Honda - FY201603 /perkembagan Mobil Honda

Annual Report 2016
Year Ended March 31, 2016
Honda Motor Co., Ltd.

Honda Motor Co., Ltd. Annual Report 2016 Return to last
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contents page 01
1 The Power of
Dreams 2 Financial Highlights 3 To Our Shareholders 4 CFO Interview 5 Review of
Operations 6 Corporate
Governance 7 Financial Section 8 Investor Relations
Information
Corporate Profile 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 s atisfaction. In addi-
tion, 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 368* subsidiaries and 83* affiliates and joint ventures accounted for using 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, 2016
Acura NSX
On the Cover: Civic (North America)

The tenth-generation Civic launched in the United States in November 2015 was named the North American Car of the Year at the North American International Auto Show held in January 2016. The powertrains available
with this model are the 1.5-liter TURBO and the 2.0-liter i-VTEC engines, both of which are inline four-cylinder DOHC. The sporty, refined new design provides one of the largest cabins* of any compact-class vehicle.
Featuring Honda SENSING, a suite of advanced driver-assistive safety technologies, as well as other advanced features, the new Civic offers truly original value in this segment. * Honda research (as of November 2015)
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1 The Power of
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1 The Power of
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Contents 1 The Power of Dreams page 03 5 Review of Operations page 11 6 Corporate Governance page 21
12 Motorcycle 21 Corporate Governance

2 Financial Highlights page 04 Business 22 Board of Directors, Corporate Auditors and
Operating Officers
3 To Our Shareholders page 05
15 Automobile
Business
7 Financial Section page 25
18 Power Product 25 Financial Review

and Other 29 Consolidated Statements of Financial Position
Businesses 30 Consolidated Statements of Income
4 CFO Interview page 09 31 Consolidated Statements of
Comprehensive Income
32 Consolidated Statements of Cash Flows
33 Segment Information
34 Unaudited Consolidated Statements of
Financial Position Divided into Non-financial
20 Financial Services Businesses and Finance Subsidiaries
Services 35 Unaudited Consolidated Statements of Cash Flows
Business Divided into Non-financial Services Businesses
and Finance Subsidiaries
36 Financial Summary
8 Investor Relations
Information
page 38
The consolidated financial statements of the Company in this Annual Report have been prepared in accordance with International Financial Reporting Standards (“IFRS”), as issued by the International Accounting Standards Board (“IASB”).
Please refer to the annual reports (Form 20-F) the Company filed with the U.S. Securities and Exchange Commission (“U.S. SEC”) if more comprehensive information is required.
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, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended. Such statements are based on management’s assumptions and beliefs,
taking into account information currently available to it. Therefore, please be advised that Honda’s actual results could differ materially from those described in these forward-looking statements as a result of numerous factors, including general economic conditions in
Honda’s principal markets; foreign exchange rates between the Japanese yen and the U.S. dollar and other major currencies; and extensive environmental and other governmental regulations, as well as other factors detailed from time to time.
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The Power of Dreams

Dreams inspire us to create innovative products that enhance mobility and benefit society.
To meet the particular needs of customers in different regions around the world,
we base our sales networks, research and development centers, and manufacturing facilities in
each region. Furthermore, as a socially responsible corporate citizen, we strive to address
important environmental and safety issues.
Striving to realize full-fledged popularization of fuel cell vehicles (FCV),

Honda created the Clarity Fuel Cell, an FCV featuring both a high level
of practicality that represents the “universal value” of an automobile
and “cutting-edge appeal” that is suitable for a vehicle that is at the
forefront of the times. As a result of improved efficiency of the power
train and a reduced energy requirement for driving, this zero-emission
vehicle achieves a world’s top-class cruising range* of 750 km on a
single charge. Clarity Fuel Cell is the world’s first five-passenger
sedan type FCV, realized by making the fuel cell powertrain more
compact utilizing original Honda technologies.
* Honda research (as of February 2016)
CLARITY FUEL CELL

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Financial Highlights Years ended March 31

Sales Revenue Operating Profit / Operating Margin hare of Profit of Investments Accounted for
S
* From fiscal 2012 to 2013, the above was named “Net Sales and Other Operating Revenue” and * From fiscal 2012 to 2013, the above was named “Operating Income” and stated in accordance Using the Equity Method
stated in accordance with U.S. GAAP. with U.S. GAAP. * From fiscal 2012 to 2013, the above was named “Equity in Income of Affiliates” and stated in
accordance with U.S. GAAP.
Yen (billions) Yen (billions) (%) Yen (billions)
15,000 1,000 8.0 150
750 6.0
10,000 100
500 4.0
5,000 50
250 2.0
0 12 13 14 15 16 0 12 13 14 15 16 0 0 12 13 14 15 16
U.S. GAAP IFRS U.S. GAAP IFRS U.S. GAAP IFRS
Operating Profit (left scale) Operating Margin (%) (right scale)
2016 Sales Revenue 2016 Operating Profit 2016 Share of Profit of Investments Accounted for
14,601.1 billion yen 503.3

Operating Margin
billion yen
Using the Equity Method
126.0 billion yen
rofit for the Year Attributable to Owners of the Parent /

P
3.4
otal Assets /
T
%
Additions to Property, Plant and Equipment /
Basic Earnings per Share Attributable to Owners of Equity Attributable to Owners of the Parent / Depreciation
the Parent Equity Attributable to Owners of the Parent per Share * From fiscal 2012 to 2013, the above were named “Capital Expenditures (Excluding Purchase of
* From fiscal 2012 to 2013, the above were named “Net Income Attributable to Honda Motor Co., * From fiscal 2012 to 2013, the above were named “Total Honda Motor Co., Ltd. Shareholders’ Operating Lease Assets)” and “Depreciation (Excluding Property on Operating Leases)”, and stated
Ltd.” and “Basic Net Income Attributable to Honda Motor Co., Ltd. per Common Share”, and Equity” and “Total Honda Motor Co., Ltd. Shareholders’ Equity per Common Share”, and stated in in accordance with U.S. GAAP.
stated in accordance with U.S. GAAP. accordance with U.S. GAAP.
Yen (billions) (Yen) Yen (billions) (Yen) Yen (billions)
800 400 20,000 4,000 800
600 300 15,000 3,000 600
400 200 10,000 2,000 400
200 100 5,000 1,000 200
0 12 13 14 15 16 0 0 12 13 14 15 16 0 0 12 13 14 15 16
U.S. GAAP IFRS U.S. GAAP IFRS U.S. GAAP IFRS
Profit for the Year Attributable to Owners of the Parent (left scale) Total Assets (left scale) Equity Attributable to Owners of the Parent (left scale) Additions to Property, Plant and Equipment
Basic Earnings per Share Attributable to Owners of the Parent (right scale) Equity Attributable to Owners of the Parent per Share (right scale) Depreciation
2016 Profit for the Year Attributable to Owners of the Parent 2016 Total Assets 2016 Additions to Property, Plant and Equipment
344.5 billion yen

Basic Earnings per Share Attributable to Owners
18,229.2 billion yen 687.3
Depreciation
billion yen
Equity Attributable to Owners of the Parent
of the Parent
191.16 yen
6,761.4 billion yen 486.4 billion yen
Equity Attributable to Owners of the Parent
per Share
3,751.59 yen
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To Our Shareholders
On behalf of Honda, I would like to express my heartfelt thanks to all
of our shareholders and investors for your continued interest and
ongoing support of Honda’s business activities.
I 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. Your support has been vital to our growth and
development.
Takahiro Hachigo
President,
Chief Executive Officer
and Representative Director
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Fiscal Year Ended March 31, 2016 ¥635.4 billion a decrease of 21.2% compared to the previous Further advancement of our six-region global
in Review fiscal year, and profit for the year attributable to owners of the operation structure
In terms of the business conditions that Honda faced, the parent amounted to ¥344.5 billion, a decrease of 32.4%. Honda divides the world into six regions, each of which oper-
U.S. economy continued to recover as employment condi- ates as an autonomous organization with its own functional
tions improved amid modest growth in housing starts and Progress on Two Core Themes capabilities. In the automobile business, we have used this
higher consumer spending, among other factors. Economic Since my appointment as CEO, I have promoted two guiding structure to develop regional models such as the Pilot in North
conditions recovered gradually in Europe as well, with themes for our business activities. These are the further America and the Brio series in Asia, which support growth by
employment and consumer spending both improving. The advancement of our six-region global operation structure, and catering to the needs of customers in those regions. We have
picture was mixed in Asia, with India posting a mild recovery the development of challenging products that are characteris- also developed the Civic, CR-V, Accord, Fit and HR-V as
even as China, Indonesia, and Thailand experienced varying tic of Honda. Based on these themes, we have considered global models that we aim to market in every region. One of
degrees of economic slowdown. In Japan, growth remained measures and are making steady progress in their execution. the strengths of Honda is that we have created product
modest as employment conditions generally improved and
capital investment recovered.
In this environment, the Honda Group strove to build a
stronger corporate enterprise that can respond swiftly and
accurately to changes in the many and varied needs of cus-
tomers and society at large. On the research and development
front, the Honda Group took proactive steps in developing
advanced technologies to enhance safety and environmental
technologies as well as product appeal. On the production
front, the Honda Group revamped its framework to further
fortify its production operations and enable it to respond to
changes in demand on a global basis. On the sales front, the
Honda Group proactively enhanced its product lineup by
launching products embodying new forms of value and
supplying products across national boundaries.
As a result, Honda’s consolidated sales revenue for the fiscal
year ended March 31, 2016 totaled ¥14,601.1 billion, an
increase of 9.6% compared to the previous year, reflecting higher
sales in the automobile and financial services business opera-
tions. Operating profit amounted to ¥503.3 billion, a decrease of
24.9% compared to the previous fiscal year, due mainly to
increased SG&A expenses including quality related product
warranty expenses, and negative currency translation effects,
despite gains from increased sales, changes in product mix and
cost-reduction efforts. Profit before income taxes amounted to
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lineups for every region of the world based on a mixture of As part of our effort to address the challenge posed by and hydrogen-powered fuel cell vehicles. Our joint develop-
global and regional models. global climate change, we seek to realize a society with zero ment of a next-generation automotive fuel cell system with
Among our global models, the Civic underwent a full CO2 emissions. To this end, Honda aims to halve CO2 emis- our U.S. partner General Motors is moving forward smoothly
model change in North America in November 2015. With the sions relative to the levels recorded in 2000 by 2050. and at the next stage, we aim to begin commercial sales by
fully remodeled Civic, we adopted a new platform to realize Widespread adoption of electrification technologies is around 2020.
superior driving performance with a downsized turbo engine. essential to realizing this goal. In our motorcycle business, we aim to launch the EV-CUB
It has been highly regarded by the media and customers in In our automobile business, we aim to make two-thirds of model based on the EV-CUB Concept electric motorcycle in
North America, and was named the North American Car of our overall unit sales from plug-in hybrid or hybrid vehicles 2018. Sales will initially begin in Japan followed by a plan to
the Year in January 2016. It has also proven a hit in China and zero-emission vehicles by 2030. In particular, we will introduce the product to the major ASEAN markets as we
and Thailand, and we plan to begin launching global models position plug-in hybrids at the core of electrification in the take on the challenge of popularizing electric motorcycles.
such as this one in Japan as soon as possible in order to future and introduce an all-new plug-in hybrid model in North We are also pursuing electrification in power products,
leverage the strength of our product lineup. America in 2017, before gradually introducing plug-in hybrid aiming to expand our electrical product lineup, including
variants for all our major models and rolling them out in every electric powered lawn mowers, electric robotic lawn mowers,
Development of challenging products that are region. At the same time, we will continue to develop and and electricity storage devices.
characteristic of Honda popularize zero-emission vehicles such as electric vehicles
In December 2015, we made the first customer delivery of the
HondaJet, a new dimension in mobility for Honda. We have
also begun lease sales of the Honda Walking Assist Device, a
rehabilitative device, to corporate customers in Japan. We will
develop this business in Japan and plan to seek opportunities
to expand this business in overseas markets.
Meanwhile, we must also address the challenges that are

created by constantly changing business conditions. All
around the world there are accelerating demands to tackle
global climate change and ensure greater transportation
safety in society.
CLARITY FUEL CELL

