Annual Report 2014

Year Ended March 31, 2014

Honda Motor Co., Ltd.

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Honda Motor Co., Ltd. Annual Report 2014

1 The Power of Dreams 2 Financial Highlights
Corporate Profile

3 To Our Shareholders

4 Review of Operations 5 Corporate Governance 6 Financial Section

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contents page

01

Relations
Information
7 Investor

Honda Motor Co., Ltd., operates under the basic principles of “Respect for the Individual” and “The Three
Joys”—expressed as “The Joy of Buying,” “The Joy of Selling” and “The Joy of Creating.” “Respect for the
­Individual” reflects our desire to respect the unique character and ability of each individual person, trusting
each other as equal partners in order to do our best in every situation. Based on this, “The Three Joys”
express our belief and desire that each person working in or coming into contact with our company, directly
or through our products, should share a sense of joy through that experience.
   In line with these basic principles, since its establishment in 1948, Honda has remained on the leading
edge by creating new value and providing products of the highest quality at a reasonable price, for worldwide customer ­satisfaction. In addition, the Company has conducted its activities with a commitment to
protecting the environment and enhancing safety in a mobile society.
   The Company has grown to become the world’s largest motorcycle manufacturer and one of the leading automakers. With a global network of 365* subsidiaries and 83* affiliates accounted for under the equity
method, Honda develops, manufactures and markets a wide variety of products to earn the Company an
outstanding ­reputation from customers worldwide.
* As of March 31, 2014

VEZEL
On the Cover: Fit (Japan model)

On the Profile: VEZEL (Japan model)

The all-new third generation Fit, which went on sale in September 2013 in Japan, once again sets the
global compact automobile benchmark. This all-new Fit features a completely redesigned powertrain and
body and offers a whole new level of interior comfort, fuel economy, styling and driving performance.

The VEZEL, which went on sale in December 2013 in Japan is a new vehicle that belongs to a new category
of automobiles that fuses together multifaceted values, including the dynamic qualities of an SUV, the
elegance of a coupe, the functionality of a minivan and excellent fuel economy, at a high level.

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Honda Motor Co., Ltd. Annual Report 2014

1 The Power of Dreams 2 Financial Highlights

3 To Our Shareholders

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contents page

4 Review of Operations 5 Corporate Governance 6 Financial Section

02

Relations
Information
7 Investor

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and extensive environmental and other governmental regulations. foreign exchange rates between the Japanese yen and the U. as amended.. as amended. the Euro and other major currencies. 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. dollar. Annual Report 2014 1 The Power of Dreams 2 Financial Highlights Contents 1 3 To Our Shareholders The Power of Dreams page 04 4 Review of Operations 5 Corporate Governance 6 Financial Section 4 Review of Operations 14 Motorcycle Business page 13 5 Go to contents page 03 Relations Information 7 Investor Corporate Governance page 23 23 Risk Factors 27 Corporate Governance 28 Board of Directors.S. Therefore. Such statements are based on management’s assumptions and beliefs. and Section 21E of the Securities Exchange Act of 1934. Ltd. . taking into account information currently available to it.Return to last page opened Honda Motor Co. Corporate Auditors and Operating Officers 17 Automobile Business 2 Financial Highlights page 05 3 To Our Shareholders page 07 6 20 Power Product and Other Businesses 31 46 47 48 Takanobu Ito President & Chief Executive Officer Services Business page 31 57 59 Financial Review Consolidated Balance Sheets Consolidated Statements of Income Consolidated Statements of Comprehensive Income Consolidated Statements of Changes in Equity Consolidated Statements of Cash Flows Segment Information Consolidated Balance Sheets Divided Into Non-Financial Services Businesses and Finance Subsidiaries Consolidated Statements of Cash Flows Divided into Non-Financial Services Businesses and Finance Subsidiaries Financial Summary Selected Quarterly Financial Data 7 Investor Relations Information 49 22 Financial Financial Section 50 51 55 56 page 60 Caution with Respect to Forward-Looking Statements This annual report contains “forward-looking statements” as defined in Section 27A of the Securities Act of 1933. including general economic conditions in Honda’s principal markets. as well as other factors detailed from time to time.

Ltd. we base our sales networks. as a socially responsible corporate citizen. To meet the particular needs of customers in different regions around the world. and manufacturing facilities in each region.. we strive to address important environmental and safety issues. Annual Report 2014 1 The Power of Dreams 2 Financial Highlights 3 To Our Shareholders 4 Review of Operations 5 Corporate Governance 6 Financial Section Go to contents page 04 Relations Information 7 Investor Acura TLX The Power of Dreams Dreams inspire us to create innovative products that enhance mobility and benefit society. research and development centers. .Return to last page opened Honda Motor Co. Furthermore.

. Annual Report 2014 1 The Power of Dreams 2 Financial Highlights 3 To Our Shareholders 05 Go to contents page Relations Information 7 Investor 4 Review of Operations 5 Corporate Governance 6 Financial Section Financial Highlights Years ended March 31 Net Sales and Other Operating Revenue Operating Income / Operating Margin Yen (billions) Yen (billions) 12.. Ltd.14 yen 10 11 12 13 14 Capital Expenditures (Excluding ­Purchase of Operating Lease Assets) Depreciation (Excluding Property on Operating Leases) 2014 Total Assets 15.4 billion yen % Net Income Attributable to Honda Motor Co. Shareholders’ Equity per Common Share Capital Expenditures (Excluding ­Purchase of Operating Lease Assets) / Depreciation (Excluding Property on Operating Leases) (%) Yen (billions) 600 15 16.0 200 2.1 10..9 Yen (billions) Capital Expenditures (Excluding ­Purchase of Operating Lease Assets) 782 billion yen Depreciation (Excluding Property on Operating Leases) 442. Ltd... Ltd.000 3.000 0 10 11 12 13 800 8.4 Equity in Income of Affiliates (%) billion yen 12 13 0 14 150 100 50 0 10 11 12 13 14 Operating Margin (%) (right scale) 2014 Operating Income 750. Shareholders’ Equity per Common Share (right scale) 2014 billion yen Total Honda Motor Co.. Shareholders’ Equity / Total Honda Motor Co.2 6.3 Yen (billions) billion yen Operating Margin Equity in Income of Affiliates 132.. 574.0 600 6.000 4.. Ltd. Ltd.000 600 8. Ltd.0 0 14 10 11 Operating Income (left scale)   2014 2014 Net Sales and Other Operating Revenue 11. (left scale) Return on Equity (%) (right scale) 2014 Net Income Attributable to Honda Motor Co.000 8. Ltd. Shareholders’ Equity (left scale) Total Honda Motor Co. / Return on Equity Yen (billions) Total Assets / Total Honda Motor Co.Return to last page opened Honda Motor Co.918.0 400 4.842..000 4. Ltd. Shareholders’ Equity per Common Share 3. Shareholders’ Equity billion yen Total Honda Motor Co.000 200 0 0 200 0 5 10 11 12 13 14 Net Income Attributable to Honda Motor Co.284.000 800 400 10 12. Ltd.3 billion yen .000 2..5 billion yen Return on Equity % 0 0 (Yen) 10 11 12 13 14 Total Assets (left scale)  Total Honda Motor Co.000 1.622 5.000 400 4. Ltd.

71 72 2.91 34 2.043.902 1.787.149 129. Dividends paid Total Honda Motor Co. dollar) Rates for the period-end Average rates for the period * Shareholders’ equity ratio: Honda Motor Co.538 (673.463.230) 1.948.398 15..2% 37.524 11.914 ¥    147.105 5.229.096..024 761.35 ¥    203.34 60 2.069.191 (1.37 ¥    318. Annual Report 2014 1 The Power of Dreams 2 Financial Highlights 3 To Our Shareholders 4 Review of Operations 5 Corporate Governance 6 Financial Section Go to contents page 06 Relations Information 7 Investor Financial Highlights Fiscal years ended March 31 Yen (millions except per share data) Net sales and other operating revenue Operating income Operating margin Income before income taxes and equity in income of affiliates Equity in income of affiliates Net income attributable to Honda Motor Co.867 569.400 61.891 82.408 335.567 1.45 ¥    295.577.451 750.500 630.284.206..4% 38.482 108.2% 336. shareholders’ equity Shareholders’ equity ratio* Return on equity Exchange rate (Yen amounts per U.775 4..270 634.583 11.810 5.744) 370.328.385.696 ¥ 8.192) 1.613 (731.743 4.247.027 442.536 6.130 4.947 544.591 519.8% 37.544.723 367.440.138 ¥ 9.877.756 534.212 (595.548 139.640 348.714 4.115 4.318 1.818 560.088 92.54 79 3. Shareholders’ equity / Total assets.249 424.629.708.095 231.572.14 37. Ltd.113.403 100.S.430 11.622.205.168.8% 37.174 363.9% 257. Ltd.279.940 132. Ltd.3% 728.0% 7. Ltd.5% 488.413 345.579.4% 630.3% 4..113 800.798. shareholders’ equity Capital expenditures (excluding purchase of operating lease assets) Depreciation (excluding property on operating leases) Cash flows from operating activities Cash flows from investing activities Cash flows from financing activities Cash and cash equivalents at end of year Per share data (Yen) Net income attributable to Honda Motor Co.751) (559.979 782.635.069) (68.599 4.282 268.364 2.Return to last page opened Honda Motor Co.765 ¥11.2% 6. Ltd.406 211.272 4.525.281 6.119..390) (126.5% ¥        93 93 ¥        83 86 ¥        82 79 ¥        94 83 ¥       103 100 .936.67 51 2. 2010 2011 2012 2013 2014 ¥ 8.842. Ltd.555 1.423 13.620 377.031 5.198 93.981 401. Cash dividends paid during the period Research and development Total equity Total assets Total Honda Motor Co.357 5.381 463.744 (1.354 487.170 ¥ 7.587 326.439.9% 10.398.918.456.756) 119.128 1.107 142.471 574.775 6.3% 12.244) 1.29 ¥    117.

Return to last page opened Honda Motor Co. Annual Report 2014 1 The Power of Dreams 2 Financial Highlights 3 To Our Shareholders 4 Review of Operations 5 Corporate Governance 6 Financial Section Takanobu Ito President & Chief Executive Officer To Our Shareholders We would like to express our heartfelt thanks to all of our shareholders for your continued interest and ongoing support for Honda’s business activities. Go to contents page 07 Relations Information 7 Investor .. Your support has been vital to our growth and development. Ltd. We would also like to extend our sincere gratitude to all of our customers. suppliers and those who live in the local communities where Honda sites are ­situated.

sales increased in North America. and accelerate our initiative to create the most appropriate products for our customers in each field of ­business and each geographic region.” we have been striving to gain a better understanding of differences in the market environment and customer preferences for each business and each region and sharing such knowledge across the entire company.54. In Europe. an increase of 56. Consolidated net income amounted to ¥574. the Japanese economy recovered gradually as evidenced by some positive indexes including the improvement of the employment situation and an increase in consumer spending. Annual Report 2014 1 The Power of Dreams 2 Financial Highlights 3 To Our Shareholders During the fiscal year ended March 31. we started to see signs of economic recovery despite negative GDP growth. due mainly to increased revenue in both our automobile and motorcycle businesses and favorable currency effects.Return to last page opened Honda Motor Co. . Honda’s consolidated net sales and operating revenue for the fiscal year ended March 31. the U. Ltd. The “Lehman Shock” triggered changes in the global economic order. Honda strives to be a company society wants to exist. In Asia. In doing so. an increase of 19. whereas the pace of economic expansion decelerated in Thailand and became more gradual in India and Indonesia. Working toward our goal to “deliver good products to our customers with speed. Needless to say. production and purchasing. and since then. 2014 amounted to ¥11. In order for each of our business operations to build and maintain a highly competitive and robust structure in the midst of fierce competition. sales increased in Japan and North America due to the positive effect of new model introductions and full model changes. For our motorcycle business. prolonged high unemployment rates and other lingering weaknesses in the economy. affordability and low CO2 emissions. a gradual increase in consumer spending and the steady performance of the housing investment market. the mindset of our customers has been changing dramatically. Toward this end. the Chinese economy continued to expand.S. we are dealing with different sets of customers and market situations for each business area. we continue to take on more and more challenges and then deliver the fruit of our efforts to our customers in the form of concrete products and technologies. The same can be said for regional differences in the business environment.. Our ultimate goal is to make Honda products the “product of choice” for more customers in each business and region around the world and provide the highest satisfaction to our customers. For our automobile business.9% compared to the previous fiscal year. each operation must have a complete understanding of its own business environment and conduct its business while making decisions with a sense of speed and high motivation. due mainly to the positive effect of new model introductions. whereas sales experienced a year-on-year decline in some regions including Asia. Meanwhile.4% compared to the previous fiscal year. we will advance our corporate structure. In such an economic environment. and net income per share increased to ¥318. These changes further increased the importance of enhancing the global competitiveness of our business while identifying and sincerely fulfilling the needs of our customers proactively. which enables us to pursue manu­ facturing that fuses together development. automobiles and power products. Now. We believe Go to contents page 08 Relations Information 7 Investor that true globalization of our business means doing these two things simultaneously. For our power products business. sales increased in India and some other countries.4 billion.1 billion.842. economy continued its gradual recovery as demonstrated by some key economic indicators including an improved employment situation. 2014. 4 Review of Operations 5 Corporate Governance 6 Financial Section Future Initiatives Offering the most appropriate products to our customers while understanding differences in business and regional characteristics Honda operates in a broad range of business domains including motorcycles.

4 plant in Indonesia. in February of this year. where we have been significantly increasing unit sales by introducing highly competitive products in the 100cc segment. Furthermore. horizontally opposed. in the area of manufacturing. we are currently building a No. We will continue fulfilling the expectations of our customers by further highlighting uniqueness and through the improved performance of our products while realizing more affordable prices. and Production to establish a structure which enables the speedy and compact operation of our motorcycle business.6 million units. a new concept model unveiled in April 2014. the world’s largest market for commuter-type motorcycles. Combined with the capacity of existing plants. we consolidated our motorcycle development and procurement divisions at Kumamoto Factory.2 million units. we will strengthen the development of 250cc to 400cc medium-sized motorcycles so that we can also fulfill increasing demand for larger-sized models in emerging markets. we made a decision to build a No. The improvement of fuel economy and overall environmental performance enables our customers to reduce gasoline consumption and CO2 emissions. Our efforts include enhancement of the product line-up and improvement of the fuel economy of scooter models. these models represent the identity of Honda motorcycle products. In the area of motorcycle production. for which demand has increased rapidly in recent years. and the NM4-01. as well. the CB1100 road sports model that possesses traditional appeal and the VFR1200F sports tourer that fuses together advanced technologies and unique styling. 4 plant is scheduled to become operational in the second half of the fiscal year ending March 31. Go to contents page 09 Relations Information 7 Investor The “FUN” models are designed to realize high recreational values in pursuit of the joy of riding and ownership. 4 plant to accommodate the further growth of the motorcycle market in India. the largest segment within the motorcycle market in India. our unit sales is continuously expanding due to strong demand for commuter models in emerging markets. 3 plant in India. Highlighting the Honda brand by taking on new challenges in the art of manufacturing In the “FUN” segment that consists mainly of medium-tolarge-sized motorcycles. and we believe that is an added value that Honda can provide to our customers and their local communities. In addition to expanding our production capacity. Moreover.8 million units. we believe it is critical for us to highlight the Honda brand by being creative and taking on new challenges as we pursue the art of manufacturing. in order to heighten the level of our capability as a manufacturer. we have already expanded the annual production capacity of the No. as a part of our efforts to accommodate vigorous demand for motorcycles in emerging nations. Purchasing. In addition.Return to last page opened Honda Motor Co. under this new organizational structure. we are striving to increase the competitive strength of our products.. Ltd. This is especially true in India. In further response to the diversifying tastes and preferences of our customers. Moreover. Annual Report 2014 1 The Power of Dreams 2 Financial Highlights 3 To Our Shareholders Motorcycle Business Strengthening the competitiveness of our products by simultaneously enhancing product performance and achieving cost reduction In the motorcycle business. we have been enhancing our product line-up while positioning several key flagship models. Toward this end. we are striving to reduce costs by maximizing ­mass-­production scale merit by sharing common components while promoting the 4 Review of Operations 5 Corporate Governance 6 Financial Section unique characteristics in each of our diverse products. we newly appointed a Representative of Motorcycle ­Development. to 4. Such models include the Gold Wing ultimate touring machine ­powered by Honda’s proprietary. NM4-01 (Japan) . We will strive to further increase the efficiency of our motorcycle business in the “FUN” segment by highlighting Honda’s identity with largesized motorcycles and preparing for the future growth of the market for medium-sized models. which became operational in May 2013. this line-up of FUN models was even further enhanced with the addition of the all-new CTX1300 cruiser in February 2014.800cc engine. 2016 with an annual production capacity of 1. For that reason. 6-­cylinder 1. The No. Honda’s overall annual motorcycle production capacity in India will reach 5. At the same time. Furthermore.

we will continue strengthening our sales capability in Japan. Accord and other models. The N-BOX Series has been especially well received by a large number of customers due to its excellent features including class-top cabin space and outstanding fuel economy. We believe that it is an extremely important step for Honda to establish a strong position in Japan. To prepare for this. Designing these new plants exclusively for the production of small-sized vehicles. By doing so. by leveraging our experience in the transformation of our global operations. where demand for diesel models is high. we also are promoting a regional production approach which fuses together development. we have already introduced several new models including the N Series in Japan. production and purchasing and introducing such renovated systems and structures to our existing production plants around the world. The Amaze. We conducted a thorough survey and research to understand local needs and realized affordable prices through various efforts including an initiative to increase local content. 4 Review of Operations 5 Corporate Governance 6 Financial Section Advancing the regional autonomy of manufacturing through the fusion of development.. We expect new growth opportunities for Honda with the introduction of this highly competitive diesel powertrain in India. We advanced our product development capability beyond what we could possibly do under the traditional development system whose focus was more on major markets in advanced nations. At Sayama Plant of the Saitama Factory. so that Japan operations can maintain self reliance and demonstrate strong leadership. 2014. Honda has established a more rational and efficient production system. In the midst of such a market trend. The new approach enables us to deliver products that accommodate the needs of our customers in each region and further increases the growth potential of our automobile business.Return to last page opened Honda Motor Co. Amaze in India. demand for small-sized cars is expected to continue to grow in automobile markets around the world. Going forward. Both plants are dedicated to the production of smallsized vehicles in Japan and North America. is a model based on the Brio. the Global Compact Series. While focusing mainly on N Series mini-vehicles and compact cars such as Fit and VEZEL. production and purchasing in each region so that we can better fulfill the needs of our customers in each region. we will improve production efficiency at existing plants that produce Civic. Annual Report 2014 1 The Power of Dreams 2 Financial Highlights 3 To Our Shareholders Automobile Business Global strategy that enables us to create core models with strong competitiveness on a global basis Against a backdrop of heightened environmental awareness. The Fit underwent a full model change and went on sale in Japan in September 2013. We introduced Honda MOBILIO targeting the market for MPVs (multi-purpose vehicle) which have been very popular in Indonesia. Honda realized a production system that achieves both a highly competitive cost structure and vehicle specifications that fulfill the needs of customers in each region by establishing an efficient global parts sourcing structure in addition to utilizing the existing procurement and production infrastructure in each region. Honda MOBILIO in Indonesia and CRIDER in China. namely Fit.5-liter i-DTEC diesel engine which was newly-developed Go to contents page 10 Relations Information 7 Investor exclusively for the Indian market. which we introduced in India. Moreover. production and purchasing While advancing the production of global models. which started with the development of the all-new Fit (Jazz). Furthermore. which was developed under the leadership of our R&D operation in Thailand. These models are being well received by our customers and contributing to an increase in our automobile sales. CRIDER (China) . has been the core of Honda’s global strategy. The N Series mini-vehicles significantly enhanced the ­presence of Honda mini-vehicles in the Japanese automobile market where the ratio of mini-vehicle sales to overall automobile sales is increasing. Ltd. we will further advance Honda’s art of manufacturing and enhance its competitive strengths. The Amaze is equipped with a 1. respectively. we opened the Yorii automobile plant of the Saitama Factory and a second plant in Mexico. including the introduction of more locally-developed models in the future. we will increase our competitive strengths in the area of small-sized vehicles by renovating every aspect of small car production including development. As a part of this initiative. VEZEL and City. we will cultivate a new set of technical expertise and evolve it to ­production operations in North America and other regions. the home market for Honda. The N-BOX Series has continued as the ­industry’s best-selling mini-vehicle in Japan for the second consecutive year as of the fiscal year ended March 31. The CRIDER is receiving widespread attention in China as a vehicle that was developed exclusively for China in China. We are planning to maintain our aggressive pace of new model introductions in China. in order to realize the continued growth of Honda on a global basis.

