Form 6-K for December 2002
Table of Contents

No.1-7628
 
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
 

 
FORM 6-K
 
REPORT OF FOREIGN PRIVATE ISSUER
PURSUANT TO RULE 13a-16 OR 15d-16
UNDER THE SECURITIES EXCHANGE ACT OF 1934
 
FOR THE MONTH OF December 2002
 
COMMISSION FILE NUMBER: 1-07628
 

 
HONDA GIKEN KOGYO KABUSHIKI KAISHA
(Name of registrant)
 
HONDA MOTOR CO., LTD.
(Translation of registrant’s name into English)
 
1-1, Minami-Aoyama 2-chome, Minato-ku, Tokyo 107-8556, Japan
(Address of principal executive officers)
 

 
Indicate by check mark whether the registrant files or will file annual reports under cover of Form 20-F or Form 40-F:
Form 20-F  x  Form 40-F  ¨
 
Indicate by check mark if the registrant is submitting the Form 6-K in paper as permitted by Regulation S-T Rule 101(b)(1):  ¨
 
Note: Regulation S-T Rule 101(b)(1) only permits the submission in paper of a Form 6-K if submitted solely to provide an attached annual report to security holders.
 
Indicate by check mark if the registrant is submitting the Form 6-K in paper as permitted by Regulation S-T Rule 101(b)(7):  ¨
 
Indicate by check mark whether by furnishing the information contained in this Form, the registrant is also thereby furnishing the information to the Commission pursuant to Rule 12g3-2(b) under the Securities Exchange Act of 1934.  Yes ¨  No ¨
 
If “Yes” is marked, indicate below the file number assigned to the registrant in connection with Rule 12g3-2(b):82-                     
 


Table of Contents
 
Contents
 
Exhibit 1:
On December 4, 2002 Honda Europe Motorcycle S.r.l. unveiled the new motorcycle models for 2003 at the Palazzo Albergati event space in Bologna, Italy. (Ref.#02075)
 
Exhibit 2:
On December 5, 2002 Honda Motor Co., Ltd. released a new model of its intelligent humanoid robot ASIMO which is capable of interpreting the postures and gestures of humans and moving independently in response. (Ref.#02076)
 
Exhibit 3:
On December 17, 2002 Honda Motor Co., Ltd. announced that total production of its Super Cub had reached 35 million units in the 44 years and three months since it first went on sale in August 1958. (Ref.#02077)
 
Exhibit 4:
On December 18, 2002 Honda Motor Co., Ltd. announced its 2002 forecast and 2003 plan in both sales and production. (Ref.#02078)
 
Exhibit 5:
On December 18, 2002 Honda Motor Co., Ltd. announced its business plan for calendar year 2003, including Honda’s plan to increase its customer base from the 2002 forecast of 15.27 million customers to 17.35 million customers in 2003. (Ref.#02079)
 
Exhibit 6:
On December 18, 2002 Guangzhou Honda Automobile Co., Ltd., Honda’s automobile production and sales joint venture in China, announced that it would increase its production capacity to 240,000 units annually by spring 2004. (Ref.#02080)
 
Exhibit 7:
On December 24, 2002 Honda Motor Co., Ltd., announced today that its global production in November was up 10.1% from the same month a year earlier, while overseas production was up for the 23rd consecutive months, at 13.9%. (Ref.#02083)
 
Exhibit 8:
Interim Business Report for the First-Half term (six months ended September 30, 2002) of the 79th fiscal period.
 
Exhibit 9:
Semi Annual Report for the First-Half term (six months ended September 30, 2002) of the 79th fiscal period.


Table of Contents
 
Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.
 
HONDA GIKEN KOGYO
KABUSHIKI KAISHA
( HONDA MOTOR CO., LTD )
 
 
/s/    SATOSHI AOKI         

Satoshi Aoki
Senior Managing and
Representative Director
 
Date:  January 15, 2003


Table of Contents

LOGO

 
Honda Europe Motorcycle S.r.l. (head office: Rome, Italy; President: Shoichi Kitahara), a local European subsidiary of Honda Motor Co., Ltd., issued the following press release on December 4, 2002 (local time: 2:00 PM; Japan time: 10:00 PM).
 
(Reference)
ref. #02075
 
Honda Announces New 2003 Motorcycle Models
for the European Market
 
December 4, 2002—Honda Europe Motorcycle S.r.l. unveiled the new motorcycle models for 2003 at the Palazzo Albergati event space in Bologna, Italy. Following is an overview of the main models.
 
Pantheon / Pantheon 150
This stylish scooter offers a choice between a 125cc or a 150cc water-cooled, 4-stroke, single-cylinder engine. The full model change features not just an all-new exterior look, but also a newly developed PGM-FI (programmed fuel injection) system—previously only available on large sports bikes—that has been specially designed for smaller models. This is the first time Honda has offered PGM-FI on this class of motorcycle. The PGM-FI gives the Pantheon a smooth, powerful ride and superior fuel economy, combined with the environmental performance to clear European EURO-2 emissions standards for 2003 by a significant margin.
Manufacturer: Honda Italia Industriale S.P.A.
Sales release date: January 2003
Planned vehicle sales (annual): 25,000
 
Newly developed compact PGM-FI (installed on Pantheon and Pantheon 150)
Honda has applied its miniaturization technology to make maximum use of the wealth of technical know-how accumulated in developing conventional fuel injection for larger bikes. The result is the newly developed PGM-FI, small enough to fit on a small 125cc motorcycle. The compact PGM-FI adds new value to small motorcycles, making them more environment-friendly, with improved performance and economy. Innovations include reducing the number of sensors from eight to six and the total number of system parts from sixteen to nine compared to the conventional system for larger bikes, reducing the cost of the unit. The fuel injection system is significantly lighter and more compact than a conventional carburetor. It also delivers outstanding environmental performance: levels of CO, HC, and NOx exhaust emissions are only  1/6,  1/10, and  1/3 of levels stipulated in EURO-2 regulations, respectively, and fuel economy is approximately 45% higher than the previous Pantheon model equipped with a 2-stroke engine.
 
LOGO
 
LOGO
Pantheon                            
 
Cutaway model of compact PGM-FI unit                    

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CB1300
This on-road naked sports model is equipped with a high-performance 4-stroke, in-line 4-cylinder, 1300cc water-cooled engine. A newly designed lightweight, compact engine and frame deliver nimble, powerful performance for a top-quality ride. Painstaking attention was also given to the “feel” of the bike—its pleasing sound and vibration provide added sensory enjoyment. Other features include multi-function digital meters, an under-seat storage space which, at approx. 12.4L, is the largest in its class, and a wealth of optional parts designed to suite the varied tastes of European users.
Sales release date: March 2003
Planned vehicle sales (annual): 4,000
 
HORNET
This mid-class, on-road naked sports model is equipped with a 4-stroke, in-line 4-cylinder, 600cc water-cooled engine. A functional electric speedometer and Honda’s original anti-theft system have been added as standard equipment, while the basic concept for the vehicle remains unchanged. It also features an environment-friendly engine with heat tube and metal catalytic converter and other enhancements to functionality and environmental performance, along with exterior design changes for a more refined look.
Sales release date: February 2003
Planned vehicle sales (annual): 17,000
 
LOGO
    
LOGO
CB1300                            
    
HORNET                            
 
Photographs and related publicity information on the above models will be available at the following URL as of December 5, 2002:
http://www.honda.co.jp/PR/
(The site is intended exclusively for the use of journalists.)

2


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LOGO

 
ref. #02076
 
Introducing a New ASIMO Featuring Intelligence Technology
 
December 5, 2002—Honda Motor Co., Ltd. has released a new model of its intelligent humanoid robot ASIMO which is capable of interpreting the postures and gestures of humans and moving independently in response. ASIMO’s ability to interact with humans has advanced significantly—it can greet approaching people, follow them, move in the direction they indicate, and even recognize their faces and address them by name. Further, utilizing networks such as the Internet, ASIMO can provide information while executing tasks such as reception duties. ASIMO is the world’s first humanoid robot to exhibit such a broad range of intelligent capabilities.
 
Starting from January of next year, Honda plans to commence rental of this new version of ASIMO to public institutions and companies.
 
   
LOGO
   
The New ASIMO
Movement in response to a gesture (posture recognition)
   
 
The key features of the new ASIMO include:
 
1.
 
Advanced communication ability thanks to recognition technology
 
1.
 
Recognition of moving objects
 
2.
 
Posture/gesture recognition
 
3.
 
Environment recognition
 
4.
 
Sound recognition
 
5.
 
Face recognition
 
2.
 
Network integration
 
1.
 
Integration with user’s network system
 
2.
 
Internet connectivity

1


Table of Contents
1.    Advanced communication ability thanks to recognition technology
 
Recognition of moving objects
Using the visual information captured by the camera mounted in its head, ASIMO can detect the movements of multiple objects, assessing distance and direction.
 
Specifically, ASIMO can:
 
 
follow the movements of people with its camera;
 
 
follow a person;
 
 
greet a person when he or she approaches.
 
   
LOGO
   
   
Recognition of the distance and direction
of movement of multiple objects
   
 
Recognition of postures and gestures
Based on visual information, ASIMO can interpret the positioning and movement of a hand, recognizing postures and gestures. Thus ASIMO can react not only to voice commands, but also to the natural movements of human beings.
 
For example, ASIMO can:
 
 
recognize an indicated location and move to that location (posture recognition);
 
 
shake a person’s hand when a handshake is offered (posture recognition);
 
 
respond to a wave by waving back (gesture recognition).
 
LOGO
 
LOGO
Movement to an indicated location
 
Recognition of hand movements
such as the waving of a hand

2


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Environment recognition
ASIMO is able to assess its immediate environment, recognizing the position of obstacles and avoiding them to prevent collisions.
 
Specifically, ASIMO can:
 
 
stop and start to avoid a human being or other moving object which suddenly appears in its path;
 
 
recognize immobile objects in its path and move around them.
 
Distinguishing sounds
ASIMO’s ability to identify the source of sounds has been improved, and it can distinguish between voices and other sounds.
 
For example, ASIMO can:
 
 
recognize when its name is called, and turn to face the source of the sound;
 
 
look at the face of the person speaking, and respond;
 
 
recognize sudden, unusual sounds, such as that of a falling object or a collision, and face in that direction.
 
Face recognition
ASIMO has the ability to recognize faces, even when ASIMO or the human being is moving.
 
For example, ASIMO can:
 
 
recognize the faces of people which have been pre-registered, addressing them by name, communicating messages to them, and guiding them;
 
 
recognize approximately ten different people.
 
LOGO
Distinguish between registered faces.

3


Table of Contents
 
2.    Network integration
 
Integration with user’s network system
 
ASIMO can:
 
 
execute functions appropriately based on the user’s customer data;
 
 
greet visitors, informing personnel of the visitor’s arrival by transmitting messages and pictures of the visitor’s face;
 
 
guide visitors to a predetermined location, etc.
 
Internet connectivity
 
Accessing information via the Internet, ASIMO can become a provider of news and weather updates, for example, ready to answer people’s questions, etc.
 
 
 
 
 
 
 
Photos of the new ASIMO will be available as of December 5, 2002 at
http://www.honda.co.jp/PR/photo/ASIMO/.
(this site is intended exclusively for the use of journalists)

4


Table of Contents

LOGO

 
ref. #02077
 
Total Super Cub Production Reaches 35 Million Units
 
December 17, 2002—Honda Motor Co., Ltd. has announced that total production of its Super Cub has reached 35 million units in the 44 years and three months since it first went on sale in August 1958.
 
The first-generation Super Cub, developed under the direction of company founder Soichiro Honda, was designed to be a new type of versatile scooter that anyone could ride with ease. At a time when 2-stroke engines were the norm, the Super Cub was fitted with a revolutionary, high-performance 50cc 4-stroke engine that offered superb economy and durability. The creative design also featured a low-floor backbone frame for easy mounting and dismounting, large plastic leg shields to protect riders’ legs from dirt and wind, and other innovations.
 