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Next, in an effort to ensure greater transportation safety in traffic, or pedestrians, thus preventing accidents. We plan to “The Power of Dreams” remains the spirit that drives the
society, Honda aims to eliminate traffic accidents to help introduce a suite of these technologies progressively to Honda creative efforts of everyone at Honda. United, we will con-
create an accident-free society that is safe for every road user. models in Japan. We are also developing a system for global tinue to pursue the realization of our dreams, while under-
To this end, we are conducting R&D into various technologies use, initially appearing in the Civic in the United States. taking reforms to maximize the capabilities of Team Honda.
to improve driving safety. With regard to automated driving technologies, which lie Honda appreciates the continuous and long-term under-
The Honda SENSING advanced driver-assistive system is a ahead in the evolution of driver-assistive systems for safer standing and support from our shareholders and investors
result of these initiatives. We are actively promoting the adop- driving, we are also engaged in R&D targeting a range of toward our business operations.
tion of this system, which utilizes precision detection capabili- technologies, including artificial intelligence, and aim to real-
ties based on cameras and radar, to apply the brakes to help ize practical application of such a system for highway driving
avoid collisions with vehicles in front of the car, oncoming by 2020.
June 16, 2016
Takahiro Hachigo
President, Chief Executive Officer and Representative Director
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volumes, the positive effect of cost reduction efforts as well
CFO Interview as other factors such as lower quality related product war-
ranty expenses. Our yen-dollar exchange rate assumption for
the fiscal year ending March 31, 2017 is ¥105/$1, compared
with an actual rate of ¥120/$1 in the fiscal year ended March
31, 2016*.
Recently, the main issue that we have faced at Honda is
how to improve profitability. We face particular challenges in
relation to 1) sales volumes in Japan, Asia and other regions
where sales have fallen short of initial forecasts due to
changes in market and economic conditions, 2) the move-
ments against the U.S. dollar of other currencies (such as the
Brazilian real, the Canadian dollar, and the Mexican peso),
and 3) product quality related warranty expenses. In the fiscal
year ended March 31, 2016, we made financial provisions for
quality related product warranty expenses for resolving the
Kohei Takeuchi
airbag inflator issue based on projected costs for the future.
Senior Managing Officer
and Director, We aim to balance global production and supply by selling
Chief Financial Officer 80–90% of local production in the region it is manufactured
and exporting the other 10–20% to other regions. As part of
this system, in the fiscal year ended March 31, 2016 we
expanded exports from Japan to the North American market,
where we have insufficient production capacity. To respond to
Q. Please provide an overview of associated with movements of other currencies (such as the currency fluctuations against the U.S. dollar, besides reinforc-
Honda’s performance in the fiscal Brazilian real, the Canadian dollar and the Mexican peso) ing our mutually complementary supply capabilities, we are
year ended March 31, 2016 and the against the U.S. dollar. also continuing to promote efforts to increase the ratio of
major related issues. The forward guidance for the fiscal year ending March 31, locally procured parts.
We recorded higher sales but lower profits in the fiscal year 2017 is a decline in sales revenue of 5.8% to ¥13,750 billion,
* As of June 16, 2016
ended March 31, 2016, with a 9.6% year on year increase in along with 19.2% growth in operating profit to ¥600 billion*.
consolidated sales revenue to ¥14,601.1 billion and a 24.9% We expect Honda group unit sales to rise in automobile busi-
decline in operating profit to ¥503.3 billion. Revenue was ness operations primarily due to growth in North America and
boosted by higher sales of automobiles in North America and Asia, but we anticipate lower revenue after currency transla-
Asia, as well as the effect of the yen’s depreciation against the tion due to the appreciation of the yen against the U.S. dollar.
U.S. dollar. However, our profits declined year on year, On the profit side, although the stronger yen will be a drag on
depressed by provisions for product warranties of about earnings due to currency effects, we are expecting growth of
¥436.0 billion that we made in relation to the airbag inflator ¥96.6 billion at the operating profit level compared to the
recall along with negative currency translation effects fiscal year ended March 31, 2016 due to higher sales
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Q. What are the future directions for R&D activities Q. What is your view on shareholder
capital expenditure and R&D Honda’s R&D divisions are structured as autonomous subsid- returns?
expenditure? iaries to encourage free, open-minded R&D activities to pro- Honda strives to increase corporate value from a global per-
Capital expenditure mote the creation of distinctive, internationally competitive spective by developing its local business operations world-
Our capital expenditure in the fiscal year ended March 31, products based on advanced technology. R&D spending wide. We regard returning profits to shareholders as a top
2016 included investments for the introduction of new increased 7.4% year on year to ¥719.8 billion in the fiscal management priority, but also recognize the necessity of
models, as well as for expanding, rationalizing, and upgrading year ended March 31, 2016. We expect a 4.1% decrease to having internal reserves to fund investments in the develop-
our production, sales and R&D facilities. Total capital expendi- ¥690 billion in the fiscal year ending March 31, 2017*. Devel- ment of environmental, safety, and other technologies that are
ture fell by 1.0% compared with the previous fiscal year, to opment of new models are a significant component of R&D essential for future growth, as well as to fund business expan-
¥647.4 billion. We expect it to decline an additional 13.5% to activities, but we are also investing in the development of sion. From the perspective of the long-term growth of Honda,
¥560 billion in the fiscal year ending March 31, 2017*. Although environmental technologies to help create a society with zero we think the appropriate shareholders’ return ratio (in the form
we are still lacking production capacity in North America and CO2 emissions and safety technologies such as automated of dividends and repurchases of the Company’s own shares)
China, we have surplus production capacity at the global level. driving for realizing a society free from accidents. For exam- to consolidated profit for the year attributable to owners of the
We are building a mutually complementary supply system ple, in line with our “generate”, “use”, and “get connected” parent is around 30%. We pay quarterly dividends to accelerate
without constructing any new plants. Our capital expenditure concept, our fuel cell vehicle R&D efforts focus not only on the return of profits to shareholders. In the fiscal year ended
plans for the fiscal year ending March 31, 2017 are focused the vehicle itself, but also on Smart Hydrogen Stations and March 31, 2016, we paid a dividend of ¥22 per share in each
primarily on maintaining and renovating existing production external power devices. These R&D activities are preparing quarter, for total dividends for the year of ¥88 per share. The
lines, and on investing in model changes and new model the way for a future society where hydrogen is utilized as a consolidated payout ratio of 46.0% was temporarily inflated by
launches in the automobile business. main energy source. the impact of quality related product warranty expenses. We
* As of June 16, 2016 * As of June 16, 2016 expect to keep total dividends for the year at ¥88 per share in
the fiscal year ending March 31, 2017 as well*.
* As of June 16, 2016
Capital Expenditures/Depreciation R&D Expenditure/ Dividend per Share

Years ended March 31 R&D Expenditure as a Percentage of Sales Revenues Years ended March 31
Years ended March 31 * From 2012 to 2013, the above was named “R&D
Yen (billions) Yen (billions) expenses” and stated in accordance with U.S. GAAP. (%) (Yen)
750 800 8 100
600 6 75
500
400 4 50
250
200 2 25
0 0 0 0
12 13 14 15 16 12 13 14 15 16 12 13 14 15 16
U.S. GAAP IFRS U.S. GAAP IFRS
R&D Expenditure (left scale)
Capital Expenditures Depreciation R&D Expenditure as a Percentage of Sales Revenues (right scale)
Note: Capital Expenditure and Depreciation in the above graph exclude Capital Note: This figure differs from R&D expenses as itemized in the consolidated
Expenditure and Depreciation in operating lease assets, financial lease assets, statement of income.
and intangible assets.
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Review of Operations
Motorcycle Business Automobile Business Power Product and Financial Services
Other Businesses Business
page 12 page 15 page 18 page 20
Sales Revenue (millions)

External customers ¥1,805,429 ¥10,625,405 ¥334,712 ¥1,835,605
Intersegment — 142,280 17,532 14,095
Total ¥1,805,429 ¥10,767,685 ¥352,244 ¥1,849,700
Segment Profit (Loss)

(millions) ¥181,773 ¥153,366 ¥(31,121) ¥199,358
Percentage of Sales Revenue by Business Percentage of Sales Revenue by Region
Other Regions
Financial Services Motorcycle Business 6.3% Japan
12.3% 12.0%
Business
12.6% Asia
21.4%
Power Product and Automobile Business Europe North America
Other Businesses
2.3% 72.8% 4.7% 55.6%

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(Fiscal years ended March 31)

Honda Group 2015 2016 2015 2016
Unit Sales*1 / 15,133
Consolidated
Unit Sales*2
(Thousands)
8,650
1,230 1,230
180 308 204 180 308 204
日本 North
Japan 北米 Europe
欧州アジア
Asia その他
Other 日本 North
Japan 北米 Europe
欧州アジア
Asia その他
Other
America Regions America Regions
*1 The total unit sales of completed products of Honda, its consolidated subsidiaries and
its affiliates and joint ventures accounted for using the equity method
*2 The total unit sales of completed products of Honda and its consolidated subsidiaries
Sales Revenue 2015 2016 % change

by Region
Yen (millions) Japan ¥ 72,487 ¥ 66,877 (7.7)%
North America 154,714 186,065 20.3
Europe 116,998 125,021 6.9
Asia 1,050,490 1,107,669 5.4
Other Regions 451,977 319,797 (29.2)
Total ¥1,846,666 ¥1,805,429 (2.2)%
Yen (billions) (%)

2,000 12.0
1,500 9.0
Japan
North America
1,000 6.0
Europe
Asia
Other Regions 500 3.0
Operating Margin
0 12 13 14 15 16 0.0
CRF1000L Africa Twin (Europe)
U.S. GAAP IFRS
Review of Operations Sales Revenue / Operating Profit

Yen (billions)
Motorcycle Business 2,000
1,500
200
150
Honda’s consolidated unit sales of motorcycles and all-terrain vehicles (ATVs) in fiscal year 2016 totaled 10,572 thousand units,
a decrease of 1.4% from the previous fiscal year, due mainly to a decline in Brazil which more than offset increases primarily in 1,000 100
Vietnam and the Philippines.
Sales revenue from external customers decreased by ¥41.2 billion, or 2.2%, to ¥1,805.4 billion from the previous fiscal year, 500 50
due mainly to negative foreign currency translation effects.
Operating profit decreased by ¥10.3 billion, or 5.4%, to ¥181.7 billion from the previous fiscal year, due mainly to negative 0 12 13 14 15 16 0
foreign currency effects, which was partially offset by continuing cost reduction. U.S. GAAP IFRS
Sales Revenue (left scale) Operating Profit (right scale)