S. offers a wide variety of products that range from portable power generators. and France as well as generators in India and China. Maintaining a global viewpoint. By introducing more GP engine-equipped power products such as generators. we will test the compatibility and efficacy of the devices in improving the walking ability of patients recovering from cerebral strokes. including the prevention and mitigation of damage caused by a disaster. In order to deliver a wide variety of power products to our customers all around the world. Honda began demonstration testing of its HEMS in Japan and the U. GP Engine 4 Review of Operations 5 Corporate Governance 6 Financial Section Developing new technologies and proposing new values unique to Honda Under the founding philosophy of “technology for the people. a remotely controlled survey robot that will conduct on-site surveys in high and narrow spaces at Fukushima No. Honda will accelerate the development of humanoid robots designed for use in response to disasters. In another area of robotics. we began a joint clinical research study with the Rehabilitation Institute of Chicago (RIC). which is one of the world’s leading hospitals specializing in the area of physical therapy and rehabilitation. we are currently producing general-purpose engines mainly in Thailand and China. Walking Assist Device . In the robotics field. tillers and lawn mowers to snow throwers. Honda will continue pursuing highly competitive product development and manufacturing. Ltd. and we will continue our efforts to create and deliver valued products and services to every corner of the world. and Honda will be able to continue helping many customers in the future. In that sense. we will expand our global product line-up and will have more opportunities to share the passion behind our power products business—the joy of helping people get things done. Through this joint study. which is being developed as a device that assists people with reduced walking ability due to injury.” Honda undertakes new challenges in creating new products and further advancing its technologies. with the aim of making further progress in the development of this device toward future commercialization. Go to contents page 11 Relations Information 7 Investor Though Honda offers a number of products that can help people get things done. Striving to sustain future growth. no market where we conduct business is ever too mature. In addition to a number of initiatives and programs in Japan. While cultivating a strong reputation for performance and reliability.S. One example of such an initiative is the new GP Series of general-purpose engines that was developed and launched for sale in emerging markets in the second half of 2013. Under this structure. Honda and the National Institute of Advanced Industrial Science and Technology (AIST) jointly developed a High-Access Survey Robot. tillers and water pumps to this market. One example of such a product is the Walking Assist Device. Honda has established a structure that allows us to produce and deliver our products globally while pursuing the optimization of our production efficiency and costs. in November 2013. a humanoid robot designed to be helpful to people while coexisting in a human environment. Annual Report 2014 1 The Power of Dreams 2 Financial Highlights 3 To Our Shareholders Power Product and Other Businesses Developing new general-purpose engines for the low-price engine market in emerging countries Honda’s power product business. In the energy field. water pumps and outboard engines used for work and in daily life. Striving to realize a low-carbon society. 1 Nuclear Power Station of Tokyo Electric Power Company. lawn mowers in the U. While making progress in the development of ASIMO. in June 2013. Honda will strive to realize “the joy and freedom of mobility” and “a sustainable society where people can enjoy life” in keeping with our desire to be a company society wants to exist.. there are still many regions in the world where people are not benefitting from such Honda products. illness or other causes and those whose leg strength is declining due to aging or some other reason. we are actively applying technologies amassed in our research and development of the ASIMO humanoid robot to mass-production products and working toward commercialization of such product applications. we aim to further expand sales in the light-use engine market which accounts for the majority of general-propose engine sales in emerging countries and is the segment where lowpriced products are rapidly gaining market share in Asia and other regions. built around general-­ purpose engines.Return to last page opened Honda Motor Co. we have developed a proprietary home energy management system (HEMS) which manages and optimizes the generation and consumption of energy in a home. Honda’s philosophy is all about making useful products.

With the passion of our associates. Honda is a company where each and every associate maintains a high level of initiative and works toward our dreams to realize the joy of our customers. Moreover. 2015. which will add up to an annual dividend of 88 yen per share. inspiration and satisfaction to our customers. We determine dividends while giving ample consideration to our consolidated financial results from a long-term perspective. For the fiscal year ending March 31. an increase of 6 yen per share from the previous fiscal year. we plan for 22 yen per share quarterly dividends. Ltd.. 2014 will be 82 yen per share. We consider the return of profits to our shareholders as one of our most important management responsibilities. which includes a 20 yen per share dividend paid for the first to third quarters. 2014 Takanobu Ito President & Chief Executive Officer . Honda associates always seek further advancement and growth while 12 Relations Information 7 Investor envisioning and carving out a better future. Annual Report 2014 1 The Power of Dreams 2 Financial Highlights 3 To Our Shareholders Return to Shareholders Honda is striving to increase its corporate value by conducting business in each country while maintaining a global viewpoint.” Driven by “The Power of Dreams.Return to last page opened Honda Motor Co. Honda appreciates the continuous and long-term understanding and support from our shareholders and other ­investors toward our business operations. Honda is striving to be “a company society wants to exist. June 13.” Honda will continue taking on new challenges in the pursuit of advanced creation only Honda can achieve so that we can continue fulfilling the expectations of society and providing joy. Honda may acquire its own shares as needed for the purpose of improving the capital efficiency of the company and implementing necessary capital policy in a flexible manner. and the total cash dividends to be paid for the Go to contents page 4 Review of Operations 5 Corporate Governance 6 Financial Section fiscal year ended March 31. We will continue to do our utmost to meet the expectations of our shareholders. The quarterly dividend for the fiscal fourth quarter will be 22 yen per share.

6% Motorcycle Business 14.Return to last page opened Honda Motor Co..5% . Annual Report 2014 1 The Power of Dreams 2 Financial Highlights Motorcycle Business page 14 Power Product and Other Businesses page 20 3 To Our Shareholders 4 Review of Operations 5 Corporate Governance 6 Financial Section Go to contents page 13 Relations Information 7 Investor Automobile Business page 17 Financial Services Business page 22 Review of Operations Percentage of Net Sales by Business Financial Services Business 5.9% Power Product and Other Businesses 2.0% Automobile Business 77. Ltd.

to ¥1.0 Net Sales / Operating Income Yen (billions) 2.176 86. Annual Report 2014 1 The Power of Dreams 2 Financial Highlights 3 To Our Shareholders 14 Go to contents page 4 Review of Operations 5 Corporate Governance 6 Financial Section Relations Information 7 Investor (Fiscal years ended March 31) Honda Group Unit Sales*1 / Consolidated Unit Sales*2 2013  2014 2013  14.343 thousand units.473 400.2 18. 1.500 150 1. Operating income totaled ¥165.515 ¥1.0 600 4.6 billion.339.2% from the previous fiscal year.464 471. despite increased SG&A and R&D expenses.6 billion from the previous fiscal year.663.2% (%) Yen (billions) CRF250L Japan North America Europe Asia Other Regions Operating Margin Review of Operations Motorcycle Business Honda’s consolidated unit sales of motorcycles and all-terrain vehicles (ATVs) totaled 10. increased by 8. an increase of 50.200 8. Ltd.000 200 1.000 100 500 50 0 10 Net Sales (left scale)   11 12 13 Operating Income (right scale) 14 0 .0 0 10 11 12 13 14 0.536 2014 (Thousands) 7.1 17.631 8.7 24.9% 26.817 226 276 1.8 30. due mainly to increased consolidated unit sales and favorable foreign currency ­translation effects.Return to last page opened Honda Motor Co.549 ¥    79.8% from the previous fiscal year. revenue from sales to external customers increased 24.634 868.527 ¥1.. its consolidated ­subsidiaries and its affiliates accounted for under the equity method *2 The total unit sales of completed products of Honda and its consolidated subsidiaries Net Sales by Region Yen (millions) Japan North America Europe Asia Other Regions Total 2013 2014 % change ¥   72.949 112. In motorcycle business operations.424 667.2%.663. due primarily to an increase in sales volume and model mix and favorable foreign currency effects.0 1.563 102.858 1.800 12.817 166 226 Japan North Europe Asia Other America Regions 276 166 Japan North Europe Asia Other America Regions *1 The total unit sales of completed products of Honda.455 141. due mainly to an increase in consolidated unit sales in Asia.

Total demand for motorcycles and all-terrain vehicles (ATVs) in the United States*. due mainly to a spike in demand ahead of an increase in Japan’s consumption tax rate. Unit sales growth reflected an improvement in consumer sentiment in line with falling unemployment rates. up 4.1% from the previous fiscal year. Total demand for motorcycles in Europe* declined around 11% from the previous fiscal year. Ltd.4% from the previous fiscal year to 276 thousand units in fiscal year 2014. This was despite brisk sales of the CB500 series of middleweight road machines. Annual Report 2014 1 The Power of Dreams 2 Financial Highlights 3 To Our Shareholders Go to contents page 4 Review of Operations 5 Corporate Governance 6 Financial Section 15 Relations Information 7 Investor Japan North America Europe Total industry demand for motorcycles in Japan* was approximately 470 thousand units in fiscal year 2014. with engines ranging from 50cc to 250cc.Return to last page opened Honda Motor Co.3% from the previous fiscal year to 166 thousand units in fiscal year 2014. to approximately 690 thousand units in calendar year 2013. mainly reflecting the lackluster market as a whole. Honda’s consolidated unit sales in Europe decreased 7. the principal market within North America. Under these circumstances. This was attributable to an increase in sales of scooters and small to lightweight motorcycles. * Source: MIC (Motorcycle Industry Council) GROM (Japan) FourTrax Rancher 4x4 ES (North America) .. Switzerland. Belgium and Austria. * Source: JAMA (Japan Automobile Manufacturers Association) * Based on Honda research: this only includes the following 10 countries—the United Kingdom. Portugal. Weak consumer sentiment due to continually high unemployment rates adversely affected demand. the Netherlands. an increase of roughly 7% from the previous fiscal year. France. Germany. and a positive impact from the introduction of the sporty MSX125 model. owing to the launch of models such as the DUNK 50cc scooter and the GROM sporty motorcycle. Under these circumstances. increased approximately 1% from the previous year to approximately 690 thousand units in calendar year 2013. mainly due to steady sales of models such as the CB500 series of middleweight road machines and the CRF250L on/off-road model. Spain. GROM and full model changes of utility ATVs such as FourTrax Rancher 4x4 ES and FourTrax Foreman 4x4 in the United States. as well as favorable effects from the introductions of the all new sporty model. Italy. Honda’s consolidated unit sales in North America increased 10. Honda’s consolidated unit sales in Japan were 226 thousand units in fiscal year 2014.

mainly due to increased sales in South American countries other than Brazil.817 thousand units in fiscal year 2014. as well as the introduction of the DREAM Neo small motorcycle. and Bicycle Manufacturers) DREAM Yuga (India) . Despite these circumstances. Annual Report 2014 1 The Power of Dreams 2 Financial Highlights 3 To Our Shareholders 4 Review of Operations 5 Corporate Governance 6 Financial Section Asia Go to contents page 16 Relations Information 7 Investor Other Regions Total demand for motorcycles in Asia* declined around 1% from the previous year to approximately 40.980 thousand units in calendar year 2013.. Looking at market conditions by country.T. Pakistan and China. This was due mainly to consumer sentiments improving in line with incomes rising in Indonesia. Malaysia. * Source: ABRACICLO (the Brazilian Association of Motorcycle. Oceania and other areas). in India. Honda’s consolidated unit sales do not include sales by P. demand in India increased roughly 3% from the previous fiscal year to approximately 14.930 thousand units. declined roughly 7% from the previous year to approximately 1. ACTIVA (India) Total demand for motorcycles in Brazil*. and Vietnam saw demand decline roughly 13% to approximately 2.700 thousand units. In Other Regions (including South America. Vietnam.510 thousand units. * Based on Honda research: this only includes the following eight countries—­ Thailand. This was due mainly to brisk sales of the ACTIVA scooter and DREAM Yuga small motorcycle. Indonesia.510 thousand units in calendar year 2013. the principal market within Other Regions. India. Africa.740 thousand units. the Middle East.2% from the previous fiscal year to 1.858 thousand units in fiscal year 2014. This. due mainly to the negative effects from stricter lending standards for retail loans in Brazil.700 ­thousand units.T.Return to last page opened Honda Motor Co. Honda’s consolidated unit sales increased 0. Astra Honda Motor in Indonesia. Moped.4% from the previous fiscal year to 7. which is an affiliate accounted for under the equity method. Demand in Thailand declined around 9% to approximately 1.300 thousand units. was partly offset by a decline in sales of small motorcycles such as the CG125 Fan and CG150 Fan. however. Indonesia saw demand increase around 8% from the previous year to approximately 7. while demand in China decreased around 9% from the previous year to approximately 11. Astra Honda Motor’s unit sales for fiscal year 2014 increased around 15% from the previous fiscal year to approximately 4. mainly due to stricter lending standards for retail loans. P. Honda’s consolidated unit sales in Asia increased 11. Ltd. the Philippines.

176.176.0 5.560 thousand units.Return to last page opened Honda Motor Co. they are not included in Consolidated Unit Sales.757 1.500 150 0 0 10 Net Sales (left scale)   11 12 13 14 Operating Income (Loss) (right scale) –150 .2% 20.673 1. to ¥9.717.286 (Thousands) Note: Certain sales of automobiles that are financed with residual value type auto loans by our Japanese finance subsidiaries are accounted for as operating leases in conformity with U.664 3.500 6.5% from the previous fiscal year. its consolidated ­subsidiaries and its affiliates accounted for under the equity method *2 The total unit sales of completed products of Honda and its consolidated subsidiaries Japan North America Europe Asia Other Regions Total 2013 2014 % change ¥1.000 600 7.2% from the previous fiscal year.385. revenue from sales to external customers increased 19.500 450 5.276 388. Operating income totaled ¥403.5 15. As a result.. an increase of 41.599.000 4.0 7. In automobile business operations.8 19.752 4.000 8.769 487.0%.069 657.462.905.3 billion from the previous fiscal year due mainly to increased consolidated unit sales and favorable foreign currency ­translation effects.449 567. despite increased SG&A and R&D expenses. 2014 1.0% Yen (billions) (%) 10.0 2.7 billion. Net Sales by Region Yen (millions) Acura MDX Japan North America Europe Asia Other Regions Operating Margin Review of Operations Automobile Business Honda’s consolidated unit sales of automobiles totaled 3.097 ¥9. Ltd.360 17.0 10 11 12 13 14 –2. Annual Report 2014 1 The Power of Dreams 2 Financial Highlights 3 To Our Shareholders 17 Go to contents page 4 Review of Operations 5 Corporate Governance 6 Financial Section Relations Information 7 Investor (Fiscal years ended March 31) Honda Group Unit Sales*1 / Consolidated Unit Sales*2 2013  2014 2013  1.216 ¥1.500 2.714.4 15.S.0 0 0.757 818 812 529 293 169 169 293 Japan North Europe Asia Other America Regions Japan North Europe Asia Other America Regions *1 The total unit sales of completed products of Honda.464 1. increased by 4.363 ¥7.0 Net Sales / Operating Income (Loss) Yen (billions) 10.000 300 2. due mainly to an increase in consolidated unit sales in Japan and North America.8 25. generally accepted accounting principles and are not included in consolidated net sales to the external customers in our auto­mobile business. due primarily to continuing cost reduction efforts as well as favorable foreign ­currency effects. but are included in Honda Group Unit Sales of our automobile business.709.

a consolidated subsidiary in Mexico. In production activities. The manufacturing capacity of the Yorii Plant.K. Honda’s unit production of automobiles increased 6. On the other hand. In production activities.770 thousand units. Civic. total demand for automobiles in Russia*2 decreased around 5% from the previous year to approximately 2. Total demand for automobiles in Europe*1 decreased roughly 2% from the previous year to approximately 12.V. This was mainly due to strong sales of the Accord. The Saitama Factory’s Yorii automobile plant. Annual Report 2014 1 The Power of Dreams 2 Financial Highlights 3 To Our Shareholders 4 Review of Operations 5 Corporate Governance 6 Financial Section Go to contents page 18 Relations Information 7 Investor Japan North America Europe Total demand for automobiles in Japan*1 rose around 9% from the previous fiscal year to approximately 5. Under these circumstances. which mainly produces the Fit and VEZEL.600 thousand units in calendar year 2013. S. excluding Russia. *1 Source: ACEA (Association des Constructeurs Europeens d’Automobiles (the European Automobile Manufacturers’ Association)) New passenger car registrations cover 27 EU countries and three EFTA countries.5% from the previous fiscal year to 1.. mainly due to higher sales in Japan. On the production front. Honda’s consolidated unit sales in Europe decreased 1. which had been under construction in Yorii-machi. excluding the U. Honda’s consolidated unit sales in Japan rose 18. is 250 thousand units per year.757 thousand units in fiscal year 2014.K. The market diminished as a whole due mainly to unemployment rates remaining high and the weakness of the real economy in the eurozone. Honda’s consolidated unit sales in North America increased 1.S. This result was attributable to the introduction of the N–WGN and VEZEL and full model change of the Fit and Odyssey. despite the shift of some production overseas. generally accepted accounting principles and are not included in consolidated net sales to the external customers in our auto­ mobile business. Gains were offset in part by a backlash from the termination of eco-car subsidies.Return to last page opened Honda Motor Co. they are not included in consolidated unit sales.2% from the previous year to 169 thousand units in fiscal year 2014.6% from the previous fiscal year to 133 thousand units in fiscal year 2014. built a new plant with an annual production capacity of 200 thousand units in order to meet expected market expansion for small cars in North America.690 thousand units in fiscal year 2014.9% from the previous fiscal year to 936 thousand units in fiscal year 2014. rose around 8% from the previous year to approximately 15. This was mainly due to a decline in unit sales of the Civic which offset sales generated by the launch of a new diesel engine equipped CR-V. *2 Source: AEB (The Association of European Businesses) * Source: WardsAuto N–WGN (Japan) . the principal market within North America. This was mainly due to sales receiving a boost in the second half of the fiscal year from a last-minute rise in demand before an increase in Japan’s consumption tax rate. de C..K. Ltd. resulting in a pocket of growth in demand for automobiles.A. Honda manufactured 1. up 5. Osato-gun. This was mainly attributable to improvements in employment conditions and upswings in consumer sentiment that led to a substantial increase in light truck sales and also a rise in small passenger car sales..300 thousand units in calendar year 2013. Saitama. unit output at Honda’s U. As a result. CR-V and other models.5% from the previous fiscal year to 812 thousand units*2. Honda de Mexico. as well as a full model change of the Acura MDX. The market’s decline was offset in part by an economic recovery in the U. plant declined 21.777 thousand units. began operation in July 2013. This new plant went into operation in February 2014.3% from the previous fiscal year. *1 Source: JAMA (Japan Automobile Manufacturers Association): (as measured by the number of regular vehicle registrations (661cc or higher) and mini vehicles (660cc or lower)) *2 Certain sales of automobiles that are financed with residual value-type auto loans by our Japanese finance subsidiaries are accounted for as operating leases in conformity with U. Total industry demand for automobiles in the United States*.

Africa. Malaysia. In Other Regions (including South America. Total industry demand for automobiles in Brazil*. This increase was mainly attributable to strong sales of the Amaze and introduction of the City in India. Honda’s unit production by consolidated subsidiaries in Asia increased 2. decreased around 1% to approximately 3. Honda Malaysia SDN BHD. Indonesia. This result was due to a decrease in sales mainly in Australia. a consolidated subsidiary in Malaysia. Malaysia.. P.. Taiwan. and Guangqi Honda Automobile Co. Annual Report 2014 1 The Power of Dreams 2 Financial Highlights 3 To Our Shareholders 4 Review of Operations 5 Corporate Governance 6 Financial Section Asia Total demand for automobiles in Asia decreased around 2% from the previous year to approximately 8. Ltd.3% from the previous fiscal year to 136 thousand units in fiscal year 2014. Honda’s consolidated unit sales in Asia outside Japan increased 1.. Moreover.1% from the previous fiscal year to 529 thousand units in fiscal year 2014. and Guangqi Honda Automobile Co. Vietnam. Ltd. constructed a new automobile plant with an annual production capacity of 120 thousand units that went into operation in January 2014..3% from the previous fiscal year to 757 thousand units in fiscal year 2014.8% from the previous fiscal year to 764 thousand units in fiscal year 2014. Taiwan.. Vietnam. Indonesia. the Middle East. This line went into operation in October 2013. Oceania and other areas). India and Pakistan. *2 Source: China Association of Automobile Manufacturers *3 The total includes the following nine countries: China.570 thousand units in calendar year 2013. Honda’s consolidated unit sales decreased 1. Total demand for automobiles in China increased roughly 14% from the previous year to approximately 21.Return to last page opened Honda Motor Co. Ltd. which were partly offset by increased sales of the Civic and other models mainly in Brazil.980 thousand units*2. a consolidated subsidiary in Indonesia. Honda’s unit production in Brazil increased 0. That said. one of the principal markets among the Other Regions.7% from the previous fiscal year to 293 thousand units in fiscal year 2014. unit production by Chinese equity-method affiliates Dongfeng Honda Automobile Co. unit sales in China increased 26. both of which are affiliates accounted for under the equity method in China. On the production front.T. Ltd. City (India) .. In addition. Honda Cars India Ltd. * Source: ANFAVEA (Associação Nacional dos Fabricantes de Veiculos Automotores (the Brazilian Automobile Association)) Includes passenger cars and light commercial vehicles. Go to contents page 19 Relations Information 7 Investor Other Regions Meanwhile.0% from the previous fiscal year to 591 thousand units*3 in fiscal year 2014. Ltd. *1 The total is based on Honda research and includes the following 10 countries: Thailand.730 thousand units*1 in the 2013 calendar year. Honda Prospect Motor. South Korea. the Philippines.. This was mainly due to the market shrinking as a consequence of a slowdown in the economy in India and the backlash from a termination of government subsidies in Thailand. a consolidated sub­ sidiary in India. constructed a new automobile plant with an annual production capacity of 120 thousand units that went into operation in February 2014. Honda’s consolidated unit sales do not include unit sales of Dongfeng Honda Automobile Co. built a second production line with an annual capacity of 50 thousand units. increased 29. The increase was mainly attributable to a full model change of the Accord and introduction of the CRIDER and JADE models. the Philippines. Singapore. India and Pakistan. and a boost from the introduction of the Honda MOBILIO in Indonesia. Thailand.