Since then the Super Cub has undergone many improvements, resulting in remarkable increases in both driving performance and fuel economy, but the basic design and concepts remain unchanged. Its original styling has made it the scooter of choice for business use—in fact, the name “Cub” has become synonymous with working scooters.
 
The Super Cub was first exported to the U.S. in 1959, and since then has been popular with customers in more than 160 countries worldwide. Currently manufactured in fourteen countries centered in the expanding motorcycle market of South-East Asia, the Super Cub is a practical scooter that enjoys a strong reputation around the world.
 
LOGO
    
LOGO
1958—Super Cub C100
    
2002—Super Cub 50 (Standard type)
 
Photographs and related publicity information on the Super Cub are available for downloading from the following URL:
http://www.honda.co.jp/PR/
(The site is intended exclusively for the use of journalists.)

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Table of Contents
 
Total Super Cub Production
 
Year

    
Production

    
Total

  1958
    
24,195
    
24,195
  1959
    
167,443
    
191,638
  1960
    
564,365
    
756,003
  1961
    
661,398
    
1,417,401
  1962
    
790,012
    
2,207,413
  1963
    
889,005
    
3,096,418
  1964
    
822,719
    
3,919,137
  1965
    
790,396
    
4,709,533
  1966
    
700,296
    
5,409,829
  1967
    
526,238
    
5,936,067
  1968
    
660,482
    
6,596,549
  1969
    
601,441
    
7,197,990
  1970
    
735,065
    
7,933,055
  1971
    
625,884
    
8,558,939
  1972
    
537,867
    
9,096,806
  1973
    
469,732
    
9,566,538
  1974
    
634,942
    
10,201,480
  1975
    
493,855
    
10,695,335
  1976
    
472,212
    
11,167,547
  1977
    
558,634
    
11,726,181
  1978
    
600,147
    
12,326,328
  1979
    
520,447
    
12,846,775
  1980
    
652,239
    
13,499,014
  1981
    
680,523
    
14,179,537
  1982
    
749,955
    
14,929,492
  1983
    
595,673
    
15,525,165
  1984
    
431,302
    
15,956,467
  1985
    
475,649
    
16,432,116
  1986
    
469,077
    
16,901,193
*1987(Jan-Feb)
    
56,715
    
16,957,908
*1987(Mar-Sep)
    
282,991
    
17,240,899
*1987(Oct-Dec), 1988(Jan-Mar)
    
233,646
    
17,474,545
  FY1988
    
504,066
    
17,978,611
  FY1989
    
595,611
    
18,574,222
  FY1990
    
734,460
    
19,308,682
  FY1991
    
730,887
    
20,039,569
  FY1992
    
721,701
    
20,761,270
  FY1993
    
1,106,160
    
21,867,430
  FY1994
    
1,142,531
    
23,009,961
  FY1995
    
1,379,099
    
24,389,060
  FY1996
    
1,523,897
    
25,912,957
  FY1997
    
1,550,872
    
27,463,829
  FY1998
    
886,407
    
28,350,236
  FY1999
    
1,230,443
    
29,580,679
  FY2000
    
1,269,734
    
30,850,413
  FY2001
    
2,272,227
    
33,122,640
  2002(Apr-Nov)
    
2,290,603
    
35,413,243

*
 
Figures up to and including 1986 are for calendar years. Figures for 1987 are shown by month due to changeover to a method based on the Honda fiscal year. Figures for fiscal 1988 (Apr 1988-Mar 1989) and after are calculated by fiscal year.
 
Overseas Cub Production Facilities
 
Country

    
Facility

    
Models produced

Japan
    
Kumamoto Factory
    
Super Cub (C50, 90), Little Cub, Postal Cub, Newspaper Delivery Cub
Philippines
    
Honda Philippines, Inc.
    
Wave125S (ANF125), Wave a (NF100)
Korea
    
Daelinm Motor Co., Ltd.
    
Citi Plus (C100)
Vietnam
    
Honda Vietnam Co., Ltd.
    
Super Dream (C100), Future (NF110), Wave a (NF100)
India
    
Hero Honda Motors Ltd.
    
Street Smart (C100)
Indonesia
    
P.T. Astra Honda Motor
    
Astrea Legenda (C100), Supra (NF100), Karisma (ANF125), Kirana (AND125)
Thailand
    
Thai Honda Mfg. Co., Ltd.
    
Dream Exces (C100), Wave100 (NF100), Wave125 (ANF125), Dream125 (AND125)
Malaysia
    
Kah Motor Co., Sdn. Bhd.
    
EX-5 (C100), EX-5 Class1 (NF110)
Bangladesh
    
Atlas Bangladesh Ltd.
    
C50
China
    
Sundiro Honda Motorcycle Co., Ltd.
    
Wave (NF100)
Mauritius
    
Maurimotors Industries Ltd.
    
C70
Columbia
    
Fabrica Nacional de Autopartes Afanalca S.A.
    
C70
Brazil
    
Motor Honda da Amazonia Ltda.
    
BIZ (C100)
Mexico
    
Honda de Mexico, S.A. de C.V.
    
BIZ (C100)
As of November 2002

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LOGO

This press release is embargoed until 11:00am, December 18, 2002 (JST).
December 18, 2002
Ref.#02078            
 
2002/2003 SALES & PRODUCTION
 
<Global Sales (unit:10 thousand)>
        *=New record
  
2002

      
2003

 
    
Forecast

  
%

      
Plan

  
%

 
Motorcycles & ATVs
  
*approx. 805
  
140
%
    
*approx. 925
  
115
%
Automobiles
  
* 282
  
106
%
    
* 310
  
110
%
Power Products
  
* 440
  
117
%
    
* 500
  
113
%
Total
  
* 1,527
  
126
%
    
* 1,735
  
114
%
<Motorcycles & ATVs>
        *=New record
  
2002

      
2003

 
    
Forecast

  
%

      
Plan

  
%

 
    
(Units)
           
(Units)
      
• Japan sales
  
420,500
  
103.1
%
    
430,000
  
102.3
%
Export sales
  
481,400
  
95.8
%
    
400,000
  
83.1
%
Motorcycles Total
  
901,900
  
99.1
%
    
830,000
  
92.0
%
ATVs
  
*325,600
  
106.0
%
    
*350,000
  
107.5
%
Motorcycles & ATVs Total
  
*1,227,500
  
100.8
%
    
1,180,000
  
96.1
%
KD sets
  
*6,733,800
  
149.1
%
    
*7,900,000
  
117.3
%

                         
•  Electric power assist bicycle (Racoon) not included in the above figures.
                         
Electric power assist bicycle
  
4,600
  
41.9
%
    
5,000
  
108.7
%
<Automobiles>
        *=New record
  
2002

      
2003

 
    
Forecast

  
%

      
Plan

  
%

 
    
(Units)
           
(Units)
      
• Registration vehicles
  
*612,400
  
107.7
%
    
*655,000
  
107.0
%
Mini vehicles
  
287,600
  
97.7
%
    
285,000
  
99.1
%
Japan sales
  
*900,000
  
104.3
%
    
*940,000
  
104.4
%
Export sales
  
473,000
  
113.8
%
    
420,000
  
88.8
%
Total
  
1,373,000
  
107.4
%
    
1,360,000
  
99.1
%
KD sets
  
*1,457,000
  
116.8
%
    
*1,550,000
  
106.4
%

                         
•  Import car sales are included in registration vehicles.
                         
Japan production (•)
  
1,380,000
  
107.4
%
    
1,340,000
  
97.1
%
Overseas production (••)
  
*1,500,000
  
109.7
%
    
*1,850,000
  
123.3
%
Global production (•••)
  
*2,880,000
  
108.5
%
    
*3,190,000
  
110.8
%

                         
(•)    —completely built unit (CBU) + complete knock-down
       (CKD)
                         
(••)  —CBU production at local plants (excluding overseas CKD)
                         
(•••)—Domestic production plus overseas production
                         
<Power Products>
        *=New record
  
2002

      
2003

 
    
Forecast

  
%

      
Plan

  
%

 
    
(Units)
           
(Units)
      
Japan sales
  
494,200
  
120.1
%
    
365,000
  
73.9
%
Export sales
  
3,916,400
  
117.2
%
    
4,635,000
  
118.3
%
Total
  
*4,410,600
  
117.5
%
    
*5,000,000
  
113.4
%

                         
•  OEM engines for export are included in Japan sales since 2001.
                         


Table of Contents

LOGO

Ref. #02079
 
Honda Announces Business Plan for CY2003
 
Tokyo, December, 2002—Honda Motor Co., Ltd. today announced its business plan for calendar year 2003, including Honda’s plan to increase its customer base from the 2002 forecast of 15.27 million customers to 17.35 million customers in 2003.
 
Honda announced its mid-term business plan in July 2002, calling for a further advance of the global activities it has vigorously pursued in order to provide new value-added products for 20 million customers in the fiscal year ending March 31, 2005.
 
Based on its mid-term plan, in 2002, Honda completed innovating the production operations at its major automobile plants in Japan, the U.S., and Europe to the “New Manufacturing System,” enabling those manufacturing lines to respond more quickly and flexibly to changes in the marketplace. Capitalizing on these improved characteristics, Honda has utilized its worldwide resources to steadily expand “Made by Global Honda” activities which ensure procurement and production in the most efficient locations to achieve quick delivery to customers.
 
In 2003, through “global networking,” Honda plans to invigorate its entire worldwide operations with the type of energy and vitality inherent in Asia, where the market is expected to continue to expand. Based on the concept and activities of “Made by Global Honda,” Honda aims to achieve motorcycle sales of 9.25 millions, automobile sales of 3.1 million, and power product sales of 5 million—resulting in a total of 17.35 million customers in 2003.
 
Major Plans by Business Category
 
Motorcycle Operations:
Japan
 
A new 50cc city-commuter model with unique styling will be launched. The model will be the 4th product created by the “N Project,” which has helped develop new markets by offering new values.
 
More reasonably priced made-in-China products will be supplied as a follow-up to the Today model, the first Chinese-made Honda scooter sold in Japan.
 
The CBR600RR, developed based on technologies used in the RC211V, winner of the 2002 Moto GP World Championship, will be introduced in Japan as the new standard for Honda’s sports model line-up. It will also be marketed in other countries in Europe and North America.
 
“Made by Global Honda
 
In addition to products made in China and Thailand, motorcycles made in India and Brazil will be exported to various countries around the world.
 
The number of models being shared globally, on a complementary basis between regions will be increased from currently about 20 models to more than 30 models.
 
A new motorcycle R&D center in Shanghai will begin operations in April 2003.

-more-


Table of Contents
Honda Announces Business Plan for 2003
Page Two
 
Providing new products with high added value
 
In spring 2003, the 125cc and 150cc Pantheon scooters equipped with fuel injection systems will go on sale in Europe. The newly developed PGM-FI fuel injection system for small displacement engines will be gradually expanded to models for other markets around the world.
 
Automobile Operations:
Japan
 
In spring 2003, Honda will import to Japan two light truck models produced in North America, the MDX sport utility vehicle and the new Element.
 
A new upscale sedan model will be launched equipped with state-of-the-art technologies, including Honda’s new accident avoidance safety technology.
 
The number of sales personnel will be increased to over 14,000 people.
 
A new dealer system utilizing IT will be established to create a more efficient sales structure.
 
In fall 2003, annual production capacity in Japan will reach 1.35 million units, achieving higher flexibility in mini-vehicle production.
—The daily production capacity of the four lines at Suzuka Factory and the Saitama Factory will be increased to 1,100 vehicles in early 2003, with the Suzuka Factory’s #2 line to be eliminated in January 2003.
—Honda and Yachiyo Kogyo will implement Honda’s flexible New Manufacturing System innovations at Yachiyo Kogyo’s production line by fall 2003, to increase its daily production capacity to 1,000 vehicles.
 