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Japan North America Europe

Total industry demand for motorcycles in Japan* decreased Total demand for motorcycles and all-terrain vehicles (ATVs) Total demand for motorcycles in Europe* increased around
by around 6% from the previous fiscal year to approximately in the United States*, the principal market within North 9% from the previous year to approximately 810 thousand
390 thousand units in fiscal year 2016. America, increased around 2% from the previous year to units in calendar year 2015.
Honda’s consolidated unit sales in Japan declined 9.5% approximately 720 thousand units in calendar year 2015. Honda’s consolidated unit sales in Europe increased
from the previous fiscal year to 180 thousand units in fiscal Honda’s consolidated unit sales in North America 6.8% from the previous fiscal year to 204 thousand units in
year 2016, reflecting an overall decline in unit sales of increased 7.7% from the previous fiscal year to 308 fiscal year 2016, mostly as a result of robust sales of
scooter models, despite an increase in unit sales of the thousand units in fiscal year 2016. This was mainly due to commuter models and the launch of the new CRF1000L
Tact 50cc scooter and certain other models. a sales increase of side-by-side (SxS) models, centered on Africa Twin model.
the new Pioneer 1000, and motorcycles, primarily in the
* Source: JAMA (Japan Automobile Manufacturers Association) * Based on Honda research. Only includes the following 10 countries: the United
United States. Kingdom, Germany, France, Italy, Spain, Switzerland, Portugal, the Netherlands,
Belgium and Austria.
* Source: MIC (Motorcycle Industry Council)
The total includes motorcycles and ATVs, but does not include side-by-side
(SxS) models.
Tact (Japan) Pioneer 1000 (North America)

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Asia Other Regions

Total demand for motorcycles in Asia* decreased around Honda’s consolidated unit sales in Asia increased 2.0% Total demand for motorcycles in Brazil*, the principal market
6% from the previous year to approximately 39,140 from the previous fiscal year to 8,650 thousand units in within Other Regions, declined about 17% from the previous
thousand units in calendar year 2015. fiscal year 2016. This was due in part to brisk sales of year to approximately 1,190 thousand units in calendar year
Looking at market conditions by country, in calendar year scooter models such as the Vision scooter in Vietnam, 2015, mainly due to an increase in unemployment and
2015, demand in India increased about 1% from the previ- increased sales of the TMX125 Alpha model in the stricter lending standards for retail loans amid a continued
ous year to approximately 16,120 thousand units. Demand Philippines, as well as other factors. worsening of economic conditions.
in China decreased around 14% from the previous year to Honda’s consolidated unit sales do not include sales by In Other Regions (including South America, the Middle
approximately 9,200 thousand units. Demand in Indonesia P.T. Astra Honda Motor in Indonesia, which is a joint venture East, Africa, Oceania and other areas), Honda’s consoli-
decreased around 18% from the previous year to approxi- accounted for using the equity method. P.T. Astra Honda dated unit sales decreased 21.7% from the previous fiscal
mately 6,480 thousand units. Vietnam saw demand increase Motor’s unit sales for fiscal year 2016 decreased around 9% year to 1,230 thousand units in fiscal year 2016, mainly
around 5% from the previous year to approximately 2,840 from the previous fiscal year to approximately 4,450 thousand reflecting an overall market slump in Brazil.
thousand units. Demand in Thailand declined around 1% units due mainly to lackluster overall market conditions,
* Source: ABRACICLO (the Brazilian Association of Motorcycle, Moped, and
from the previous year to approximately 1,670 thousand despite steady sales of the Vario series and other models. Bicycle Manufacturers)
units. Demand in Pakistan increased around 16% from the
* Based on Honda research. Only includes the following eight countries: Thailand,
previous year to approximately 1,520 thousand units. Indonesia, Malaysia, the Philippines, Vietnam, India, Pakistan and China.
TMX125 Alpha (Philippines) Vision (Vietnam)

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Honda Group 2015 2016 2015 2016
Unit Sales*1 /
1,929 1,929
Consolidated 1,723
Unit Sales*2
(Thousands)
Note:
Certain sales of automobiles that 668 670
are financed with residual value 614
type auto loans by our Japanese
finance subsidiaries and sold
172 251 172 251
through our consolidated
subsidiaries are accounted for
as operating leases in conformity
with IFRS and are not included 日本 North
Japan 北米 Europe
欧州アジア
Asia その他
Other 日本 North
Japan 北米 Europe
欧州アジア
Asia その他
Other
in consolidated sales revenue to America Regions America Regions
external customers in the
Automobile business. Accord- *1 The total unit sales of completed products of Honda, its consolidated subsidiaries and
ingly, they are not included in its affiliates and joint ventures accounted for using the equity method
consolidated unit sales. *2 The total unit sales of completed products of Honda and its consolidated subsidiaries

by Region Japan ¥1,526,054 ¥ 1,439,959 (5.6)%
Yen (millions)
North America 5,199,008 6,186,765 19.0
Europe 456,562 491,204 7.6
Asia 1,795,791 1,962,501 9.3
Other Regions 625,920 544,976 (12.9)
Total ¥9,603,335 ¥10,625,405 10.6 %
Yen (billions) (%)

12,000 12.0
9,000 9.0
Japan
North America 6,000 6.0
Europe
3,000 3.0
Asia
Other Regions 0 0.0
Operating Margin
Civic (North America) 12 13 14 15 16 –3.0
U.S. GAAP IFRS
Review of Operations Sales Revenue / Operating Profit (Loss)

Yen (billions)
Automobile Business 12,000
9,000
600
450
Honda’s consolidated unit sales of automobiles totaled 3,636 thousand units in fiscal year 2016, an increase of 3.5% from the
6,000 300
previous fiscal year, due mainly to increases in sales in North America and Asia following the launch of new models and full-model-
changes. On the other hand, sales primarily declined in Japan as a result of difficult market conditions. 3,000 150
Sales revenue from external customers increased by ¥1,022.0 billion, or 10.6%, to ¥10,625.4 billion from the previous fiscal year, due
0 0
mainly to increased consolidated unit sales.
Operating profit decreased by ¥126.3 billion, or 45.2%, to ¥153.3 billion from the previous fiscal year, due mainly to increased selling, 12 13 14 15 16 –150
general and administrative expenses including product warranty expenses and negative foreign currency effect, which was partially U.S. GAAP IFRS
offset by an increase in profit attributable to increased sales revenue and model mix as well as continuing cost reduction. Sales Revenue (left scale) Operating Profit (right scale)
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Japan North America Europe

Total demand for automobiles in Japan*1 decreased around Total industry demand for automobiles in the United Total demand for automobiles in Europe* increased about
7% from the previous fiscal year to approximately 4,930 States*, the principal market within North America, rose 9% from the previous year to approximately 14,200
thousand units in fiscal year 2016. This was greatly influ- around 6% from the previous year to approximately 17,470 thousand units in calendar year 2015, mainly driven by the
enced by the impact of a tax increase on mini vehicles. thousand units in calendar year 2015. This was mainly gradual recovery in economic conditions.
Honda’s consolidated unit sales in Japan decreased attributable to a continued recovery in economic conditions, Honda’s consolidated unit sales in Europe increased
11.8% from the previous fiscal year to 614 thousand units*2 including the positive effects of an improvement in employ- 6.8% from the previous fiscal year to 172 thousand units in
in fiscal year 2016. The main reason for the decline was a ment conditions, a gradual rise in housing starts, and a fiscal year 2016. This was mainly due to the positive effect
tax increase on mini vehicles. This was despite the positive continued increase in personal consumption, as well as a of launching the new HR-V model.
effect from the introduction of new automobile models such surge in light truck sales as a result of lower gasoline prices. Unit production at Honda’s U.K. plant in fiscal year 2016
as the Shuttle, and a full-model-change of the Step WGN, Under these conditions, Honda’s consolidated unit sales was roughly level with the previous fiscal year at 115
and other factors. in North America increased 10.2% from the previous fiscal thousand units.
Honda’s unit production of automobiles in fiscal year year to 1,929 thousand units in fiscal year 2016. This
* Source: ACEA (Association des Constructeurs Europeens d’Automobiles (the
2016 decreased 12.3% from the previous fiscal year to 761 increase was mainly attributable to the effect of launching European Automobile Manufacturer’s Association)) New passenger car registra-
thousand units. This was mainly due to the negative effect the new HR-V model, and brisk sales of the CR-V and tions cover 28 EU countries and three EFTA countries.
of a decline in unit sales in Japan, which more than offset Civic models.
an increase in export volume. Honda manufactured 1,919 thousand units in fiscal year
2016, an increase of 6.0% from the previous fiscal year. This
*1 Source: JAMA (Japan Automobile Manufacturers Association), as measured by
the number of regular vehicle registrations (661cc or higher) and mini vehicles increase mainly reflected an increase in unit production at
(660cc or lower) Honda’s plants in the United States and Canada, primarily
*2 Certain sales of automobiles that are financed with residual value type auto loans
by our Japanese finance subsidiaries and sold through our consolidated subsid- to cope with brisk sales of CR-V and Civic models, and
iaries are accounted for as operating leases in conformity with IFRS and are not increased production of HR-V models at the plant in Mexico.
included in consolidated sales revenue to external customers in the Automobile
business. Accordingly, they are not included in consolidated unit sales. * Source: Autodata
Pilot (North America)

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Asia Other Regions

Total demand for automobiles in Asia increased around 3% sales in China increased 33.5% from the previous fiscal Total industry demand for automobiles in Brazil*, the princi-
from the previous year to approximately 7,090 thousand year to 1,053 thousand units in fiscal year 2016. The pal market within Other Regions, decreased around 26%
units*1 in calendar year 2015. This was mainly due to a increase was mainly attributable to strong sales of the XR-V from the previous year to approximately 2,480 thousand
recovery in demand in India despite a moderate slowdown and Vezel models. units in calendar year 2015. The decrease resulted mainly
in Indonesia. Total demand for automobiles in China Honda’s unit production by consolidated subsidiaries in from a deterioration in the unemployment rate and an
increased about 5% from the previous calendar year to Asia increased 3.0% from the previous fiscal year to 718 increase in loan interest rates amid continued difficult eco-
approximately 24,590 thousand units*2. thousand units*3 in fiscal year 2016. nomic conditions and a downturn due to the termination of
Honda’s consolidated unit sales in Asia outside Japan Meanwhile, unit production by Chinese joint ventures the tax reduction program for manufactured products (IPI
increased 5.2% from the previous fiscal year to 670 Dongfeng Honda Automobile Co., Ltd. and Guangqi Honda (Imposto Sobre Produtos Industrializados)).
thousand units in fiscal year 2016. This increase was mainly Automobile Co., Ltd. increased 29.5% from the previous In Other Regions (including South America, the Middle
attributable to brisk sales of the HR-V in Malaysia and fiscal year to 1,049 thousand units in fiscal year 2016. East, Africa, Oceania and other areas), Honda’s consoli-
Indonesia, the launch of the new Mobilio model in the dated unit sales decreased 6.7% from the previous fiscal
*1 The total is based on Honda research and includes the following eight countries:
Philippines, and the effect of launching the new BR-V Thailand, Indonesia, Malaysia, the Philippines, Vietnam, Taiwan, India and Pakistan. year to 251 thousand units in fiscal year 2016. This result
model in Indonesia. *2 Source: CAAM (China Association of Automobile Manufacturers) was due to a decrease in sales mainly in the Middle East,
*3 The total includes the following nine countries: China, Thailand, Indonesia,
Honda’s consolidated unit sales do not include unit sales Malaysia, the Philippines, Vietnam, Taiwan, India and Pakistan. which more than offset brisk sales of the HR-V model in
of Dongfeng Honda Automobile Co., Ltd. and Guangqi Brazil and other factors.
Honda Automobile Co., Ltd., both of which are joint ven- Unit production at Honda’s plant in Brazil increased
tures accounted for using the equity method in China. Unit 7.5% from the previous fiscal year to 144 thousand units in
fiscal year 2016.
* Source: ANFAVEA (Associação Nacional dos Fabricantes de Veiculos Auto

motores (the Brazilian Automobile Association)) Includes passenger cars and light
commercial vehicles.
BR-V (Asia) HR-V (Asia)