0 300 18. which was ­partially offset by an increase in unit sales in North America. due mainly to favorable foreign currency translation effects.0 22.0 Net Sales / Operating Loss Yen (billions) 400 40 200 20 0 0 10 Net Sales (left scale)   11 12 13 Operating Loss (right scale) 14 –20 .4 % (%) Yen (billions) HS1336i Japan North America Europe Asia Other Regions Operating Margin Review of Operations Power Product and Other Businesses Honda’s consolidated unit sales of power products totaled 6.7 billion from the previous fiscal year.366 ¥304.0 200 12.676 ¥ 77.234 40.0 0 0.Return to last page opened Honda Motor Co.2 billion from the previous fiscal year.2)% 15.4%. Ltd.275 (6.414 64.7 billion.0 10 11 12 13 14 –6.6% from the ­previous fiscal year.0 3. Honda reported an ­operating loss of ¥1.032 472 314 Japan North Europe Asia Other America Regions Note: In power product business. due mainly to a decrease in consolidated unit sales in Asia and Other Regions.0 100 6.718 (Thousands) 1.551 ¥280. an improvement of ¥7..297 24.100 84.373 36. decreased by 0.5 8. Revenue from sales to external customers in power product and other businesses increased 8.685 52. due mainly to f­avorable foreign currency effects. there is no discrepancy between Honda Group Unit Sales and Consolidated Unit Sales Net Sales by Region Yen (millions) Japan North America Europe Asia Other Regions Total 2013 2014 % change ¥ 83. 400 24.964 97.036 thousand units. Annual Report 2014 1 The Power of Dreams 2 Financial Highlights 3 To Our Shareholders 20 Go to contents page 4 Review of Operations 5 Corporate Governance 6 Financial Section Relations Information 7 Investor (Fiscal years ended March 31) Honda Group Unit Sales / Consolidated Unit Sales 2013  2014 2.500 1.6 9.967 23. to ¥304.

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Relations
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7 Investor

Japan

Europe

Other Regions

Honda’s consolidated unit sales of power product and other
businesses in Japan remained about the same as the previous fiscal year at 314 thousand units in fiscal year 2014.
This was mainly due to a decline in sales of portable power
generators which offset an increase in sales of OEM*
­general-purpose engines and snow throwers.

Honda’s consolidated unit sales in Europe increased 2.8%
from the previous fiscal year to 1,032 thousand units in
fiscal year 2014. This was mainly due to an increase in
sales of OEM engines which offset a decline in sales of lawn
mowers and snow throwers.

Honda’s consolidated unit sales in Other Regions (including
South America, the Middle East, Africa, Oceania and other
areas) decreased 18.2% from the previous fiscal year to
472 thousand units in fiscal year 2014.
This was mainly due to a decrease in sales of pumps
and OEM engines in the Middle East.

* OEM (Original Equipment Manufacturer): refers to the manufacturers of products
and components sold under a third-party brand.

North America
Honda’s consolidated unit sales in North America increased
4.4% from the previous fiscal year to 2,718 thousand units
in fiscal year 2014. This was mainly attributable to an
increase in sales of OEM engines which offset a decline in
sales of portable power generators.

Asia
Honda’s consolidated unit sales in Asia decreased 4.6%
from the previous fiscal year to 1,500 thousand units in
fiscal year 2014. This was mainly attributable to a decline in
sales of OEM engines in Thailand and portable power
­generators in India which offset an increase in sales of OEM
engines and pumps in China.

GP160 (Engine)

GX160 (Engine)

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22

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7 Investor
(Fiscal years ended March 31)

Total amount of finance subsidiaries-receivables and property on operating leases of finance subsidiaries
increased by ¥1,144.2 billion, or 19.5%, to ¥7,018.4 billion from the previous fiscal year. Honda estimates
that by applying Japanese yen exchange rates of the previous fiscal year to the current fiscal year, total
amount of finance subsidiaries-receivables and property on operating leases of finance subsidiaries as of
the end of the year would have increased by approximately ¥641.4 billion, or 10.9%, compared to the
increase as reported of ¥1,144.2 billion, which includes positive foreign currency translation effects.
Revenue from external customers in Financial services business increased by ¥149.6 billion, or 27.3%,
to ¥698.1 billion from the previous fiscal year, due mainly to an increase in operating lease revenues and
positive foreign currency translation effects. Honda estimates that by applying Japanese yen exchange
rates of the previous fiscal year to the current fiscal year, revenue for the year would have increased by
approximately ¥39.4 billion, or 7.2%, compared to the increase as reported of ¥149.6 billion, which
includes positive foreign currency translation effects. Revenue including intersegment sales increased by
¥148.3 billion, or 26.5%, to ¥708.5 billion from the previous fiscal year.
Operating costs and expenses increased by ¥123.7 billion, or 30.8%, to ¥525.8 billion from the previous fiscal year. Cost of sales increased by ¥103.9 billion, or 30.9%, to ¥440.1 billion from the previous
fiscal year, due mainly to an increase in costs attributable to increased operating lease revenues and
negative foreign currency effects. Selling, general
and administrative expenses increased by ¥19.7
billion, or 30.0%, to ¥85.6 billion from the previous
fiscal year.
Operating income increased by ¥24.5 billion, or
15.6%, to ¥182.7 billion from the previous fiscal
year, due mainly to positive foreign currency effects,
which was partially offset by increased selling, general and administrative expenses.

Net Sales
by Region
Yen (millions)

Japan
North America
Europe
Asia
Other Regions
Total

2013

2014

% change

¥ 34,282
484,275
7,256
3,145
19,548
¥548,506

¥ 40,333
610,848
12,646
8,051
26,307
¥698,185

17.7%
26.1
74.3
156.0
34.6
27.3%

Yen (billions)

Japan
North America
Europe
Asia
Other Regions
Operating Margin

(%)

750

60.0

500

40.0

250

20.0

0

10

11

12

13

14

0.0

Finance Receivables / Property on Operating Leases
2010

2011

2012

2013

2014

¥3,461.5

¥3,480.0

¥3,446.1

¥4,031.1

¥4,781.7

1,308.1

1,357.6

1,472.7

1,843.1

2,236.7

¥4,769.6

¥4,837.6

¥4,918.8

¥5,874.2

¥7,018.4

Yen (billions)

Finance Receivables
Property on
­Operating Leases
Total

Review of Operations

Financial Services Business
To support the sale of its products, Honda provides retail lending and leasing to customers and wholesale financing to ­dealers through our finance subsidiaries in Japan, the United States, Canada, the United K
­ ingdom, Germany, Brazil, ­Thailand and other countries.

Net Sales / Operating Income
Yen (billions)
800

400

600

300

400

200

200

100

0

10

Net Sales (left scale)  

11

12

13

Operating Income (right scale)

14

0

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Corporate Governance: Risk Factors
Risks Relating to Honda’s Industry
1. Honda may be adversely affected by market
conditions
Honda conducts its operations in Japan and throughout
the world, including North America, Europe and Asia. A
sustained loss of consumer confidence in these markets, which may be caused by continued economic
slowdown, recession, changes in consumer preferences, rising fuel prices, financial crisis or other factors
could trigger a decline in demand for automobiles,
motorcycles and power products that may adversely
affect Honda’s results of operations.

2. Prices for products can be volatile
Prices for automobiles, motorcycles and power products in certain markets may experience sharp changes
over short periods of time. This volatility is caused by
various factors, including fierce competition, which is
increasing, short-term fluctuations in demand caused
by instability in underlying economic conditions,
changes in tariffs, import regulations and other taxes,
shortages of certain materials and parts, steep rise in
material prices and sales incentives. There can be no
assurance that such price volatility will not continue for

an extended period of time or that price volatility will not
occur in markets that to date have not experienced
such volatility.
Overcapacity within the industry has increased and
will likely continue to increase if the economic downturn
continues in Honda’s major markets, leading, potentially, to further increased price volatility. Price volatility
in any of Honda’s markets could adversely affect
Honda’s results of operations.

Risks Relating to Honda’s Business Generally

Currency and Interest Rate Risks
1. Honda’s operations are subject to currency
fluctuations
Honda has manufacturing operations throughout the
world, including Japan, and exports products and components to various countries.
Honda purchases materials and components and
sells its products and components in foreign currencies.
Therefore, currency fluctuations may affect Honda’s
pricing of products sold and materials purchased.
Accordingly, currency fluctuations have an effect on
Honda’s results of operations and financial condition, as
well as Honda’s competitiveness, which will over time
affect its results.
Since Honda exports many products and components, particularly from Japan, and generates a

substantial portion of its revenues in currencies other
than the Japanese yen, Honda’s results of operations
would be adversely affected by an appreciation of the
Japanese yen against other ­currencies, in particular the
U.S. dollar.

2. Honda’s hedging of currency and interest
rate risk exposes Honda to other risks
Although it is impossible to hedge against all currency
or interest rate risks, Honda uses derivative financial
instruments in order to reduce the substantial effects of
currency fluctuations and interest rate exposure on our
cash flows and financial condition. These instruments
include foreign currency forward contracts, currency
swap agreements and currency option contracts, as
well as interest rate swap agreements. Honda has
entered into, and expects to continue to enter into,

such hedging arrangements. As with all hedging instruments, there are risks associated with the use of such
instruments. While limiting to some degree our risk fluctuations in currency exchange and interest rates by
utilizing such hedging instruments, Honda potentially
forgoes benefits that might result from other fluctuations
in currency exchange and interest rates. Honda is also
exposed to the risk that its ­counterparties to hedging
contracts will default on their obligations. Honda manages exposure to counterparty credit risk by limiting the
counterparties to major international banks and financial
­institutions meeting established credit guidelines. However, any default by such counterparties might have an
adverse effect on Honda.

financial condition or results of operations.. and in several countries. Loss of a key supplier in particular may affect our production and increase our costs. it may have an adverse affect on Honda’s business. However. These patents and trademarks have been of value in the growth of Honda’s business and may continue to be of value in the future. investigations and proceedings under relevant laws and ­regulations of various jurisdictions.Return to last page opened Honda Motor Co. Annual Report 2014 1 The Power of Dreams 2 Financial Highlights 3 To Our Shareholders 4 Review of Operations 5 Corporate Governance 6 Financial Section Legal and Regulatory Risks 3. fuel economy. Regulations regarding vehicle emission levels. Honda is subject to legal proceedings 1. in part due to the legal and other requirements of those countries. financial condition or results of operations. These factors include the ability of its suppliers to provide a continued source of raw materials and parts and Honda’s ability to compete with other users in obtaining the supplies. motorcycle and power product industries. ­customers can also obtain financing for the lease or purchase of Honda’s products through a variety of other sources that compete with our financing services. Honda conducts businesses through joint ventures with local entities. The financial services offered by us also involve credit risk as well as risks relating to lease residual values. an inability to protect this intellectual property generally. and are often made more restrictive. These businesses are subject to various regulations. The costs to comply with these regulations can be significant to Honda’s operations. or the illegal infringement of some or a large group of Honda’s intellectual property rights. particularly in recent years. Ltd. Honda’s Financial services business conducts business under highly competitive conditions in an industry with inherent risks Honda’s Financial services business offers various financing plans to its customers designed to increase the opportunity for sales of its products and to generate financing income. However. Honda does not regard any of its businesses as being dependent upon any single patent or related group of patents. due to an increasing concern with respect to ­possible global climate changes. . cost of capital and access to funding. Go to contents page 24 Relations Information 7 Investor 2. as well as levels of pollutants from production plants. Honda conducts its operations in various regions of the world Honda conducts its businesses worldwide. noise and safety and noxious substances. The automobile. Honda’s ability to continue to obtain these supplies in an efficient and costeffective manner is subject to a number of factors. Honda is reliant on the protection and preservation of its intellectual property Honda owns or otherwise has rights in a number of patents and trademarks relating to the products it manufactures. and relies on certain suppliers for some of the raw materials and parts which it uses in the manufacture of its products. Risks Relating to Honda’s Operations 1. If these regulations or the business conditions or policies of these local entities change. motorcycle and power product industries are subject to extensive environmental and other governmental regulations. 3. some of which are not within Honda’s control. are extensive within the automobile. A negative outcome in any of the legal proceedings pending against Honda could adversely affect Honda’s business. would have an adverse effect on Honda’s operations. These regulations are subject to change. Competition for customers and/or these risks may affect Honda’s results of operations in the future. which have been obtained over a period of years. Honda relies on external suppliers for the provision of certain raw materials and parts Honda purchases raw materials and parts from numerous external suppliers. including the legal and other ­requirements of each country. including with respect to global climate changes Honda is and could be subject to suits. 2. including commercial banks and finance and leasing companies.

are available only to holders of record. including Honda’s cash requirements to fund such obligations. and exercising appraisal rights.. natural disasters. the manufacture. terrorism. and other events beyond our control. and may be adversely affected by. claims for damages from the customers or parties affected. in the capacity as an ADS holder. The depositary will make efforts to exercise votes regarding the Shares ­underlying Go to contents page 25 Relations Information 7 Investor the ADSs as instructed by the holders and will pay to the holders the dividends and ­distributions collected from the Company. company. sales and distribution of products. . in the region where such events occurred. including exercising voting rights inherent in their shares. Regulations of the Board of Corporate Auditors and the Company Law of Japan (the “Company Law”) govern corporate affairs of the Company.S. The amounts of pension benefits. disruption or ­suspension occurs and continues for a long period of time. financial condition or results of operations may be adversely affected. use of force by foreign countries. state. disrupt or suspend the purchase of raw materials and parts. 7. through its custodian agents. Regulations of the Board of Directors. In addition. examine our accounting books or records or exercise appraisal rights through the depositary. etc. and shareholders’ rights may be different from those that would apply if the Company were a U. examining a company’s accounting books and records. only the depositary can exercise those rights in connection with the deposited Shares. lump-sum payments and other post-retirement benefits are primarily based on the combination of years of service and compensation. Such events occurring in one region may in turn affect other regions. If this occurs.. Honda’s business. Honda may be subject to. which could materially affect our financial condition and results of operations. including the discount rate. Also. natural disasters such as earthquakes.S. Annual Report 2014 1 The Power of Dreams 2 Financial Highlights 3 To Our Shareholders 4. Ltd. The funding policy is to make periodic contributions as required by applicable regulations. epidemics and labor strikes Honda conducts its businesses worldwide and such businesses may be affected by events. 8. Honda may be adversely affected by wars. Rights of shareholders under Japanese law may be more limited than under the laws of other jurisdictions The Company’s Articles of Incorporation. epidemics and labor strikes. Because the depositary. receiving dividends and distributions. such holder will not be able to bring a derivative action. Benefit obligations and pension costs are based on assumptions of many factors. use of force by foreign countries. Risks relating to pension costs and other postretirement benefits Honda has pension plans and provides other postretirement benefits. bringing derivative actions. the rate of salary increase and the expected longterm rate of return on plan assets. Differences in actual expenses and costs or changes in assumptions could affect Honda’s pension costs and benefit obligations. A holder of ADSs will have fewer rights than a shareholder has and such holder will have to act through the depositary to exercise those rights The rights of shareholders under Japanese law to take various actions. the provision of services. multinational conflicts and frictions. such information may be inadvertently disclosed.Return to last page opened Honda Motor Co. Japanese courts may not be willing to enforce liabilities against the Company in actions brought in Japan that are based upon the securities laws of the United States or any U. political uncertainty. is the record holder of the Shares underlying the ADSs. which may delay. Shareholders’ rights under Japanese law may not be as extensive as shareholders’ rights under the laws of the United States. directors’ and officers’ fiduciary duties. Honda may be adversely affected by inadvertent disclosure of confidential information Although Honda maintains internal controls through established procedures to keep confidential information including personal information of its customers and relating parties. An ADS holder may have more difficulty in asserting his/her rights as a shareholder than such an ADS holder would as a shareholder of a U. Legal principles relating to such matters as the validity of corporate procedures. such as wars.S. 5. tsunami and floods. corporation. inadvertent ­d isclosure of confidential business or technical information to third parties may also result in a loss of Honda’s competitiveness. 4 Review of Operations 5 Corporate Governance 6 Financial Section 6. If such delay. political uncertainty. multinational ­conflicts and frictions. terrorism. However.

executive officers or corporate auditors The Company is a limited liability. Courts predicated upon the civil liability provisions of the Federal securities laws of the United States. which are currently specified as June 30. September 30 and December 31 by the ­Articles of Incorporation. The Company’s dividend payout practice is no exception. for U. such a resolution of the shareholders is usually made at an ordinary general meeting of shareholders held in June.Return to last page opened Honda Motor Co. Annual Report 2014 1 The Power of Dreams 2 Financial Highlights 3 To Our Shareholders 9.S. an investor wishing to sell at a price above or below the relevant daily limit may not be able to sell his or her shares at such price on a particular trading day. investors may have difficulty in serving process or enforcing a judgment against the Company or its directors. since these forecasts are not legally binding and resolutions to pay dividends are usually not adopted until after the record date. in original actions or in actions for enforcement of judgment of U. . It may not be possible. However. Ltd. There is doubt as to the enforceability in Japan. of liabilities predicated solely upon the federal securities laws of the United States. the dividend payment is made to shareholders as of the applicable record dates.. Most of its directors. executive officers and corporate auditors reside in Japan. If the board adopts such a resolution. If the shareholders adopt such a resolution. our shareholders of record on record dates for year-end and quarterly dividends may not receive the dividend they anticipate. therefore. these forecasts are not legally binding. investors to effect service of process within the United States upon the Company or 4 Review of Operations 5 Corporate Governance 6 Financial Section these persons or to enforce against the Company or these persons judgments obtained in U. these exchanges set daily upward and downward price fluctuation limits for each stock. Because of daily price range limitations under Japanese stock exchange rules. However. courts. no transactions may take place outside these limits. Although transactions may continue at the upward or downward limit price if the limit price is reached on a ­particular trading day. To prevent excessive volatility. Consequently. Shareholders of record as of an applicable record date may sell shares after the record date in anticipation of receiving a certain dividend payment based on the previously announced forecasts. Go to contents page 26 Relations Information 7 Investor the board usually does not adopt a resolution with respect to a quarterly dividend until after the respective record dates.S. However. The actual payment of year-end dividends requires a resolution of the Company’s shareholders. a holder of ADSs may not be able to sell his/her shares of the Company’s common stock at a particular price on any particular ­trading day. These exchanges are order-driven markets without specialists or market makers to guide price formation. based on the previous day’s closing price. the year-end dividend payment is made to shareholders as of the applicable record date. or at all Stock prices on Japanese stock exchanges are determined on a real-time basis by the equilibrium between bids and offers. or at all.S. While the Company may announce forecasts of yearend and quarterly dividends prior to the record date. U. joint stock corporation incorporated under the laws of Japan. 10. The Company’s shareholders of record on a record date may not receive the dividend they anticipate The customary dividend payout practice and relevant regulatory regime of publicly listed companies in Japan may differ from that followed in foreign markets. which is currently specified as March 31 by the Company’s Articles of Incorporation. 11. All or substantially all of the Company’s assets and the assets of these persons are located in Japan and elsewhere outside the United States.S. The payment of quarterly dividends requires a resolution of the Company’s Board of Directors.

company must have a compensation committee composed entirely of independent directors. each of the Board of Directors and Board of ­Corporate Auditors determines the compensation amount for each member within the respective maximum total amounts. manager or employee of the parent company of the company or of the major business counterparties.honda. Annual Report 2014 1 The Power of Dreams 2 Financial Highlights 3 To Our Shareholders 4 Review of Operations 5 Corporate Governance 6 Financial Section Go to contents page 27 Relations Information 7 Investor Corporate Governance Companies listed on the New York Stock Exchange (the “NYSE”) must comply with ­certain standards regarding corporate governance under Section 303A of the NYSE Listed Company Manual. the listing rules of the Tokyo Stock Exchange. or someone who is a professional advisor receiving significant remuneration from the company. Currently.02(a) (ii) of the NYSE Listed Company Manual. The task of overseeing management and. A compensation committee must also have authority to retain or obtain the advice of compensation and other advisers. A NYSE-listed U. are required to have at least three ­Corporate Auditors. Currently. Corporate Governance Practices Followed by NYSE-listed U. Once the proposals for such maximum total amounts of compensation are approved at the meeting of shareholders. are permitted to follow home country practice in lieu of certain provisions of ­Section 303A. Ltd.com/CSR/governance) . listed companies under Section 303A of the NYSE Listed C ­ ompany Manual and those ­followed by Honda. an independent director/corporate auditor may not be a person who is an executive officer. Its Board of Directors does not have the power to fill vacancies thereon. A proposal by ­Honda’s Board of Directors to elect a corporate auditor must be approved by a resolution of its Board of Corporate Auditors. In the case of Japanese companies which employ the Board of Corporate Auditors system. please refer to (http://world. and to make efforts to have at least one “independent” director. at least half of the Corporate Auditors must be “outside” Corporate Auditors who must meet additional independence requirements under Japan’s Company Law. Honda has five Corporate Auditors.S. and the audit committee must have at least three members. require listed companies to have at least one “­independent” director or corporate auditor. However. by a meeting of shareholders. who are separate from the company’s management and meet certain independence requirements under Japan’s Company Law.Return to last page opened Honda Motor Co. of a U. Under this system.S.S. the term of each director of Honda is one year. Like a majority of Japanese companies. which employ a corporate governance system based on a Board of Corporate Auditors (The “Board of Corporate Auditors system”).S. Honda’s directors are elected at a meeting of shareholders. including Honda. Japan’s Company Law has no independence requirement with respect to directors. company: to monitor the performance of the directors. Honda relies on an exemption under that rule which is available to foreign private issuers with Board of Corporate Auditors meeting certain criteria.S.S. Honda has three outside Corporate Auditors which constitute 60% of Honda’s five Corporate Auditors. company must have an audit committee composed entirely of independent directors. Honda’s Corporate Auditors are also elected at a meeting of shareholders. In contrast.S. Requirements for an independent director/corporate auditor are more stringent than those for outside directors or outside corporate auditors. A NYSE-listed U. Companies Corporate Governance Practices Followed by Honda A NYSE-listed U. The main function of the Board of Corporate Auditors is similar to that of independent directors. company must have a majority of directors meeting the independence requirements under Section 303A of the NYSE Listed ­C ompany Manual. subject to prescribed independence criteria that the committee must consider prior to engaging any such adviser. In addition. Honda employs the Board of Corporate Auditors system as described above. accounting councilor. together with the accounting audit firm. or any other employee of the company or any of its subsidiaries. executive officer. Securities Exchange Act of 1934 relating to listed company audit committees. Compensation committee members must satisfy the additional independence requirements under Section 303A. With respect to the requirements of Rule 10A-3 under the U. If Honda were to adopt such a plan. A NYSE-listed U. Honda must obtain shareholder approval for stock options only if the stock options are issued with specifically favorable conditions or price concerning the issuance and exercise of the stock options. including Honda. which Honda is subject to. including those who are members of the audit committee. The following table shows the significant differences between the corporate governance practices followed by U. and voted on. listed companies that are foreign private issuers. manager. the Board of ­Corporate Auditors is a legally separate and independent body from the Board of Directors. including Honda. Unlike an outside director/corporate auditor. Currently. For Japanese companies. Honda does not adopt stock option compensation plans. Each Corporate Auditor has a four-year term. A NYSE-listed U.. company must have a nominating/­ corporate governance committee entirely of independent directors. The Corporate ­Auditors have the right to state their opinion concerning election of a Corporate Auditor at the meeting of shareholders. * For information about Honda’s corporate governance practices.S. Japanese companies which employ the Board of Corporate Auditors system.S. such as Honda. Maximum total amounts of compensation for Honda’s Directors and Corporate Auditors are proposed to. for the protection of the company’s shareholders. Honda already has one independent Director out of two outside Directors and two independent Corporate Auditors out of three outside Corporate Auditors. An outside Corporate Auditor is defined as a Corporate Auditor who has not served as a director. company must generally obtain shareholder approval with respect to any equity compensation plan. accounting is assigned to the corporate auditors. The Board of Corporate Auditors is empowered to request that Honda’s directors submit a proposal for election of a Corporate Auditor to a meeting of shareholders. and review and express opinion on the method of auditing by the company’s accounting audit firm and on such accounting audit firm’s audit reports.

