,645
Assets	¥	5,250,120		¥	12,310,903	¥	553,219	¥	3,491,191	¥	505,794		¥	22,111,227	¥	138,552		¥	22,249,779
Non-current assets other than financial instruments, deferred tax assets and net defined benefit assets	¥	3,006,685		¥	5,196,501	¥	55,887	¥	667,201	¥	133,948		¥	9,060,222	¥	—		¥	9,060,222
For the three months ended December 31, 2020
	Yen (millions)
	Japan			North America		Europe		Asia		Other Regions			Total		Reconciling Items			Consolidated
Sales revenue:
External customers	¥	559,587		¥	2,068,582	¥	114,672	¥	892,829	¥	135,899		¥	3,771,569	¥	—		¥	3,771,569
Inter-geographic areas		518,693			99,268		58,881		136,149		1,887			814,878		(814,878	)		—
Total		1,078,280			2,167,850		173,553		1,028,978		137,786			4,586,447		(814,878	)		3,771,569
Operating profit (loss)	¥	43,691		¥	149,920	¥	7,114	¥	79,132	¥	(1,653	)	¥	278,204	¥	(469	)	¥	277,735

5

HONDA MOTOR CO., LTD. AND SUBSIDIARIES

Notes to Condensed Consolidated Interim Financial Statements

For the three months ended December 31, 2021

	Yen (millions)
	Japan		North America		Europe		Asia		Other Regions		Total		Reconciling Items			Consolidated
Sales revenue:
External customers	¥	607,190	¥	1,849,299	¥	122,244	¥	949,803	¥	160,249	¥	3,688,785	¥	—		¥	3,688,785
Inter-geographic areas		514,470		104,766		8,779		181,501		2,340		811,856		(811,856	)		—
Total		1,121,660		1,954,065		131,023		1,131,304		162,589		4,500,641		(811,856	)		3,688,785
Operating profit (loss)	¥	11,614	¥	134,619	¥	4,897	¥	98,383	¥	1,575	¥	251,088	¥	(21,639	)	¥	229,449

Explanatory notes:

1. Major countries in each geographic area:

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

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

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

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

5. Reconciling items include elimination of inter-geographic transactions and balances as well as unallocated corporate assets. Unallocated corporate assets, included in reconciling items as of December 31, 2020 and 2021 amounted to ¥931,069 million and ¥847,711 million, respectively, which consist primarily of the Company’s cash and cash equivalents and financial assets measured at fair value through other comprehensive income.

(5) Reversal of impairment loss on investments accounted for using the equity method

For the nine months ended December 31, 2020, upon the successful completion of the tender offers targeting our former affiliates which were Keihin Corporation, Showa Corporation and Nissin Kogyo Co., Ltd. (collectively, the “Target Companies”), the Company recognized reversal of impairment losses of ¥56,849 million which had been previously recognized on the investments in certain Target Companies accounted for using the equity method, based on quoted market values which had increased since the announcement of the tender offers. 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 nine months ended December 31, 2021, the Company did not recognize any significant reversal of impairment losses.

(6) Equipment on Operating Leases

The additions to equipment on operating leases for the nine months ended December 31, 2020 and 2021 are ¥1,482,193 million and ¥1,636,938 million, respectively.

The sales or disposals of equipment on operating leases for the nine months ended December 31, 2020 and 2021 are ¥764,146 million and ¥976,175 million, respectively.

(7) Property, Plant and Equipment

The additions to property, plant and equipment for the nine months ended December 31, 2020 and 2021 are ¥251,576 million and ¥242,976 million, respectively.

The sales or disposals of property, plant and equipment for the nine months ended December 31, 2020 and 2021 are ¥29,340 million and ¥21,982 million, respectively.