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1 The Power of
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Honda Group 2015 2016
Unit Sales /
2,811
Consolidated
Unit Sales
(Thousands)
1,349
1,008
363 434
日本 North
Japan 北米 Europe
欧州アジア
Asia その他
Other
America Regions
Note: In power product business, there is no discrepancy between Honda Group Unit
Sales and Consolidated Unit Sales

by Region Japan ¥ 82,176 ¥ 85,275 3.8 %
Yen (millions)
North America 107,615 122,079 13.4
Europe 67,536 62,883 (6.9)
Asia 40,632 41,282 1.6
Other Regions 24,589 23,193 (5.7)
Total ¥322,548 ¥334,712 3.8 %
Yen (billions) (%)

400 40.0
300 30.0
Japan
North America 200 20.0
Europe
100 10.0
Asia
Other Regions 0 0.0
Operating Margin
EU2000i (Generator) 12 13 14 15 16 –10.0
U.S. GAAP IFRS
Review of Operations Sales Revenue / Operating Profit (Loss)

Yen (billions)
Power Product and Other Businesses 400
200
40
20
Honda’s consolidated unit sales of power products in fiscal year 2016 totaled 5,965 thousand units, a decrease of 0.3% from
the previous fiscal year primarily due to a decrease in sales in Europe which more than offset an increase in North America and 0 0
other countries.
Sales revenue from external customers increased by ¥12.1 billion, or 3.8%, to ¥334.7 billion from the previous fiscal year, due –20
mainly to increased sales revenue in Other businesses.
Operating loss was ¥31.1 billion, an increase of ¥27.2 billion from the previous fiscal year, due mainly to an increase in operating 12 13 14 15 16 –300
costs in Other businesses. U.S. GAAP IFRS
Sales Revenue (left scale) Operating Profit (Loss) (right scale)

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1 The Power of
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Japan Europe Other Regions

Honda’s consolidated unit sales in power product business Honda’s consolidated unit sales in Europe decreased 7.6% Honda’s consolidated unit sales in Other Regions (including
operations in Japan increased 7.4% from the previous fiscal from the previous fiscal year to 1,008 thousand units in South America, the Middle East, Africa, Oceania and other
year to 363 thousand units in fiscal year 2016. This was fiscal year 2016. This was mostly due to a decline in sales areas) decreased 7.1% from the previous fiscal year to 434
mainly due to an increase in sales of OEM* engines, which of OEM engines. thousand units in fiscal year 2016. This was mainly due to a
more than offset a decline in sales of snow blowers and decrease in sales of OEM engines.
other models. Asia
* OEM (Original Equipment Manufacturer): refers to the manufacturers of products Honda’s consolidated unit sales in Asia decreased 2.4%
and components sold under a third-party brand.
from the previous fiscal year to 1,349 thousand units in
fiscal year 2016. The main reason was a decrease in sales
North America of OEM engines, despite an increase in sales of water
Honda’s consolidated unit sales in North America increased pumps and other factors.
3.9% from the previous fiscal year to 2,811 thousand units in
fiscal year 2016. This was mainly attributable to an increase
in sales of generators, lawn mowers, and OEM engines.
HRX217 (Lawn mower) GX160 (Engine)

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Total receivables from financial services and equipment on operating leases of finance subsidiaries on March Sales Revenue 2015 2016 % change
31, 2016 decreased by ¥332.7 billion, or 3.7%, to ¥8,686.1 billion from March 31, 2015. Honda estimates by Region Japan ¥ 119,722 ¥ 162,056 35.4 %
Yen (millions)
that by applying Japanese yen exchange rates of the previous fiscal year to the current fiscal year, the total North America 1,376,287 1,619,201 17.6
amount of receivables from financial services and equipment on operating leases of finance subsidiaries as Europe 14,249 14,490 1.7
of March 31, 2016 would have increased by approximately ¥236.0 billion, or 2.6%, compared to the Asia 12,157 12,615 3.8
decrease as reported of ¥332.7 billion, which includes negative foreign currency translation effects. Other Regions 33,135 27,243 (17.8)
Sales revenue from external customers increased by ¥280.0 billion, or 18.0%, to ¥1,835.6 billion from Total ¥1,555,550 ¥1,835,605 18.0 %
the previous fiscal year, due mainly to an increase in operating lease revenues and revenues on disposition
of lease vehicles. Honda estimates that by applying Japanese yen exchange rates of the previous fiscal Yen (billions) (%)
year to the current fiscal year, sales revenue for the year would have increased by approximately ¥151.1 2,000 60.0
billion, or 9.7%, compared to the increase as reported of ¥280.0 billion, which includes positive foreign
1,500 45.0
currency translation effects. Sales revenue including intersegment sales increased by ¥281.7 billion, or Japan
North America
18.0%, to ¥1,849.7 billion from the previous fiscal year. Europe
1,000 30.0
Operating costs and expenses increased by ¥285.0 billion, or 20.9%, to ¥1,650.3 billion from the Asia
Other Regions 500 15.0
previous fiscal year. Cost of sales increased by ¥275.2 billion, or 21.6%, to ¥1,547.1 billion from the Operating Margin
previous fiscal year, due mainly to an increase in 0 12 13 14 15 16 0.0
U.S. GAAP IFRS
costs attributable to increased operating lease
revenues and revenues on disposition of lease
Receivables from Financial Services / Equipment on Operating Leases
vehicles. Selling, general and administrative * From fiscal 2012 to 2013, the above were named “Finance Receivables” and “Property on Operating Leases”, and stated in
accordance with U.S. GAAP.
expenses increased by ¥9.7 billion, or 10.4%, to
Yen (billions) 2012 2013 2014 2015 2016
¥103.1 billion.
Receivables from
Operating profit decreased by ¥3.2 billion, or ¥3,446.1 ¥4,031.1 ¥5,351.2 ¥5,683.6 ¥5,008.0
Financial Services
1.6%, to ¥199.3 billion from the previous fiscal Equipment on
1,472.7 1,843.1 2,427.4 3,335.3 3,678.1
year, due mainly to increased selling, general and Operating Leases
administrative expenses. Total ¥4,918.8 ¥5,874.2 ¥7,778.6 ¥9,018.9 ¥8,686.1
Review of Operations Sales Revenue / Operating Profit

Yen (billions)
Financial Services Business 2,000
1,500
400
300
To support the sale of its products, Honda provides retail lending and leasing to customers and wholesale financing to dealers
through its finance subsidiaries in Japan, the United States, Canada, the United Kingdom, Germany, Brazil and Thailand. 1,000 200
500 100
0 12 13 14 15 16 0
U.S. GAAP IFRS
Sales Revenue (left scale) Operating Profit (right scale)

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Corporate Governance
Basic Approach Corporate governance structure (as of June 30, 2016)

Based on our Fundamental Beliefs, Honda strives to enhance corporate
governance in order to further strengthen the trust of our shareholders/ General Meeting of Shareholders
investors, customers and society; encourage timely, decisive and risk-
Election/ Election/ Election/
considered decision-making; seek sustainable growth and the enhance- Dismissal Dismissal Dismissal
Coop-
ment of corporate value over the medium to long term; and in order that Audit Board of Corporate Auditors eration
Accounting
we become “a company that society wants to exist”. As such, corporate Board of Directors
5 Corporate Auditors
Auditors
(including 3 Outside Auditors)
governance is one of the most important management issues. 13 Directors (including 2 Outside Directors) Audit
We are making efforts to appropriately disclose corporate information

including the release and disclosure of quarterly financial results and Executive Council Corporate Auditors’ Office
management policies in a timely and accurate manner to bolster trust and (Officers of senior managing director level and above)
appreciation from shareholders / investors and society. Going forward, we Report

will continue to strive to ensure the transparency of our management. Report Report
Overview of corporate governance (as of June 30, 2016) Business Ethics Report Compliance Risk Management
Improvement
Form of organization Company with corporate auditors Proposal Line
Compliance Risk Management
Number of Directors (also serving as Operating Officers) . . . . . . . . . 13 (10) Officer Officer
Number of Outside Directors . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2 Audit Office
Number of Specified Independent Directors . . . . . . . . . . . . . . . . . . . . 2
Number of Female Directors . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1 Report/
Supervision/ Compliance Global Emergency
Proposal Delegation Committee Headquarters
Term of Directors . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1 year Proposal
of authority
Number of Corporate Auditors . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5
Number of Outside Corporate Auditors . . . . . . . . . . . . . . . . . . . . . . . . 3 Report Report
Number of Specified Independent Auditors . . . . . . . . . . . . . . . . . . . . . 3 Internal
Number of Female Corporate Auditors . . . . . . . . . . . . . . . . . . . . . . . . 1 Respective Business/Functional Operations/ audit
Regional Operations/Subsidiaries
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Board of Directors, Corporate Auditors and Operating Officers
Senior Managing Officer Senior Managing Officer Senior Managing Officer

and Director and Director Senior Managing Officer and Director
Yoshi Yamane Yoshiyuki Matsumoto Toshiaki Mikoshiba Kohei Takeuchi
President, Chief Executive Officer Executive Vice President,

and Representative Director Executive Officer and Representative Director
Takahiro Hachigo Seiji Kuraishi
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Directors
President, Executive Vice

Chief Executive President,
Officer and Executive Officer Senior Managing Senior Managing Senior Managing Managing
Representative and Representative Officer and Officer and Officer and Officer and
Director Director Director Director Director Director Director
Takahiro Seiji Yoshiyuki Yoshi Kohei Takashi Hideko
Hachigo Kuraishi Matsumoto Yamane Takeuchi Sekiguchi Kunii
Operating Operating Operating Operating

Director and Officer and Officer and Officer and Officer and
Director Advisor Director Director Director Director
Motoki Takanobu Shinji Noriya Kazuhiro Masayuki
Ozaki Ito Aoyama Kaihara Odaka Igarashi
*1 H ideko Kunii and Motoki Ozaki are outside directors as

provided for in Article 2, Item 15 of the Company Law.
*2 Hideko Kunii and Motoki Ozaki have been designated by
the Company as Independent Directors as provided for in
the rules of the Tokyo Stock Exchange and registered
with the Tokyo Stock Exchange.
Corporate Auditors
*1 C orporate Auditors Toshiaki Hiwatari, Hideo Takaura and

Mayumi Tamura are outside corporate auditors as pro-
Corporate Corporate vided for in Article 2, Item 16 of the Company Law.
Auditor Auditor Corporate Corporate Corporate *2 Toshiaki Hiwatari, Hideo Takaura and Mayumi Tamura
(full-time) (full-time) Auditor Auditor Auditor
have been designated by the Company as Independent
Masahiro Kunio Toshiaki Hideo Mayumi Auditors as provided for in the rules of the Tokyo Stock
Yoshida Endo Hiwatari Takaura Tamura Exchange and registered with the Tokyo Stock Exchange.
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Executive Officers
President, Chief Executive Officer Executive Vice President, Executive Officer
Takahiro Hachigo Seiji Kuraishi
Risk Management Officer
Corporate Brand Officer
Senior Managing Officers