North America
 
In spring 2003, a new sports sedan model will be launched on the Acura channel.
 
Europe
 
In addition to the new Accord and the Accord Wagon, the Accord Diesel will be introduced at the end of 2003.
 
The new diesel engine, independently developed by Honda and to be installed in the Accord, will be manufactured at the Tochigi Center of Honda Engineering.
 
Asia
 
Mass production of the CR-V will start in January 2003 in Taiwan at a new plant 100% owned by Honda. First year production volume is set at 20,000 units.
 
Mass production will begin at new automobile plants in January in Malaysia and in March in Indonesia.
 
A complementary product supply network will be established among Honda operations in Thailand, Indonesia and the Philippines.
 
The production capacity at Honda’s Thai plant will be expanded from the current 70,000 units to 120,000 units by mid 2003.

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Table of Contents
Honda Announces 3-Year Business Plan
Page Three
 
 
 
China
 
The production and sales of the Fit Saloon (known in Japan as the Fit Aria) will start next summer at Guangzhou Honda in China for the domestic Chinese market.
 
The production capacity at Guangzhou Honda will be increased to 120,000 units in February 2003, with an additional expansion to 240,000 units in spring 2004.
 
 
The export of powertrain components from the Philippines and Indonesia to Europe will begin in fall 2003.
 
South America
 
In Spring 2003, the production and sales of the Honda Fit will begin in Brazil.
 
The production capacity at the Brazilian plant will increase from 30,000 units to 50,000 units in spring 2003.
 
Small Car Series
 
More than 500,000 small car series models built on the Global Small Platform will be sold globally in 2004.
 
Power Product Operations:
 
The annual production capacity of the plant in Thailand has been increased from 400,000 units to 1 million units in November 2002, with exports to Europe and North America to begin in 2003.
 
Products in the home-use category will be aggressively marketed in Japan, including a personal use mini-tiller, and a home-use hybrid snowplow model.
 
The sales of a compact, home-use energy cogeneration system unit will begin in Japan in spring 2003.
 
# # #


Table of Contents

LOGO

Ref.# 02080
 
Honda Increases Automobile Production Capacity in China
 
Tokyo, December 18, 2002—Guangzhou Honda Automobile Co., Ltd., Honda’s automobile production and sales joint venture in China, will increase its production capacity to 240,000 units annually by spring 2004. Guangzhou Honda is currently in the process of increasing capacity from 50,000 to 120,000 units a year by February 2003. The latest capacity increase was determined necessary in response to the continuing expansion of the Chinese passenger car market.
 
The new expansion project includes additional investment of approximately 660 million yuan (¥10 billion) to expand the facilities, including the assembly plant building and additional sub-assembly lines. Guangzhou Honda expects plant employment to increase from 2,400 to 3,400 associates by spring 2004.
 
After the expansion is complete, the production line at Guangzhou Honda will incorporate Honda’s “New Manufacturing System” to become a mass production operation with a high level of efficiency and flexibility equivalent to other Honda production bases in Japan, North America and Europe. The New Manufacturing System improvements include more flexible welding equipment, functional process zones on the main assembly line with quality assurance within each zone, a standardized main assembly line with sub-lines absorbing processes that fall outside common assembly parameters, and an enhanced workplace environment.
 
As Guangzhou Honda plans to launch the all-new Accord in January 2003 and the Fit Saloon (sold as the Fit Aria in Japan), the third production model to go into production in summer 2003, the company will make full use of the increased production capacity to respond to the ever-diversifying needs of the Chinese market. Guangzhou Honda began building the Odyssey minivan in spring 2002.
 
The production and sales of Guangzhou Honda have been increasing at a faster pace than initially anticipated since production began in March 1999. Production results for 2002 are expected to reach 59,000 units, with cumulative production through the end of 2002 expected to exceed 152,000 units and production for 2003 forecast at 112,000 units.


Table of Contents
 
In addition, Guangzhou Honda will increase the number of dealers from approximately 130 to 200 dealers by the end of 2003. It is the first sales and service dealer network in China to be developed by a manufacturer, integrating auto sales and service into one organization, including maintenance service, parts supply and communication with customers.
 
Current Outline of Guangzhou Honda Automobile Co., Ltd.
 
Established:
  
July 1998
Capital Investment:
  
Approx. 1.15 billion yuan
Capitalization Ratio:
  
Honda Motor Co., Ltd.:                 50%
    
Guangzhou Auto Group Corp.:     50%
Location:
  
Guangzhou City, China
Representative:
  
President, Koji Kadowaki
Employment:
  
Approx. 2,400 associates
Start Production:
  
March 1999
Products:
  
Accord 2.0L, 2.3L, 3.0L V6 and Odyssey
Annual Capacity:
  
120,000 units (as of February 2003)


Table of Contents

LOGO

 
(NOTE: This release is embargoed until 11:30 a.m., Dec. 24)
 
Ref.#02083
 
Honda Global Production Up 10.1% In November
 
December 24, 2002—Honda Motor Co., Ltd., announced today that its global production in November was up 10.1% from the same month a year earlier, while overseas production was up for the 23rd consecutive month, at 13.9%. Domestic sales were down slightly, at 0.7%, while industry-wide, sales were up 1.4% for the month. For the calendar year, domestic sales were up 5.3% compared to the first 11 months of 2001.
 
Domestic sales totaled 76,697 vehicles in November, again led by the Fit sub-compact vehicle (26,407 units), up 33.6% from November 2001. Honda’s Life mini-vehicle (10,131 units) and Mobilio (6,734 units) were the other Honda best-sellers last month.
 
By vehicle category, passenger car and light truck sales were up 6.7%, while mini vehicle sales were down 14.9%.
 
Export shipments from Japan in November were up sharply by 27.4%, partly due to a sharp rise in shipments to Asia.
 
Honda Production, Sales And Exports—November 2002
 
PRODUCTION
 
    
Nov. Units

  
Vs. 11/01

    
Annual Total
Units

  
2002 Vs. 2001

 
Domestic (CBU+CKD)
  
121,394
  
+6.1
%
  
1,271,998
  
+8.4
%
Overseas (CBU only)
  
136,891
  
+13.9
%
  
1,410,631
  
+10.5
%
Worldwide Total (*)
  
258,285
  
+10.1
%
  
2,682,629
  
+9.5
%

(*)
 
except overseas CKD
 
REGIONAL PRODUCTION
 
    
Nov. Units

  
Vs. 11/01

    
Annual Total Units

  
Vs. 2001

 
North America
  
96,553
  
+5.5
%
  
1,038,228
  
+4.0
%
(USA only
  
64,009
  
+10.6
%
  
701,039
  
+7.8
%)
Europe
  
17,113
  
+28.1
%
  
164,296
  
+56.9
%
Asia
  
18,115
  
+58.6
%
  
160,334
  
+27.4
%
Others
  
5,110
  
+34.2
%
  
47,773
  
– 0.4
%
Overseas Total
  
136,891
  
+13.9
%
  
1,410,631
  
+10.5
%


Table of Contents
 
SALES
 
Vehicle type

  
Nov. Units

  
Vs. 11/01

      
Annual Total Units

  
Vs. 2001

 
Passenger cars & light trucks
  
54,064
  
+6.7
%
    
558,625
  
+8.4
%
(Imports
  
459
  
–32.0
%
    
8,080
  
+1.0
%
Mini vehicles
  
22,633
  
–14.9
%
    
267,498
  
–0.7
%
TOTAL
  
76,697
  
–0.7
%
    
826,123
  
+5.3
%
 
EXPORTS
 
    
Nov. Units

  
Vs. 11/01

      
Annual Total Units

  
Vs. 2001

 
North America
  
27,630
  
+4.5
%
    
271,979
  
+8.5
%
(USA only
  
24,139
  
+3.5
%
    
241,793
  
+4.8
%)
Europe
  
5,255
  
–13.8
%
    
64,702
  
+12.7
%
Asia
  
2,428
  
+176.2
%
    
30,303
  
+5.8
%
Others
  
10,602
  
+304.5
%
    
65,159
  
+51.0
%
TOTAL
  
45,915
  
+27.4
%
    
432,143
  
+13.7
%
 
For further information, please contact:
 
Masaya Nagai
Noriko Okamoto
Tatsuya David Iida
Honda Motor Co., Ltd. Corporate Communications Division
Telephone: 03-5412-1512
Facsimile: 03-5412-1545


Table of Contents
LOGO
 
 
 
 
 
 
 
 
 
 
 
 
INTERIM BUSINESS REPORT FOR THE FIRST-HALF TERM
(SIX MONTHS ENDED SEPTEMBER 30, 2002)
OF THE 79TH FISCAL PERIOD
 
 
 
 
 
 
 
 
 

   
   
(This is a translation of summary information of the interim business report in the Japanese language which is contained in the November 2002 issue of “Honda Kabunushi Tsushin” (News for Stockholders), mailed on November 22, 2002, to holders of Honda Common Stock in Japan.)
   
 

   
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
HONDA MOTOR CO., LTD.
(HONDA GIKEN KOGYO KABUSHIKI KAISHA)
TOKYO, JAPAN


Table of Contents
 
CONTENTS
 
    
Consolidated Financial Summary
  
1
Unit Sales Breakdown
  
1
Net Sales Breakdown
  
2
Business Segment Information
  
3
Geographical Segment Information
  
3
Five-Year Financial Results
  
4
Consolidated Statements of Income
  
5
Consolidated Balance Sheets
  
6
Consolidated Statements of Cash Flows
  
8
Explanatory Notes
  
9
Consolidated Statements of Cash Flows Divided into Non-financial Services Businesses and Finance Subsidiaries (Unaudited)
  
10
Unconsolidated Financial Section
  
11
Unconsolidated Balance Sheets
  
12
Unconsolidated Statements of Income
  
14
Common Stock Information
  
15
Breakdown of Stockholders
  
15
Principal Stockholders
  
15
Five-Year Financial Results (Unconsolidated)
  
16
Board of Directors
  
17


Table of Contents
CONSOLIDATED FINANCIAL SUMMARY
 
For the six months ended September 30, 2002 and 2001
and forecasts for the fiscal year ending March 31, 2003
Honda Motor Co., Ltd. and Subsidiaries
    
Yen
(millions)

    
U.S. dollar
(millions)

  
Yen
(millions)

                            
FORECASTS*

Financial Highlights

    
Six months ended September 30, 2002

  
%
change

    
Six months ended September 30, 2001

    
Six months ended September 30, 2002

  
Fiscal year ending March 31, 2003

Net sales and other operating revenue
    
¥
3,853,611
  
9.9
%
  
¥
3,504,996
    
$
31,432
  
¥
7,900,000
Operating income
    
 
323,869
  
2.7
 
  
 
315,237
    
 
2,642
      
Income before income taxes and equity in
income of affiliates
    
 
273,701
  
1.4
 
  
 
269,987
    
 
2,232
  
 
580,000
Net income
    
 
194,779
  
12.1
 
  
 
173,740
    
 
1,589
  
 
410,000
      

  

  

    

  

 
      
Yen

    
U.S. dollar

    
Yen

                           
FORECAST*

      
Six months ended September 30, 2002

    
Six months ended September 30, 2001

    
Six months ended September 30, 2002

    
Fiscal year ending March 31, 2003

Basic net income per common share
    
¥
199.98
    
¥
178.30
    
$
1.63
        
Basic net income per American share
    
 
99.99
    
 
89.15
    
 
0.82
        
Cash dividend per common share
    
 
16
    
 
13
             
¥
32
      

    

             

 
 
 
UNIT SALES BREAKDOWN
 
For the six months ended September 30, 2002 and 2001
and forecasts for the fiscal year ending March 31, 2003
Honda Motor Co., Ltd. and Subsidiaries
    
Units
(thousands)

 
                      
FORECASTS*

 
    
Six months ended September 30, 2002

      
Six months ended September 30, 2001

      
Fiscal year ending March 31, 2003

 
Motorcycles:
                          
Japan
    
215
 
    
216
 
    
430
 
(motorcycles included above)
    
(215
)
    
(216
)
    
(430
)
North America
    
291
 
    
254
 
    
660
 
(motorcycles included above)
    
(138
)
    
(127
)
    
(342
)
Europe
    
155
 
    
162
 
    
310
 
(motorcycles included above)
    
(150
)
    
(159
)
    
(303
)
Others
    
3,206
 
    
2,174
 
    
6,710
 
(motorcycles included above)
    
(3,201
)
    
(2,169
)
    
(6,701
)
      

    

    

Total
    
3,867
 
    
2,806
 
    
8,110
 
(motorcycles included above)
    
(3,704
)
    
(2,671
)
    
(7,776
)
      

    

    

Automobiles:
                          
Japan
    
426
 
    
421
 
    
900
 
North America
    
732
 
    
655
 
    
1,500
 
Europe
    
104
 
    
84
 
    
200
 
Others
    
144
 
    
128
 
    
290
 
      

    

    

Total
    
1,406
 
    
1,288
 
    
2,890
 
      

    

    

Power Products:
                          
Japan
    
252
 
    
191
 
    
440
 
North America
    
900
 
    
736
 
    
1,970
 
Europe
    
424
 
    
375
 
    
1,220
 
Others
    
430
 
    
408
 
    
970
 
      

    

    

Total
    
2,006
 
    
1,710
 
    
4,600
 
      

    

    


Explanatory note:    The geographical breakdown of unit sales is based on the location of affiliated and unaffiliated customers.
 