Chief Executive Officer and Representative Director Executive Vice President.Return to last page opened Honda Motor Co.. Representative Director President. Ltd. Corporate Auditors and Operating Officers Chairman. Executive Officer and Representative Director Fumihiko Ike Takanobu Ito Tetsuo Iwamura 28 Senior Managing Officer Senior Managing Officer and Director Senior Managing Officer and Director Senior Managing Officer Sho Minekawa Takashi Yamamoto Yoshiharu Yamamoto Koichi Fukuo . Annual Report 2014 1 The Power of Dreams 2 Financial Highlights 3 To Our Shareholders Go to contents page 4 Review of Operations 5 Corporate Governance 6 Financial Section Relations Information 7 Investor Board of Directors.

Annual Report 2014 1 The Power of Dreams 2 Financial Highlights 3 To Our Shareholders 4 Review of Operations 5 Corporate Governance 6 Financial Section Go to contents page 29 Relations Information 7 Investor Directors Chairman. Representative Director President.Return to last page opened Honda Motor Co. *2 Both Hirotake Abe and Toshiaki Hiwatari have been designated by the Company as Independent Auditors as provided for in the rule of the Tokyo Stock Exchange and registered with the Tokyo Stock Exchange. Tomochika Iwashita and Toshiaki ­Hiwatari are outside corporate auditors as provided for in Article 2.. Executive Officer and Representative Director Senior Managing Officer and Director Senior Managing Officer and Director Fumihiko Ike Takanobu Ito Tetsuo Iwamura Takashi Yamamoto Yoshiharu Yamamoto Managing Officer and Director Managing Officer and Director Director Director Toshihiko Nonaka Masahiro Yoshida Nobuo Kuroyanagi Hideko Kunii *1 N  obuo Kuroyanagi and Hideko Kunii are outside directors as provided for in Article 2. Ltd. *2 Hideko Kunii has been designated by the Company as an Independent Director as provided for in the rule of the Tokyo Stock Exchange and registered with the Tokyo Stock Exchange. . Corporate Auditors Operating Officer and Director Operating Officer and Director Operating Officer and Director Operating Officer and Director Yuji Shiga Kohei Takeuchi Shinji Aoyama Noriya Kaihara Corporate Auditors (full-time) Corporate Auditors Masaya Yamashita Kunio Endo Hirotake Abe Tomochika Iwashita Toshiaki Hiwatari *1 C  orporate Auditors Hirotake Abe. Item 16 of the Company Law. Item 15 of the Company Law. Chief Executive Officer and Representative Director Executive Vice President.

Automobile Operations Yusuke Hori Head of Regional Unit (Africa and the Middle East) Tomomi Kosaka Executive Vice President and Director of Honda North America.. Purchasing and Production (North America) Executive Vice President and Director of Honda North America..Return to last page opened Honda Motor Co. Inc. Ltd. Chief Operating Officer for IT Operations Sho Minekawa Chief Operating Officer for Regional Operations (Japan) Chief Officer of Honda Driving Safety Promotion Center Koichi Fukuo Executive in Charge of Business Unit No.. Chief Executive Officer Executive Vice President. *T  he Company has introduced an operating officer system to strengthen operations in regions and local workplaces and implement quick and appropriate decisions. Operating Officers Takashi Sekiguchi Executive in Charge of Business Unit No. Automobile Operations Michimasa Fujino President and Director of Honda Aircraft Company. Purchasing and Production (Asia and Oceania) Executive Vice President of Asian Honda Motor Co. Automobile Production. Yoshi Yamane Representative of Automobile Development. Yoshiyuki Matsumoto Representative of Development.K. Managing Director of Honda of the U. Chief Executive Officer and Representative Director of Honda R&D Co. . President and Director of Honda of America Mfg.. Vice President of Honda Motor Technology (China) Co. President and Director of Honda Automobile (Thailand) Co. Manufacturing Ltd. Ltd.. President and Chief Executive Officer of American Honda Motor Co.. Ltd. Automobile Operations Shinji Aoyama Chief Operating Officer for Motorcycle Operations Noriya Kaihara Chief Quality Officer Chief Operating Officer for Customer Service Operations Head of Service Supervisory Unit for Automobile Operations Tetsuo Suzuki Representative of Motorcycle Development. 2. Inc. Inc. Automobile Production. Ltd. Yoshiharu Yamamoto President.. Toshiaki Mikoshiba Chief Operating Officer for Regional Operations (Europe Region) President and Director of Honda Motor Europe Ltd. Toshiyuki Shimabara Executive in Charge of Motorcycle Production for Motorcycle Operations General Manager of Kumamoto Factory for Motorcycle Operations Executive in Charge of Power Product Production for Power Product Operations Yasuhide Mizuno President of Guangqi Honda Automobile Co. Inc.. Yuji Shiga Chief Operating Officer for Power Product Operations Kohei Takeuchi Chief Operating Officer for Business Management Operations Naoto Matsui Chief Operating Officer for Purchasing Operations Head of Purchasing Supervisory Unit. 1 for Automobile Operations Managing Officers Toshihiko Nonaka Chief Operating Officer for Automobile Operations Takuji Yamada Chief Operating Officer for Regional Operations (North America) President and Director of Honda North America. Purchasing and Production (China) Vice President of Honda Motor (China) Investment Co. Executive Officer Takanobu Ito Tetsuo Iwamura Risk Management Officer Corporate Brand Officer Chairman of American Honda Motor Co. Automobile Operations Head of Powertrain Production Supervisory Unit. President of Honda Motor Technology (China) Co. Purchasing and Production (Europe Region) Executive Vice President and Director of Honda Motor Europe Ltd... Ltd. Noriaki Abe Chief Operating Officer for Regional Operations (Asia & Oceania) President and Director of Asian Honda Motor Co. LLC Soichiro Takizawa Representative of Development. Automobile Production. Ltd.. Seiji Kuraishi Chief Operating Officer for Regional Operations (China) President of Honda Motor (China) Investment Co. Toshihiro Mibe Executive in Charge of Powertrain Business. Automobile Production. Ltd. President and CEO of Honda Motor India Private Ltd. Ltd. Chief Executive Officer and Representative Director of Honda Engineering Co. President and Director of Moto Honda da Amazonia Ltda. Inc. Ltd. Purchasing and Production (Japan) Head of Automobile Production. Ko Katayama Executive in Charge of Production Strategy for Automobile Operations Head of Supply Chain Management Supervisory Unit in Automobile Production for Automobile Operations Masahiro Yoshida Chief Operating Officer for Business Support Operations Compliance Officer Chitoshi Yokota Representative of Automobile Development. Ltd. Automobile Operations Mitsugu Matsukawa Head of Drivetrain Business Unit.. Purchasing and Production. Motorcycle Operations Issao Mizoguchi Chief Operating Officer for Regional Operations (Latin America) President and Director of Honda South America Ltda. President and Director of Honda Automoveis do Brasil Ltda. Annual Report 2014 1 The Power of Dreams 2 Financial Highlights Go to contents page 4 Review of Operations 5 Corporate Governance 6 Financial Section 3 To Our Shareholders 30 Relations Information 7 Investor Executive Officers President. Purchasing and Production for Automobile Operations President... Inc. Regional Operations (Japan) Takahiro Hachigo Representative of Development. Ltd. Regional Operations (Japan) Head of Production Supervisory Unit. Senior Managing Officers Takashi Yamamoto Chief Production Officer Head of Automobile Production for Automobile Operations Representative of Automobile Development.

” management analyzed foreign currency adjustments primarily related to the ­following currencies: U. general and administrative expenses and increased R&D expenses. to ¥132.7%.9%.842.8 billion.5 billion. 12. to ¥1.6 billion from the previous fiscal year.2%.7% from the previous fiscal year. which was partially offset by increased selling. or 19. Ltd. Selling. Japanese yen and others at the level of the Company and its material consolidated subsidiaries.” which come from the translation of the currency of foreign subsidiaries’ financial statements into Japanese yen..3%. and negative foreign currency effects.000 Equity in Income of Affiliates 4. With respect to “foreign currency adjustments. to ¥728. due mainly to an increase in foreign currency transaction losses.1%.S.7 billion. due mainly to an increase in income attributable to increased net sales and positive foreign currency effects.9 billion.) Income before Income Taxes and Equity in Income of Affiliates Income before income taxes and equity in income of affiliates increased by ¥240. or 18.6 billion. are as follows: Unrealized gains and losses related to derivative instruments had a positive impact of ¥74. 2013.1 billion from the previous fiscal year. due mainly to an increase in costs attributable to increased consolidated unit sales in Automobile business and Motorcycle business. .2 billion. “Foreign currency effects” consist of “translation adjustments. “net sales”) for the fiscal year ended March 31.0 billion. due mainly to increased net sales in Automobile business and Motorcycle business operations as well as positive foreign currency translation effects.8 billion. due mainly to increased product warranty expenses and increase in selling expenses attributable to increased ­consolidated unit sales in Automobile business and Motorcycle business.8%. due mainly to an increase in income attributable to increased net sales at affiliates in Asia and a recognition of impairment loss on certain investments in affiliates. to ¥252. Other income (expenses) excluding unrealized gains and losses related to derivative instruments had a negative impact of ¥39. R&D expenses increased by ¥73. or 19. which includes positive foreign currency translation effects.9 billion from the previous fiscal year. to ¥750. or 4.1 billion from the previous fiscal year. net sales for the year would have increased by approximately ¥458.4 billion.4 billion from the fiscal year ended March 31. 2014.761.000 8. to ¥11. Honda estimates that by applying Japanese yen exchange rates of the previous fiscal year to the current fiscal year.” which result from foreigncurrency-denominated sales.9 billion. or 41. compared to the increase as reported of ¥1.7 billion. Cost of sales increased by ¥1.2 billion.Return to last page opened Honda Motor Co. or 49. Honda estimates operating income decreased by ¥83. to ¥634. or 18. dollar. or 60. Management analyzed changes in these ­factors at the levels of the Company and its material consolidated subsidiaries. increased by ¥1. or 37. 10 11 12 13 14 Equity in income of affiliates increased by ¥49.4 billion. which was included in the previous fiscal year. to ¥11.964.0 billion. Income Tax Expense Yen (billions) Income tax expense increased by ¥73. Annual Report 2014 1 The Power of Dreams 2 Financial Highlights 3 To Our Shareholders 4 Review of Operations 5 Corporate Governance 6 Financial Section Go to contents page 31 Relations Information 7 Investor Financial Section: Financial Review Operating and Financial Review Operating Income Net Sales and Other Operating Revenue Honda’s consolidated net sales and other operating revenue (hereafter.0 billion from the previous fiscal year. to ¥8.2%. The main factors behind this increase.2 billion from the previous fiscal year.9%.092. management identified factors and used what it believes to be a reasonable method to analyze the respective changes in such factors. Euro. Operating Costs and Expenses Operating costs and expenses increased by ¥1. The effective tax rate decreased 1. general and administrative expenses increased by ¥269.000 0 Operating income increased by ¥205. Excluding positive foreign currency effects of ¥288.696.1%.964.4 billion.759.6%.4 billion. Net Sales and Other Operating Revenue Fiscal years ended March 31 (With respect to the discussion above of the changes. due mainly to improving safety and environmental technologies and enhancing of the attractiveness of the products.9 percentage points to 34. except factors relating operating income. and “foreign currency adjustments.5 billion. or 13. The decrease in the effective tax rate was due mainly to a decrease in a portion of unrecognized tax benefits related to transfer pricing matters of overseas transactions between the Company and foreign affiliates.415.

5%. Net income attributable to Honda Motor Co.663. compared to the increase as reported of ¥1. to ¥34.9%.0 billion.1 billion from the previous fiscal year.. (left scale) Net Income attributable to Honda Motor Co.5% from the previous fiscal year.0%. or 10.2%. per Common Share (right scale) (Yen) 450 400 300 200 150 0 10 11 12 13 14 0 Business Segments Motorcycle Business Honda’s consolidated unit sales of motorcycles and all-terrain vehicles (ATVs) totaled 10.176.5%. general and administrative expenses increased by ¥43.0 billion. due mainly to an increase in income attributable to increased net sales and positive foreign currency effects. compared to the increase as reported of ¥324.9%. which was partially offset by an increase in unit sales in North America. R&D expenses increased by ¥6.194. or 21.7%. due mainly to an increase in costs attributable to increased consolidated unit sales and negative foreign currency effects.1 billion. The impact of price changes was immaterial. or 21. or 18.9 billion.6% from the previous fiscal year. general and administrative expenses and increased R&D expenses.1 billion.5 billion. to ¥165.353. to ¥8.9 billion from the previous fiscal year. due mainly to an increase in consolidated unit sales in Asia. Automobile Business Honda’s consolidated unit sales of automobiles totaled 3.2%. or 24. / 600 Net Income attributable to Honda Motor Co. Operating costs and expenses increased by ¥268.471. due mainly to increased consolidated unit sales and positive foreign currency translation effects. The impact of price changes was immaterial. Net Income attributable Yen (billions) to Honda Motor Co.791. . Cost of sales increased by ¥218. which includes positive foreign currency translation effects. due mainly to increased product warranty expenses.0%.1 billion. due mainly to continuing cost reduction and positive foreign currency effects.8%. due mainly to an increase in ­consolidated unit sales in Japan and North America.. Ltd.2%. or 35. to ¥608. R&D expenses increased by ¥67. decreased by 0.7 billion.6 billion from the previous fiscal year. to ¥9.9 billion. due mainly to a decrease in consolidated unit sales in Asia and Other Regions.086. per Common Share Fiscal years ended March 31 Net Income attributable to Honda Motor Co.3 billion..560 thousand units.0%. due mainly to an increase in selling expenses attributable to increased consolidated unit sales and negative foreign currency effects. or 41. Selling. Power Product and Other Businesses Honda’s consolidated unit sales of power products totaled 6. to ¥403.6 billion.2 billion from the previous fiscal year. Revenue including intersegment sales increased by ¥1.6 billion. to ¥243. to ¥9. increased by 4. net sales for the year would have increased by approximately ¥304. to ¥1.4 billion. which was partially offset by increased selling. general and administrative expenses and increased R&D expenses. or 19. Cost of sales increased by ¥1..7 billion from the previous fiscal year.3 billion.4%. increased by 8.6 billion from the previous fiscal year. Honda estimates that by applying Japanese yen exchange rates of the previous fiscal year to the current fiscal year.467.4 billion. Annual Report 2014 1 The Power of Dreams 2 Financial Highlights 4 Review of Operations 5 Corporate Governance 6 Financial Section 3 To Our Shareholders Net Income Net income increased by ¥216. Revenue from external customers increased by ¥1.304. to ¥73.. Ltd.498.3 billion. Revenue from external customers increased by ¥324. or 19.5 billion.3%.. to ¥574.1 billion. or 55. general and administrative expenses increased by ¥199. Ltd.0%. or 18. or 56. to ¥531.3 billion. due mainly to an increase in costs Go to contents page 32 Relations Information 7 Investor attributable to increased consolidated unit sales and negative foreign currency effects. which was partially offset by increased selling.6 billion. Operating costs and expenses increased by ¥1. Honda estimates that by applying Japanese yen exchange rates of the previous fiscal year to the current fiscal year. to ¥1.7 billion. or 22.181.036 thousand units. an increase in selling expenses attributable to increased consolidated unit sales and negative foreign currency effects.. which includes positive foreign currency translation effects. or 14.343 thousand units. Net Income attributable to Honda Motor Co. Ltd. Operating income increased by ¥117.0 billion.467. to ¥6. Selling.2%. or 18. or 9. Net Income attributable to Noncontrolling Interests Net income attributable to noncontrolling interests increased by ¥9.9%.6 billion from the previous fiscal year. due mainly to increased consolidated unit sales and positive foreign currency translation effects.0%. Operating income increased by ¥55.8 billion. Ltd.955.7 billion from the ­previous fiscal year. Ltd. net sales for the year would have increased by approximately ¥124. to ¥1. or 3.8% from the previous fiscal year. increased by ¥206. due mainly to improving safety and environmental technologies and enhancing of the attractiveness of the products.0 billion from the previous fiscal year. to ¥1.Return to last page opened Honda Motor Co. Ltd.3 billion.5 billion. or 50.3 billion from the previous fiscal year.1 billion.

2 billion from the previous fiscal year. which mainly consists of the United States. or 10. or 5. or 3. the United States. Cost of sales increased by ¥12. to ¥85. Honda provides retail lending and leasing to customers and wholesale financing to dealers through our finance subsidiaries in Japan. due mainly to an increase in costs attributable to increased operating lease revenues and negative foreign currency effects.1 billion. Operating income increased by ¥35.8%. revenue for the year would have increased by approximately ¥39. revenue from domestic and export sales increased by ¥298. Operating loss was ¥1. due mainly to a decrease in income attributable to decreased net sales and model mix.7 billion from the previous fiscal year.9%.018.4 billion.5 billion from the previous fiscal year. or 30. which was partially offset by a decrease in revenue in Motorcycle business and Automobile business. to ¥318.2%. an improvement of ¥7. or 11. to ¥708.5%.5 ­billion. due mainly to negative foreign currency effects. Brazil. total amount of finance subsidiaries-receivables and property on operating leases of finance subsidiaries as of the end of the year would have increased by approximately ¥641. Asia In Asia.8 billion from the previous fiscal year. due mainly to positive foreign currency translation effects. to ¥775.9 billion from the previous fiscal year. or 7. Total amount of finance subsidiaries-receivables and property on operating leases of finance subsidiaries increased by ¥1.7%.2 billion. Operating income increased by ¥71. or 7. R&D expenses decreased by ¥0.4 billion. due mainly to an increase in revenue in Motorcycle business and positive foreign currency translation effects. general and administrative expenses.192. or 8. Revenue including intersegment sales increased by ¥148. Canada.. due mainly to continuing cost reduction and positive foreign currency effects. to ¥63. Thailand and other countries. Operating loss was ¥17.5%.2 billion from the previous fiscal year. Cost of sales increased by ¥103.9 billion. which includes positive foreign currency translation effects. revenue increased by ¥133.1 billion from the previous fiscal year. net sales for the year would have decreased by approximately ¥10.144.9 billion from the previous fiscal year.5%. Revenue from external customers in Financial services business increased by ¥149. which was partially offset by decreased selling.0%.1 billion from the previous fiscal year.6 billion.4%. Honda estimates that by applying Japanese yen exchange rates of the previous fiscal year to the current fiscal year.7 billion. or 26.0 billion from the previous fiscal year. or 20. to ¥29.1 billion. or 30. Ltd. to ¥5.2 billion. general and administrative expenses increased by ¥6. to ¥304. Revenue including intersegment sales increased by ¥26. general and administrative expenses. to ¥4.4%. to ¥319. or 27. to ¥217. due mainly to an increase in operating lease revenues and positive foreign currency translation effects. Germany. general and administrative expenses increased by ¥19.2%.5 billion.4 billion.9%. or 22.969. which was partially offset by increased R&D expenses and increased selling. to ¥440. a decrease of ¥17.Return to last page opened Honda Motor Co. Operating income increased by ¥81.8 billion. or 20. to ¥227. due mainly to positive foreign currency effects. compared to the increase as reported of ¥23.6 billion. which was partially offset by increased selling.7 billion from the ­previous fiscal year.9 billion. or 19. Operating income increased by ¥24.2 billion.6 billion. compared to the increase as reported of ¥149.144. to ¥7.6%. revenue increased by ¥521. Selling.6%. due mainly to an increase in income attributable to increased net sales and model mix and positive foreign currency effects.1 billion. to ¥698. to ¥290.6%. Annual Report 2014 1 The Power of Dreams 2 Financial Highlights 3 To Our Shareholders 4 Review of Operations 5 Corporate Governance 6 Financial Section Go to contents page 33 Relations Information 7 Investor Revenue from external customers increased by ¥23. due mainly to positive foreign currency effects. or 48. revenue increased by ¥1. or 6. which includes positive foreign currency translation effects. or 0.5 billion of operating income from the previous fiscal year. due mainly to positive foreign currency effects.1 billion from the previous fiscal year. the United Kingdom.1%.2 billion. which was partially offset by increased selling. to ¥214. or 30.1 billion. or 39. In North America.7%.9%.9 billion from the previous fiscal year.7 billion. or 22.2 billion from the previous fiscal year.6 billion from the previous fiscal year. or 9. which includes positive foreign currency translation effects. to ¥2. to ¥182. general and administrative expenses. Honda estimates that by applying Japanese yen exchange rates of the previous fiscal year to the current fiscal year. Operating costs and expenses increased by ¥18.112.5 billion. .826. Europe In Europe. Honda estimates that by applying Japanese yen exchange rates of the previous fiscal year to the current fiscal year.3%. general and administrative expenses. general and administrative expenses and positive foreign currency effects.4 billion from the previous fiscal year. Financial Services Business North America To support the sale of its products.0%.7 billion. compared to the increase as reported of ¥1.6 billion. due mainly to an increase in revenue in Automobile business and Motorcycle business.7 billion.2%. to ¥525.5 billion. due mainly to positive foreign currency translation effects.9 billion from the previous fiscal year.1 billion. Operating costs and expenses increased by ¥123. Selling.5 billion.1 billion.7%.7 billion. Geographical Information Japan In Japan. or 15.7%. which was partially offset by increased selling.3 billion.9 billion from the previous fiscal year. due mainly to an increase in revenue in Automobile business and positive foreign currency translation effects.