Yoshiyuki Matsumoto Toshiaki Mikoshiba Yoshi Yamane Kohei Takeuchi
President, Chief Executive Officer and Chief Operating Officer for Regional Chief Operating Officer for Production Chief Operating Officer for Business
Director of Honda R&D Co., Ltd. Operations (North America) Operations Management Operations
Supervising Director of F1 Project President and Director of Honda North Chief Officer for Honda Driving Safety
America, Inc. Promotion Center
President and Chief Executive Officer of
American Honda Motor Co., Inc.
Managing Officers
Toshihiko Nonaka Takashi Sekiguchi Soichiro Takizawa Michimasa Fujino
President, Chief Executive Officer and Chief Operating Officer for Automobile Senior Executive Vice President and President and Director of Honda Aircraft
Director of Honda Engineering Co., Ltd. Operations Director of Honda North America, Inc. Company, LLC
Executive in Charge of Sales Strategy
for Automobile Operations
Operating Officers
Naoto Matsui Issao Mizoguchi Noriaki Abe Kazuhiro Odaka Katsushi Inoue
Chief Operating Officer for Purchasing Chief Operating Officer for Regional Chief Operating Officer for Regional Chief Operating Officer for Business Chief Operating Officer for Regional
Operations Operations (Latin America) Operations (Asia & Oceania) Support Operations Operations (Europe Region)
President and Director of Honda South President and Director of Asian Honda Compliance Officer President and Director of Honda
America Ltda. Motor Co., Ltd. Motor Europe Ltd.
Mitsugu Matsukawa President and Director of Honda Automoveis
Chief Operating Officer for IT Operations do Brazil Ltda. Masayuki Igarashi
Head of Production Planning Supervisory Unit President and Director of Moto Honda da Toshiyuki Shimabara Chief Operating Officer for Power Kimiyoshi Teratani
for Production Operations Amazonia Ltda. Executive in Charge of Motorcycle Production Product Operations Chief Operating Officer for Regional
for Motorcycle Operations Operations (Japan)
General Manager of Kumamoto Factory for
Shinji Aoyama Toshihiro Mibe Motorcycle Operations Hiroyuki Kachi
Chief Operating Officer for Motorcycle Senior Managing Officer and Director of Honda Executive in Charge of Power Product Head of Automobile Production for Regional Asako Suzuki
Operations R&D Co., Ltd. Production for Power Product Operations Operations (Japan) General Manager of Marketing and
Product Planning Division for Regional
Operations (Japan)
Noriya Kaihara Yusuke Hori Yasuhide Mizuno Soichi Yamamoto
Chief Operating Officer for Customer Head of Regional Unit (Africa & the Middle East) Chief Operating Officer for Regional Executive Vice President and Director of
First Operations Operations (China) Honda Motor Europe Ltd.
Chief Quality Officer President of Honda Motor (China) Managing Director of Honda of the U.K.
Tomomi Kosaka Investment Co., Ltd. Manufacturing Ltd.
Executive Vice President and Director of Honda President of Honda Motor Technology
Tetsuo Suzuki North America, Inc. (China) Co., Ltd.
Representative of Motorcycle DEB for President and Director of Honda of America
Motorcycle Operations Mfg., Inc.
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Financial Section: Financial Review

In the fiscal year ended March 31, 2015, we changed the basis of the accounting Operating Profit
principles used to prepare our consolidated financial statements from U.S. GAAP Operating profit decreased by ¥167.2 billion, or 24.9%, to ¥503.3 billion from the
to IFRS. Accordingly, the consolidated financial statements of the Company in this previous fiscal year, due mainly to an increase in selling, general and administrative
Annual Report have been prepared in accordance with IFRS, as issued by IASB. expenses including product warranty expenses and negative foreign currency
effects, which was partially offset by an increase in profit attributable to increased
sales revenue and model mix as well as continuing cost reduction. Honda esti-
Operating and Financial Review mates that by excluding negative foreign currency effects of approximately ¥60.1
billion, operating profit would have decreased by approximately ¥107.0 billion.
Sales Revenue
Honda’s consolidated sales revenue for the fiscal year ended March 31, 2016, (With respect to the discussion above of the changes, management identified
increased by ¥1,273.0 billion, or 9.6%, to ¥14,601.1 billion from the fiscal year factors and used what it believes to be a reasonable method to analyze the
ended March 31, 2015, due mainly to increased sales revenue in the Automobile respective changes in such factors. Management analyzed changes in these
business and Financial services business operations. Honda estimates that by factors at the levels of the Company and its material consolidated subsidiaries.
applying Japanese yen exchange rates of the previous fiscal year to the current “Foreign currency effects” consist of “translation adjustments”, which come from
fiscal year, sales revenue for the year would have increased by approximately the translation of the currency of foreign subsidiaries’ financial statements into
¥853.9 billion, or 6.4%, compared to the increase as reported of ¥1,273.0 billion, Japanese yen, and “foreign currency adjustments”, which result from foreign-
which includes positive foreign currency translation effects. currency-denominated sales. With respect to “foreign currency adjustments”,
management analyzed foreign currency adjustments primarily related to the
Operating Costs and Expenses following currencies: U.S. dollar, Japanese yen and others at the level of the
Operating costs and expenses increased by ¥1,440.2 billion, or 11.4%, to Company and its material consolidated subsidiaries.)
¥14,097.7 billion from the previous fiscal year. Cost of sales increased by
¥1,001.6 billion, or 9.7%, to ¥11,332.3 billion from the previous fiscal year, due Profit before Income Taxes
mainly to an increase in costs attributable to increased consolidated unit sales in Profit before income taxes decreased by ¥170.7 billion, or 21.2%, to ¥635.4
the Automobile business. Selling, general and administrative expenses increased billion. The main factors behind this decrease, except factors relating to operating
by ¥388.3 billion, or 22.6%, to ¥2,108.8 billion from the previous fiscal year, due profit, are as follows:
mainly to increased product warranty expenses. Product warranty expenses Share of profit of investments accounted for using the equity method had a
include expenses related to airbag inflators. Research and development expenses positive impact of ¥29.9 billion, due mainly to an increase in profit attributable to
increased by ¥50.3 billion, or 8.3%, to ¥656.5 billion from the previous fiscal year. increased sales revenue at affiliates and joint ventures in Asia, which was partially
offset by a recognition of impairment loss on certain investments accounted for
using the equity method.
Finance income and finance costs had a negative impact of ¥33.4 billion, due
Sales Revenue Yen (billions) mainly to a decrease in gains on foreign exchange.
* From fiscal 2012 to 2013, the above was
named “Net Sales and Other Operating 15,000
Revenue” and stated in accordance with
U.S. GAAP.
Income Tax Expense
Fiscal years ended March 31 Income tax expense decreased by ¥16.0 billion, or 6.5%, to ¥229.0 billion from
10,000
the previous fiscal year. The average effective tax rate increased 5.7 percentage
points to 36.1% from the previous fiscal year.
5,000
0
12 13 14 15 16
U.S. GAAP IFRS
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Profit for the Year

Profit for the year decreased by ¥154.7 billion, or 27.6%, to ¥406.3 billion from the
previous fiscal year.
Profit for the Year Attributable to Owners of the Parent

Profit for the year attributable to owners of the parent decreased by ¥164.9 billion,
or 32.4%, to ¥344.5 billion from the previous fiscal year.
Profit for the Year Attributable to Non-controlling Interests

Profit for the year attributable to non-controlling interests increased by ¥10.1
billion, or 19.7%, to ¥61.8 billion from the previous fiscal year, due mainly to an
increase in profit for the year of the subsidiaries in Asia which have non-
controlling interests.
Profit for the Year Yen (billions) (Yen)

Attributable to Owners of 800 400
the Parent/Basic Earnings
per Share Attributable to
Owners of the Parent 600 300
* From fiscal 2012 to 2013, the above were named
“Net Income Attributable to Honda Motor Co.,
Ltd.” and “Basic Net Income Attributable to
Honda Motor Co., Ltd. per Common Share”, 400 200
and stated in accordance with U.S. GAAP.
Fiscal years ended March 31
200 100
Profit for the Year Attributable to
Owners of the Parent (left scale)
Basic Earnings per Share 0 0
Attributable to Owners of 12 13 14 15 16
the Parent (right scale) U.S. GAAP IFRS
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Risk Factors Legal and Regulatory Risks