*
 
These forecasts are based on the assumption that the exchange rates for the yen to the U.S. dollar and the euro for the current fiscal year will average ¥122 and ¥113, respectively. This announcement contains forward-looking statements within the meaning of Section 21E of the U.S. Securities Exchange Act of 1934. Honda’s actual results could materially differ from those contained in these forward-looking statements as a result of numerous factors outside of Honda’s control. Such factors include general economic conditions in Honda’s principal markets, and foreign exchange rates between the Japanese yen and other major currencies, as well as other factors detailed from time to time in Honda’s reports filed with the U.S. Securities and Exchange Commission.

1


Table of Contents
NET SALES BREAKDOWN
 
For the six months ended September 30, 2002 and 2001
Honda Motor Co., Ltd. and Subsidiaries
  
Yen
(millions)

 
    
Six months
ended
September 30, 2002

    
Six months
ended
September 30, 2001

 
Motorcycle business:
                           
Japan
  
¥
51,975
  
10.4
%
  
¥
53,850
  
12.1
%
North America
  
 
164,254
  
33.0
 
  
 
150,384
  
33.9
 
Europe
  
 
87,221
  
17.5
 
  
 
81,660
  
18.4
 
Others
  
 
194,384
  
39.1
 
  
 
157,543
  
35.6
 
    

  

  

  

Total
  
¥
497,834
  
100.0
%
  
¥
443,437
  
100.0
%
    

  

  

  

Automobile business:
                           
Japan
  
¥
758,141
  
24.5
%
  
¥
815,995
  
28.7
%
North America
  
 
1,862,010
  
60.2
 
  
 
1,652,405
  
58.2
 
Europe
  
 
204,265
  
6.6
 
  
 
158,638
  
5.6
 
Others
  
 
267,097
  
8.7
 
  
 
212,469
  
7.5
 
    

  

  

  

Total
  
¥
3,091,513
  
100.0
%
  
¥
2,839,507
  
100.0
%
    

  

  

  

Others:
                           
Japan
  
¥
66,930
  
25.3
%
  
¥
56,995
  
25.7
%
North America
  
 
154,275
  
58.4
 
  
 
128,501
  
57.9
 
Europe
  
 
26,280
  
9.9
 
  
 
21,549
  
9.7
 
Others
  
 
16,779
  
6.4
 
  
 
15,007
  
6.7
 
    

  

  

  

Total
  
¥
264,264
  
100.0
%
  
¥
222,052
  
100.0
%
    

  

  

  

Total:
                           
Japan
  
¥
877,046
  
22.8
%
  
¥
926,840
  
26.4
%
North America
  
 
2,180,539
  
56.6
 
  
 
1,931,290
  
55.1
 
Europe
  
 
317,766
  
8.2
 
  
 
261,847
  
7.5
 
Others
  
 
478,260
  
12.4
 
  
 
385,019
  
11.0
 
    

  

  

  

Total
  
¥
3,853,611
  
100.0
%
  
¥
3,504,996
  
100.0
%
    

  

  

  


Explanatory notes:
 
1.
 
The geographical breakdown of net sales is based on the location of affiliated and unaffiliated customers.
   
2.
 
Net sales of others includes revenue from sales of power products and related parts, leisure businesses, and trading and finance subsidiaries.
 

2


Table of Contents
BUSINESS SEGMENT INFORMATION
 
For the six months ended September 30, 2002 and 2001 and the year ended March 31, 2002
Honda Motor Co., Ltd. and Subsidiaries
  
Yen
(millions)

 
Net Sales and Other Operating Revenue

  
Six months ended September 30, 2002

   
%
change

    
Six months ended September 30, 2001

    
Fiscal year ended March 31, 2002

 
Motorcycle business:
                                
Sales to unaffiliated customers
  
¥
497,834
 
 
12.3
%
  
¥
443,437
 
  
¥
947,900
 
Automobile business:
                                
Sales to unaffiliated customers
  
 
3,091,513
 
 
8.9
 
  
 
2,839,507
 
  
 
5,929,742
 
Financial services:
                                
Sales to unaffiliated customers
  
 
117,116
 
 
22.3
 
  
 
95,731
 
  
 
201,906
 
Intersegment sales
  
 
1,737
 
 
(42.0
)
  
 
2,993
 
  
 
7,409
 
    


        


  


Total
  
 
118,853
 
 
20.4
 
  
 
98,724
 
  
 
209,315
 
    


        


  


Other businesses:
                                
Sales to unaffiliated customers
  
 
147,148
 
 
16.5
 
  
 
126,321
 
  
 
282,890
 
Intersegment sales
  
 
5,495
 
 
8.7
 
  
 
5,056
 
  
 
10,968
 
    


 

  


  


Total
  
 
152,643
 
 
16.2
 
  
 
131,377
 
  
 
293,858
 
    


        


  


Eliminations
  
 
(7,232
)
 
 
  
 
(8,049
)
  
 
(18,377
)
    


        


  


Consolidated
  
¥
3,853,611
 
 
9.9
 
  
¥
3,504,996
 
  
¥
7,362,438
 
    


 

  


  


For the six months ended September 30, 2002 and 2001 and the year ended March 31, 2002
Honda Motor Co., Ltd. and Subsidiaries
  
Yen
(millions)

 
Operating Income

  
Six months ended September 30, 2002

   
%
change

    
Six months ended September 30, 2001

    
Fiscal year ended March 31, 2002

 
Motorcycle business
  
¥
37,326
 
 
27.5
%
  
¥
29,271
 
  
¥
69,656
 
Automobile business
  
 
246,446
 
 
(8.0
)
  
 
267,985
 
  
 
520,510
 
Financial services
  
 
33,520
 
 
71.6
 
  
 
19,535
 
  
 
45,084
 
Other businesses
  
 
6,577
 
 
 
  
 
(1,554
)
  
 
4,046
 
    


        


  


Consolidated
  
¥
323,869
 
 
2.7
 
  
¥
315,237
 
  
¥
639,296
 
    


 

  


  


GEOGRAPHICAL SEGMENT INFORMATION
                                
For the six months ended September 30, 2002 and 2001 and the year ended March 31, 2002
Honda Motor Co., Ltd. and Subsidiaries
  
Yen
(millions)

 
Operating Income

  
Six months ended September 30, 2002

   
%
change

    
Six months ended September 30, 2001

    
Fiscal year ended March 31, 2002

 
Japan
  
¥
91,149
 
 
(29.1
)%
  
¥
128,549
 
  
¥
253,431
 
North America
  
 
189,610
 
 
(4.7
)
  
 
199,022
 
  
 
402,395
 
Europe
  
 
1,668
 
 
 
  
 
(20,708
)
  
 
(35,338
)
Others
  
 
33,099
 
 
18.6
 
  
 
27,915
 
  
 
40,711
 
Eliminations
  
 
8,343
 
 
 
  
 
(19,541
)
  
 
(21,903
)
    


        


  


Consolidated
  
¥
323,869
 
 
2.7
 
  
¥
315,237
 
  
¥
639,296
 
    


 

  


  



 
The geographical segmentation is based on the location where sales originated.

3


Table of Contents
FIVE-YEAR FINANCIAL RESULTS
 
For the years ended March 31, 1999, 2000, 2001 and 2002
and the six months ended September 30, 2002
Honda Motor Co., Ltd. and Subsidiaries

  
Year ended March 31, 1999

  
Year ended March 31, 2000

  
Year ended March 31, 2001

  
Year ended March 31, 2002

    
Six months ended September 30, 2002

Net sales and other operating revenue (¥ millions)
  
¥
6,231,041
  
¥
6,098,840
  
¥
6,463,830
  
¥
7,362,438
    
¥
3,853,611
Operating income (¥ millions)
  
 
548,698
  
 
426,230
  
 
406,960
  
 
639,296
    
 
323,869
Income before income taxes and equity in income of affiliates (¥ millions)
  
 
520,511
  
 
416,063
  
 
384,976
  
 
551,342
    
 
273,701
Net income (¥ millions)
  
 
305,045
  
 
262,415
  
 
232,241
  
 
362,707
    
 
194,779
Net income per common share, basic (¥)
  
 
313.05
  
 
269.31
  
 
238.34
  
 
372.23
    
 
199.98
Net income per common share, diluted (¥)
  
 
313.05
  
 
269.31
  
 
238.34
  
 
372.23
    
 
199.98
Total assets (¥ millions)
  
 
5,034,247
  
 
4,898,428
  
 
5,667,409
  
 
6,940,795
    
 
6,971,585
Total stockholders’ equity (¥ millions)
  
 
1,763,855
  
 
1,930,373
  
 
2,230,291
  
 
2,573,941
    
 
2,593,350
Stockholders’ equity per common share (¥)
  
 
1,810.20
  
 
1,981.07
  
 
2,288.87
  
 
2,641.55
    
 
2,666.73
Research and development (¥ millions)
  
 
311,632
  
 
334,036
  
 
352,829
  
 
395,176
    
 
213,023
Capital expenditures (¥ millions)
  
 
237,080
  
 
222,891
  
 
285,687
  
 
303,424
    
 
133,290
Depreciation (¥ millions)
  
 
177,666
  
 
172,139
  
 
170,342
  
 
194,944
    
 
102,105
    

  

  

  

    


Explanatory note:
 
Net income per common share is calculated according to the average number of issued shares during the interim term, and stockholders’ equity per common share is calculated based on shares issued at fiscal term-end. The number of issued shares for this calculation had included the number of treasury stock prior to the fiscal year ended March 31, 2001, whereas the number of treasury stock has been excluded from the calculation after the fiscal year ended March 31, 2002.