6

HONDA MOTOR CO., LTD. AND SUBSIDIARIES

Notes to Condensed Consolidated Interim Financial Statements

(8) Provisions

The components of and changes in provisions for the nine months ended December 31, 2021 are as follows:

	Yen (millions)
	Product warranties*			Other			Total
Balance as of April 1, 2021	¥	481,023		¥	160,018		¥	641,041
Provision	¥	85,742		¥	4,947		¥	90,689
Write-offs		(135,208	)		(77,107	)		(212,315	)
Reversal		(14,406	)		(1,600	)		(16,006	)
Exchange differences on translating foreign operations		8,786			3,054			11,840
Balance as of December 31, 2021	¥	425,937		¥	89,312		¥	515,249

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

	Yen (millions)
	As of March 31, 2021		As of December 31, 2021
Current liabilities	¥	362,151	¥	262,373
Non-current liabilities		278,890		252,876
Total	¥	641,041	¥	515,249

Explanatory note:

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

7

HONDA MOTOR CO., LTD. AND SUBSIDIARIES

Notes to Condensed Consolidated Interim Financial Statements

(9) Sales Revenue

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

The sales revenue disaggregated by geographical markets based on the location of the customer and the reconciliation of the disaggregated revenue with the four reportable segments for the nine months ended December 31, 2020 and 2021 are as follows:

For the nine months ended December 31, 2020

	Yen (millions)
	Motorcycle Business		Automobile Business		Financial Services Business		Life Creation and Other Businesses		Total
Revenue arising from Contracts with Customers
Japan	¥	63,671	¥	936,043	¥	91,615	¥	41,826	¥	1,133,155
North America		143,742		3,408,131		778,483		98,425		4,428,781
Europe		93,641		213,196		—		39,724		346,561
Asia		802,575		1,472,728		1		34,844		2,310,148
Other Regions		152,863		167,147		—		12,079		332,089
Total	¥	1,256,492	¥	6,197,245	¥	870,099	¥	226,898	¥	8,550,734
Revenue arising from the other sources*		1,681		10,483		983,542		273		995,979
Total	¥	1,258,173	¥	6,207,728	¥	1,853,641	¥	227,171	¥	9,546,713
				��
For the nine months ended December 31, 2021
	Yen (millions)
	Motorcycle Business		Automobile Business		Financial Services Business		Life Creation and Other Businesses		Total
Revenue arising from Contracts with Customers
Japan	¥	78,716	¥	964,125	¥	100,930	¥	56,945	¥	1,200,716
North America		176,848		3,610,940		970,204		117,671		4,875,663
Europe		149,675		238,051		—		51,988		439,714
Asia		942,846		1,636,675		30		47,379		2,626,930
Other Regions		252,477		212,109		—		17,807		482,393
Total	¥	1,600,562	¥	6,661,900	¥	1,071,164	¥	291,790	¥	9,625,416
Revenue arising from the other sources*		1,534		6,757		1,043,171		135		1,051,597
Total	¥	1,602,096	¥	6,668,657	¥	2,114,335	¥	291,925	¥	10,677,013

Explanatory note:

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

8

HONDA MOTOR CO., LTD. AND SUBSIDIARIES

Notes to Condensed Consolidated Interim Financial Statements

For the three months ended December 31, 2020

	Yen (millions)
	Motorcycle Business		Automobile Business		Financial Services Business		Life Creation and Other Businesses		Total
Revenue arising from Contracts with Customers
Japan	¥	19,699	¥	334,622	¥	30,291	¥	17,483	¥	402,095
North America		48,628		1,478,347		257,062		32,093		1,816,130
Europe		22,540		76,339		—		14,022		112,901
Asia		335,336		621,458		—		12,376		969,170
Other Regions		64,525		72,275		—		4,851		141,651
Total	¥	490,728	¥	2,583,041	¥	287,353	¥	80,825	¥	3,441,947
Revenue arising from the other sources*		129		2,149		327,196		148		329,622
Total	¥	490,857	¥	2,585,190	¥	614,549	¥	80,973	¥	3,771,569
For the three months ended December 31, 2021
	Yen (millions)
	Motorcycle Business		Automobile Business		Financial Services Business		Life Creation and Other Businesses		Total
Revenue arising from Contracts with Customers
Japan	¥	24,897	¥	341,810	¥	35,397	¥	22,562	¥	424,666
North America		62,516		1,192,577		288,582		38,607		1,582,282
Europe		36,689		66,695		—		17,545		120,929
Asia		363,817		652,468		17		19,735		1,036,037
Other Regions		89,278		77,448		—		6,772		173,498
Total	¥	577,197	¥	2,330,998	¥	323,996	¥	105,221	¥	3,337,412
Revenue arising from the other sources*		1,169		2,390		347,781		33		351,373
Total	¥	578,366	¥	2,333,388	¥	671,777	¥	105,254	¥	3,688,785