Honda is subject to various governmental regulations
Honda conducts business operations in countries worldwide. As such, changes in
Risks Relating to Honda’s Industry regulations in these countries related to emissions, fuel economy, noise, vehicle
safety, factory pollution levels, climate change or other factors could adversely
Honda may be adversely affected by market conditions affect Honda’s business, financial condition, or results.
Honda conducts its operations in Japan and throughout the world, including North
America, Europe and Asia. A sustained loss of consumer confidence in these Honda is reliant on the protection and preservation of its
markets, which may be caused by an extended economic slowdown, recession, intellectual property
changes in consumer preferences, rising fuel prices, financial crisis or other factors Honda owns or otherwise has rights in a number of patents and trademarks relat-
could trigger a decline in demand for motorcycles, automobiles and power prod- ing to the products it manufactures, which have been obtained over a period of
ucts that may adversely affect Honda’s results. years. These patents and trademarks have been of value in the growth of Honda’s
business and will continue to be of value in the future. Honda does not regard any
Prices for products may fluctuate of its business operations as being dependent upon any single patent or related
Prices for motorcycles, automobiles and power products in certain markets may group of patents. However, an inability to protect this intellectual property gener-
experience sharp changes over short periods of time. This volatility may be caused ally, or the illegal infringement of some or a large group of Honda’s intellectual
by various factors, including fierce competition, short-term fluctuations in demand property rights, could have an adverse effect on Honda’s operations.
caused by instability in underlying economic conditions, changes in tariffs, import
regulations and other taxes, shortages of certain materials and parts, a steep rise in Honda may be subject to legal proceedings
material prices and sales incentives. There is no guarantee that such price volatility Honda could be subject to suits, various investigations and legal proceedings
will not continue for an extended period of time or that price volatility will not occur under relevant laws and regulations of various jurisdictions. A negative outcome in
in markets that to date have not experienced such volatility. any such current or future legal proceedings brought against Honda could
Overcapacity within the industry has increased and will likely continue to adversely affect Honda’s business, financial condition or results.
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 Risks Relating to Honda’s Operations
markets could adversely affect Honda’s results. 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
Risks Relating to Honda’s Business in General designed to increase the opportunity for sales of its products. However, customers
can also obtain financing for the lease or purchase of Honda’s products through a
Currency and Interest Rate Risks variety of other sources that compete with our financing services, including com-
Honda’s operations are subject to currency fluctuations mercial banks and finance and leasing companies. The financial services offered
Honda has manufacturing operations throughout the world, including Japan, and by Honda involve credit risk as well as risks relating to lease residual values, cost
exports products and components to various countries. of capital and access to funding. Competition for customers and/or these risks
Honda purchases materials and components and sells its products and may affect Honda’s results.
components in foreign currencies. Therefore, currency fluctuations could affect
Honda’s pricing of materials purchased and products sold. Accordingly, currency
fluctuations have an effect on Honda’s results and financial condition, as well as
Honda’s competitiveness, which will over time affect its results.
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Honda relies on external suppliers for the provision of certain raw information handled by these systems and networks, Honda implements a range
materials and parts of security measures both in hardware and software, such as building manage-
Honda purchases raw materials and parts from numerous external suppliers, and ment systems including those of subcontractors, information-handling procedures
relies on certain suppliers for some of the raw materials and parts which it uses in and training of staff. However, there is a risk of leakage of confidential information,
the manufacture of its products. Honda’s ability to continue to obtain these sup- suspension of important operations and services, improper administrative pro-
plies in an efficient and cost-effective manner is subject to a number of factors, cessing, or destruction or alteration of important data or other adverse develop-
some of which are outside of Honda’s control. These factors include the ability of ments. These may be the result of external cyber-attacks, equipment malfunction,
its suppliers to provide a continued source of raw materials and parts and Honda’s or management deficiencies and human error, as well as natural disasters, infra-
ability to compete with other users in obtaining the supplies. In particular, the loss structure failures, or other unforeseen events within Honda or at its subcontrac-
of a key supplier could affect our production and increase our costs. tors. In such cases, Honda’s business activities and performance could be
adversely affected in terms of damage to its brand image or social reputation,
Honda relies on business alliances and joint ventures with liability to customers or parties affected, and a loss of Honda’s competitiveness.
other companies
Honda engages in business operations through alliances and joint ventures with Honda is subject to risks relating to its obligations to provide
other companies in expectation of synergy effects and increased efficiency, or in post-employment benefits
accordance with requirements from the countries in which Honda conducts its Honda has various pension plans and provides other post-employment benefits,
businesses. However, if disagreements occur between the parties to an alliance or in which the amount of benefits is basically determined based on the level of
joint venture, or if an alliance or joint venture is changed or cancelled, it may have salary, service years, and other factors. Contributions are also regularly reviewed
an adverse effect on Honda’s business, financial condition, or results. and adjusted as necessary to the extent permitted by laws and regulations.
Defined benefit obligations and defined benefit costs are based on assumptions of
Honda may be adversely affected by wars, terrorism, political many factors, including the discount rate and the rate of salary increase. Changes
uncertainty and labor strikes in assumptions could affect Honda’s defined benefit costs and obligations, includ-
Honda conducts business operations in countries worldwide and is exposed to ing Honda’s cash requirements to fund such obligations in the future, which could
risks including wars, terrorism, political uncertainty and labor strikes in those materially affect Honda’s financial condition and results.
countries or neighboring regions. If such unforeseeable events occur, and opera-
tions are delayed or suspended, Honda’s business, financial condition, or results Honda’s success depends in part on the value of its brand image,
could be adversely affected. which could be diminished by product defects
One of the important factors behind corporate sustainability is trust and support
Honda may be adversely affected by natural disasters for the Honda brand from our customers, society and the communities in which
In order to minimize the impact on its business operations when events such as Honda conducts business operations. With respect to the quality of our products,
large-scale natural disasters, accidents, or the outbreak of infectious diseases which serves as the pillar of our brand image, we recognize that our mainstay
occur, Honda conducts a risk evaluation of these events and constructs business products provide personal mobility and touch human lives, so we place top priority
continuity plans (BCPs) in each region. However, if operations are delayed or sus- on the safety and security of our customers and constantly strive to further
pended due to the occurrence of disasters, accidents, or the outbreak of infec- enhance the quality of our development, production and service-related activities.
tious diseases that exceed assumptions, Honda’s business, financial condition or However, if for some unforeseeable reason a product defect does occur, from the
results could be adversely affected. standpoint of assuring the safety and security of our customers, it is possible that
Honda will issue a recall or take some other action considered to be appropriate.
Honda’s operations rely on information systems and networks In such an event, the Honda brand image could be damaged and this could
Honda uses a range of information systems and networks relating to information adversely impact Honda’s business operations as well as our results.
services and operational support in its business activities and its products, includ-
ing in areas managed by subcontractors. To protect the confidentiality of
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Consolidated Statements of Financial Position

March 31, 2015 and 2016
Yen (millions) Yen (millions)
Assets 2015 2016 Liabilities and Equity 2015 2016
Current assets: Current liabilities:

Trade payables ¥ 1,157,738 ¥ 1,128,041
Cash and cash equivalents ¥ 1,471,730 ¥ 1,757,456 Financing liabilities 2,833,563 2,789,620
Trade receivables 820,681 826,714 Accrued expenses 377,372 384,614
Other financial liabilities 109,715 89,809
Receivables from financial services 2,098,951 1,926,014 Income taxes payable 53,654 45,872
Other financial assets 92,708 103,035 Provisions 294,281 513,232
Other current liabilities 474,731 519,163
Inventories 1,498,312 1,313,292 Total current liabilities 5,301,054 5,470,351
Other current assets 313,758 315,115
Non-current liabilities:
Total current assets 6,296,140 6,241,626 Financing liabilities 3,926,276 3,736,628
Other financial liabilities 61,147 47,755
Retirement benefit liabilities 592,724 660,279
Non-current assets: Provisions 182,661 264,978
Investments accounted for using Deferred tax liabilities 744,410 789,830
the equity method 614,975 593,002 Other non-current liabilities 234,744 227,685
Total non-current liabilities 5,741,962 5,727,155
Receivables from financial services 3,584,654 3,082,054 Total liabilities 11,043,016 11,197,506
Other financial assets 350,579 335,203
Equity:
Equipment on operating leases 3,335,367 3,678,111
Common stock 86,067 86,067
Property, plant and equipment 3,189,511 3,139,564 Capital surplus 171,118 171,118
Treasury stock (26,165) (26,178)
Intangible assets 759,535 824,939
Retained earnings 6,083,573 6,194,311
Deferred tax assets 138,069 180,828 Other components of equity 794,034 336,115
Equity attributable to owners of
Other non-current assets 157,007 153,967 the parent 7,108,627 6,761,433
Total non-current assets 12,129,697 11,987,668 Non-controlling interests 274,194 270,355
Total equity 7,382,821 7,031,788
Total assets ¥18,425,837 ¥18,229,294 Total liabilities and equity ¥18,425,837 ¥18,229,294
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Consolidated Statements of Income

Years ended March 31, 2015 and 2016
Yen (millions)
2015 2016
Sales revenue ¥ 13,328,099 ¥ 14,601,151
Operating costs and expenses:

Cost of sales (10,330,784) (11,332,399)
Selling, general and administrative (1,720,550) (2,108,874)
Research and development (606,162) (656,502)
Total operating costs and expenses (12,657,496) (14,097,775)
Operating profit 670,603 503,376
Share of profit of investments accounted for using the equity method 96,097 126,001
Finance income and finance costs:
Interest income 27,037 28,468
Interest expense (18,194) (18,146)
Other, net 30,694 (4,249)
Total finance income and finance costs 39,537 6,073
Profit before income taxes 806,237 635,450
Income tax expense (245,139) (229,092)
Profit for the year ¥ 561,098 ¥ 406,358
Profit for the year attributable to:

Owners of the parent ¥ 509,435 ¥ 344,531
Non-controlling interests 51,663 61,827
Yen
2015 2016
Earnings per share attributable to owners of the parent
Basic and diluted ¥ 282.66 ¥ 191.16
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Consolidated Statements of Comprehensive Income

Yen (millions)
2015 2016
Profit for the year ¥ 561,098 ¥ 406,358
Other comprehensive income, net of tax:

Items that will not be reclassified to profit or loss
Remeasurements of defined benefit plans (101,286) (70,709)
Net changes in revaluation of financial assets measured at fair value through other comprehensive income 24,007 (15,797)
Share of other comprehensive income of investments accounted for using the equity method (714) (1,274)
Items that may be reclassified subsequently to profit or loss
Exchange differences on translating foreign operations 465,776 (430,152)
Share of other comprehensive income of investments accounted for using the equity method 57,356 (36,591)
Total other comprehensive income, net of tax 445,139 (554,523)
Comprehensive income for the year ¥1,006,237 ¥ (148,165)
Comprehensive income for the year attributable to:

Owners of the parent ¥ 931,709 ¥ (188,580)
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Consolidated Statements of Cash Flows

2015 2016 2015 2016
Cash flows from operating activities: Cash flows from investing activities:
Profit before income taxes ¥ 806,237 ¥ 635,450 Payments for additions to property,
Depreciation, amortization and plant and equipment ¥ (648,205) ¥ (635,176)
impairment losses excluding equipment Payments for additions to and internally
on operating leases 625,229 660,714 developed intangible assets (234,915) (236,783)
Share of profit of investments accounted Proceeds from sales of property,
for using the equity method (96,097) (126,001) plant and equipment and intangible assets 33,243 25,617
Finance income and finance costs, net (41,941) (982) Payments for acquisitions of investments
Interest income and interest costs accounted for using the equity method (1,971) (3,238)
from financial services, net (172,275) (151,374) Proceeds from sales of investments
Changes in assets and liabilities accounted for using the equity method — 3,237
Trade receivables (45,839) (88,173) Payments for acquisitions of other
financial assets (108,873) (173,761)
Inventories (56,285) 66,405
Proceeds from sales and redemptions of
Trade payables 22,246 105,189
other financial assets 119,897 145,414
Accrued expenses 8,865 32,151
Other, net 328 (387)
Provisions and retirement benefit liabilities 107,324 329,391
Net cash used in investing activities (840,496) (875,077)
Receivables from financial services 316,962 354,353
Cash flows from financing activities:
Equipment on operating leases (535,165) (558,826)
Proceeds from short-term financing liabilities 8,731,773 8,302,231
Other assets and liabilities 45,255 20,765
Repayments of short-term financing liabilities (8,602,054) (8,708,320)
Other, net (12,931) 4,851
Proceeds from long-term financing liabilities 1,505,732 1,826,991
Dividends received 114,501 105,477
Repayments of long-term financing liabilities (1,389,121) (1,267,290)
Interest received 236,344 233,873
Dividends paid to owners of the parent (158,601) (158,601)
Interest paid (89,804) (92,355)
Dividends paid to non-controlling interests (21,513) (40,331)
Income taxes paid, net of refund (212,222) (139,913)
Purchases and sales of treasury stock, net (16) (13)
Net cash provided by operating activities 1,020,404 1,390,995
Other, net (53,712) (49,966)
Net cash provided by (used in)
financing activities 12,488 (95,299)
Effect of exchange rate changes on
cash and cash equivalents 85,750 (134,893)
Net change in cash and cash equivalents 278,146 285,726
Cash and cash equivalents at
beginning of year 1,193,584 1,471,730
Cash and cash equivalents at end of year ¥ 1,471,730 ¥ 1,757,456
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Segment Information
Honda has four reportable segments: Motorcycle business, Automobile business, Financial services business and Power product and other businesses, which are based
on Honda’s organizational structure and characteristics of products and services. Operating segments are defined as the components of Honda for which separate
financial information is available that is evaluated regularly by the chief operating decision maker in deciding how to allocate resources and in assessing performance.
The accounting policies used for these reportable segments are consistent with the accounting policies used in the Company’s consolidated financial statements.
Segment Information
Segment information as of and for the years ended March 31, 2015 and 2016 is as follows:
As of and for the year ended March 31, 2015
Yen (millions)
Financial Power Product
Motorcycle Automobile Services and Other Segment Reconciling
Business Business Business Businesses Total Items Consolidated
Sales revenue:
External customers ¥1,846,666 ¥9,603,335 ¥1,555,550 ¥322,548 ¥13,328,099 ¥ — ¥13,328,099
Intersegment — 154,536 12,363 24,362 191,261 (191,261) —
Total 1,846,666 9,757,871 1,567,913 346,910 13,519,360 (191,261) 13,328,099
Segment profit (loss) 192,154 279,756 202,574 (3,881) 670,603 — 670,603
Segment assets 1,489,703 7,653,645 9,318,545 334,858 18,796,751 (370,914) 18,425,837
Depreciation and amortization 70,881 525,522 484,526 12,061 1,092,990 — 1,092,990
Capital expenditures 87,762 791,626 1,685,245 14,588 2,579,221 — 2,579,221
As of and for the year ended March 31, 2016