a new hybrid system combining a three-motor electric mode and V6 engine with direct fuel injection to realize both superb acceleration performance and fuel economy was developed. Honda is aiming to deliver appealing products in a timely manner that offer outstanding environmental performance and that will enable customers to experience the joy of ownership. Furthermore. R&D expenses in this segment amounted to ¥73. we prioritized initiatives designed to bolster product appeal. to ¥44. R&D Expenses and R&D Expenses as a ­Percentage of Net Sales 34 Go to contents page Relations Information 7 Investor Yen (billions) (%) 750 9 500 6 250 3 Fiscal years ended March 31 R&D Expenses (left scale) R&D Expenses as a Percentage of Net Sales (right scale) 0 10 11 12 13 14 0 Automobile Business In the automobile business segment. due mainly to an increase in income attributable to increased net sales and model mix. To this end.Return to last page opened Honda Motor Co.025. CB400F and 400X sports models equipped with a newly developed DOHC parallel twin-cylinder 400cc water-cooled four-stroke engine were launched. 2014. It was initially installed in the Fit Hybrid and the new VEZEL Hybrid models. Honda’s aim is to become the premier manufacturer of interesting. R&D expenses in this segment amounted to ¥531. Honda won the rider. revenue increased by ¥129. general and administrative expenses. quicken the pace of product and technology development. the Honda’s main R&D divisions operate independently as subsidiaries. The CBR and CB models were equipped with a newly developed DOHC parallel four cylinder 650cc water-cooled four-stroke engine. and respond to the demands of a low-carbon society.9 billion from the previous fiscal year. 2014.. Research and Development Honda and its consolidated subsidiaries use the most-advanced technologies and conduct R&D activities with the goal of creating distinctive products that are internationally competitive. This system utilizes a microwave radar and a set of cameras to monitor the surroundings of a vehicle. Ltd.. and will be installed in models to be launched in the near future. Inc. The CTX1300 is the new flagship model of the CTX series with “Comfort Technology Experience” as its development concept. to ¥1. CBR650F and CB650F models were launched globally.” Among major technological achievements in the automobile business segment.0 billion in the year ended March 31. Ltd. in Japan. which is characteristic of EVs. at affordable prices and with low CO2 emissions. and automatically provides braking and steering assistance to help the driver take evasive action.4 billion in the year ended March 31. Moreover. In addition. Annual Report 2014 1 The Power of Dreams 2 Financial Highlights 3 To Our Shareholders 4 Review of Operations 5 Corporate Governance 6 Financial Section Other Regions In Other Regions. in the United States. Honda R&D Americas. To attain this goal. Inc.. The capacity of the lithium ion battery was enlarged for the plug-in hybrid model to enable it to operate entirely in EV mode in most daily driving situations.8%.1 billion in the fiscal year ended March 31. As a result. in Thailand. 2014.. As for other technological achievements. The overall strategic direction is to develop “great products speedily. and Honda R&D Asia Pacific Co. was realized in these two models. which was partially offset by increased selling. or 25. in Japan and Honda Engineering North America. a hybrid system combining a two-motor electric mode CVT powertrain with lithium ion batteries was developed for installation in the Accord Hybrid and Accord Plug-in Hybrid models. strengthen cost competitiveness. Motorcycle Business In the motorcycle business segment. allowing engineers to pursue their tasks with significant freedom. Among major technological achievements.0 billion. R&D on production technologies centers around Honda Engineering Co. In terms of major race results. Honda developed and launched the all new N-WGN and N-WGN Custom models equipped with safety enhancements. the CBR400R. Product-related R&D is spearheaded by Honda R&D Co. This proprietary system with two motors mounted in the back is capable of independently controlling the torque to the left and right rear wheels. a balance between nimble acceleration and fuel economy. an omnidirectional safety system to assist drivers in avoiding accidents was developed. Total consolidated R&D expenses amounted to ¥634. Ltd. in the United States. cleverly designed cars that enable customers to experience the joy of driving. including six airbags and a system that prevents the car from drifting sideways in reaction to abrupt turns of the steering wheel. Honda enhanced fuel economy by developing a new lightweight and compact hybrid system that can operate on one motor in electric vehicle (EV) mode.5 billion from the previous fiscal year. In addition. Operating income increased by ¥9. .2 billion. a new-model DUNK scooter equipped with a newly developed OHC single-cylinder 50cc water-cooled four-stroke “eSP” engine was also introduced. In Japan. the CTX1300. constructor and team divisions to become a triple crown champion in MotoGP-class motorcycle racing. or 14. All of these entities work in close association with our other entities and businesses in their respective regions. Ltd.4%. due mainly to an increase in revenue in Motorcycle business and positive foreign currency translation effects.

and improvement of sales and R&D facilities. A second auto plant of Honda De Mexico.128. and improvement of sales and R&D facilities.6 billion in the year ended March 31. while capital expenditures for property on operating leases were ¥1. Patents and Licenses As of March 31.187 ¥132. to regain bipedal mobility. Honda’s walking assist devices are being developed to help people who have walking impairments due to illness. Osato-gun. which enables riders to move at walking speed simply by shifting their weight and leaning in the direction they would like to go.575 million in the fiscal year ended March 31. S.575 656.5 billion from the previous year. capital expenditures excluding property on operating leases amounted to ¥620 million in the fiscal year ended March 31. Japan completed construction of its facilities for production in July 2013. completed construction of facilities for production in February 2014. Honda’s patents are important. among other features..519 Total ¥1.045 Financial Services Business 793.281 ¥  726. Also launched was the HSL2511 large-sized snowblower equipped with a function for adjusting the angling of the auger. for the year amounted to ¥726. Saitama.367 334. The segment’s core technological initiatives focus primarily on (1) creating new products and technologies for developed countries. 35 Go to contents page Relations Information 7 Investor Capital Expenditures Capital expenditures in fiscal 2014 were applied to the introduction of new models. which is one of the Company’s consolidated subsidiaries. rehabilitation institute in Chicago.800 patents in Japan and for more than 15. injuries or weakened leg muscles due to old age. Spending by business ­segment is shown below. In Financial services business. Fundamental Research Major initiatives in the fundamental research area included a joint trial research project for Honda’s walking assist device in collaboration with a leading U. we made capital expenditures of ¥55.386. A second auto plant of Honda Cars India Limited. 2014.0 billion.. Honda also had applications pending for more than 8. Annual Report 2014 1 The Power of Dreams 2 Financial Highlights 3 To Our Shareholders 4 Review of Operations 5 Corporate Governance 6 Financial Section Power Product and Other Businesses The power product business’ overall strategic direction is to proactively propose new and useful ideas that will bring joy to customers worldwide.1 billion. the GP160H and GP200H engines were developed for sale in emerging markets. Honda owned more than 20. excluding property on operating leases. This beta model was developed based on data and user feedback collected from trial demonstrations that began in June 2012. as well as the improvement. streamlining and modernization of production facilities.580 ¥1.S.460 ¥(17. Ltd.628 ¥   55. de C. Honda launched the HSS760n compact rotary snowblower equipped with an auger (snow-throwing unit) with a concentric. reverse mechanism that prevents the machine from riding up on top of hardened snow. Please note that expenses incurred in fundamental research are allocated among each business segment. total capital expenditures.412 1. In Motorcycle business. In the general-purpose engine category. While Honda considers that.Return to last page opened Honda Motor Co.900 patents abroad.2 billion from the previous year.854.938) 151. or any related group of them. streamlining and modernization of production facilities. simultaneous forward. Yen (millions) 2013 2014 Increase (Decrease) Motorcycle Business ¥    73. completed construction of facilities for production in February 2014. Also.513 Automobile Business 505.854. increased by ¥132. Funds were allocated to the introduction of new models.412 million in the fiscal year ended March 31.027 69 (939) ¥467. as well as the improvement.746 Total (Excluding Property on Operating Leases) ¥   593.800 patents in Japan and more than 25. it does not consider any one of such patents.127.700 patents abroad. which is one of the Company’s consolidated subsidiaries. streamlining and modernization of production facilities.791 620 13. and (2) developing products for expanding markets in the emerging countries. to be of such importance that the expiration or termination thereof would materially affect ­Honda’s business. 2014. In Automobile business. as well as the improvement. 2014. Among key technological achievements.840 ­million.669 Financial Services Business (Excluding Property on Operating Leases) 551 Power Product and Other Businesses 14. Total capital expenditures for the year amounted to ¥1. Honda also unveiled a UNI-CUB ß model of its UNI-CUB Personal Mobility Device. we made capital expenditures of ¥656. 2014. R&D expenses in this segment amounted to ¥29. in the aggregate.559 Fiscal years ended March 31 Note: Intangible assets are not included in the table above. These engines were designed to share as many water pump and generator components produced in China as possible in order to lower their price and make them affordable to many more customers. and improvement of sales and R&D facilities.V. increased by ¥467. A new auto plant in Yorii-machi. Funds were allocated to the introduction of new models.A. Capital expenditures in Power products and other businesses in the fiscal . 2014.

Honda meets its working capital requirements primarily through cash generated by operations and bank loans. due mainly to an increase in cash received due to increased unit sales in Automobile business. Cash inflows from financing activities increased by ¥250.900 900 11. commercial paper. has been changed. we modified our capital expenditure plans which were originally set out in the prior fiscal year. which is under construction in Sakura-shi. are as follows: Net cash provided by operating activities amounted to ¥1. Managements mainly consider economic trends of each region.5 billion of cash inflows. automobiles and power products. Cash outflows from investing activities increased by ¥638.708.400 559. when compared with the previous fiscal year.229. which was partially offset by an increase in collections of finance subsidiaries-receivables. Intangible assets are not included in the table above. The reasons for the increases or decreases for each cash flow activity. a mega-solar power plant will be built on its property. bank loans. upgrade.7 billion of cash outflows. corporate bonds. To support this business. The modified plans are as follows: The scale of a test course in a new R&D facility. Cash inflows from operating activities increased by ¥428.580 million.2 billion from March 31.Return to last page opened Honda Motor Co. The estimated amounts of capital expenditures for fiscal year ending March 31. Annual Report 2014 1 The Power of Dreams 2 Financial Highlights Capital Expenditures and Depreciation Fiscal years ended March 31 3 To Our Shareholders 4 Review of Operations 5 Corporate Governance 6 Financial Section 750 10 11 12 13 14 Note: Capital Expenditure and Depreciation aforementioned exclude Capital ­Expenditure and Depreciation in operating lease assets and intangible assets. 2014. 2015 are shown below. due mainly to an increase in proceeds from debt. Net cash provided by financing activities amounted to ¥370. Ltd.168. Japan.800 ¥650.9 billion. rationalize and renew production facilities. Plans after Fiscal Year 2014 During the fiscal year ended March 31. year ended March 31. as well as wholesale financing services for dealers. The year-end balance of liabilities associated with these finance subsidiaries’ funding for Financial services business was ¥5. Tochigi.1 billion of cash inflows. were deployed to upgrade..000 Note: T  he estimated amount of capital expenditures for Financial services business in the above table does not include property on operating leases. a sufficient level of liquidity and a sound balance sheet.838. Honda requires working capital mainly to purchase parts and raw materials required for production. In addition. 2014. Net cash used in investing activities amounted to ¥1. Honda believes that its working capital is sufficient for the Company’s present requirements. to ¥1.9 billion compared with the previous fiscal year. 2015 Motorcycle Business Automobile Business Financial Services Business Power Product and Other Businesses Total Relations Information 7 Investor Overview of Capital Requirements. 2014 decreased by ¥37. Sources and Uses 250 0 36 Liquidity and Capital Resources Yen (billions) 500 Capital Expenditures Depreciation Go to contents page 2015 ¥ 77. demand trends. Also. Yen (millions) Fiscal year ending March 31. which was partially offset by increased payments for parts and raw materials. securitization of finance receivables. and intercompany loans. the Company’s finance subsidiaries fund financial programs for customers and dealers primarily from medium-term notes. which was partially offset by an increase in dividends paid. The policy of Honda is to support its business activities by maintaining sufficient capital resources.4 billion compared with the previous fiscal year. 2013. due mainly to an increase in acquisitions of finance subsidiaries-receivables and purchases of operating lease assets.3 billion as of March 31. streamline. and modernize manufacturing facilities for power products. as well as to expand and reinforce sales and R&D facilities. The year-end balance of liabilities associated with the Company and its subsidiaries’ funding for non-Financial services businesses was ¥565.9 billion compared with the previous fiscal year. Honda’s main business is the manufacturing and sale of motorcycles. mainly to introduce new models. it also provides retail financing and automobile leasing services for customers. situation of competitors and our business strategy such as introduction plans of new models in determining the future of projects. 2014. totaling ¥13. . Honda also requires funds for capital expenditures. as well as to maintain inventory of finished products and cover receivables from dealers and for providing financial services. Cash Flows Consolidated cash and cash equivalents on March 31.2 billion as of March 31. and to improve R&D facilities for power products. 2014.

The following table shows the ratings of Honda’s unsecured debt securities by Moody’s.734 ¥293. contributions to defined benefit pension plans reflect only contributions expected for the next fiscal year.Return to last page opened Honda Motor Co. 2014 Total Within 1 year 1–3 years 3–5 years Thereafter Long-term debt ¥4.240 ¥1.724 4. plant and equipment as of March 31.802 — ¥910. the company utilized the balances and average interest rates of borrowings and debts and derivative instruments as of March 31. Credit ratings for Short-term unsecured debt securities Moody’s Investors Service Standard & Poor’s Rating Services Rating and Investment Information Go to contents page Long-term unsecured debt securities P-1 A-1 a-1+ 37 Relations Information 7 Investor The above ratings are based on information provided by Honda and other i­nformation deemed credible by the rating agencies. Ratings can be revised or nullified by agencies at any time.015 39. Annual Report 2014 1 The Power of Dreams 2 Financial Highlights 3 To Our Shareholders 4 Review of Operations 5 Corporate Governance 6 Financial Section Liquidity The ¥1. 2014.and long-term debt securities are rated by credit rating agencies. Inc. Each rating agency may use different standards for calculating Honda’s credit rating.464 ¥2.674 Operating leases Purchase and other commitments*1 Interest payments*2 Contributions to defined benefit pension plans*3 Total 102. Honda is aware of the possibility that various factors. such as Moody’s Investors Service.005 *1 Honda had commitments for purchases of property.240 ¥5. A1 A+ AA Tabular Disclosure of Contractual Obligations The following table shows our contractual obligations as of March 31. no amount has been accrued for any estimated losses under the obligations. Honda’s short.637 18. 2014. Standard & Poor’s and Rating and Investment Information as of March 31.168. Honda believes it currently has sufficient credit limits. as of the date of the filing of Honda’s Form 20-F. Ltd. 2014: Yen (millions) Payments due by period As of March 31.031. and also makes its own assessment.865 — ¥2. *2 To estimate the schedule of interest payments.537. Standard & Poor’s Rating Services.061 79. 2014.574.180 131. we guaranteed ¥25.452 73. 2014. we are required to perform under the guarantee. At the same time. As of March 31. and Honda believes it has sufficient liquidity for its business operations.530 ¥1. The undiscounted maximum amount of our obligation to make future payments in the event of defaults is ¥25. and Rating and Investment Information. . They are also based on the agencies’ assessment of credit risk associated with designated securities issued by Honda.3 billion of employee bank loans for their housing costs.658 ¥851.075 27.027 16. Inc.542 16. as it was probable that the employees would be able to make all scheduled payments. 2014..448 79.862 93.303.9 billion in cash and cash equivalents at the end of the fiscal year 2014 corresponds to approximately 1. *3 Since contributions beyond the next fiscal year are not currently determinable.206. For this reason..2 months of net sales. These ratings are not meant to serve as a recommendation for trading in or holding Honda’s unsecured debt securities.566.8 billion have committed lines of credit equivalent to ¥965.567 16. may adversely affect liquidity. such as recession-induced market contraction and financial and foreign exchange market volatility.238 181.449 79. finance subsidiaries that carry total short-term borrowings of ¥1.886 2.452 25.088. Off-Balance Sheet Arrangements Guarantee As of March 31. extended by prominent international banks.721 — ¥341. If an employee defaults on his/her loan payments.3 billion.0 billion that serve as alternative liquidity for the commercial paper issued regularly to replace debt.

947 397 11.620 ¥11. Ltd. As of March 31. Honda classifies retail and direct financing lease receivables (consumer finance receivables) derived from those services as finance subsidiaries-receivables.8 billion.898 (8. We believe our accrued warranty liability is a “critical accounting estimate” because changes in the calculation can materially affect net income attributable to Honda Motor Co. Since suppliers ­typically warrant these parts.090) 97. including the expected number of units to be affected and estimated average repair cost per unit for product recalls. effects by market conditions. We also provide for specific estimated warranty program costs at the time those costs for new warranty programs are deemed to be probable and can be reasonably estimated. Product Warranty We warrant our products for specific periods of time. The changes in the accrued liabilities for those product warranties and net sales and other operating revenue for each of the years in the three-year period ended March 31. 2014.842.562 (64. Our products Go to contents page 38 Relations Information 7 Investor contain certain parts manufactured by third party suppliers. which are inherently uncertain.. including current sales trends. 2014. Our policy is to continuously monitor warranty cost accruals to determine the adequacy of the accrual.033 (104.Return to last page opened Honda Motor Co. including product recalls. and require us to estimate the frequency and amounts of future claims. effects of currency fluctuations or other factors have combined to increase the uncertainty inherent in such estimates and assumptions. Actual claims incurred in the future may differ from the original estimates. Annual Report 2014 1 The Power of Dreams 2 Financial Highlights 3 To Our Shareholders 4 Review of Operations 5 Corporate Governance 6 Financial Section If our estimates of unrecognized tax benefits and potential tax benefits are not representative of actual outcomes. due mainly to the change of the expected level of future warranty costs. we had no material capital lease obligations or longterm liabilities reflected on our balance sheet under U. Product warranties vary depending upon the nature of the product. We provide for general estimated warranty costs at the time products are sold to customers.. Credit Losses Our finance subsidiaries provide retail lending and leasing to customers and wholesale financing to dealers primarily to support sales of our products. as needed.033 ¥9. 2014 are as follows: Yen (millions) Fiscal years ended March 31 Provisions for product warranties Balance at beginning of year Warranty claims paid during the period Liabilities accrued for ­warranties issued during the period Changes in liabilities for ­pre-existing warranties during the period* Foreign currency translation Balance at end of year Net sales and other operating revenue 2013 2014 ¥  170.S. Certain finance receivables related to sales of inventory are included in trade accounts and notes receivable and other assets in the consolidated balance sheets. . We recognize costs for general warranties on products we sell and for specific warranty programs. Since it is difficult to estimate actual payment in the future related to our uncertain tax positions. which may result in material revisions to the warranty expense accruals. the ­geographic location of their sales and other factors. often requiring us to make estimates about the effect of matters that are inherently uncertain and which may change in sub­ sequent periods.451 *1 Liabilities accrued for warranties issued during the period for the fiscal year ended March 31. Application of Critical Accounting Policies Critical accounting policies are those which require us to apply the most difficult. due mainly to the future warranty costs for product recalls in Automobile business. The following is not intended to be a comprehensive list of all our accounting policies.382 269. or for which the use of different estimates that could have reason­ably been used in the current period would have had a material impact on the presentation of our financial condition and results of operations. subjective or complex judgments.583) 13.888 208.983 million is not represented in the table above. Therefore. Further changes in the economic environment surrounding us.6 billion.. our consolidated financial statements could be materially affected in the period of settlement or when the statutes of limitations expire. 2012. including product recalls.877. was ¥17. Operating leases are classified as property on operating leases. was ¥153.108 153. as we treat these events as discrete items in the period of resolution. warranty expense accruals are maintained at an amount we deem adequate to cover estimated warranty expenses. unrecognized tax benefit totaled ¥6. the expected receivables from warranties of these suppliers are deducted from our estimates of accrued warranty obligations. Ltd. Estimated warranty costs are provided based on historical warranty claim experience with consideration given to the expected level of future warranty costs. We have identified the following critical accounting policies with respect to our financial presentation. We also provide specific warranty programs.942) ¥   208. the expected number of units to be affected and the estimated average repair cost per unit for warranty claims. GAAP other than those set forth in the table above. *2 Changes in liabilities for pre-existing warranties during the period for the fiscal year ended March 31.