4


Table of Contents
 
CONSOLIDATED STATEMENTS OF INCOME
 

For the six months ended September 30, 2002 and 2001
Honda Motor Co., Ltd. and Subsidiaries
    
Yen
(millions)

 
      
Six months
ended
September 30, 2002

    
Six months
ended
September 30, 2001

 
Net sales and other operating revenue
    
¥
3,853,611
 
  
¥
3,504,996
 
Operating costs and expenses:
                   
Cost of sales
    
 
2,614,864
 
  
 
2,405,537
 
Selling, general and administrative
    
 
701,855
 
  
 
601,468
 
Research and development
    
 
213,023
 
  
 
182,754
 
      


  


      
 
3,529,742
 
  
 
3,189,759
 
      


  


Operating income
    
 
323,869
 
  
 
315,237
 
Other income:
                   
Interest
    
 
4,093
 
  
 
4,056
 
Other
    
 
5,541
 
  
 
1,167
 
      


  


      
 
9,634
 
  
 
5,223
 
      


  


Other expenses:
                   
Interest
    
 
6,377
 
  
 
8,765
 
Other
    
 
53,425
 
  
 
41,708
 
      


  


      
 
59,802
 
  
 
50,473
 
      


  


Income before income taxes and equity in income of affiliates
    
 
273,701
 
  
 
269,987
 
Income taxes
    
 
107,184
 
  
 
113,326
 
      


  


Income before equity in income of affiliates
    
 
166,517
 
  
 
156,661
 
Equity in income of affiliates
    
 
28,262
 
  
 
17,079
 
      


  


Net income
    
 
194,779
 
  
 
173,740
 
Retained earnings:
                   
Balance at beginning of period
    
 
2,765,600
 
  
 
2,428,293
 
Cash dividends paid
    
 
(14,616
)
  
 
(11,693
)
Transfer to legal reserves
    
 
(43
)
  
 
(448
)
      


  


Balance at end of period
    
¥
2,945,720
 
  
¥
2,589,892
 
      


  


 

      
Yen

      
Six months
ended
September 30, 2002

    
Six months
ended
September 30, 2001

Basis net income per common share
    
¥
199.98
    
¥
178.30
Basis net income per American share
    
 
99.99
    
 
89.15
      

    

5


Table of Contents
CONSOLIDATED BALANCE SHEETS
 
March 31, 2002 and September 30, 2002 and 2001
Honda Motor Co., Ltd. and Subsidiaries
  
Yen
(millions)

Assets

  
September 30, 2002

  
March 31, 2002

  
September 30, 2001

Current assets:
                    
Cash and cash equivalents
  
¥
518,408
  
¥
609,441
  
¥
465,706
Trade accounts and notes receivable
  
 
332,185
  
 
452,208
  
 
368,947
Finance subsidiaries–receivables, net
  
 
980,852
  
 
995,087
  
 
767,479
Inventories
  
 
670,268
  
 
644,282
  
 
640,223
Deferred income taxes
  
 
205,290
  
 
182,788
  
 
180,741
Other current assets
  
 
227,826
  
 
204,538
  
 
178,952
    

  

  

Total current assets
  
 
2,934,829
  
 
3,088,344
  
 
2,602,048
    

  

  

Finance subsidiaries–receivables, net
  
 
2,024,071
  
 
1,808,861
  
 
1,564,031
Investments and advances
  
 
395,138
  
 
395,495
  
 
364,978
Property, plant and equipment, at cost:
                    
Land
  
 
336,708
  
 
318,208
  
 
304,136
Buildings
  
 
912,139
  
 
920,106
  
 
839,359
Machinery and equipment
  
 
2,018,426
  
 
2,048,244
  
 
1,883,224
Construction in progress
  
 
96,542
  
 
82,610
  
 
145,418
    

  

  

    
 
3,363,815
  
 
3,369,168
  
 
3,172,137
Less accumulated depreciation
  
 
1,987,880
  
 
1,979,455
  
 
1,894,853
    

  

  

Net property, plant and equipment
  
 
1,375,935
  
 
1,389,713
  
 
1,277,284
    

  

  

Other assets
  
 
241,612
  
 
258,382
  
 
174,190
    

  

  

Total assets
  
¥
6,971,585
  
¥
6,940,795
  
¥
5,982,531
    

  

  

6


Table of Contents
    
Yen
(millions)

 
Liabilities and Stockholders’ Equity

  
September 30, 2002

    
March 31, 2002

    
September 30, 2001

 
Current liabilities:
                          
Short-term debt
  
¥
937,819
 
  
¥
1,035,069
 
  
¥
1,068,122
 
Current portion of long-term debt
  
 
142,231
 
  
 
308,014
 
  
 
361,388
 
Trade payables
  
 
775,584
 
  
 
840,957
 
  
 
723,156
 
Accrued expenses
  
 
719,596
 
  
 
678,118
 
  
 
574,890
 
Income taxes payable
  
 
66,269
 
  
 
61,244
 
  
 
110,823
 
Other current liabilities
  
 
232,643
 
  
 
186,657
 
  
 
136,550
 
    


  


  


Total current liabilities
  
 
2,874,142
 
  
 
3,110,059
 
  
 
2,974,929
 
    


  


  


Long-term debt
  
 
953,833
 
  
 
716,614
 
  
 
344,271
 
Other liabilities
  
 
550,260
 
  
 
540,181
 
  
 
323,792
 
    


  


  


Total liabilities
  
 
4,378,235
 
  
 
4,366,854
 
  
 
3,642,992
 
    


  


  


Stockholders’ equity:
                          
Common stock, authorized 3,600,000,000 shares;
issued 974,414,215 shares at September 30, 2002,
March 31, 2002 and September 30, 2001
  
 
86,067
 
  
 
86,067
 
  
 
86,067
 
Capital surplus
  
 
172,529
 
  
 
172,529
 
  
 
172,529
 
Legal reserves
  
 
29,012
 
  
 
28,969
 
  
 
28,377
 
Retained earnings
  
 
2,945,720
 
  
 
2,765,600
 
  
 
2,589,892
 
Adjustments from foreign currency translation
  
 
(455,149
)
  
 
(300,081
)
  
 
(459,243
)
Net unrealized gains on marketable equity securities
  
 
12,611
 
  
 
8,730
 
  
 
3,599
 
Minimum pension liabilities adjustments
  
 
(187,824
)
  
 
(187,824
)
  
 
(81,682
)
Accumulated other comprehensive income (loss)
  
 
(630,362
)
  
 
(479,175
)
  
 
(537,326
)
Treasury stock
  
 
(9,616
)
  
 
(49
)
  
 
 
    


  


  


Total stockholders’ equity
  
 
2,593,350
 
  
 
2,573,941
 
  
 
2,339,539
 
    


  


  


Total liabilities and stockholders’ equity
  
¥
6,971,585
 
  
¥
6,940,795
 
  
¥
5,982,531
 
    


  


  


7


Table of Contents
 
CONSOLIDATED STATEMENTS OF CASH FLOWS
 
For the six months ended September 30, 2002 and 2001
Honda Motor Co., Ltd. and Subsidiaries
  
Yen
(millions)

 
    
Six months ended
September 30, 2002

    
Six months ended
September 30, 2001

 
Cash flows from operating activities:
                 
Net income
  
¥
194,779
 
  
¥
173,740
 
Adjustments to reconcile net income to net cash provided by operating activities:
                 
Depreciation
  
 
102,105
 
  
 
89,858
 
Deferred income taxes
  
 
(8,713
)
  
 
(44,278
)
Equity in income of affiliates
  
 
(28,262
)
  
 
(17,079
)
Loss on fair value adjustment of derivative instrument (profit)
  
 
43,462
 
  
 
30,576
 
Decrease (increase) in assets:
                 
Trade accounts and notes receivable
  
 
97,858
 
  
 
61,630
 
Inventories
  
 
(62,948
)
  
 
(36,773
)
Increase (decrease) in trade payables
  
 
(26,445
)
  
 
(81,018
)
Other, net
  
 
60,393
 
  
 
91,675
 
    


  


Net cash provided by operating activities
  
 
372,229
 
  
 
268,331
 
Cash flows from investing activities:
                 
Decrease (increase) in investments and advances
  
 
11,785
 
  
 
4,082
 
Capital expenditures
  
 
(133,290
)
  
 
(133,092
)
Proceeds from sales of property, plant and equipment
  
 
5,517
 
  
 
6,320
 
Decrease (increase) in finance subsidiaries–receivables
  
 
(417,561
)
  
 
(353,738
)
    


  


Net cash used in investing activities
  
 
(533,549
)
  
 
(476,428
)
Cash flows from financing activities:
                 
Increase (decrease) in short-term debt
  
 
(4,164
)
  
 
196,418
 
Proceeds from long-term debt
  
 
349,893
 
  
 
220,501
 
Repayment of long-term debt
  
 
(229,568
)
  
 
(148,345
)
Acquisition of treasury stock
  
 
(9,567
)
  
 
 
Cash dividends paid
  
 
(14,616
)
  
 
(11,693
)
Increase (decrease) in commercial paper classified as long-term debt
  
 
2,069
 
  
 
391
 
    


  


Net cash provided by (used in) financing activities
  
 
94,047
 
  
 
257,272
 
Effect of exchange rate changes on cash and cash equivalents
  
 
(23,760
)
  
 
(988
)
    


  


Net change in cash and cash equivalents
  
 
(91,033
)
  
 
48,187
 
Cash and cash equivalents at beginning of year
  
 
609,441
 
  
 
417,519
 
    


  


Cash and cash equivalents at end of year
  
¥
518,408
 
  
¥
465,706
 
    


  


8


Table of Contents
 
EXPLANATORY NOTES
 
Honda Motor Co., Ltd. and Subsidiaries
 
1.    The Company prepares its consolidated financial statements in conformity with accounting principles generally accepted in the United States of America since the Company has issued American Depositary Receipts listed on the New York Stock Exchange and files reports with the U.S. Securities and Exchange Commission, except all segment information which is prepared in accordance with a Ministerial Ordinance under the Securities and Exchange Law of Japan.
 
2.    The average exchange rates for the fiscal first half ended September 30, 2002 were ¥123.14=U.S.$1 and ¥116.94=euro1, as compared with ¥122.21=U.S.$1 and ¥107.77=euro1, for the corresponding period last year.
 
3.    United States dollar amounts have been translated from yen solely for the convenience of the reader at the rate of ¥122.60=U.S.$1, the mean of the telegraphic transfer selling exchange rate and the telegraphic transfer buying exchange rate prevailing on the Tokyo foreign exchange market on September 30, 2002.
 
4.    The Company’s Common Stock-to-ADR exchange rate has been changed from two shares of Common Stock to one ADR to one share of Common Stock to two ADRs, effective January 10, 2002.
 
5.    The Company has adopted the provisions of Statement of Financial Accounting Standards (SFAS) No. 130, “Reporting Comprehensive Income.” The following table represents components of the Company’s comprehensive income. Other comprehensive income (loss) consists of changes in adjustments from foreign currency translation, net unrealized gains on marketable equity securities and minimum pension liabilities adjustment.
 
6.    Certain reclassifications have been made to the prior year’s consolidated financial statements to conform to the presentation used for the fiscal second quarter and first half ended September 30, 2002.
 