Yen (millions)
Financial Power Product
Motorcycle Automobile Services and Other Segment Reconciling
Business Business Business Businesses Total Items Consolidated
Sales revenue:
External customers ¥1,805,429 ¥10,625,405 ¥1,835,605 ¥334,712 ¥14,601,151 ¥ — ¥14,601,151
Intersegment — 142,280 14,095 17,532 173,907 (173,907) —
Total 1,805,429 10,767,685 1,849,700 352,244 14,775,058 (173,907) 14,601,151
Segment profit (loss) 181,773 153,366 199,358 (31,121) 503,376 — 503,376
Segment assets 1,412,404 7,493,086 9,071,874 333,586 18,310,950 (81,656) 18,229,294
Depreciation and amortization 76,267 564,631 622,874 13,770 1,277,542 — 1,277,542
Capital expenditures 73,541 796,209 1,972,647 18,251 2,860,648 — 2,860,648
Explanatory notes:
1. Intersegment sales revenues are generally made at values that approximate arm’s-length prices.
2. Reconciling items include elimination of intersegment transactions and balances as well as unallocated corporate assets. Unallocated corporate assets, included in reconciling items as of March 31, 2015 and 2016
amounted to ¥345,266 million and ¥451,387 million, respectively, which consist primarily of the Company’s cash and cash equivalents and financial assets measured at fair value through other comprehensive income.
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Unaudited Consolidated Statements of Financial Position

Divided into Non-financial Services Businesses and Finance Subsidiaries
March 31, 2015 and 2016
2015 2016 2015 2016
Assets Liabilities and Equity
< Non-financial Services Businesses > < Non-financial Services Businesses >
Current assets: ¥ 4,483,938 ¥ 4,382,596 Current liabilities: ¥ 2,745,267 ¥ 2,842,994
Cash and cash equivalents 1,378,534 1,666,899 Trade payables 1,165,664 1,138,349
Trade receivables 833,910 835,291 Financing liabilities 443,216 313,515
Inventories 1,486,140 1,294,608 Other current liabilities 1,136,387 1,391,130
Other current assets 785,354 585,798
Non-current liabilities: 1,168,262 1,325,514
Non-current assets: 5,624,166 5,570,825
Financing liabilities 149,404 181,830
Investments accounted for using
the equity method 614,975 593,002 Retirement benefit liabilities 585,757 653,575
Property, plant and equipment 3,179,323 3,131,624 Other non-current liabilities 433,101 490,109
Intangible assets 750,893 814,522 Total liabilities 3,913,529 4,168,508
Other non-current assets 1,078,975 1,031,677
Total assets 10,108,104 9,953,421 < Finance Subsidiaries >
Financing liabilities, current 2,854,243 2,769,802
< Finance Subsidiaries > Financing liabilities, non-current 3,795,584 3,556,228
Cash and cash equivalents 93,196 90,557 Other liabilities 1,176,496 1,217,764
Receivables from financial services, Total liabilities 7,826,323 7,543,794
current 2,099,944 1,927,378
Receivables from financial services,
Reconciling items (696,836) (514,796)
non-current 3,586,272 3,083,478
Equipment on operating leases 3,335,367 3,678,111 Total liabilities 11,043,016 11,197,506
Other assets 203,766 292,350
Total assets 9,318,545 9,071,874 Equity attributable to owners of the parent 7,108,627 6,761,433
Reconciling items (1,000,812) (796,001) Total equity 7,382,821 7,031,788
Total assets ¥18,425,837 ¥18,229,294 Total liabilities and equity ¥18,425,837 ¥18,229,294
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Unaudited Consolidated Statements of Cash Flows

Divided into Non-financial Services Businesses and Finance Subsidiaries
Fiscal years ended March 31, 2015 and 2016
Yen (millions)
2015 2016
Non-financial Non-financial
Services Finance Reconciling Services Finance Reconciling
Businesses Subsidiaries Items Consolidated Businesses Subsidiaries Items Consolidated
Cash flows from operating activities:
Profit before income taxes ¥ 592,086 ¥ 214,151 ¥— ¥ 806,237 ¥ 419,309 ¥ 216,141 ¥— ¥ 635,450
Depreciation, amortization and impairment losses excluding equipment
on operating leases 622,238 2,991 — 625,229 657,856 2,858 — 660,714
Share of profit of investments accounted for using the equity method (96,097) — — (96,097) (126,001) — — (126,001)
Decrease (increase) in trade receivables (55,694) 1,383 8,472 (45,839) (83,670) (3,601) (902) (88,173)
Decrease (increase) in inventories (55,882) (403) — (56,285) 73,943 (7,538) — 66,405
Increase (decrease) in trade payables 20,132 352 1,762 22,246 103,276 4,608 (2,695) 105,189
Decrease (increase) in receivables from financial services — 317,033 (71) 316,962 — 354,147 206 354,353
Decrease (increase) in equipment on operating leases — (535,165) — (535,165) — (558,826) — (558,826)
Dividends received 114,499 2 — 114,501 105,475 2 — 105,477
Other, net (72,899) (48,238) (10,248) (131,385) 280,338 (47,443) 3,512 236,407
Net cash provided by (used in) operating activities 1,068,383 (47,894) (85) 1,020,404 1,430,526 (39,652) 121 1,390,995
Cash flows from investing activities:
Payments for additions to property, plant and equipment (647,773) (432) — (648,205) (634,457) (719) — (635,176)
Payments for additions to and internally developed intangible assets (231,280) (3,635) — (234,915) (232,393) (4,390) — (236,783)
Decrease (increase) in other financial assets* 145,452 (948) (133,480) 11,024 135,263 (1,918) (161,692) (28,347)
Other, net 26,970 4,630 — 31,600 22,499 2,730 — 25,229
Net cash provided by (used in) investing activities (706,631) (385) (133,480) (840,496) (709,088) (4,297) (161,692) (875,077)
Cash flows from financing activities:
Proceeds from (repayment of) short-term financing liabilities* 54,692 (58,331) 133,358 129,719 (64,922) (488,127) 146,960 (406,089)
Proceeds from long-term financing liabilities* 53,375 1,452,391 (34) 1,505,732 120,484 1,706,507 — 1,826,991
Repayments of long-term financing liabilities* (106,769) (1,282,593) 241 (1,389,121) (113,463) (1,168,438) 14,611 (1,267,290)
Dividends paid to owners of the parent (158,601) — — (158,601) (158,601) — — (158,601)
Other, net (75,241) — — (75,241) (90,310) — — (90,310)
Net cash provided by (used in) financing activities (232,544) 111,467 133,565 12,488 (306,812) 49,942 161,571 (95,299)
Effect of exchange rate changes on cash and cash equivalents 77,335 8,415 — 85,750 (126,261) (8,632) — (134,893)
Net change in cash and cash equivalents 206,543 71,603 — 278,146 288,365 (2,639) — 285,726
Cash and cash equivalents at beginning of period 1,171,991 21,593 — 1,193,584 1,378,534 93,196 — 1,471,730
Cash and cash equivalents at end of period ¥1,378,534 ¥ 93,196 ¥— ¥ 1,471,730 ¥1,666,899 ¥ 90,557 ¥— ¥ 1,757,456
Note: Non-financial services businesses provide loans to finance subsidiaries. These cash flows are included in the decrease (increase) in other financial assets, proceeds from (repayment of) short-term financing liabilities,
proceeds from and repayment of long-term financing liabilities (marked by *). The amount of the loans to finance subsidiaries is a ¥133,480 million decrease for the fiscal year ended March 31, 2015, and a ¥161,692
million decrease for the fiscal year ended March 31, 2016, respectively.
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Financial Summary
U.S. GAAP IFRS
2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2014 2015 2016
Sales, income and dividends Sales, income and dividends
Net sales and other operating revenue ¥ 9,907,996 ¥11,087,140 ¥12,002,834 ¥10,011,241 ¥ 8,579,174 ¥ 8,936,867 ¥ 7,948,095 ¥ 9,877,947 ¥11,842,451 ¥12,646,747 Sales revenue ¥12,506,091 ¥13,328,099 ¥14,601,151
Operating income 868,905 851,879 953,109 189,643 363,775 569,775 231,364 544,810 750,281 606,878 Operating profit 823,864 670,603 503,376
Operating margin 8.8% 7.7% 7.9% 1.9% 4.2% 6.4% 2.9% 5.5% 6.3% 4.8% Operating margin 6.6% 5.0% 3.4%
Income before income taxes and Share of profit of investments
equity in income of affiliates 829,904 792,868 895,841 161,734 336,198 630,548 257,403 488,891 728,940 644,809 accounted for using the equity method 130,916 96,097 126,001
Income taxes 317,189 283,846 387,436 109,835 146,869 206,827 135,735 178,976 252,662 235,204 Profit before income taxes 933,903 806,237 635,450
Equity in income of affiliates 99,605 103,417 118,942 99,034 93,282 139,756 100,406 82,723 132,471 126,570 Income tax expense 267,992 245,139 229,092
Net income attributable to
noncontrolling interests (15,287) (20,117) (27,308) (13,928) (14,211) (29,389) (10,592) (25,489) (34,642) (43,168) Profit for the year 665,911 561,098 406,358
Net income attributable to Profit for the year attributable to
Honda Motor Co., Ltd. 597,033 592,322 600,039 137,005 268,400 534,088 211,482 367,149 574,107 493,007 owners of the parent 624,703 509,435 344,531
Cash dividends paid during Dividends paid to owners of
the period 71,061 140,482 152,590 139,724 61,696 92,170 108,138 129,765 142,381 158,601 the parent 142,381 158,601 158,601
Research and development 510,385 551,847 587,959 563,197 463,354 487,591 519,818 560,270 634,130 662,610 R&D expenditure 625,698 670,331 719,810
Interest expense 11,902 12,912 16,623 22,543 12,552 8,474 10,378 12,157 12,703 16,598 Interest expense 12,803 18,194 18,146
Assets, long-term debt and

shareholders’ equity Assets, liabilities and equity
Total assets ¥10,631,400 ¥12,036,500 ¥12,615,543 ¥11,818,917 ¥11,629,115 ¥11,577,714 ¥11,787,599 ¥13,635,357 ¥15,622,031 ¥18,088,839 Total assets ¥16,048,438 ¥18,425,837 ¥18,229,294
Financing liabilities
Long-term debt 1,879,000 1,905,743 1,836,652 1,932,637 2,313,035 2,043,240 2,235,001 2,710,845 3,234,066 3,933,860 (Non-current liabilities) 3,224,512 3,926,276 3,736,628
Total Honda Motor Co., Ltd. Equity attributable to owners of
shareholders’ equity 4,125,750 4,488,825 4,550,479 4,007,288 4,328,640 4,439,587 4,398,249 5,043,500 5,918,979 6,696,693 the parent 6,335,534 7,108,627 6,761,433
Capital expenditures
(excluding purchase of operating Additions to property,
lease assets) 457,841 627,066 654,030 633,913 348,981 326,620 424,413 630,408 782,027 714,502 plant and equipment 803,231 703,920 687,306
Depreciation
(excluding property on
operating leases) 262,225 361,747 417,393 441,868 401,743 377,272 345,105 335,536 442,318 490,375 Depreciation 419,022 451,052 486,410
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Financial Summary (continued)

