Honda Motor Reports Consolidated Financial Results for the Fiscal Third Quarter and the Fiscal Nine-month Period Ended December 31, 2011

FYI: Honda Buyer's Guide

TOKYO--Jan. 31, 2012: Honda Motor Co., Ltd. today announced its consolidated financial results for the fiscal third quarter ended December 31, 2011.

Honda's consolidated net income attributable to Honda Motor Co., Ltd. for the fiscal third quarter ended December 31, 2011 totaled JPY 47.6 billion (USD 613 million), a decrease of 41.2% from the same period last year. Basic net income attributable to Honda Motor Co., Ltd. per common share for the quarter amounted to JPY 26.45 (USD 0.34), a decrease of JPY 18.56 (USD 0.24) from JPY 45.01 for the corresponding period last year. One Honda American Depository Share represents one common share.

Consolidated net sales and other operating revenue (herein referred to as "revenue") for the quarter amounted to JPY 1,942.5 billion (USD 24,988 million), a decrease of 8.0% from the same period last year, due primarily to decreased revenue in the automobile business due to the supply chain disruption mainly caused by Thailand flood and the unfavorable foreign currency translation effects, despite increased revenue in the motorcycle business. Honda estimates that if calculated at the same exchange rate as the corresponding period last year, revenue for the quarter would have decreased by approximately 1.7%.

Consolidated operating income for the quarter amounted to JPY 44.2 billion (USD 570 million), a decrease of 64.7% from the same period last year, due primarily to a decrease in sales volume and model mix, an increase in fixed costs per unit as production volume decreased, the impact of raw material price increases and the unfavorable foreign currency effect.

Consolidated income before income taxes and equity in income of affiliates for the quarter totaled JPY 58.4 billion (USD 752 million), a decrease of 55.5% from the same period last year.

Equity in income of affiliates amounted to JPY 22.9 billion (USD 295 million) for the quarter, a decrease of 47.3% from the corresponding period last year due mainly to declined income in affiliated companies in China due to decreased sales and production caused by supply-chain disruption after the Great East Japan Earthquake occurred on March 11, 2011 (the "Earthquake").

With respect to Honda's sales for the fiscal third quarter by business segment, motorcycle unit sales totaled 3,076 thousand units, an increase of 6.3% from the same period last year due mainly to increased unit sales in Asia and other regions including South America. Revenue from sales to external customers increased 0.2%, to JPY 302.5 billion (USD 3,892 million), from the same period last year, due mainly to increased unit sales, despite unfavorable foreign currency translation effects. Operating income totaled to JPY 25.8 billion (USD 333 million), a decrease of 11.2% from the same period last year, due primarily to increased SG&A expenses and unfavorable foreign currency effects, despite an increase in sales volume and model mix.

Honda's automobile unit sales totaled 830 thousand units, a decrease of 2.9% from the same period last year due to decreased unit sales mainly in Asia primarily caused by the impact of the Thailand flood. Revenue from sales to external customers decreased 10.1%, to JPY 1,451.0 billion (USD 18,665 million), from the same period last year due mainly to a decrease in sales unit and unfavorable currency translation effects. Honda reported an operating loss of JPY 16.9 billion (USD 219 million), a decrease of JPY 85.3 billion (USD 1,098 million) from the same period last year, due primarily to a decrease in sales volume and model mix, the impact of raw material price increases, increased R&D expenses and unfavorable currency effects, despite decreased SG&A expenses.

Revenue from customers in the financial services business decreased 8.5%, to JPY 124.8 billion (USD 1,605 million) from the same period last year due mainly to the unfavorable foreign currency translation effects. Operating income decreased 15.7% to JPY 37.5 billion (USD 484 million) from the same period last year due mainly to the unfavorable foreign currency effects.

Honda's power product unit sales totaled 1,021 thousand units, a decrease of 11.8% from the same period last year due to decreased unit sales in all regions. Revenue from sales to external customers in power product and other businesses decreased 5.8%, to JPY 64.0 billion (USD 824 million), from the same period last year, due mainly to decreased unit sales in power products and the unfavorable currency translation effects. Honda reported an operating loss of JPY 2.1 billion (USD 28 million), a deterioration of JPY 0.1 billion from the same period last year due mainly to unfavorable foreign currency effects.

Forecasts for the Fiscal Year Ending March 31, 2012

In regard to the forecasts of the financial results for the fiscal year ending March 31, 2012, Honda projects consolidated results to be as shown below:

The forecasts are based on the assumption that the average exchange rates for the Japanese yen to the U.S. dollar and the Euro will be JPY 78 and JPY 106, respectively, for the fiscal full year ending March 31, 2012.

Projected unit sales for the full year ending March 31, 2012 are shown below.

FY2012 Forecasts for Consolidated Results

Fiscal year ending March 31, 2012

Dividend per Share of Common Stock

The Board of Directors of Honda Motor Co., Ltd., at its meeting held on January 31, 2012, resolved to make the quarterly dividend JPY 15 per share of common stock, the record date of which is December 31, 2011.  The total expected annual dividend per share of common stock for the fiscal year ending March 31, 2012, is JPY 60 per share.

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 Honda's actual results could differ materially from those described in these forward-looking statements as a result of numerous factors, including general economic conditions in Honda's principal markets and foreign exchange rates between the Japanese yen and the U.S. dollar, the Euro and other major currencies, as well as other factors detailed from time to time.