Ltd. and economic factors that could affect the creditworthiness of dealers.4 billion. Estimated losses on operating leases expected to terminate early due to lessee defaults are also determined collectively. We believe our allowance for credit losses and impairment losses on operating leases is a “critical accounting estimate” because it requires significant judgment about inherently uncertain items. and are specific to the base conditions in fiscal 2014. Wholesales receivables are individually evaluated for impairment when specifically identified as impaired. Estimated losses on past due operating lease rental payments are also recognized with an allowance for credit losses. which affect the level of credit risk that is assumed. If we had experienced a 10% increase in net credit losses during fiscal 2014. the following ­scenario demonstrates the impact that a deviation in one of the primary factors estimated as a part of our allowance calculation would have on the provision and allowance for credit losses. Wholesales receivables are considered to be impaired when it is probable that our finance subsidiaries will be unable to collect all amounts due according to the original terms of the loan. and their ability to perform under the terms of the loans. Exposure to credit risk in dealer financing is managed by performing comprehensive reviews of dealers prior to establishing financing arrangements and continuously monitoring the payment performance and creditworthiness of dealers with existing financing arrangements. The majority of the credit risk is with consumer financing and to a lesser extent with dealer financing. financial condition and cash flows. internal and external credit scores.. The determination of whether dealer loans are impaired is based on evaluations of dealerships’ payment history. and consumer debt service burdens are also incorporated when estimating losses. the provision for fiscal 2014 and the allowance balance at the end of fiscal 2014 would have increased by approximately ¥4. at minimum. Our finance subsidiaries are also exposed to credit risk on operating lease assets. Declines in used vehicle prices can reduce the amount of recoveries on repossessed collateral. Adverse changes such as a rise in unemployment rates can increase the likelihood of defaults. pricing contracts for expected losses. Dealer loans that have not been specifically identified as impaired are collectively evaluated for impairment. Credit risk on dealer loans is affected primarily by the financial strength of the dealers within the portfolio. Credit risk on consumer finance receivables can be affected by general economic conditions. As an example of the sensitivity of the allowance calculation. The estimates are based on information available as of each reporting date. unemployment rates. consistent with the methodologies used for consumer finance receivables. ­Delinquencies and losses are continuously monitored and this historical experience provides the primary basis for estimating the allowance. The factors affecting credit risk on operating leases and management of the risk are similar to that of consumer finance receivables. Our finance subsidiaries evaluate these estimates. . However actual losses may differ from the original estimates as a result of actual results varying from those assumed in our estimates. Annual Report 2014 1 The Power of Dreams 2 Financial Highlights 3 To Our Shareholders 4 Review of Operations 5 Corporate Governance 6 Financial Section Credit losses are an expected cost of extending credit.1 billion and ¥2. Economic factors such as used vehicle prices. We regularly review the adequacy of the allowance for credit losses and impairment losses on operating leases. the value of collateral securing the financings. The allowance for credit losses is management’s estimate of probable losses incurred on finance receivables. A portion of our finance subsidiaries’ operating leases are expected to terminate prior to their scheduled maturities when lessees default on their contractual obligations. Note that this sensitivity analysis may be asymmetric. The models take Go to contents page 39 Relations Information 7 Investor into consideration attributes of the portfolio including loan-to-value ratios. Exposure to credit risk on consumer finance receivables is managed by monitoring and adjusting underwriting standards. Losses are generally realized upon the disposition of the repossessed operating lease vehicles. and collateral types.Return to last page opened Honda Motor Co. Consumer finance receivables are collectively evaluated for impairment. on a quarterly basis. respectively. and focusing collection efforts to minimize losses. Various methodologies are utilized when estimating the allowance for credit losses including models that incorporate vintage loss and delinquency migration analysis.

15% 0.0) 8.6 ¥4.37% 0.678. 2013 Retail Direct financing lease Allowance for credit losses Balance at beginning of year ¥   20.44% .1 ¥  1.. net Net charge-offs as a % of average receivable balance 8.1 0.8 ¥5.4 0.7 0.2 1.1 0.6 0.3 ¥   19.21% 0.6 ¥3.158.358.0 Provision Charge-offs Recoveries Adjustments from foreign currency translation Balance at end of year Ending receivable balance Average receivable balance.2 ¥431.746.6 ¥422.46% 0.9) 0.1 (22.5 0.6 ¥394.7 (20.7 ¥4.0 ¥5.8 0.9 ¥334.09% ¥   19.36% ¥  0.0 0.4 (0.10% ¥  1.3 (0. Annual Report 2014 1 The Power of Dreams 2 Financial Highlights 3 To Our Shareholders 4 Review of Operations 5 Corporate Governance 6 Financial Section Go to contents page 40 Relations Information 7 Investor Additional Narrative of the Change in Credit Loss The following tables summarize our allowance for credit losses on finance receivables: Yen (billions) For the fiscal year ended March 31.261.0 ¥4.4 (28.0 ¥  1.7 ¥4.5) 0.1 ¥   17.2 ¥   21.865.4 ¥   24.0 0.2 ¥  2.08% 9.9 ¥457.5) 11. Ltd.6 18.429.5) 11.4 ¥   23. 2014 Allowance for credit losses Balance at beginning of year Provision Charge-offs Recoveries Adjustments from foreign currency translation Balance at end of year Ending receivable balance Average receivable balance.Return to last page opened Honda Motor Co.46% 0.8) 8.42% Retail Direct financing lease Allowance as a % of ending receivable balance Wholesale Total Yen (billions) For the fiscal year ended March 31.32% 0.2) 0.0 0.7 1.7 20.8 0.1 0.599.4 ¥3.0 (0.52% 0.6 1.0 ¥  0.1 1.6 (27.33% 0.2 1. net Net charge-offs as a % of average receivable balance Allowance as a % of ending receivable balance Wholesale Total ¥   17.4) 0.3 (0.5 ¥497.0 ¥  0.7 ¥448.18% 0.30% 0.4 ¥  1.0 0.3 ¥446.

Factors considered in this evaluation include. Ltd. Losses on Lease Residual Values Our finance subsidiaries in North America determine contractual residual values of lease vehicles at lease inception based on expectations of future used vehicle values. For operating leases. or 29.6 billion. We are exposed to risk of loss on the disposition of returned lease vehicles when the proceeds from the sale of the vehicles are less than the contractual residual values at the end of the lease term. the total impact would be an increase in depreciation expense by approximately ¥0. Honda considers the eligible investment assets under investment policies. the rate of salary increase and the expected long-term rate of return on plan assets. on a quarterly basis. which are inherently uncertain. We believe that our estimated losses on lease residual values and impairment losses is a “critical accounting estimate” because it is highly susceptible to market volatility and requires us to make assumptions about future economic trends and lease residual values.2 billion. declines in auction values are likely to have a negative effect on return rates which could affect the sensitivities. and net charge-offs increased by ¥2.6%. The salary increase assumptions reflect our actual experience as well as near-term outlook. impairment losses are measured by the amount carrying values exceed their fair values. 41 Relations Information 7 Investor We also review our investment in operating leases for impairment whenever events or changes in circumstances indicate that their carrying values may not be recoverable. The discount rate is determined mainly based on the rates of high quality corporate bonds currently available and expected to be available during the period to maturity of the defined benefit pension plans. economic conditions. and 2014. 2014 were 1. if future auction values in our North American direct financing lease portfolio were to decrease by approximately ¥10. Honda determines the expected long-term rate of return based on the investment policies. With the same prerequisites shown above. Our assumed discount rate and rate of salary increase as of March 31. Note that this sensitivity analysis may be asymmetric. taking into consideration external industry data and our own historical experience. And if future return rates were to increase by one percentage point from our present estimates.4 billion. among other factors.2%. holding all other assumption constant.9%. including the discount rate. downward adjustments for declines in estimated residual values deemed to be other-than-temporary are recognized as a loss on lease residual values in the period in which the estimate changed. Returned lease vehicles that are not purchased by the grounding dealers are sold through online and physical auctions. For direct financing leases. were to decrease by approximately ¥10.5% and 2.7 ¥3. If impairment conditions are met.3 Fiscal Year 2014 Compared with Fiscal Year 2013 The provision for credit losses on finance receivables increased by ¥11. Similarly. which would be recognized over the remaining lease terms. 2012. or 21. Lease customers have the option at the end of the lease term to return the vehicle to the dealer or to buy the vehicle for the contractual residual value (or if purchased prior to lease maturity.9 billion. at the ­outstanding contractual balance) or through market based pricing programs.6 billion. The primary factors affecting the estimates the percentage of leased vehicles that we expect to be returned by the lessee at the end of lease term and the expected loss severity. if future return rates for our existing portfolio of all Honda and Acura vehicles were to increase by one percentage point from our present estimates. Benefit obligations and pension costs are based on assumptions of many factors. at the outstanding contractual ­balance). historical experience. which would be recognized over the remaining lease terms. We believe that the assumptions used are appropriate.8%.000 per unit from our present estimates. adjustments to estimated residual values are made on a straight-line basis over the remaining term of the lease and are included as depreciation expense. Pension and Other Postretirement Benefits We have various pension plans covering substantially all of our employees in Japan and certain employees in foreign countries. and market information on new and used vehicles.. 2014. Impairment losses on operating leases due to early ­termination decreased by ¥1. the total impact would be slight. and the long-term target allocations of the various asset categories. the total impact would be an increase in losses on lease residual values by approximately ¥0. . 2013. The increase in net charge-offs was primarily due to the increase in finance receivables and declines in used vehicle prices which reduced recoveries on repossessed collateral in North America. or 122. Also. Returned lease vehicles can be purchased by the grounding dealer for the contractual residual value (or if purchased prior to lease maturity. If future auction values for all Honda and Acura vehicles in our North American operating lease portfolio as of March 31. Annual Report 2014 1 The Power of Dreams 2 Financial Highlights 3 To Our Shareholders 4 Review of Operations 5 Corporate Governance 6 Financial Section The following table provides information related to losses on operating leases due to customer defaults: Yen (billions) Fiscal years ended March 31 Provision for credit losses on past due rental payments Impairment losses on operating leases due to early termination Go to contents page 2013 2014 ¥1. historical trends.7 ¥4. expected long-term rate of return under the investing environment.000 per unit from our present estimates. the total impact would be an increase in depreciation expense by approximately ¥4.Return to last page opened Honda Motor Co.1 billion. However actual losses incurred may differ from original estimates as a result of actual results varying from those assumed in our estimates. at minimum. and are specific to the base conditions in fiscal 2014. There were no events or circumstances that indicated that the carrying values of our operating leases would not be recoverable during the fiscal years ended March 31. We assess our estimates for end of term market values of lease vehicles.1 ¥1.

Annual Report 2014 1 The Power of Dreams 2 Financial Highlights 3 To Our Shareholders 4 Review of Operations 5 Corporate Governance 6 Financial Section respectively. .0/+71. and our assumed expected long-term rate of return for fiscal 2014 was 6. Ltd. as we treat these events as discrete items in the period of resolution. We believe that the accounting estimates related to our pension plans are “­critical accounting estimate” because changes in these estimates can materially affect our financial condition and results of operations. Our estimates may change in the future due to new developments.2/–52.5 –61.3 –4. We believe that the assumptions currently used are appropriate.5 –89. Actual results may differ from our assumptions. the difference generally will be reflected as our recognized expenses in future periods.9 –2. 2013 assumptions.0 — –4. the Company has decreased a portion of unrecognized tax benefits during the year ended March 31. Pension expense for fiscal 2014 is affected by March 31.5/–66.0~7.5 +0.5/–0. and pension expense.. 2014 was 3. Due to the Company’s remeasurement based on technical merits regarding transfer pricing matters of overseas transactions between the Company and foreign affiliates. 2014 were 4. however.4% for foreign plans. differences in actual expenses or changes in assumptions could affect our pension costs and obligations.0% for Japanese plans. Income Taxes Honda is subject to income tax examinations in many tax jurisdictions because Honda conducts its operations in various regions of the world. and the difference is Go to contents page 42 Relations Information 7 Investor accumulated and amortized over future periods.8% and 2.2 Percentage point change (%) Funded status Equity Pension expense +0. 2014 assumptions.9 — –1. Therefore.8 — +59.5 +0. Japanese Plans Assumptions Discount rate Expected long-term rate of return Foreign Plans Assumptions Discount rate Expected long-term rate of return Percentage point change (%) Funded status Equity Pension expense +0. We recognize the tax benefit from an uncertain tax position based on the technical merits of the position when the position is more likely than not to be sustained upon examination.6~4. 2014. 2014.0 — +44. however. We believe our accounting for tax uncertainties is a “critical accounting estimate” because it requires us to evaluate and assess the probability of the outcome that could be realized upon ultimate resolution. Our assumed discount rate and rate of salary increase as of March 31.5~3. We performed a comprehensive review of any uncertain tax positions.4/+4. and are specific to the base conditions at March 31. *2 Funded status for fiscal 2014 is affected by March 31.7/+100.5% change in the assumed discount rate and the expected long-term rate of return on our funded status. and our assumed expected long-term rate of return for the year ended March 31. if our estimates of unrecognized tax benefits and potential tax benefits are not representative of actual outcomes.5/–0. The following table shows the effect of a 0. our consolidated financial statements could be materially affected in the period of settlement or when the statutes of limitations expire. respectively. equity.8/+2.9%.5/–0. We believe that our estimates and assumptions of unrecognized tax benefits are reasonable.8/+2. including our cash requirements to fund such obligations.8 Yen (billions) Yen (billions) *1 Note that this sensitivity analysis may be asymmetric.5/–0.Return to last page opened Honda Motor Co.2/+4. Benefits from tax positions that meet the more likely than not recognition threshold are measured at the largest amount of benefit that is greater than 50% likelihood of being realized upon ultimate resolution.

39 — — — ¥  2.019 53 53 ¥  4.119) 21 31 (69) (1. For forward exchange contracts and currency options.145 33 (9) 1 — 25 — — — — — ¥  1.441 7.230 108.318) 4 100 1.00 141.S.10 143. Interest rate swap agreements are mainly used to manage interest rate risk exposure and to convert floating rate financing to fixed rate financing (normally three-five years) in order to match financing costs with income from finance receivables. 2013 and 2014.384) 103.861 1. The following tables provide information about our derivatives related to foreign currency exchange rate risk as of March 31. Our finance receivables are primarily fixed rate.92 — — — ¥ 98.441 (47. All forward exchange contracts and currency contracts to which we are a party have original maturities within one year. Foreign Currency Exchange Rate Risk Go to contents page 43 Relations Information 7 Investor Foreign currency written option contracts are entered into in combination with purchased option contracts to offset premium amounts to be paid for purchased option contracts.311) 375 17 (14.734 (225) (6) — (17) (1.373 3.656 216.37 91.289 10 1. dollars).593 25. also serve to hedge foreign currency exchange risk as well as interest rate risk. Foreign currency forward exchange contracts and purchased option contracts are used to hedge currency risk of sale commitments denominated in foreign currencies (principally U.53 — 102.759 (33.Return to last page opened Honda Motor Co.215 3..905 ¥747.548 14. Foreign Exchange Risk Contract amount Forward Exchange Contracts To sell US$ To sell EUR To sell CA$ To sell GBP To sell other foreign currencies To buy US$ To buy other foreign currencies Cross-currencies Total Currency Option Contracts Option purchased to sell US$ Option written to sell US$ Option purchased to sell other foreign currencies Option written to sell other foreign currencies Total 2014 2013 Fiscal years ended March 31 Yen (millions) Yen Fair value Average contractual rate Contract amount Yen (millions) Yen Fair value Average contractual rate ¥390.801 ¥506. .489 371.860 — — ¥  3.197) (2. Foreign currency and interest rate swap agreements used among different currencies.889) 85. in interest rates and in prices of marketable equity securities. Honda has long-term debt with both fixed and floating rates.99 169. these tables present the contract amounts and fair value.260 3.55 — 93. Annual Report 2014 1 The Power of Dreams 2 Financial Highlights 3 To Our Shareholders 4 Review of Operations 5 Corporate Governance 6 Financial Section Quantitative and Qualitative Disclosure about Market Risk Honda is exposed to market risks. Honda is a party to derivative financial instruments in the normal course of business in order to manage risks associated with changes in foreign currency exchange rates and in interest rates. Ltd. which are changes in foreign currency exchanges rates.751 13 6.020 2.80 92.721 (11) 10 — — (1) — — — — — Interest Rate Risk Honda is exposed to market risk for changes in interest rates related primarily to its debt obligations and finance receivables. In addition to short-term financing such as commercial paper.72 99.919 2. Honda does not hold any derivative financial instruments for trading purposes.

For interest rate swaps and 44 Go to contents page Relations Information 7 Investor currency and interest rate swaps.891 3.199 0. the table presents notional amounts.627 ¥  450. Interest Rate Risk Finance Subsidiaries-Receivables 2014 2013 Fiscal years ended March 31 Yen (millions) Yen (millions) Expected maturity date Total Within 1 year 1–2 years 2–3 years 3–4 years 4–5 years Thereafter 20.780 132.306 30.025.799 495.835 116.577 233.715 23.442 10.135 2.736 628.530 1. Variable interest rates are determined using formulas such as LIBOR+a and an index.741 808.075 3.746.020 684.728.22 942.333 ¥5.570 128.297 0.467 — 518.127 221.945 1.548 65.126 105.650 174.655.423 461.S. disclosure of fair values of direct financing leases is not required.68 Total—Other finance subsidiaries-receivables ¥4.297.349 Fair value Average interest rate (%) Direct financing leases JP¥ Other Total—Direct financing leases Other finance subsidiaries-receivables JP¥ ¥  542.018 33.002 1.550 60..059. 2013 and 2014.419.196 391.809 307.674 4.086 994.967 124.167 172.11 36.847 77.408.923 43.743 — .745 231.672 — ¥  422.000 452.150 24.424 52. these tables present principal cash flows.627 15.48 42.378 5.004 460.000 30.185 722.136 1.097 — ¥5.000 342.988 1.982 27.220 1.724 93.936 114.991 36.464 963.441 ¥  628. Ltd.000 80.Return to last page opened Honda Motor Co.597.S.979 118.093 16. Annual Report 2014 1 The Power of Dreams 2 Financial Highlights 3 To Our Shareholders 4 Review of Operations 5 Corporate Governance 6 Financial Section The following tables provide information about Honda’s financial instruments that were sensitive to changes in interest rates at March 31.630 84.564 — Total*2 ¥4.091 140.279 28.61 US$ 3.995 0.309.864 146.373 0.314.580 350. *2 The finance subsidiaries-receivables include finance subsidiaries-receivables contained in trade accounts and notes receivable and other assets in the consolidated balance sheets. generally accepted accounting principles.330 6.351 1.604 2.711 677.425 4.125.391 927.101.730 293. fair value and weighted average interest rates.607.637.994 — — — — 1.462 1.890 57.924 0.405 — — — 2.072 — — — — — — — — Other *1 Under U.123 914.537. dollar medium-term notes (Floating rate) 235.021 ¥4.000 130.445 112.967 390.519 543 811.73 5.145 327.877. For finance receivables and long-term debt.303.612 226.599.63 Asset backed notes 681.716 1.000 95.964 102.000 60.098 3.716 29.937 — 303.397 407.532 109.99 ¥3.043 854.264 ¥  448.607 129 — — Fair value Total ¥  106.062.920 1.994 — 1.292 16. dollar medium-term notes (Fixed rate) 1–2 years 2–3 years 3–4 years 4–5 years Thereafter Fair value Average interest rate (%) Total Fair value Total Within 1 year ¥  340.735 — ¥  119.987 209.346 611.206 940.022 412.70 Loans and others—primarily fixed rate Total 1.278 202.112 — — 2.45 U.200 267.589 73.927 136.165 544.495 129 — 4.722 13.675. Long-Term Debt (including current portion) 2014 2013 Fiscal years ended March 31 Yen (millions) Yen (millions) Expected maturity date Japanese yen bonds Japanese yen medium-term notes (Fixed rate) Japanese yen medium-term notes (Floating rate) U.427 237.445 36.136 3.685 91.437 5.686 3.626 341.20 730.S.176.488 1. fair value and related weighted average interest rates.547 515.27 28.185 1.700 3.490 5.000 55.663.326.175.

139 — — — (17) 0.840 231.291.910 19. At March 31.210.96 — — — (354) 0. Honda recognizes an accrued liability for loss contingencies when it is probable that an obligation has been incurred and the amount of loss can be reasonably estimated.135 5.174 924 74.462 1.472 140. Honda reviews these pending lawsuits and claims periodically and adjusts the amounts recorded for these contingent liabilities.101 0.834 11.934 1.289 17. by considering the nature of lawsuits and claims.306) 258. Marketable equity securities included in Honda’s investment portfolio are held for purposes other than trading.32 1.254 (24.704) ¥ 44.911 113. 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.071 13.360 (11.52 0.89 — — 103.328 — 5.267 155.033 4.508) ¥3.089.45 1.76 3. Punitive damages are claimed in certain of these lawsuits.24 Float/Fix 493.065.22 0.920 (1.854 34.73 993.731.330 — Fix/Float 253. Annual Report 2014 1 The Power of Dreams 2 Financial Highlights 3 To Our Shareholders Interest Rate Swaps 4 Review of Operations 5 Corporate Governance 6 Financial Section Relations Information 7 Investor 2014 2013 Fiscal years ended March 31 Yen (millions) Yen (millions) Expected maturity date Notional principal currency US$ CA$ GBP Receive/Pay Contract amount Fair value Contract amount Within 1 year 1–2 years 2–3 years 3–4 years 4–5 years Thereafter Fair value ¥2.222 221.892 (7.051.076 Receive/Pay Fix/Float Float/Float Other Other Total Average pay rate (%) Float/Fix Float/Fix Paying side currency Average receive rate (%) Fix/Float Total Receiving side currency 45 Go to contents page Equity Price Risk Honda is exposed to equity price risk as a result of its holdings of marketable equity securities. We believe that such proceedings constitute ordinary routine litigation incidental to our business.213 (94) 50.431) — — Legal Proceedings Various legal proceedings are pending against us.029 (2. 2–3 years 3–4 years Fair value Average receive rate (%) Average pay rate (%) 4–5 years Thereafter — — 2.278 205.72 19.4 billion.513 ¥4. personal injury claims or lawsuits.90 32.330 — 2.037 1. respectively. With respect to product liability.743) 529.Return to last page opened Honda Motor Co.256 37. with unrealized gains or losses. and taking into account all known factors pertaining to existing lawsuits and claims.680 427.662) 0.961 10.108 33.71 ¥4.810) 1.303 10.650 174. results of operations or cash flows..1 billion and ¥138.927 — — Currency & Interest Rate Swaps 2014 2013 Fiscal years ended March 31 Yen (millions) Yen (millions) Expected maturity date JP¥ US$ Contract amount Fair value Contract amount Within 1 year 1–2 years ¥ 46.200 3. if necessary.256 — 69 2.76 0.85 Fix/Float 120. After consultation with legal counsel. net of deferred taxes.24 0. Ltd.501 273.335 8.910 ¥337. and are reported at fair value.128 (1.287 (3.366 715.063.512 — — — 37.610) 61. we believe that any judgment that may be recovered by any plaintiff for general and special damages and court costs will be adequately covered by our insurance and accrued liabilities.733 185.074 6.31 1.31 1.171 69.904 1.365 99.347 2. .159 49.031 180.212 1.477 35.706 1.922 (20.920 14. We are also subject to potential liability under other various lawsuits and claims.118 26.076 — — 1.964 102.234 — — Float/Fix 31.570 128.168 30. the estimated fair values of marketable equity securities were ¥117.374 (2.479 9. the progress of the case and the opinions of legal counsel. included in accumulated other comprehensive income (loss) in equity section of the consolidated balance sheets.532) ¥366.320 853. 2013 and 2014.925 (2.383 88 2.360 18.30 — 105.378) 0.800 192.809.424.