Yen Yen
U.S. GAAP IFRS
2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2014 2015 2016
Per common share Per share
Net income attributable to Honda Profit for the year attributable to
Motor Co., Ltd.: owners of the parent
Basic ¥ 324.33 ¥ 324.62 ¥ 330.54 ¥ 75.50 ¥ 147.91 ¥ 295.67 ¥ 117.34 ¥ 203.71 ¥ 318.54 ¥ 273.54 Basic ¥ 346.62 ¥ 282.66 ¥ 191.16
Diluted 324.33 324.62 330.54 75.50 147.91 295.67 117.34 203.71 318.54 273.54 Diluted 346.62 282.66 191.16
Dividends 50 67 86 63 38 54 60 76 82 88 Dividends 82 88 88
Honda Motor Co., Ltd. Equity attributable to owners of
shareholders’ equity 2,259.26 2,463.69 2,507.79 2,208.35 2,385.45 2,463.29 2,440.35 2,798.37 3,284.14 3,715.66 the parent 3,515.27 3,944.23 3,751.59
Sales progress Sales progress
Sales amounts:*1 Sales revenue:*1
Japan ¥ 1,694,044 ¥ 1,681,190 ¥ 1,585,777 ¥ 1,446,541 ¥ 1,577,318 ¥ 1,503,842 ¥ 1,517,927 ¥ 1,652,995 ¥ 1,912,504 ¥ 1,810,283 Japan ¥ 1,920,114 ¥ 1,800,439 ¥1,754,167
17% 15% 13% 14% 18% 17% 19% 17% 16% 14% 15% 14% 12%
Overseas 8,213,952 9,405,950 10,417,057 8,564,700 7,001,856 7,433,025 6,430,168 8,224,952 9,929,947 10,836,464 Overseas 10,585,977 11,527,660 12,846,984
83% 85% 87% 86% 82% 83% 81% 83% 84% 86% 85% 86% 88%
Total ¥ 9,907,996 ¥11,087,140 ¥12,002,834 ¥10,011,241 ¥ 8,579,174 ¥ 8,936,867 ¥ 7,948,095 ¥ 9,877,947 ¥11,842,451 ¥12,646,747 Total ¥12,506,091 ¥13,328,099 ¥14,601,151
100% 100% 100% 100% 100% 100% 100% 100% 100% 100% 100% 100% 100%
Thousands Thousands
Unit sales:*2 Unit sales:*2
Motorcycles 10,271 10,369 9,320 10,114 9,639 18,331 15,061 15,494 17,021 17,765 Motorcycles 17,008 17,592 17,055
Automobiles 3,391 3,652 3,925 3,517 3,392 3,529 3,108 4,014 4,323 4,364 Automobiles 4,340 4,367 4,743
Power Products 5,876 6,421 6,057 5,187 4,744 5,509 5,819 6,071 6,036 6,001 Power Products 6,018 5,983 5,965
Number of employees 144,785 167,231 178,960 181,876 176,815 179,060 187,094 190,338 198,561 203,902 Number of employees 199,368 204,730 208,399
Exchange rate Exchange rate

(yen amounts per U.S. dollar) (yen amounts per U.S. dollar)
Rates for the period-end ¥ 117 ¥ 118 ¥ 100 ¥ 98 ¥ 93 ¥ 83 ¥ 82 ¥ 94 ¥ 103 ¥ 120 Rates for the period-end ¥ 103 ¥ 120 ¥ 113
Average rates for the period 113 117 114 101 93 86 79 83 100 110 Average rates for the period 100 110 120
*1 The geographic breakdown of sales amounts is based on the location of customers.
*2 Honda changed its counting method for unit sales as follows;
· 2006–2010: the total of unit sales of completed products of Honda and its consolidated subsidiaries, and sales of parts for local production at Honda’s affiliates accounted for using the equity method
· 2011–2016: the total of unit sales of completed products of Honda, its consolidated subsidiaries and its affiliates accounted for using the equity method (Honda Group Unit Sales)
page opened
Go to
contents page 38
1 The Power of
Information
Investor Relations Information

(As of March 31, 2016)
Honda Motor Co., Ltd.

Company Information IR Offices
Established September 24, 1948 Japan
Lines of Business Motorcycles, Automobiles, Power Product and Other Businesses, Financial Services Honda Motor Co., Ltd.
1-1, 2-chome, Minami-Aoyama, Minato-ku,
Fiscal Year-End March 31
Tokyo 107-8556, Japan
Independent Registered KPMG AZSA LLC TEL: 81-(0)3-3423-1111 (Switchboard)
Public Accounting Firm
Web Site Corporate Web Site: http://world.honda.com/ U.S.A.
IR Web Site Japanese: http://www.honda.co.jp/investors/ Honda North America, Inc.
IR Web Site English: http://world.honda.com/investors/ New York Office
156 West 56th Street, 20th Floor
New York, NY 10019, U.S.A.
TEL: 1-212-707-9920
Corporate Web Site IR Web Site

http://world.honda.com/ http://world.honda.com/investors/
Stock Information Shareholders’ Register Manager Depositary and Transfer Agent

for Common Stock for American Depositary Receipts
Securities Code 7267
Number of Shares 7,086,000,000 shares Shareholders’ Register Manager: JPMorgan Chase Bank, N.A.
Authorized Sumitomo Mitsui Trust Bank, Limited 4 New York Plaza, Floor 12,
Total Number of 1,811,428,430 shares 4-1, Marunouchi 1-chome, Chiyoda-ku, Tokyo New York, NY 10004, U.S.A.
Shares Issued
Contact Address: Contact Address:
Number of 199,343 Sumitomo Mitsui Trust Bank, Limited, JPMorgan Service Center
Shareholders
Stock Transfer Agency Department P.O. Box 64504
Number of Shares 100 shares
8-4, Izumi 2-chome, Suginami-ku, St. Paul, MN 55164-0504, U.S.A.
per Trading Unit
Tokyo 168-0063, Japan TEL: 1-800-990-1135
Stock Exchange Japan: Tokyo stock exchanges
Listings Overseas: New York stock exchanges TEL: 0120-782-031 (toll free within Japan) E-mail: jpmorgan.adr@wellsfargo.com
Ratio: 1 ADR = 1 share of underlying stock
General Meeting June
of Shareholders Ticker symbol: HMC
Record Dates June 30 September 30 Note: With respect to taxation and other matters relating to the acquisition,
for Dividends December 31 March 31 holding, and disposition of the Company’s common stock or ADRs by
non-residents of Japan, please also refer to “Item 10E. Taxation” of
Form 20-F included in the “Investor Relations” section on our web site.
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contents page 39
1 The Power of
Information
Investor Relations Information

(As of March 31, 2016)
Major Shareholders Breakdown of Shareholders by Type
Number of Percentage of total Individuals 9.0%

shares held shares outstanding
Individual or Organization (thousands) (%)
Treasury stock 0.5%
Japan Trustee Services Bank, Ltd. (Trust Account) 116,000 6.40
Moxley & Co. LLC 76,126 4.20 Foreign institutions Financial institutions 39.0%
The Master Trust Bank of Japan, Ltd. (Trust Account) 74,567 4.12 and individuals 42.0%
Meiji Yasuda Life Insurance Company 51,199 2.83
State Street Bank and Trust Company 505223 48,888 2.70 Securities companies 1.7%
State Street Bank and Trust Company 45,337 2.50
Tokio Marine & Nichido Fire Insurance Co., Ltd. 40,780 2.25 Domestic companies
Japan Trustee Services Bank, Ltd. (Trust Account 09) 37,920 2.09
and others 7.8%
The Bank of Tokyo-Mitsubishi UFJ, Ltd. 36,686 2.03
Nippon Life Insurance Company 27,066 1.49
Honda’s Stock Price and Trading Volume on the Tokyo Stock Exchange
(Yen) Stock (millions)
5,000
← High Trading
← Low Volume
4,000
3,000
2,000 400
300
1,000 200
100
0 0
2010 2011 2012 2013 2014 2015 2016

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Annual Report 2016

Year Ended March 31, 2016

Honda Motor Co., Ltd.

On the Cover: Civic (North America)

User Guide Icons

Click on these links to move to different sections of the report.

12 Motorcycle 21 Corporate Governance

3 To Our Shareholders page 05

7 Financial Section page 25

18 Power Product 25 Financial Review

Caution with Respect to Forward-Looking Statements

The Power of Dreams

Striving to realize full-fledged popularization of fuel cell vehicles (FCV),

CLARITY FUEL CELL

Financial Highlights Years ended March 31 

14,601.1 billion yen 503.3

126.0 billion yen

 rofit for the Year Attributable to Owners of the Parent /

600 300 15,000 3,000 600

400 200 10,000 2,000 400

200 100 5,000 1,000 200

344.5 billion yen

Meanwhile, we must also address the challenges that are

CLARITY FUEL CELL

June 16, 2016

volumes, the positive effect of cost reduction efforts as well

Capital Expenditures/Depreciation R&D Expenditure/ Dividend per Share

Sales Revenue (millions)

Segment Profit (Loss)

Percentage of Sales Revenue by Business Percentage of Sales Revenue by Region

Financial Services Motorcycle Business 6.3% Japan

2.3% 72.8% 4.7% 55.6%

(Fiscal years ended March 31)

Sales Revenue 2015 2016 % change

Yen (billions) (%)

Review of Operations Sales Revenue / Operating Profit

Motorcycle Business 2,000

Sales Revenue (left scale) Operating Profit (right scale)

Japan North America Europe

Tact (Japan) Pioneer 1000 (North America)

Asia Other Regions

TMX125 Alpha (Philippines) Vision (Vietnam)

(Fiscal years ended March 31)

Sales Revenue 2015 2016 % change

Yen (billions) (%)

Review of Operations Sales Revenue / Operating Profit (Loss)

Automobile Business 12,000

Japan North America Europe

Pilot (North America)

Asia Other Regions

* Source: ANFAVEA (Associação Nacional dos Fabricantes de Veiculos Auto­

BR-V (Asia) HR-V (Asia)

(Fiscal years ended March 31)

Sales Revenue 2015 2016 % change

Yen (billions) (%)

Review of Operations Sales Revenue / Operating Profit (Loss)

Power Product and Other Businesses 400

Sales Revenue (left scale) Operating Profit (Loss) (right scale)

Japan Europe Other Regions

HRX217 (Lawn mower) GX160 (Engine)

(Fiscal years ended March 31)

Review of Operations Sales Revenue / Operating Profit

Financial Services Business 2,000

Financial Highlights Years ended March 31

rofit for the Year Attributable to Owners of the Parent /

Yen (billions) (%)

Yen (billions) (%)

* Source: ANFAVEA (Associação Nacional dos Fabricantes de Veiculos Auto

Yen (billions) (%)

*1 H ideko Kunii and Motoki Ozaki are outside directors as

*1 C orporate Auditors Toshiaki Hiwatari, Hideo Takaura and

Profit for the Year Yen (billions) (Yen)