Explanatory note:

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

9

HONDA MOTOR CO., LTD. AND SUBSIDIARIES

Notes to Condensed Consolidated Interim Financial Statements

(10) 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.

10

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 the 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.

Price book-value ratio (PBR) of a comparable company are used as a significant unobservable input in the fair value measurement of equity securities classified as Level 3. The fair value increases (decreases) as PBR of a comparable company rise (decline). 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 LIBOR rates, swap 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.

11

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, 2021 and December 31, 2021 consist of the following:

	Yen (millions)
As of March 31, 2021	Level 1		Level 2		Level 3		Total
Other financial assets:
Financial assets measured at fair value through profit or loss:
Derivatives
Foreign exchange instruments	¥	—	¥	43,782	¥	—	¥	43,782
Interest rate instruments		—		60,367		—		60,367
Other		—		—		4,829		4,829
Total		—		104,149		4,829		108,978
Debt securities		26,570		36,439		5,314		68,323
Financial assets measured at fair value through other comprehensive income:
Debt securities		—		10,134		—		10,134
Equity securities		234,155		—		110,050		344,205
Total	¥	260,725	¥	150,722	¥	120,193	¥	531,640
Other financial liabilities:
Financial liabilities measured at fair value through profit or loss:
Derivatives
Foreign exchange instruments	¥	—	¥	17,343	¥	—	¥	17,343
Interest rate instruments		—		64,913		—		64,913
Total		—		82,256		—		82,256
Total	¥	—	¥	82,256	¥	—	¥	82,256

  There were no transfers between Level 1 and Level 2 for the year ended March 31, 2021.

	Yen (millions)
As of December 31, 2021	Level 1		Level 2		Level 3		Total
Other financial assets:
Financial assets measured at fair value through profit or loss:
Derivatives
Foreign exchange instruments	¥	—	¥	27,718	¥	—	¥	27,718
Interest rate instruments		—		59,913		—		59,913
Other		—		—		4,607		4,607
Total		—		87,631		4,607		92,238
Debt securities		41,997		54,842		4,372		101,211
Financial assets measured at fair value through other comprehensive income:
Debt securities		—		17,627		—		17,627
Equity securities		352,746		—		119,017		471,763
Total	¥	394,743	¥	160,100	¥	127,996	¥	682,839
Other financial liabilities:
Financial liabilities measured at fair value through profit or loss:
Derivatives
Foreign exchange instruments	¥	—	¥	28,128	¥	—	¥	28,128
Interest rate instruments		—		35,695		—		35,695
Total		—		63,823		—		63,823
Total	¥	—	¥	63,823	¥	—	¥	63,823

There were no transfers between Level 1 and Level 2 for the nine months ended December 31, 2021.

12

HONDA MOTOR CO., LTD. AND SUBSIDIARIES

Notes to Condensed Consolidated Interim Financial Statements

There were no significant effects of the measurements on profit or loss or other comprehensive income in Level 3 assets and liabilities measured at fair value on a recurring basis for the nine months ended December 31, 2021.

   (d) Financial Assets and Financial Liabilities measured at amortized cost

The carrying amounts and fair values of financial assets and financial liabilities measured at amortized cost as of March 31, 2021 and December 31, 2021 are as follows:

	Yen (millions)
	As of March 31, 2021				As of December 31, 2021
	Carrying amount		Fair value		Carrying amount		Fair value
Receivables from financial services	¥	5,414,550	¥	5,488,065	¥	5,287,441	¥	5,338,370
Debt securities		173,302		173,302		214,237		214,237
Financing liabilities		7,720,985		7,809,379		7,589,741		7,631,960

The table does not include financial assets and financial liabilities measured at amortized cost whose fair values approximate their carrying amounts.