      
Yen
(millions)

 
      
Six months
Ended
September 30, 2002

      
Six months
Ended
September 30, 2001

 
Net income
    
¥
194,779
 
    
¥
173,740
 
Other comprehensive income (loss)
    
 
(151,187
)
    
 
(52,799
)
      


    


Comprehensive income (loss)
    
¥
43,592
 
    
¥
120,941
 
      


    


9


Table of Contents
 
CONSOLIDATED STATEMENTS OF CASH FLOWS
Divided into Non-financial Services Businesses and Finance Subsidiaries (Unaudited)
 
For the six months ended September 30, 2002
Honda Motor Co., Ltd. and Subsidiaries
    
Yen
(millions)

 
      
Six months ended September 30, 2002

 
      
Non-financial
services businesses

    
Finance
subsidiaries

 
Cash flows from operating activities:
                   
Net income
    
¥
200,010
 
  
¥
(5,082
)
Adjustments to reconcile net income to net cash provided by operating activities:
                   
Depreciation
    
 
101,711
 
  
 
394
 
Deferred income taxes
    
 
(32,271
)
  
 
23,558
 
Equity in income of affiliates
    
 
(28,048
)
  
 
—  
 
Loss on fair value adjustment of derivative instrument (profit)
    
 
2,282
 
  
 
41,180
 
Decrease (increase) in trade accounts and notes receivable
    
 
95,394
 
  
 
—  
 
Decrease (increase) in inventories
    
 
(62,948
)
  
 
—  
 
Increase (decrease) in trade payables
    
 
(29,419
)
  
 
—  
 
Other, net
    
 
63,469
 
  
 
8,432
 
      


  


Net cash provided by operating activities
    
 
310,270
 
  
 
68,482
 
Cash flows from investing activities:
                   
Decrease (increase) in investments and advances*
    
 
(159,786
)
  
 
(125
)
Capital expenditures
    
 
(131,206
)
  
 
(2,084
)
Proceeds from sales of property, plant and equipment
    
 
5,439
 
  
 
78
 
Decrease (increase) in finance subsidiaries—receivables
    
 
—  
 
  
 
(420,528
)
      


  


Net cash used in investing activities
    
 
(285,553
)
  
 
(422,659
)
      


  


Free cash flow (cash flows from operating and investing activities)
    
 
24,717
 
  
 
(354,177
)
Free cash flow of non-financial services businesses excluding the increase in loans (amounting to ¥154,808 million) to finance subsidiaries (Note)
    
 
179,525
 
  
 
—  
 
Cash flows from financing activities:
                   
Increase (decrease) in short-term debt*
    
 
(74,844
)
  
 
220,252
 
Proceeds from long-term debt*
    
 
7,446
 
  
 
344,287
 
Repayment of long-term debt*
    
 
(4,117
)
  
 
(225,451
)
Proceeds from issuance of common stock
    
 
—  
 
  
 
16,967
 
Acquisition of treasury stock
    
 
(9,567
)
  
 
—  
 
Cash dividends paid
    
 
(14,661
)
  
 
(194
)
Increase (decrease) in commercial paper classified as long-term debt
    
 
—  
 
  
 
2,069
 
      


  


Net cash provided by financing activities
    
 
(95,743
)
  
 
357,930
 
      


  


Effect of exchange rate changes on cash and cash equivalents
    
 
(23,262
)
  
 
(498
)
      


  


Net change in cash and cash equivalents
    
 
(94,288
)
  
 
3,255
 
Cash and cash equivalents at beginning of year
    
 
590,798
 
  
 
18,643
 
      


  


Cash and cash equivalents at end of year
    
¥
496,510
 
  
¥
21,898
 
      


  



Notes:
 
Non-financial services businesses loans to finance subsidiaries. These cash flows were included in the items of “Decrease (increase) in investments and advances” of non-financial services businesses, and “Increase (decrease) in short-term debt”, “Proceeds from long-term debt” and “Repayment of long-term debt” of finance subsidiaries (marked by *).
Free cash flow of non-financial services businesses excluding the increase in loans to finance subsidiaries is stated for readers’ information.

10


Table of Contents

UNCONSOLIDATED FINANCIAL SECTION

11


Table of Contents
UNCONSOLIDATED BALANCE SHEETS
 

March 31, 2002 and September 30, 2002 and 2001
Honda Motor Co., Ltd.
    
Yen
(millions)

 
Assets

    
September 30, 2002

    
March 31, 2002

    
September 30, 2001

 
Current assets
    
¥
783,642
 
  
¥
766,973
 
  
¥
738,586
 
Cash and bank deposits
    
 
165,257
 
  
 
150,794
 
  
 
153,628
 
Notes/accounts receivable
    
 
235,441
 
  
 
261,288
 
  
 
239,376
 
Inventories
    
 
119,092
 
  
 
128,879
 
  
 
132,665
 
Other
    
 
266,744
 
  
 
229,477
 
  
 
215,837
 
Allowance for doubtful accounts
    
 
(2,895
)
  
 
(3,466
)
  
 
(2,921
)
                              
                              
                              
                              
Fixed assets
    
 
1,217,210
 
  
 
1,170,832
 
  
 
1,087,105
 
Tangible fixed assets
    
 
583,016
 
  
 
584,064
 
  
 
577,512
 
Buildings
    
 
168,358
 
  
 
169,469
 
  
 
169,411
 
Machinery and equipment
    
 
93,153
 
  
 
95,943
 
  
 
95,715
 
Land
    
 
242,710
 
  
 
234,658
 
  
 
231,632
 
Other
    
 
78,794
 
  
 
83,992
 
  
 
80,752
 
Intangible fixed assets
    
 
3,467
 
  
 
3,163
 
  
 
2,751
 
Investments and others
    
 
630,727
 
  
 
583,604
 
  
 
506,841
 
Investment securities
    
 
471,267
 
  
 
436,422
 
  
 
376,269
 
Other investments
    
 
178,911
 
  
 
166,849
 
  
 
149,695
 
Allowance for doubtful accounts
    
 
(19,451
)
  
 
(19,668
)
  
 
(19,123
)
      


  


  


Total assets
    
¥
2,000,853
 
  
¥
1,937,805
 
  
¥
1,825,691
 
      


  


  



Explanatory note:    The amounts described above disregard figures of less than one million yen.

12


Table of Contents
 
      
Yen
(milions)

Liabilities and Stockholders’ Equity

    
September 30, 2002

    
March 31, 2002

      
September 30, 2001

Current liabilities
    
¥
500,231
 
  
¥
523,785
 
    
¥
486,433
Notes/accounts payable
    
 
293,055
 
  
 
294,035
 
    
 
269,483
Short-term bank loans
    
 
626
 
  
 
123
 
    
 
30,131
Accrued expenses
    
 
89,396
 
  
 
113,306
 
    
 
84,771
Accrued product warranty
    
 
43,078
 
  
 
38,028
 
    
 
31,095
Accrued employees’ bonuses
    
 
31,440
 
  
 
35,107
 
    
 
31,628
Other
    
 
42,634
 
  
 
43,184
 
    
 
39,323
Fixed liabilities
    
 
91,079
 
  
 
71,372
 
    
 
59,504
Long-term bank loans
    
 
949
 
  
 
1,045
 
    
 
1,097
Reserve for product warranties
    
 
30,444
 
  
 
27,766
 
    
 
25,011
Accrued employees’ retirement benefits
    
 
49,474
 
  
 
33,237
 
    
 
24,053
Other
    
 
10,212
 
  
 
9,323
 
    
 
9,343
      


  


    

Total liabilities
    
 
591,311
 
  
 
595,157
 
    
 
545,938
      


  


    

Common stock
    
 
86,067
 
  
 
86,067
 
    
 
86,067
Capital surplus
    
 
168,912
 
  
 
168,912
 
    
 
163,829
Retained earnings (including legal reserves)
    
 
1,138,572
 
  
 
1,061,853
 
    
 
1,005,505
Unrealized gains on securities available for sale
    
 
25,606
 
  
 
25,864
 
    
 
24,351
Treasury stock
    
 
(9,616
)
  
 
(49
)
    
 
—  
      


  


    

Total stockholders’ equity
    
 
1,409,541
 
  
 
1,342,648
 
    
 
1,279,753
      


  


    

Total liabilities and stockholders’ equity
    
¥
2,000,853
 
  
¥
1,937,805
 
    
¥
1,825,691
      


  


    


Note:
 
Reclassifications on stockholders’ equity have been made to the prior periods-end to conform to the Amended Regulations Concerning the Terms, Forms and Methods of Preparation of Semi-annual Financial Statements, Etc.

13


Table of Contents
 
UNCONSOLIDATED STATEMENTS OF INCOME
 
For the six months ended September 30, 2002 and 2001
and forecasts for fiscal year ending March 31, 2003
Honda Motor Co., Ltd.
    
Yen
(millions)

                    
FORECASTS*

      
Six months
ended
September 30, 2002

    
Six months
ended
September 30, 2001

    
Fiscal year
ending
March 31, 2003

Ordinary profit and loss:
                          
Operating profit and loss:
                          
Operating revenue:
                          
Net sales
    
¥
1,625,558
 
  
¥
1,551,914
 
  
¥
3,300,000
Operating expenses:
                          
Cost of sales
    
 
1,108,036
 
  
 
1,066,789
 
      
Selling, general and administrative expenses
    
 
451,359
 
  
 
402,137
 
      
      


  


      
Operating profit
    
 
66,162
 
  
 
82,987
 
      
      


  


      
Non-operating profit
    
 
62,837
 
  
 
47,655
 
      
Non-operating expenses
    
 
8,238
 
  
 
10,619
 
      
      


  


      
Ordinary profit
    
 
120,762
 
  
 
120,023
 
  
 
225,000
      


  


      
Extraordinary profit
    
 
1,474
 
  
 
91
 
      
Extraordinary loss
    
 
4,108
 
  
 
31,528
 
      
      


  


      
Income before income taxes
    
 
118,128
 
  
 
88,585
 
      
      


  


      
Income taxes:
                          
Current
    
 
51,883
 
  
 
52,922
 
      
Deferred
    
 
(25,469
)
  
 
(30,246
)
      
      


  


      
Net income
    
 
91,714
 
  
 
65,910
 
  
 
165,000
      


  


      
Unappropriated retained earnings at beginning of period
    
 
32,366
 
  
 
10,706
 
      
      


  


      
Unappropriated retained earnings at end of period
    
¥
124,081
 
  
¥
76,617
 
      
      


  


      

Explanatory note:    The amounts described above disregard figures of less than one million yen.
*
 
These forecasts are based on the assumption that the exchange rates for the yen to the U.S. dollar and the euro for the current fiscal year will average and respectively. This announcement contains forward-looking statements within the meaning of Section 21E of the U.S. Securities Exchange Act of 1934. Honda’s actual results could materially differ from those contained in these forward-looking statements as a result of numerous factors outside of Honda’s control. Such factors include general economic conditions in Honda’s principal markets, and foreign exchange rates between the Japanese yen and other major currencies, as well as other factors detailed from time to time in Honda’s reports filed with the U.S. Securities and Exchange Commission.

14


Table of Contents
 
COMMON STOCK INFORMATION
 
As of September 30, 2002
Honda Motor Co., Ltd.

         
Number of shares authorized to be issued
  
3,600,000,000 shares
Number of shares issued and outstanding
  
   974,414,215 shares
Number of stockholders
  
55,053
Share prices (closing prices on the Tokyo Stock Exchange)
  
High
  
 
¥5,990 (May 2002)
    
Low
  
 
¥4,620 (September 2002)
    
Close
  
 
¥4,930 (September 30, 2002)
    
 
BREAKDOWN OF STOCKHOLDERS
 
As of September 30, 2002
Honda Motor Co., Ltd.

  
Number of stockholders

  
Number of shares held (thousands)

Individuals and others
  
53,074
  
66,676
Financial institutions
  
299
  
536,244
Securities companies
  
42
  
2,009
Domestic companies and others
  
705
  
104,209
Foreign institutions and individuals
  
932
  
263,341
Treasury stock
  
1
  
1,932
    
  
Total
  
55,053
  
974,414
    
  

Explanatory notes: 
  
1.    The number of shares described above disregard figures of less than one thousand shares.
    
2.    Individuals and others include shares of treasury stock.
    
3.    Domestic companies and others include shares of the Japan Securities Depository Center.
 
PRINCIPAL STOCKHOLDERS
 
As of September 30, 2002
Honda Motor Co., Ltd.

  
Number of
shares held (thousands)

  
%

The Bank of Tokyo-Mitsubishi, Ltd.
  