431. plant and equipment.885 million in 2013 and ¥9.124) (26.329 Long-term debt.843.623 4. 2013 and 2014 Yen (millions) Assets Current assets: Cash and cash equivalents Trade accounts and notes receivable.717 ¥13.354 956.132 2.317.622.066 Other liabilities Total liabilities 1.093 7.448 5. net Inventories Deferred income taxes Other current assets Total current assets Finance subsidiaries—receivables.818.446 5.276 6.832.110 209.043.686. Annual Report 2014 1 The Power of Dreams 2 Financial Highlights 3 To Our Shareholders 4 Review of Operations 5 Corporate Governance 6 Financial Section Go to contents page 46 Relations Information 7 Investor Consolidated Balance Sheets March 31.297 945..243.132 ¥15. shareholders’ equity Noncontrolling interests Total equity Commitments and contingent liabilities Total liabilities and equity .811.979 161.113. Ltd.790 564.179 626.000. net Treasury stock.085 8.131 481.423 194.410 2. authorized 7.005.677 million in 2014 Finance subsidiaries—receivables.014) (26.806 1.398 ¥13.399.503 43.131.583 6.721 515.071.085 319.633 86.123 474.004 28.046 ¥ 1.053 1.630.140 shares in 2013 and 9. shareholders’ equity: Common stock.137.563.086.117 47.661 817.454 275.089.895 202.934 1.464 Trade payables: Notes Accounts Accrued expenses Income taxes payable Other current liabilities Total current liabilities 31.090 288. net Investments and advances: Investments in and advances to affiliates Other.635.135 3. issued 1.206.128 ¥ 1.710. plant and equipment Other assets.462 521.238.031 Yen (millions) Liabilities and Equity Current liabilities: Short-term debt Current portion of long-term debt 2013 2014 ¥ 1.530 4.754 million in 2013 and ¥22.168.788. including marketable equity securities Total investments and advances Property on operating leases: Vehicles Less accumulated depreciation Net property on operating leases Property.895.845 3.932 2.771.421 234.429.100 million in 2014 Total assets 2013 2014 ¥ 1. net of allowance for doubtful accounts of ¥22.357 660.215 1. excluding current portion 2.680 668.000 shares.140 4.553 459. at cost 9.303.321.236.862 2.671 1.464.319.638 3. Ltd.981 1.Return to last page opened Honda Motor Co.322.927 2.234.501 1.419 6.918.158.430 shares Capital surplus Legal reserves Retained earnings Accumulated other comprehensive income (loss).661 1.923 5.792) (793.508.140.718.205.424 400.660 593.234 shares in 2014 Total Honda Motor Co.215.067 171. at cost: Land Buildings Machinery and equipment Construction in progress Less accumulated depreciation and amortization Net property.344 1.117 49.302. net of allowance for doubtful accounts of ¥7.266 2.073 6.384.357 ¥15.031 Equity: Honda Motor Co.075 418.266 253.428.323.922.635.001.914 1.149) 5.255 339.294 3.067 171.570 48.292 1.. Ltd.622..236.253 4.682 (1.649 86.243.711.238 9.432 612.002 1.500 5.

642 ¥   574.664) (21. Ltd.252 178.638 132.504) (55. Annual Report 2014 1 The Power of Dreams 2 Financial Highlights 3 To Our Shareholders 4 Review of Operations 5 Corporate Governance 6 Financial Section Go to contents page 47 Relations Information 7 Investor Consolidated Statements of Income Fiscal years ended March 31.705 560.149 34.Return to last page opened Honda Motor Co.54 Net sales and other operating revenue Operating costs and expenses: Cost of sales Selling. general and administrative Research and development Total operating costs and expenses Operating income Less: Net income attributable to noncontrolling interests Net income attributable to Honda Motor Co.451 7..749 25.842.236 45. 2013 and 2014 Yen (millions) 2013 2014 ¥9.026 (12. Ltd.877.915 207.976 309.281 Other income (expenses): Interest income Interest expense Other.170 750.162 1..278 Equity in income of affiliates Net income 82.940 Income tax expense: Current Deferred Total income tax expense Income before equity in income of affiliates 125.426 252.696.703) (32.427.333. net Total other income (expenses) Income before income taxes and equity in income of affiliates 25.092.489 ¥  367.471 608.761.742 (12.724 53.345. Ltd. per common share . Yen Basic net income attributable to Honda Motor Co.662 476.130 11.810 8.957 634.270 9.891 24.919) 488.947 ¥11.083 1.107 2013 2014 ¥   203.157) (69.341) 728..723 392.137 544.71 ¥    318.

718 456.730 ¥1.866 1.447 816. net Pension and other postretirement benefits adjustments Other comprehensive income (loss). Annual Report 2014 1 The Power of Dreams 2 Financial Highlights 3 To Our Shareholders 4 Review of Operations 5 Corporate Governance 6 Financial Section Go to contents page 48 Relations Information 7 Investor Consolidated Statements of Comprehensive Income Fiscal years ended March 31. net Unrealized gains (losses) on derivative instruments. Ltd.984 (52) (15.659 15.885 . Ltd.017.065. 2013 and 2014 Yen (millions) 2013 2014 Net income ¥392.085 39. net of tax: Adjustments from foreign currency translation Unrealized gains (losses) on available-for-sale securities.435 333.615 47.812 7.749 Other comprehensive income (loss).650 ¥776.252 237 107.Return to last page opened Honda Motor Co.297) 423. net of tax Comprehensive income (loss) Less: Comprehensive income attributable to noncontrolling interests Comprehensive income (loss) attributable to Honda Motor Co. 430...638 ¥  608.

2013 Common stock Capital surplus Legal reserves Retained earnings Accumulated other comprehensive income (loss).676 ¥4.124) ¥5. shareholders Dividends paid to noncontrolling interests Capital transactions and others (1.693) — — (142. Annual Report 2014 1 The Power of Dreams 2 Financial Highlights 3 To Our Shareholders 49 Go to contents page 4 Review of Operations 5 Corporate Governance 6 Financial Section Relations Information 7 Investor Consolidated Statements of Changes in Equity Fiscal years ended March 31. 2013 ¥86.681 86.205. net ¥86.236.902 6.923 ¥5.017.765) (129.149 25.638 409.043.693 Transfer to legal reserves Dividends paid to Honda Motor Co.758. 2012 Treasury stock Total Honda Motor Co..412) 1. 2012 Common stock Capital surplus Legal reserves Retained earnings Accumulated other comprehensive income (loss).023 Transfer to legal reserves Dividends paid to Honda Motor Co.792) 1. net of tax 409..236. shareholders (1.447 776.117) ¥4. 2013 and 2014 Yen (millions) Balance at March 31.001.078) (26.778 Other comprehensive income (loss).392..979 (26) 1 ¥194.117 ¥47.398.583 ¥6.682 ¥  (793. Ltd.117 ¥49.067 ¥171.161 423.792) Treasury stock Total Honda Motor Co. Ltd.641 ¥(1.749 443.557) 574.529 ¥47.381) (142.517. net ¥86.149 Other comprehensive income (loss).765) Adjustment resulting from change in fiscal year-end of a subsidiary.730 1.583 399 (399) — (129.107 34.500 ¥161. net of tax Total comprehensive income (loss) Purchase of treasury stock Reissuance of treasury stock Balance at March 31..113.923 ¥5.067 ¥171.286 14. net of tax Balance at March 31.078) ¥(26.764.529 47.658 7.646.381) (142.117 ¥47.398 .249 127.286 Total comprehensive income (loss) Purchase of treasury stock (8) (8) (8) Reissuance of treasury stock 1 1 1 ¥(26.381) Dividends paid to noncontrolling interests (9.525.419 ¥6.918.067 ¥172.412) — (129.423 Yen (millions) Balance at March 31.489 392. shareholders’ equity Non­controlling interests Total equity ¥125.023 1.043.646.649 ¥(1.149) ¥5. Ltd.001. shareholders’ equity ¥(26.124) ¥5.649 ¥(1.423 Balance at March 31.664 (1.107 Net income 443. Ltd.Return to last page opened Honda Motor Co.615 Comprehensive income (loss): 574.117) 4.184 ¥5.677) Capital transactions and others (5.583 ¥6.866 1.205.067 172.642 608.276 ¥6.067 ¥171.431.189 (223) 367.250) (6.334 4.014) (26) (26) 1 1 ¥(26.500 Non­controlling interests Total equity ¥161.226 6.885 47..778 13.085 Comprehensive income (loss): Net income 367.250) (1.065.677) (9.184 5.088 456.557) (5. Ltd. 2014 ¥86.765) (6.650 816.435 39.

495) (92. Ltd.243 Payments for purchases of available-for-sale securities (5.206. 2013 and 2014 Yen (millions) 2013 2014 ¥  392.191 Dividends paid (129. Annual Report 2014 1 The Power of Dreams 2 Financial Highlights 3 To Our Shareholders 4 Review of Operations 5 Corporate Governance 6 Financial Section 50 Go to contents page Relations Information 7 Investor Consolidated Statements of Cash Flows Fiscal years ended March 31.617) Cash flows from investing activities: Adjustments to reconcile net income to net cash provided by operating activities: Depreciation excluding property on operating leases 335. net Net cash provided by operating activities Net cash used in investing activities Cash flows from financing activities: (4.933 352.756) (1.771) Proceeds from redemptions of held-to-maturity securities 17.775.301 35.006) 44.765) (142.426) ¥   (45.708.638 ¥  608.069.459) Proceeds from sales of available-for-sale securities 1.800 Trade accounts and notes receivable (90.688) Proceeds from short-term debt 6.168.113 1.702) (1.840) (27.906) Repayments of long-term debt (970.723) (132.795) (95.621.229.469 1.826 (66.904 Increase in investments and advances Decrease in investments and advances 19.744) Trade accounts and notes payable (95. net Decrease (increase) in assets: Other current assets Other assets Increase (decrease) in liabilities: Proceeds from sales of property.318 Depreciation of property on operating leases 254.059 18.988 Accrued expenses 52.127.250) (9.616) Other liabilities Other.774) Inventories (74.347 14.186) (20.384) (53..985) (37. net of cash and cash equivalents disposed — 9.951.744 1.784 Net change in cash and cash equivalents (40.182 34.019 (7. net Other.Return to last page opened Honda Motor Co.128 ¥ 1.363 (626.402 Deferred income taxes 53.638) Acquisitions of finance subsidiaries—receivables (1.363) Purchases of operating lease assets (793.536 442.460 71.027 (39.317 Impairment loss on property on operating leases Loss (gain) on derivative instruments.897) (8.086 611.588.914 .595) 800.471) Dividends from affiliates 84.955 Provision for credit and lease residual losses on finance subsidiaries—receivables Yen (millions) 2013 10.705 98. plant and equipment Proceeds from insurance recoveries for damaged property.376) 9.917) (22.029 2.773 3.039.636 8.749 Cash flows from operating activities: Net income 2014 ¥   (34.559.265) 119.021 49.381) (6.252 45.206. net 3.792.563.288 Other current liabilities (4.642) (44.489) 31.764 (8.101.816) Proceeds from sales of operating lease assets 418.833.850 58.214) Cash and cash equivalents at beginning of year Cash and cash equivalents at end of year 1. net Net cash provided by (used in) financing activities (7) (25) (28.802) (2.129 Proceeds from sales of investments in affiliates — 5.600 6.901) Collections of finance subsidiaries—receivables 1.677) Dividends paid to noncontrolling interests Sales (purchases) of treasury stock.567 370.354.243) (59.005 3.879) (774.718 Income taxes payable 21.404 Repayments of short-term debt (6.558 (86) (1.669 2.247.358 Proceeds from sales of subsidiaries.501 Payments for purchases of held-to-maturity securities (5.118) (1.426 Equity in income of affiliates (82.192) 70.815) Proceeds from long-term debt 1.555 Effect of exchange rate changes on cash and cash equivalents 108. plant and equipment Other.069 Capital expenditures 4.128 ¥ 1.662) (2.

947 37.229.869 4.423.625 — ¥  548.095.765.118) (37.599 285.376 590.877.635.723 13.Return to last page opened Honda Motor Co.750 560. Automobile business.915.322 — 256. Financial services business and Power product and other businesses.059 Segment Total Reconciling Items Consolidated .522 540.670 301.116 14.810 82.723.947 — 9.374 7.333.118 9.773 — — 10.357 85.991 56.572) 756 309.059 — 10. 2013 Yen (millions) Net sales and other operating revenue: External customers Intersegment Total Cost of sales.526 4. and others Research & Development / Manufacturing / Sales and related services Research & Development / Manufacturing Sales and related services Retail loan and lease related to Honda products / Others Research & Development / Manufacturing Sales and related services / Others Segment Information As of and for the fiscal year ended March 31.255 544.. which are based on Honda’s organizational structure and characteristics of products and services.339.118) (37.065 9.954 457.437.549 1.928.513 — ¥7.947 9.665 73.810 82. and functions of each segment are as follows: Segment Principal products and services Functions Motorcycle Business Motorcycles.233 25.317 290.216 14. Annual Report 2014 1 The Power of Dreams 2 Financial Highlights 3 To Our Shareholders Go to contents page 4 Review of Operations 5 Corporate Governance 6 Financial Section 51 Relations Information 7 Investor Segment Information Honda has four reportable segments: Motorcycle business.158 — 6. Operating segments are defined as components of Honda’s about 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.469 1.877.370.423.994 291.676 10.773 ¥— (37.723 13.137 544. The accounting policies used for these reportable segments are consistent with the accounting policies used in Honda’s consolidated financial statements.316 110.118) — — (293.126 352.759.469 1.773 ¥280.149 20.590 7.376 590.549 — 1. and relevant parts Automobile Business Automobiles and relevant parts Financial Services Business Financial.357 457.877.242 (9.361 5. insurance services Power Product and Other Businesses Power products and relevant parts.020 9.526 4.606 1.256 402.519 — ¥ 9. Ltd. SG&A and R&D expenses Segment income (loss) Equity in income of affiliates Segment assets Investments in affiliates Depreciation and amortization Capital expenditures Impairment loss on long-lived assets Provision for credit and lease residual losses on finance subsidiaries—receivables Motorcycle Business Automobile Business Financial Services Business Power Product and Other Businesses ¥1.597) — — — — ¥ 9. all-terrain vehicles (ATVs). Principal products and services.506 11.166 794.339.098 158.039 34.059 — 10.709.

702 — ¥9.761 3.791.264.479 1.118 million for the year ended March 31. Ltd.486 346.175 319. which consist primarily of cash and cash equivalents. Intersegment sales and revenues are generally made at values that approximate arm’s-length prices.663.301 ¥304. 3.588 525.842. amounted to ¥293. Annual Report 2014 1 The Power of Dreams 2 Financial Highlights 3 To Our Shareholders Go to contents page 4 Review of Operations 5 Corporate Governance 6 Financial Section 52 Relations Information 7 Investor Segment Information (continued) As of and for the fiscal year ended March 31. including derivative financial instruments. 2013 and 2014.506 6.042 750.842. 2.956 (1.900 318. 5.819 million as of March 31.664 794. of depreciation of property on operating leases. which is income before income taxes and equity in income of affiliates before other income (expenses). 7. 2013 and ¥352.359 46.696 — ¥  698. 2013 and ¥294. respectively.323 11. for the years ended March 31.135.185 10.228 403.131.471 15.170 750. 2014 Yen (millions) Net sales and other operating revenue: External customers Intersegment Total Cost of sales.649 562. 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.176.832 182.301 — — 18.092.177 20.301 ¥— (42. 2014.631 — 1. Segment assets of each segment are defined as total assets.872) — — (368. SG&A and R&D expenses of Automobile business. and deferred tax assets.038 57.990. available-for-sale securities and held-to-maturity securities held by the Company.451 42.872) (42. Expenses not directly associated with specific segments are allocated based on the most reasonable measures applicable.583 million as of March 31.325 705. 2014.664 794. Reconciling items also include elimination of intersegment transactions.281 132. Unallocated corporate assets.756 — 7. 2013 and ¥1. Liabilities accrued for warranties issued are ¥97.904 — 18.904 — 18.031 562.720 1.360 18.781) 1.720 1.872) (42.108 million and ¥153. 6.980.569 9.Return to last page opened Honda Motor Co.622.867 3. Segment income (loss) of each segment is measured in a consistent manner with consolidated operating income.867 3. respectively.403 708. .749 10.580 439.275 13.281 132.909.653 14.701 94. Depreciation and amortization of Financial services business include ¥254.904 Segment Total Reconciling Items Consolidated Explanatory notes: 1.451 — 11. respectively. 4. of purchases of operating lease assets.026 165.708 — ¥11..631 1.127. included in reconciling items.663.704 1.398.840 million for the year ended March 31.842. SG&A and R&D expenses Segment income (loss) Equity in income of affiliates Segment assets Investments in affiliates Depreciation and amortization Capital expenditures Impairment loss on long-lived assets Provision for credit and lease residual losses on finance subsidiaries—receivables Motorcycle Business Automobile Business Financial Services Business Power Product and Other Businesses ¥1.903 102.402 million for the year ended March 31.933 million for the year ended March 31. investments in affiliates.618) — — — — ¥11. 2014.898 million.498. respectively. Capital expenditures of Financial services business includes ¥793. These are mainly included in Cost of sales.989 — 354.556 383.909.194.872 11.451 11.929 8.605 36.885.471 15.

506 221.134.630 52.021 ¥11.727 2.934.185 251. .730 9.176.380.925.977 ¥4.018 2.280.887 802.890 64.071 ¥4.360 698.877.645 ¥11.659 7.063.691.Return to last page opened Honda Motor Co.355 ¥9.333 1.236 ¥4.888.842. 2013 Yen (millions) Net sales and other operating revenue Long-lived assets Japan United States Other Countries ¥1.842.901 80.697 Japan United States Other Countries Total ¥2.885 ¥3. insurance services Power products and relevant parts Others Total 2013 2014 ¥1.167.451 5. Annual Report 2014 1 The Power of Dreams 2 Financial Highlights 3 To Our Shareholders 4 Review of Operations 5 Corporate Governance 6 Financial Section Go to contents page 53 Relations Information 7 Investor External Sales and Other Operating Revenue by Product or Service Groups As of and for the fiscal years ended March 31 Yen (millions) Motorcycles and relevant parts All-terrain vehicles (ATVs) and relevant parts Automobiles and relevant parts Financial. Ltd.818 As of and for the fiscal year ended March 31.216 548.069 Total ¥9.783.947 4..877.198.216.709.274.698 1.321 59.350.735 1. 2014 Yen (millions) Net sales and other operating revenue Long-lived assets The above information is based on the location of the Company and its subsidiaries.947 ¥ 1.451 Geographical Information As of and for the fiscal year ended March 31.582.