(11) Contingent Liabilities

Claims and Lawsuits

Honda is subject to potential liability under various lawsuits and claims. Honda recognizes a provision for loss contingencies 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. Honda reviews these pending lawsuits and claims periodically and adjusts the amounts recognized for these contingent liabilities, if necessary, by considering the nature of lawsuits and claims, the progress of the case and the opinions of legal counsel.

With respect to product liability, personal injury claims or lawsuits, Honda believes that any judgment that may be recovered by any plaintiff for general and special damages and court costs will be adequately covered by Honda’s insurance and provision. Punitive damages are claimed in certain of these lawsuits.

After consultation with legal counsel, and taking into account all known factors pertaining to existing lawsuits and claims, Honda believes that the ultimate outcome of such lawsuits and pending claims should not result in liability to Honda that would be likely to have an adverse material effect on its consolidated financial position or results of operations.

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.

13

HONDA MOTOR CO., LTD. AND SUBSIDIARIES

Notes to Condensed Consolidated Interim Financial Statements

(12) Earnings Per Share

Earnings per share attributable to owners of the parent for the nine months ended December 31, 2020 and 2021 are calculated based on the following information. There were no significant dilutive potential common shares outstanding for the nine months ended December 31, 2020 and 2021.

	2020		2021
Profit for the period attributable to owners of the parent (millions of yen)	¥	444,102	¥	582,169
Weighted average number of common shares outstanding, basic (shares)		1,726,634,998		1,722,778,664
Basic earnings per share attributable to owners of the parent (yen)	¥	257.21	¥	337.92

Earnings per share attributable to owners of the parent for the three months ended December 31, 2020 and 2021 are calculated based on the following information. There were no significant dilutive potential common shares outstanding for the three months ended December 31, 2020 and 2021.

	2020		2021
Profit for the period attributable to owners of the parent (millions of yen)	¥	284,051	¥	192,960
Weighted average number of common shares outstanding, basic (shares)		1,726,645,596		1,716,433,911
Basic earnings per share attributable to owners of the parent (yen)	¥	164.51	¥	112.42

(13) Dividend

Dividend payout

For the nine months ended December 31, 2020

Resolution	The Board of Directors Meeting on May 12, 2020
Type of shares	Common shares
Total amount of dividends (millions of yen)	48,363
Dividend per share (yen)	28.00
Record date	March 31, 2020
Effective date	June 3, 2020

Resolution	The Board of Directors Meeting on August 5, 2020
Type of shares	Common shares
Total amount of dividends (millions of yen)	18,999
Dividend per share (yen)	11.00
Record date	June 30, 2020
Effective date	September 4, 2020

Resolution	The Board of Directors Meeting on November 6, 2020
Type of shares	Common shares
Total amount of dividends (millions of yen)	32,818
Dividend per share (yen)	19.00
Record date	September 30, 2020
Effective date	December 2, 2020

14

HONDA MOTOR CO., LTD. AND SUBSIDIARIES

Notes to Condensed Consolidated Interim Financial Statements

For the nine months ended December 31, 2021

Resolution	The Board of Directors Meeting on May 14, 2021
Type of shares	Common shares
Total amount of dividends (millions of yen)	93,272
Dividend per share (yen)	54.00
Record date	March 31, 2021
Effective date	June 7, 2021

Resolution	The Board of Directors Meeting on November 5, 2021
Type of shares	Common shares
Total amount of dividends (millions of yen)	95,130
Dividend per share (yen)	55.00
Record date	September 30, 2021
Effective date	December 1, 2021

(14) Approval of Release of Condensed Consolidated Interim Financial Statements

The release of the condensed consolidated interim financial statements was approved by Toshihiro Mibe, Director, President and Representative Executive Officer and Kohei Takeuchi, Director, Senior Managing Executive Officer and Chief Financial Officer on February 10, 2022.