47,066
  
4.9
UFJ Bank, Limited
  
40,429
  
4.2
The Tokio Marine & Fire Insurance Co., Ltd.
  
37,635
  
3.9
The Master Trust Bank of Japan, Ltd.
  
36,880
  
3.8
Japan Trustee Services Bank, Ltd.
  
35,235
  
3.7
State Street Bank and Trust Company, N.A.
  
32,884
  
3.4
The Mitsubishi Trust & Banking Corp.
  
31,845
  
3.3
Meiji Life Insurance Company
  
28,444
  
2.9
The Chase Manhattan Bank, N.A., London
  
24,932
  
2.6
UFJ Trust Bank, Limited
  
23,860
  
2.5
    
  

Explanatory notes:
  
1.    The number of shares described above disregard figures of less than one thousand shares.
    
2.    Number of shares of the Company’s common stock held by The Master Trust Bank of Japan, Ltd., Japan
       Trustee Services Bank, Ltd., and UFJ Trust Bank, Limited are owned exclusively in connection with their
       trust businesses.
    
3.    State Street Bank and Trust Company, N.A. and The Chase Manhattan Bank, N.A., London conduct custody
       services of the Company’s common stock mainly owned by institutional investors in Europe and the  United
       States and are also nominees of shares of the Company’s common stock held by such institutional  investors.

15


Table of Contents
 
FIVE-YEAR FINANCIAL RESULTS (UNCONSOLIDATED)
 
For the years ended March 31, 1999, 2000, 2001 and 2002
and the six months ended September 30, 2002
Honda Motor Co., Ltd.

  
Year ended March 31, 1999

    
Year ended March 31, 2000

    
Year ended March 31, 2001

    
Year ended March 31, 2002

      
Six months
ended September 30, 2002

 
Net sales (¥ millions)
  
¥
2,962,170
 
  
¥
2,919,840
 
  
¥
3,042,022
 
  
¥
3,211,186
 
    
¥
1,625,558
 
Ordinary profit (¥ millions)
  
 
259,787
 
  
 
201,440
 
  
 
137,374
 
  
 
218,987
 
    
 
120,762
 
Net income (¥ millions)
  
 
135,944
 
  
 
135,322
 
  
 
11,326
 
  
 
134,925
 
    
 
91,714
 
Net income per common share (¥)
  
 
139.51
 
  
 
138.88
 
  
 
11.62
 
  
 
138.47
 
    
 
94.17
 
Total assets (¥ millions)
  
 
1,656,243
 
  
 
1,758,588
 
  
 
1,765,814
 
  
 
1,937,805
 
    
 
2,000,853
 
Stockholders’ equity (¥ millions)
  
 
1,065,359
 
  
 
1,212,899
 
  
 
1,236,686
 
  
 
1,342,648
 
    
 
1,409,541
 
Stockholders’ equity per common
share (¥)
  
 
1,093.33
 
  
 
1,244.75
 
  
 
1,269.16
 
  
 
1,377.92
 
    
 
1,449.43
 
Common stock (¥ millions)
  
 
86,067
 
  
 
86,067
 
  
 
86,067
 
  
 
86,067
 
    
 
86,067
 
Stockholders’ equity ratio (%)
  
 
64.3
%
  
 
69.0
%
  
 
70.0
%
  
 
69.3
%
    
 
70.4
%
    


  


  


  


    



Explanatory notes:
1.
 
The amounts over one million yen described above disregard figures of less than one million yen.
2.
 
Net income per common share is calculated according to the average number of issued shares during the interim term, and stockholders’ equity per common share is calculated based on shares issued at fiscal term-end. The number of issued shares for this calculation had included the number of treasury stock prior to the fiscal year ended March 31, 2001, whereas the number of treasury stock has been excluded from the calculation after the fiscal year ended March 31, 2002.

16


Table of Contents
BOARD OF DIRECTORS
 
 
As of September 30, 2002
 
Chairman and Representative Director
Yoshihide Munekuni
 
President and Representative Director
Hiroyuki Yoshino
 
Executive Vice President and Representative Director
Koichi Amemiya
 
Senior Managing and Representative Directors
Katsuro Suzuki
Takeo Fukui
Michiyoshi Hagino
Minoru Harada
Motoatsu Shiraishi
Satoshi Aoki
 
Managing Directors
Atsuyoshi Hyogo
Hiroshi Okubo
Satoshi Dobashi
Satoshi Toshida
Koki Hirashima
Koichi Kondo
Yasuo Ikenoya
Toru Onda



 
Directors
Satoru Kishi
Akira Takano
Mikio Yoshimi
Masaaki Kato
Shigeru Takagi
Masahiro Yoshimura
Toshio Saito
Hiroshi Kuroda
Akio Hamada
Teruo Kowashi
Seiichi Moriguchi
Tetsuo Iwamura
Takashi Yamamoto
Takanobu Ito
Masaru Takabayashi
Tatsuhiro Oyama
Suguru Kanazawa
Manabu Nishimae
 
Director and Advisor
Nobuhiko Kawamoto
 
Corporate Auditors
Kunihiro Chujo*
Kenichi Takashima*
Koji Miyajima
Yasuharu Yabuta
 
* Full-time service auditor
 

17


Table of Contents
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
LOGO

Printed in Japan


Table of Contents
 
Semi annual report on a consolidated basis for the first-half term
(Six months ended September 30, 2002) of the 79th fiscal period
 
 

 
(This is a translation of summary information of the semi annual report in
the Japanese language, which is contained in “ Hanki Houkokusho”. (Semi
annual report) issued in December, 2002)
 

 
 
HONDA MOTOR CO., LTD
(HONDA GIKEN KOGYO KABUSHIKI KAISHA)
TOKYO, JAPAN


Table of Contents
 
HONDA MOTOR CO., LTD. AND SUBSIDIARIES
 
Consolidated Financial Statements
 
September 30, 2002


Table of Contents
 
HONDA MOTOR CO., LTD. AND SUBSIDIARIES
 
Consolidated Balance Sheets
 
September 30, 2001 and 2002 and March 31, 2002
 
    
Yen (millions)

    
September 30, 2001

  
September 30, 2002

  
March 31, 2002

Assets
                    
Current assets:
                    
Cash and cash equivalents
  
¥
465,706
  
¥
518,408
  
¥
609,441
Trade accounts and notes receivable, net of allowance for doubtful accounts of ¥8,559 million in September 30, 2001, ¥7,310 million in September 30, 2002 and ¥8,662 million in March 31, 2002
  
 
368,947
  
 
332,185
  
 
452,208
Finance subsidiaries-receivables, net (note 2)
  
 
767,479
  
 
980,852
  
 
995,087
Inventories (note 3)
  
 
640,223
  
 
670,268
  
 
644,282
Deferred income taxes
  
 
180,741
  
 
205,290
  
 
182,788
Other current assets
  
 
178,952
  
 
227,826
  
 
204,538
    

  

  

Total current assets
  
 
2,602,048
  
 
2,934,829
  
 
3,088,344
    

  

  

Finance subsidiaries-receivables, net (note 2)
  
 
1,564,031
  
 
2,024,071
  
 
1,808,861
Investments and advances:
                    
Investments in and advances to affiliates
  
 
219,934
  
 
249,877
  
 
249,959
Other, including marketable equity securities (note 4)
  
 
145,044
  
 
145,261
  
 
145,536
    

  

  

Total investments and advances
  
 
364,978
  
 
395,138
  
 
395,495
    

  

  

Property, plant and equipment, at cost (note 5):
                    
Land
  
 
304,136
  
 
336,708
  
 
318,208
Buildings
  
 
839,359
  
 
912,139
  
 
920,106
Machinery and equipment
  
 
1,883,224
  
 
2,018,426
  
 
2,048,244
Construction in progress
  
 
145,418
  
 
96,542
  
 
82,610
    

  

  

    
 
3,172,137
  
 
3,363,815
  
 
3,369,168
Less accumulated depreciation
  
 
1,894,853
  
 
1,987,880
  
 
1,979,455
    

  

  

Net property, plant and equipment
  
 
1,277,284
  
 
1,375,935
  
 
1,389,713
    

  

  

Other assets
  
 
174,190
  
 
241,612
  
 
258,382
    

  

  

Total assets
  
¥
5,982,531
  
¥
6,971,585
  
¥
6,940,795
    

  

  


Table of Contents
 
HONDA MOTOR CO., LTD. AND SUBSIDIARIES
 
Consolidated Balance Sheets
 
September 30, 2001 and 2002 and March 31, 2002
 
    
Yen (millions)

 
    
September 30, 2001

    
September 30, 2002

    
March 31, 2002

 
Liabilities and Stockholders’ Equity
                          
Current liabilities:
                          
Short-term debt (note 5)
  
¥
1,068,122
 
  
¥
937,819
 
  
¥
1,035,069
 
Current portion of long-term debt (note 5)
  
 
361,388
 
  
 
142,231
 
  
 
308,014
 
Trade payables:
                          
Notes
  
 
29,378
 
  
 
24,736
 
  
 
26,009
 
Accounts
  
 
693,778
 
  
 
750,848
 
  
 
814,948
 
Accrued expenses
  
 
574,890
 
  
 
719,596
 
  
 
678,118
 
Income taxes payable
  
 
110,823
 
  
 
66,269
 
  
 
61,244
 
Other current liabilities
  
 
136,550
 
  
 
232,643
 
  
 
186,657
 
    


  


  


Total current liabilities
  
 
2,974,929
 
  
 
2,874,142
 
  
 
3,110,059
 
    


  


  


Long-term debt (note 5)
  
 
344,271
 
  
 
953,833
 
  
 
716,614
 
Other liabilities (note 6)
  
 
323,792
 
  
 
550,260
 
  
 
540,181
 
    


  


  


Total liabilities
  
 
3,642,992
 
  
 
4,378,235
 
  
 
4,366,854
 
    


  


  


Stockholders’ equity:
                          
Common stock, authorized 3,600,000,000 shares ; issued 974,414,215 shares at September 30, 2001 and 2002 and March 31, 2002
  
 
86,067
 
  
 
86,067
 
  
 
86,067
 
Capital surplus
  
 
172,529
 
  
 
172,529
 
  
 
172,529
 
Legal reserves
  
 
28,377
 
  
 
29,012
 
  
 
28,969
 
Retained earnings
  
 
2,589,892
 
  
 
2,945,720
 
  
 
2,765,600
 
Accumulated other comprehensive income (loss) (notes 4 and 8)
  
 
(537,326
)
  
 
(630,362
)
  
 
(479,175
)
Treasury stock, at cost 1,932,337 shares and 10,036 shares at September 30, 2002 and March 31, 2002
  
 
—  
 
  
 
(9,616
)
  
 
(49
)
    


  


  


Total stockholders’ equity
  
 
2,339,539
 
  
 
2,593,350
 
  
 
2,573,941
 
Commitments and contingent liabilities (notes 11 and 12)
                          
    


  


  


Total liabilities and stockholders’ equity
  
¥
5,982,531
 
  
¥
6,971,585
 
  
¥
6,940,795
 
    


  


  



Table of Contents
 
HONDA MOTOR CO., LTD. AND SUBSIDIARIES
 
Consolidated Statements of Income
 
For the 6 months ended September 30, 2001 and 2002 and the year ended March 31, 2002
 
 
    
Yen (millions)

    
September 30, 2001

    
September 30, 2002

    
March 31, 2002

Net sales and other operating revenue
  
¥
3,504,996
 
  
¥
3,853,611
 
  
¥
7,362,438
Operating costs and expenses:
                        
Cost of sales
  
 
2,405,537
 
  
 
2,614,864
 
  
 
5,036,188
Selling, general and administrative
  
 
601,468
 
  
 
701,855
 
  
 
1,291,778
Research and development
  
 
182,754
 
  
 
213,023
 
  
 
395,176
    


  


  

    
 
3,189,759
 
  
 
3,529,742
 
  
 
6,723,142
    


  


  

Operating income
  
 
315,237
 
  
 
323,869
 
  
 
639,296
Other income:
                        
Interest
  
 
4,056
 
  
 
4,093
 
  
 
7,445
Other
  
 
1,167
 
  
 
5,541
 
  
 
1,898
    


  


  

    
 
5,223
 
  
 
9,634
 
  
 
9,343
    


  


  

Other expenses (note 1(q)):
                        
Interest
  
 
8,765
 
  
 
6,377
 
  
 
16,769
Other
  
 
41,708
 
  
 
53,425
 
  
 
80,528
    


  


  

    
 
50,473
 
  
 
59,802
 
  
 
97,297
    


  


  

Income before income taxes and equity in
income of affiliates
  
 
269,987
 
  
 
273,701
 
  
 
551,342
Income taxes:
                        
Current
  
 
157,604
 
  
 
115,897
 
  
 
223,064
Deferred
  
 
(44,278
)
  
 
(8,713
)
  
 
8,086
    


  


  

    
 
113,326
 
  
 
107,184
 
  
 
231,150
    


  


  

Income before equity in income of affiliates
  
 
156,661
 
  
 
166,517
 
  
 
320,192
Equity in income of affiliates
  
 
17,079
 
  
 
28,262
 
  
 
42,515
    


  


  

Net income
  
¥
173,740
 
  
¥
194,779
 
  
¥
362,707
    


  


  

    
Yen

    
September 30, 2001

    
September 30, 2002

    
March 31, 2002

Basic net income per common share (note 1(o)):
                        
    
¥
178.30
 
  
¥
199.98
 
  
¥
372.23
    


  


  

 
See accompanying notes to consolidated financial statements.