United Kingdom.842. .544 4.999 5.647 2. .648.819 million as of March 31. . . .789. .893.018 5. .469 1.694 660.100 98. France.635.716.947.891) (2.225 171.519) (2. Belgium.842. .900 709.970 14.947 2. .583 million as of March 31. which consist primarily of cash and cash equivalents.827 ¥876. Australia 2. .158. Vietnam   Other Regions . . . .901 767. .179 3. .741.609.818 As of and for the fiscal year ended March 31.826.622.198. .645.925.448) (132.877. .741 4. 2014 Yen (millions) Net sales and other operating revenue: External customers Transfers between geographic areas Total Cost of sales. .061 588.451 — 11.842.905 8. United States.715. Annual Report 2014 1 The Power of Dreams 2 Financial Highlights 3 To Our Shareholders Go to contents page 4 Review of Operations 5 Corporate Governance 6 Financial Section 54 Relations Information 7 Investor Supplemental Geographical Information In addition to the disclosure required by U.773 35.281) — ¥ 9.361 244. China. . . including derivative financial instruments.947 9. .350.133 12. available-for-sale securities and held-to-maturity securities held by the Company.024. Indonesia.758 1. Reconciling items also include elimination of transactions between geographic areas.519 14. Assets of each geographical region are defined as total assets.357 4.825.889 146. 2013 Yen (millions) Japan North America Asia Other Regions Europe Total ¥1. . and deferred tax assets. .650 460 673.947. 3.184 208. . .110 641.216.981 374.947 — 9.333.170 750. Canada. Thailand.031 5.102 4.088 ¥1. Honda provides the following supplemental information in order to provide financial statements users with additional useful information: Supplemental geographical information based on the location of the Company and its subsidiaries As of and for the fiscal year ended March 31. investments in affiliates.GAAP.095 ¥676.594.918 7. .891 12.481.340.969.383 1.595.198. .675 15.069 Reconciling Items Consolidated Net sales and other operating revenue: External customers Transfers between geographic areas Total Cost of sales.891) (2. Operating income (loss) of each geographical region is measured in a consistent manner with consolidated operating income. Major countries or regions in each geographic area:   North America .393 2. . SG&A and R&D expenses Operating income (loss) Assets Long-lived assets ¥— (2.125) 217. . Russia  Asia . Unallocated corporate assets.350.947. Sales and revenues between geographic areas are generally made at values that approximate arm’s-length prices.023 (17. .013.. . . .502 ¥2.434 379.968. Ltd.501 980.523.746 1.451 11.735 1.295 750.929 133.838 12.213 2.600 44.192 434.877. .647 5.540 2.691.443) (25.856 143. respectively. Mexico  Europe . .092.094 3.264.877. India. SG&A and R&D expenses Operating income (loss) Assets Long-lived assets Europe Reconciling Items ¥ — (2.S. included in reconciling items.094 290.236 ¥4.519) (2.333 1.923 792. .679.616) — Consolidated ¥11.069 Explanatory notes: 1. .767.278 3.638 4.Return to last page opened Honda Motor Co. .305. 2013 and ¥294. .167. amounted to ¥293.856 105. . .279 3. .818 Japan North America Asia Other Regions Total ¥2. .039.810 13.137 544.975.504 896.580 570.097 ¥536. .667 124. Germany.025.413 ¥1. .823 775.963 19.612.268 2. .368 1.258 13.947.071 ¥5.254 642.857.570 ¥ 9. .281 15.185 214.429 ¥11.428 3.926.084 178. 2014. 4. .716. Brazil.125) (394) (119.978.442.280.996.467 860. which is income before income taxes and equity in income of affiliates before other income (expenses).512 3. .451 2.716.025.192. . 5.766 486. .

excluding current portion Other liabilities Total liabilities ¥ 2.697.989 517.905 3.581 278.105 918.491 1.209 278.249) (949.397.043 6.980.876 72.360 2.043 190.979 194.196 716.590.571.132 2.611 551.180.934 5.622.806.312. Annual Report 2014 1 The Power of Dreams 2 Financial Highlights 3 To Our Shareholders Go to contents page 4 Review of Operations 5 Corporate Governance 6 Financial Section 55 Relations Information 7 Investor Consolidated Balance Sheets Divided into Non-Financial Services Businesses and Finance Subsidiaries March 31.064. net Investments and advances Property.721 Cash and cash equivalents Other assets Total assets Reconciling Items Total assets Yen (millions) 2014 831.357 1. 2013.998 7.870 894.205.319.566.322 7.715 3.981 343.633 5.714 Finance subsidiaries Short-term debt Current portion of long-term debt Accrued expenses Long-term debt.302.300 ¥ 4.419 6.730) 8.528 994. 2013 and 2014 Yen (millions) 2013 Assets Non-financial services businesses Current Assets: Cash and cash equivalents ¥ 4.918.423 ¥13.946 939.108.439 117.303 Finance subsidiaries— short-term receivables..385 5.843.156.465.079 Inventories 1.508.355 403.Return to last page opened Honda Motor Co..148.390) 9. net Other assets Total assets 399.389 2.865 1. net 1. net 2.765.689 1. .520 Finance subsidiaries 26.795 1.664 998.362 Net property on operating leases 1.635.719.739.309 (612.421 1.113.398 ¥15.622.923 5.635.031 2013 2014 Liabilities and Equity Non-financial services businesses Current liabilities: Short-term debt Current portion of long-term debt Trade payables Accrued expenses Other current liabilities Long-term debt.223.031 * Honda adjusts the amounts for the fiscal year ended March 31.236.895 Other current assets 1. Ltd.461 2.067. shareholders’ equity Noncontrolling interests Total equity Total liabilities and equity 1.112.161 660.339.444 6.818.106 96.170.099 20.500 161.168 1.443 Trade accounts and notes receivable.418 851.478) ¥13.990 146.429. Ltd.284 8. plant and equipment.357 ¥15.049 3.690 1.245.381.253 260.989 (849. excluding current portion Other liabilities Total liabilities Reconciling Items Total liabilities Honda Motor Co.043.654 3.014.206.085 50.159 Finance subsidiaries— long-term receivables.250 (579.428 578.476 829.414 ¥ 2.029 1.387.215.

net Net cash provided by (used in) investing activities Cash flows from financing activities: Proceeds from (repayment of) short-term debt.148) 583. 2014.793) — — — — 240.230 — — 4.069 6.496 million increase for the fiscal year ended March 31.101.099 ¥1.972) — — (43.250) (7) (28.796) 1.921) 3.Return to last page opened Honda Motor Co. and repayment of long-term debt (marked by *).836 (625.471) 98.673 (16.800 (438.473.677) — (25) — (22.281 (117.107) (1..345) (7.677) (25) (22.858) 73.301 (39.914 — — — — — — 2.180.784 (37.611 ¥     20.723) 84.747) 379.660 8.347 — — — — — — 1.400 (35. Annual Report 2014 1 The Power of Dreams 2 Financial Highlights 3 To Our Shareholders 56 Go to contents page 4 Review of Operations 5 Corporate Governance 6 Financial Section Relations Information 7 Investor Consolidated Statements of Cash Flows Divided into Non-Financial Services Businesses and Finance Subsidiaries Fiscal years ended March 31.265) — (206.242 (44. proceeds from (repayment of) short-term debt.745) (1.928 ¥   26. 2013.597) 105.469 (970.495) (74.247.142 129.052) (626.914 Notes: 1.180.317 14.099 15. plant and equipment Proceeds from insurance recoveries for damage property.858 (34.765) (6.358 — (2.048 ¥— ¥   392.745) (774.684) (963. These cash flows are included in the decrease (increase) in investments and advances.499) 254.035 334.459 (31.418) (5.062) 2.166 21.388 (14.113 ¥ 1.638) (2.756) (32.917) (134.555 71.662) (92. 2013 and 2014 Cash flows from operating activities: Net Income Adjustments to reconcile net income to net cash provided by operating activities: Depreciation Deferred income taxes Equity in income of affiliates Dividends from affiliates Impairment loss on long-lived assets Loss (gain) on derivative instruments.587 (6.509 6.128 ¥ 1.206.917) 119.168.190) — — — ¥ — (4.839) — 48 (89.214) 1. net Net cash provided by (used in) financing activities Effect of exchange rate changes on cash and cash equivalents Net change in cash and cash equivalents Cash and cash equivalents at beginning of period Cash and cash equivalents at end of period Yen (millions) 2014 2013 Non-financial services businesses Finance subsidiaries Reconciling Items Consolidated Non-financial services businesses ¥  295.095) (670) (1.742 1.185 ¥1.471) 98. net Other.006) (793.751) 143 — (118.470) (2.800 — — — 14. and a JPY 2.739 — — 3.406 (750.218 million decrease for the fiscal year ended March 31.720 45.840) 611.128 Finance subsidiaries Reconciling Items ¥ Consolidated — ¥   608.901) 70. net Net cash provided by (used in) operating activities Cash flows from investing activities: Decrease (increase) in investments and advances* Capital expenditures Proceeds from sales of property.039 9.595) (142.687 (132.588.496 — — — 11.936) 855.600 — — — 3.016 40.765) (6.303 32.224.460 (40.218 3. respectively.710) 132 — — — — (7.945 14.955 3. .723) 84.791 538.714 ¥   116.826 (1.893 69. 2.086 3.148.085) 30.784) (129.601 (87.558 (553.988 (125.840) 611.048) 800.133) (793.229.668) 794.875 — — — — 13.915) 9.881) (74.922 3.739 1.277) 16.540) 65.794 (76. net Decrease (increase) in trade accounts and notes receivable Decrease (increase) in inventories Increase (decrease) in trade accounts and notes payable Other.192) (17.170) (770.029 72.301 7.362 — — — 13. Decrease (increase) in trade accounts and notes receivable for finance subsidiaries is due to the reclassification of finance subsidiaries-receivables which relate to sales of inventory in the unaudited consolidated statements of cash flows presented above. The amount of the loans to finance subsidiaries is a JPY 21.773 35.744) (84.027 (90.381) — (9.127.071) (3.704 4.560 — (450.006) 34.985) 1.705 — 28.773 6.469 53.206.671 — (9.638 ¥  492.408 (856.316) (21.171 22.022 (82.049) (78.426 (132.265) 370.156) 1.562) 1.218) — — — (127) — — — (21.708.845 82. Non-financial services businesses provide loans to finance subsidiaries. proceeds from long-term debt.069.086 — (495.558 (1.376) (92.307 1. net* Proceeds from long-term debt* Repayment of long-term debt* Dividends paid Dividends paid to noncontrolling interests Sales (purchases) of treasury stock. plant and equipment Collections (acquisitions) of finance subsidiaries—receivables Purchase of operating lease assets Proceeds from sales of operating lease assets Other.705 4.749 354.220) 3.328) 1.901) 80.955 — (47.879) 44.191 (5.590 ¥   97.317 — (972.043) (142.381) (9.182 9.118) 418.252 (82.103 590.127.744 440.460) 121 (6.303 7.294 256.600 (118.662) (95.702) (129.325 2.025. Ltd.250) (7) (28.029 26.406 (1.128) 44.242 — — — ¥— 153.118) 418.426 (3.039.567 108.

976 252.543 12.795 839.743 1.696 92.652 1.225 . shareholders’ equity 2.294 4.057 99.612 1.642) Net income attributable to Honda Motor Co.002.559.095 ¥ 9.635.378 12.406 82.354 487.249 5.236 ¥10.400 3.151 96.818.917 ¥11.403 488.471 Net income attributable to noncontrolling interests (11.281 Income before income taxes and equity in income of affiliates 653.328.879 953.979 287.840 361.357 ¥15.605 103..030 633. income and dividends Net sales and other operating revenue Operating income 600.723 132.489) (34.088 211.385 551.234.868 401.587 4.928) (14.261 668.918.402 Capital expenditures (excluding purchase of operating lease assets) Purchase of operating lease assets Depreciation (excluding property on operating leases) Depreciation of property on operating leases 213.845 3.591 519.640 4.7% 3.776 227.846 387.762 254.170 108.289.149 574.548 257.368.445 225.381 Research and development 448.959 563.631.115 ¥11.948.579.043.847 587.308) (13.027 798.408 782.313.482 367.140 ¥12.775 569.128 544.157 12.735 178.834 ¥10.451 2004 2005 2006 2007 2008 2009 2010 2011 2012 Sales.087.3% 5.027 366.541 47.620 424.117) (27.841 627.032 195.500 ¥12.143 209.240 2.734 336.7% 4.933 352.590 139.662 Equity in income of affiliates 75.488.318 9.836.400 534.827 135..127.905.787.947 ¥11.7% 5.842..174 ¥ 8.931 212.835 146.0% 5.036.967 467.912 16.394.4% 3.389) (10.981 326.932.750 4.211) (29.818 560.743 377.724 61.039 137.703 ¥8.543 ¥11.436 109.393 441.001 2.650.996 ¥11.197 597.000 1.417 118.767 793.810 750.144 630.033 592.107 5.577.8% Net income as a percentage of net sales Cash dividends paid during the period 33.869 206.270 634.380.936. long-term debt and shareholders’ equity Total assets Long-term debt 1.0% 1.066 654.439.747 417.765 142. Annual Report 2014 1 The Power of Dreams 2 Financial Highlights 3 To Our Shareholders 57 Go to contents page 4 Review of Operations 5 Corporate Governance 6 Financial Section Relations Information 7 Investor Financial Summary Fiscal years ended March 31 Yen (millions) 2013 2014 ¥8.364 544.643 363.549 ¥9.797 71.879.138 129.550.194 11.235.043.241 ¥ 8.622. Ltd.599 ¥13.398.752 262.680 668.637 2. Ltd.288 4. Ltd.282 139.034 93.007.904 792.753) (11.189 283.655 11.162.109 189.913 348.Return to last page opened Honda Motor Co.741 373.775 231.500 1.536 442.287) (20.874.600 ¥8.841 161.066 Total Honda Motor Co.920 868.125.105 335.907.322 600.482 152.479 4.867 ¥ 7.740 266.031 Interest expense Assets.035 2.197 463.756 100.902 12.980 457.891 728.272 345.105 ¥ 9.005 268.615.623 22. 464.877.710.500 5.420 683.1% 6.118 1.364 829.940 Income taxes 252.942 99.825 4.130 10.741 101.474 10.061 140.629.905 851.400 ¥12.559) (15.6% 6.0% 2.754 510.665 317.413 630.714 ¥11.592) (25.198 630.868 895.552 8.338 486.011.

430.983 3.856 7.541 ¥ 1.912.300 5.259.45 260.107 6.140 ¥12.504 20% 20% 17% 15% 13% 14% 18% 17% 19% 17% 16% 6.231 178.35 2.529 3.929.50 ¥    147.493 ¥1.241 ¥ 8.440.391 3.446.948.876 6.67 117.867 ¥ 7.002.71 ¥    318.463.5 77 84 77 34 51 60 72 79 1.600 137.952 9.213.69 2.652.815 179.33 324.206 10.947 80% 80% 83% 85% 87% 86% 82% 83% 81% 83% 84% ¥8.778.271 10. Ltd.507.34 203.699.960 181.174 ¥ 8.057 5.061 15.798.162.54 ¥     75.463.67 ¥    117.044 ¥ 1.433.34 ¥    324.534.33 ¥    324.369 9.950 10.996 ¥11.205 ¥ 1..011.681.503.417.700 7.517.777 ¥ 1.021 Automobiles 2.585.995 ¥  1.494 17.187 4.517 3..628.190 ¥ 1.45 ¥   260.876 176.392 3.405.50 147.34 ¥    203.54 2004 2005 2006 2007 2008 2009 2010 2011 2012 Per common share Net income attributable to Honda Motor Co. its consolidated subsidiaries and its affiliates accounted for under the equity method (Honda Group Unit Sales) 100 .: Basic Diluted Cash dividends paid during the period Honda Motor Co.509 5.45 1.26 2.564.Return to last page opened Honda Motor Co.087. shareholders’ equity 243.001.900 8.24 2.936.819 6.5 25.877.108 4.45 2.91 ¥    295.842 ¥ 1.947 ¥11.834 ¥10.094 190.35 2.025 6.338 198.071 6.014 4.385.577.950.927 ¥ 1.62 ¥    330.600 ¥8.652 3.320 10. · 2004–2010: the total of unit sales of completed products of Honda and its consolidated subsidiaries.036 131.421 6. Ltd.650.451 100% 100% 100% 100% 100% 100% 100% 100% 100% 100% 100% Thousands Unit sales:*2 Motorcycles 9.925 3. dollar) Rates for the period-end Average rates for the period 113 108 113 117 114 101 93 86 79 83 *1 The geographic breakdown of sales amounts is based on the location of customers.827 144.331 15.14 Yen (millions) Sales progress Sales amounts:*1 Japan Overseas Total ¥1. Ltd. Annual Report 2014 1 The Power of Dreams 2 Financial Highlights 3 To Our Shareholders 58 Go to contents page 4 Review of Operations 5 Corporate Governance 6 Financial Section Relations Information 7 Investor Financial Summary (continued) Yen 2013 2014 ¥   243.060 187.34 324.208.54 17.579.482 10..907.744 5.224.105 ¥ 9.323 Power Products 5.242 3.29 2.284.91 295.785 167.114 9.095 ¥ 9.37 3. and sales of parts for local production at Honda’s affiliates accounted for under the equity method · 2011–2014: the total of unit sales of completed products of Honda.561 ¥      106 ¥      107 ¥       117 ¥       118 ¥       100 ¥        98 ¥        93 ¥        83 ¥        82 ¥        94 ¥       103 Number of employees Exchange rate (yen amounts per U.71 318.318 ¥ 1.694.057 8.639 18.5 38.79 2.S.62 330.952 9.842.54 75.047 5.527.168 8. *2 Honda changed its counting method for unit sales as follows.

260 89.320 Low 2.941 135.26 36.780 106.13 $    39.490 3.100 3.035 165.00 $    42.. Ltd. Tokyo Stock Exchange: (TSE) (in yen) New York Stock Exchange: (NYSE) (in U.354 2.339 2.96 $    41.294 3.508 ¥    73.095 ¥2.435.Return to last page opened Honda Motor Co.744. Ltd.86 37.909 ¥2.020.86 $    42.293 Income before income taxes and equity in income of affiliates 194.15 35.587 216.889 ¥3.431 High $    38.18 35.989 184.867 131. dollars) .286 ¥2.233 77.799 ¥    3.96 $    34.441 75.890.574 165.945 ¥    4.706 Net income attributable to Honda Motor Co.499 120.97 ¥    42.752 122.074 172.250 ¥    2.221 ¥3.723 82.18 ¥    94.97 ¥    66. Annual Report 2014 1 The Power of Dreams 2 Financial Highlights 3 To Our Shareholders 59 Go to contents page 4 Review of Operations 5 Corporate Governance 6 Financial Section Relations Information 7 Investor Selected Quarterly Financial Data Fiscal years ended March 31 Yen (millions except per share amounts) 2014 2013 Net sales and other operating revenue Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 ¥2.834.79 ¥    89.368 160.777 98.963 171.350 3.271.013 100.71 34.732 170.960 ¥2.03 ¥    67.50 29.680 3.792 ¥2.S.246 Operating income 176.097.185 ¥    3.612 174.385 ¥    4.38 Low 30.00 $    40.451 228.61 High ¥    3.24 Basic net income attributable to Honda Motor Co.405 ¥    3. Ltd.30 28.830 ¥    4.81 $    37..63 ¥    42.. 131.425.09 ¥    45.

O. U.com/ ■ U. Ltd..000.com/ IR Web Site Japanese: http://www.S.com/investors/ Corporate Web Site http://world.428. Suginami-ku. Minami-Aoyama.S. Chiyoda-ku. Izumi 2-chome.honda. Company Information Established Lines of Business Fiscal Year-End Independent ­Registered Public Accounting Firm Web Site IR Offices September 24.com/investors/ Stock Information Securities Code Number of Shares Authorized Total Number of Shares Issued Number of Shareholders Number of Shares per Trading Unit Stock Exchange Listings General Meeting of Shareholders Record Dates for Dividends ■ Japan Honda Motor Co. Contact Address: Contact Address: Sumitomo Mitsui Trust Bank.A. Japan TEL: 81-(0)3-3423-1111 (Switchboard) 7267 7.430 shares 215. 20th Floor New York. U. Limited. NY 10005. 2014) Honda Motor Co.com Ratio: 1 ADR = 1 share of underlying stock Ticker symbol: HMC Note: With respect to taxation and other matters relating to the acquisition.. Annual Report 2014 1 The Power of Dreams 2 Financial Highlights 3 To Our Shareholders 4 Review of Operations 5 Corporate Governance 6 Financial Section Go to contents page 60 Relations Information 7 Investor Investor Relations Information (As of March 31. New York. New York Office 156 West 56th Street. Minato-ku. Tokyo 168-0063. Ltd. N. . Marunouchi 1-chome. Box 64504 St. Power Product and Other Businesses.honda. Taxation” of Form 20-F included in the “Investor Relations” section on our web site.adr@wellsfargo.555 100 shares Japan: Tokyo stock exchanges Overseas: New York stock exchanges June June 30 September 30 December 31 March 31 Shareholders’ Register Manager for Common Stock Depositary and Transfer Agent for American Depositary Receipts Shareholders’ Register Manager: JPMorgan Chase Bank. Stock Transfer Agency Department 8-4. MN 55164-0504.A.000 shares 1. 2-chome. Inc. Ltd.jp/investors/ IR Web Site English: http://world. U. Financial Services March 31 KPMG AZSA LLC Corporate Web Site: http://world. TEL: 1-800-990-1135 E-mail: jpmorgan.honda. 1-1. 1948 Motorcycles. Sumitomo Mitsui Trust Bank.Return to last page opened Honda Motor Co. please also refer to “Item 10E. Japan TEL: 0120-782-031 (toll free within Japan) JPMorgan Service Center P.A.086..S. Paul. Floor 58.S. TEL: 1-212-707-9920 IR Web Site http://world.honda.811. holding. and disposition of the Company’s common stock or ADRs by non-residents of Japan. Automobiles. Tokyo 1 Chase Manhattan Plaza. Limited 4-1. NY 10019. Tokyo 107-8556.A.co. Honda North America.A.honda.

8 2. (Trust Account) Moxley & Co. LLC Meiji Yasuda Life Insurance Company Tokio Marine & Nichido Fire Insurance Co.883 25. Ltd.359 55. Ltd.4% .7 3.000 400 300 1.0% 38.Return to last page opened Honda Motor Co.964 51.2 2. State Street Bank and Trust Company 505223 JPMorgan Chase Bank 380072 The Bank of Tokyo-Mitsubishi UFJ.5% Treasury stock Foreign institutions and individuals 41..0% Honda’s Stock Price and Trading Volume on the Tokyo Stock Exchange (Yen)  Stock (millions) 5.553 40. 117.4% Individuals 0. Nippon Life Insurance Company Mitsui Sumitomo Insurance Company.5 4.4 2.7 1.1 2.472 37.199 42.288 36.000 200 100 0 2008 2009 2010 2011 2012 2013 2014 0 Government and municipal corporation Financial institutions 0.000 2. Ltd.4 9.8% Domestic companies and others 8. Ltd. Annual Report 2014 1 The Power of Dreams 2 Financial Highlights 3 To Our Shareholders 4 Review of Operations 5 Corporate Governance 6 Financial Section 61 Go to contents page Relations Information 7 Investor Investor Relations Information (As of March 31.000 ← High ← Low Trading Volume 4. Ltd.000 3.739 6.059 85. Ltd.0 1.1 2. 2014) Major Shareholders Breakdown of Shareholders by Type Individual or Organization Number of Percentage of total shares held shares outstanding (%) (thousands) Japan Trustee Services Bank.9% Securities companies 1. (Trust Account) The Master Trust Bank of Japan..686 30.