[Translation]

February 18, 2022

To: Shareholders of Honda Motor Co., Ltd.

From: Honda Motor Co., Ltd.

1-1, Minami-Aoyama 2-chome,

Minato-ku, Tokyo, 107-8556

Toshihiro Mibe

Director, President and Representative Executive Officer

Notice Concerning Changes in Representative Executive Officers, Directors and Officers

Honda Motor Co., Ltd. (the “Company”) hereby announces that its Nominating Committee today made an internal decision on the following personnel changes in its Directors to become effective as of the date of the Ordinary General Meeting of Shareholders of the Company scheduled to be held in June 2022, and that its Board of Directors today decided on personnel changes in its Representative Executive Officers, Directors, Executive Officers and Operating Officers to become effective as of April 1, 2022.

The personnel changes in Directors to become effective as of the date of the Ordinary General Meeting of Shareholders scheduled to be held in June 2022 shall be formally determined at that Ordinary General Meeting of Shareholders, and the personnel changes in Executive Officers to become effective as of such date shall be formally determined at a meeting of the Board of Directors scheduled to be held on that same day.

Particulars

1. Planned Personnel Changes in Representative Executive Officers

<As of April 1, 2022>

Persons to be or to retire Representative Executive Officers

Name	Current Title	New Title
Seiji Kuraishi	Director, Executive Vice President and Representative Executive Officer	Chairman and Director
Kohei Takeuchi	Director, Senior Managing Executive Officer	Director, Executive Vice President and Representative Executive Officer

Reason for personnel change:

In order to promote company transformations that enable further growth and value creation under a new management team going forward.

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2. Planned Personnel Changes in Directors

<As of April 1, 2022>

Name	Current Title	New Title
Toshiaki Mikoshiba	Chairman and Director	Director

<As of the date of the Ordinary General Meeting of Shareholders to be held in June 2022>

Candidate for Director to be newly appointed

Name	Current Title	New Title
Shinji Aoyama	Managing Executive Officer	Director, Senior Managing Executive Officer

Shinji Aoyama is scheduled to be promoted from Managing Executive Officer to Senior Managing Executive Officer as of April 1, 2022.

Director to retire

Name	Current Title
Toshiaki Mikoshiba	Chairman and Director

3. Planned Personnel Changes in Executive Officers

<As of April 1, 2022>

Executive Officers to be promoted

Name	Current Title	New Title
Shinji Aoyama	Managing Executive Officer	Senior Managing Executive Officer
Yasuhide Mizuno	Managing Executive Officer	Senior Managing Executive Officer

4. Planned Personnel Changes in Operating Officers

<As of April 1, 2022>

Operating Officer to be promoted

Name	Current Title	New Title
Hisao Takahashi	Managing Officer	Senior Managing Officer

Operating Officers to be newly appointed

Name	Current Title	New Title
Masayuki Igarashi	Operating Executive	Managing Officer
Kensuke Oe	Operating Executive	Managing Officer

Operating Officer to retire

Name	Current Title
Michimasa Fujino	Managing Officer

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<For Reference>

Compositions of Directors and Officers as of April 1, 2022 and as of the date of the Ordinary General Meeting of Shareholders to be held in June 2022

Name	As of April 1, 2022	As of the date of the Ordinary General Meeting of Shareholders
Seiji Kuraishi	Chairman and Director*1	Chairman and Director
Toshihiro Mibe	Director, President and Representative Executive Officer	Director, President and Representative Executive Officer
Kohei Takeuchi	Director, Executive Vice President and Representative Executive Officer*1	Director, Executive Vice President and Representative Executive Officer
Shinji Aoyama	Senior Managing Executive Officer*1	Director, Senior Managing Executive Officer*2
Toshiaki Mikoshiba	Director	—
Asako Suzuki	Director	Director
Masafumi Suzuki	Director	Director
Kunihiko Sakai	Director*3	Director*3
Fumiya Kokubu	Director*3	Director*3
Yoichiro Ogawa	Director*3	Director*3
Kazuhiro Higashi	Director*3	Director*3
Ryoko Nagata	Director*3	Director*3
Yasuhide Mizuno	Senior Managing Executive Officer*1	Senior Managing Executive Officer
Noriaki Abe	Managing Executive Officer	Managing Executive Officer
Keiji Ohtsu	Managing Executive Officer	Managing Executive Officer
Hisao Takahashi	Senior Managing Officer*1	Senior Managing Officer
Noriya Kaihara	Managing Officer	Managing Officer
Mitsugu Matsukawa	Managing Officer	Managing Officer
Katsushi Inoue	Managing Officer	Managing Officer
Yoshishige Nomura	Managing Officer	Managing Officer
Masayuki Igarashi	Managing Officer*2	Managing Officer
Kensuke Oe	Managing Officer*2	Managing Officer

*¹  To be promoted

*²  To be newly appointed

*³  Outside Directors

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As of February 18, 2022

Resume of Representative Executive Officer to be newly appointed

Kohei TAKEUCHI

Date of Birth:    February 10, 1960 (62 years old)

Professional Experience:

April	1982	Joined Honda Motor Co., Ltd.
April	2013	Chief Officer, Business Management Operations, Honda Motor Co., Ltd. Chief Financial Officer, Honda Motor Co., Ltd.
June	2013	Operating Officer and Director, Honda Motor Co., Ltd.
April	2015	Managing Officer and Director, Honda Motor Co., Ltd.
April	2016	Senior Managing Officer and Director, Honda Motor Co., Ltd. Chief Officer, Driving Safety Promotion Center, Honda Motor Co., Ltd.
April	2017	Chief Financial Officer (Accounting, Finance, Human Resources, Corporate Governance and IT), Honda Motor Co., Ltd.
June	2017	Senior Managing Director, Honda Motor Co., Ltd.
April	2019	Chief Financial Officer and Director in Charge of Finance and Administration (Accounting, Finance, Human Resources, Corporate Governance and IT), Honda Motor Co., Ltd. Compliance Officer, Honda Motor Co., Ltd.
April	2020	Chief Financial Officer and Director in Charge of Finance and Administration (Accounting, Finance, Human Resources and Corporate Governance), Honda Motor Co., Ltd.
April	2021	Chief Financial Officer, Honda Motor Co., Ltd.
June	2021	Director, Senior Managing Executive Officer, Honda Motor Co., Ltd.

Number of shares held: 31,700 shares

*Current responsibilities in boldface

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As of February 18, 2022

Resume of Candidate for Director to be newly appointed

Shinji AOYAMA

Date of Birth:    December 25, 1963 (58 years old)

Professional Experience:

April	1986	Joined Honda Motor Co., Ltd.
April	2012	Operating Officer, Honda Motor Co., Ltd.
April	2013	Chief Officer, Motorcycle Operations, Honda Motor Co., Ltd.
June	2013	Operating Officer and Director, Honda Motor Co., Ltd.
April	2017	Chief Officer, Regional Operations (Asia & Oceania), Honda Motor Co., Ltd. President and Director, Asian Honda Motor Co., Ltd.
June	2017	Operating Officer, Honda Motor Co., Ltd. (retired as a Director)
April	2018	Managing Officer, Honda Motor Co., Ltd. Vice Chief Officer, Regional Operations (North America), Honda Motor Co., Ltd. Senior Executive Vice President, Chief Operating Officer and Director, Honda North America, Inc. Senior Executive Vice President, Chief Operating Officer and Director, American Honda Motor Co., Inc.
November	2018	President, Chief Operating Officer and Director, Honda North America, Inc. President, Chief Operating Officer and Director, American Honda Motor Co., Inc.
April	2019	Chief Officer, Regional Operations (North America), Honda Motor Co., Ltd. President, Chief Executive Officer and Director, Honda North America, Inc. President, Chief Executive Officer and Director, American Honda Motor Co., Inc.
July	2021	Officer in Charge of Electrification, Honda Motor Co., Ltd.
October	2021	Managing Executive Officer, Honda Motor Co., Ltd.

Number of shares held: 35,900 shares

*Current responsibilities in boldface

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