Table of Contents
 
HONDA MOTOR CO., LTD. AND SUBSIDIARIES
 
Consolidated Statements of Stockholders’ Equity
 
For the 6 months ended September 30, 2001 and 2002 and the year ended March 31, 2002
 
    
Yen (millions)

 
    
September 30, 2001

    
September 30, 2002

    
March 31, 2002

 
Common stock:
                          
Balance at beginning of the period
  
¥
86,067
 
  
¥
86,067
 
  
¥
86,067
 
    


  


  


Balance at end of the period
  
 
86,067
 
  
 
86,067
 
  
 
86,067
 
    


  


  


Capital surplus:
                          
Balance at beginning of the period
  
 
172,529
 
  
 
172,529
 
  
 
172,529
 
    


  


  


Balance at end of the period
  
 
172,529
 
  
 
172,529
 
  
 
172,529
 
    


  


  


Legal reserves:
                          
Balance at beginning of the period
  
 
27,929
 
  
 
28,969
 
  
 
27,929
 
Transfer from retained earnings
  
 
448
 
  
 
43
 
  
 
1,040
 
    


  


  


Balance at end of the period
  
 
28,377
 
  
 
29,012
 
  
 
28,969
 
    


  


  


Retained earnings:
                          
Balance at beginning of the period
  
 
2,428,293
 
  
 
2,765,600
 
  
 
2,428,293
 
Net income for the period
  
 
173,740
 
  
 
194,779
 
  
 
362,707
 
Cash dividends
  
 
(11,693
)
  
 
(14,616
)
  
 
(24,360
)
Transfer to legal reserves
  
 
(448
)
  
 
(43
)
  
 
(1,040
)
    


  


  


Balance at end of the period
  
 
2,589,892
 
  
 
2,945,720
 
  
 
2,765,600
 
    


  


  


Accumulated other comprehensive income (loss):
                          
(notes 4 and 8)
                          
Balance at beginning of the period
  
 
(484,527
)
  
 
(479,175
)
  
 
(484,527
)
Other comprehensive income (loss) for the period, net of tax
  
 
(52,799
)
  
 
(151,187
)
  
 
5,352
 
    


  


  


Balance at end of the period
  
 
(537,326
)
  
 
(630,362
)
  
 
(479,175
)
    


  


  


Treasury stock:
                          
Balance at beginning of the period
  
 
—  
 
  
 
(49
)
  
 
—  
 
Purchase of treasury stock
  
 
—  
 
  
 
(9,567
)
  
 
(49
)
    


  


  


Balance at end of the period
  
 
—  
 
  
 
(9,616
)
  
 
(49
)
    


  


  


Total stockholders’ equity
  
¥
2,339,539
 
  
¥
2,593,350
 
  
¥
2,573,941
 
    


  


  


Disclosure of comprehensive income:
                          
Net income for the period
  
¥
173,740
 
  
¥
194,779
 
  
¥
362,707
 
Other comprehensive income (loss) for the period, net of tax (notes 4 and 8)
  
 
(52,799
)
  
 
(151,187
)
  
 
5,352
 
    


  


  


Total comprehensive income for the period
  
¥
120,941
 
  
¥
43,592
 
  
¥
368,059
 
    


  


  


 
See accompanying notes to consolidated financial statements.


Table of Contents
 
HONDA MOTOR CO., LTD. AND SUBSIDIARIES
 
Consolidated Statements of Cash Flows
 
For the 6 months ended September 30, 2001 and 2002 and the year ended March 31, 2002
 
    
Yen (millions)

 
    
September 30, 2001

    
September 30, 2002

    
March 31, 2002

 
Cash flows from operating activities (note 7):
                          
Net income
  
¥
173,740
 
  
¥
194,779
 
  
¥
362,707
 
Adjustments to reconcile net income to net cash provided by operating activities:
                          
Depreciation
  
 
89,858
 
  
 
102,105
 
  
 
194,944
 
Deferred income taxes
  
 
(44,278
)
  
 
(8,713
)
  
 
8,086
 
Equity in income of affiliates
  
 
(17,079
)
  
 
(28,262
)
  
 
(42,515
)
Provision for credit and lease residual losses on finance subsidiaries-receivables
  
 
10,143
 
  
 
14,443
 
  
 
22,139
 
Loss on derivative instruments and related others
  
 
30,576
 
  
 
43,462
 
  
 
21,740
 
Decrease (increase) in assets:
                          
Trade accounts and notes receivable
  
 
61,630
 
  
 
97,858
 
  
 
5,539
 
Inventories
  
 
(36,773
)
  
 
(62,948
)
  
 
10,191
 
Other current assets
  
 
1,609
 
  
 
(82,642
)
  
 
69,243
 
Other assets
  
 
(21,826
)
  
 
(11,079
)
  
 
(28,577
)
Increase (decrease) in liabilities:
                          
Trade payables
  
 
(81,018
)
  
 
(26,445
)
  
 
(14,101
)
Accrued expenses
  
 
50,671
 
  
 
82,292
 
  
 
75,772
 
Income taxes payable
  
 
73,172
 
  
 
6,315
 
  
 
20,551
 
Other current liabilities
  
 
(42,161
)
  
 
24,093
 
  
 
(41,717
)
Other liabilities
  
 
17,739
 
  
 
4,898
 
  
 
59,762
 
Other, net
  
 
2,328
 
  
 
22,073
 
  
 
26,186
 
    


  


  


Net cash provided by operating activities
  
 
268,331
 
  
 
372,229
 
  
 
749,950
 
Cash flows from investing activities:
                          
Decrease in investments and advances
  
 
4,082
 
  
 
11,785
 
  
 
476
 
Capital expenditures
  
 
(133,092
)
  
 
(133,290
)
  
 
(303,424
)
Proceeds from sales of property, plant and equipment
  
 
6,320
 
  
 
5,517
 
  
 
7,416
 
Acquisitions of finance subsidiaries-receivables
  
 
(1,410,913
)
  
 
(1,735,474
)
  
 
(2,900,128
)
Collections of finance subsidiaries-receivables
  
 
848,506
 
  
 
927,562
 
  
 
1,615,182
 
Proceeds from sales of finance subsidiaries-receivables
  
 
208,669
 
  
 
390,351
 
  
 
693,907
 
    


  


  


Net cash used in investing activities
  
 
(476,428
)
  
 
(533,549
)
  
 
(886,571
)
Cash flows from financing activities :
                          
Increase (decrease) in short-term debt
  
 
196,418
 
  
 
(4,164
)
  
 
5,997
 
Proceeds from long-term debt
  
 
220,501
 
  
 
349,893
 
  
 
624,070
 
Repayment of long-term debt
  
 
(148,345
)
  
 
(229,568
)
  
 
(298,718
)
Cash dividends paid
  
 
(11,693
)
  
 
(14,616
)
  
 
(24,360
)
Increase in commercial paper classified as long-term debt
  
 
391
 
  
 
2,069
 
  
 
649
 
Purchase of treasury stock
  
 
—  
 
  
 
(9,567
)
  
 
—  
 
    


  


  


Net cash provided by financing activities
  
 
257,272
 
  
 
94,047
 
  
 
307,638
 
Effect of exchange rate changes on cash and cash equivalents
  
 
(988
)
  
 
(23,760
)
  
 
20,905
 
    


  


  


Net change in cash and cash equivalents
  
 
48,187
 
  
 
(91,033
)
  
 
191,922
 
Cash and cash equivalents at beginning of year
  
 
417,519
 
  
 
609,441
 
  
 
417,519
 
    


  


  


Cash and cash equivalents at end of year
  
¥
465,706
 
  
¥
518,408
 
  
¥
609,441
 
    


  


  


 
See accompanying notes to consolidated financial statements.
 


Table of Contents

HONDA MOTOR CO., LTD. AND SUBSIDIARIES
 
Notes to Consolidated Financial Statements

For the 6 months ended September 30, 2001 and 2002 and the year ended March 31, 2002
 
(1)
 
General and Summary of Significant Accounting Policies
 
 
(a)
 
Financial Statements
The accompanying consolidated financial statements have been prepared in accordance with accounting principles generally accepted in the United States of America. In the opinion of management, all adjustments which are necessary for a fair presentation have been included. The results for interim periods are not necessarily indicative of results which may be expected for any other interim period or for the year. For further information, refer to the March 31, 2002 consolidated financial statements and notes thereto included in Honda Motor Co., Ltd. and Subsidiaries Annual Report for the year ended March 31, 2002. Consolidated financial statements ended March 31, 2002 are audited while consolidated financial statements ended September 30, 2001 and 2002 are unaudited.
 
 
(b)
 
Description of Business
Honda Motor Co., Ltd. (the “Company”) and its subsidiaries (collectively “Honda”) develop, manufacture, distribute and provide financing for the sale of its motorcycles, automobiles and power products. Honda’s manufacturing operations are principally conducted in 25 separate factories, 5 of which are located in Japan. Principal overseas manufacturing facilities are located in the United States of America, Canada, the United Kingdom, France, Italy, Spain, India, Pakistan, the Philippines, Thailand, Vietnam, Brazil and Mexico.
 
Net sales and other operating revenue by category of activity for the 6 months ended September 30, 2002 were derived from: motorcycle business 12.9%, automobile business 80.2%, financial services 3.0%, and other businesses 3.9%. Operating income by category of activity for the 6 months ended September 30, 2002 was derived from: motorcycle business 11.5%, automobile business 76.1%, financial services 10.3%, and other businesses 2.1%.
 
Honda sells motorcycles, automobiles and power products in most countries in the world. For the 6 months ended September 30, 2002, 74.3% of net sales and other operating revenue (¥2,864,466 million) was derived from subsidiaries operating outside Japan (2001: ¥2,481,798 million). Net sales and other operating revenue for the 6 months ended September 30, 2002 was geographically broken down based on the location of customers as follows: Japan 22.8%, North America 56.6%, Europe 8.2%, and others 12.4%. For the 6 months ended September 30, 2002, 69.3% of operating income (¥224,377 million) was generated from foreign subsidiaries, disregarding the effect of elimination of unrealized profits between domestic operations and foreign operations (2001: ¥206,229 million).
 
 
(c)
 
Basis of Presenting Consolidated Financial Statements
The Company and its domestic subsidiaries maintain their books of account in conformity with financial accounting standards of Japan, and its foreign subsidiaries generally maintain their books of account in conformity with those of the countries of their domicile.
 
The consolidated financial statements presented herein have been prepared in a manner and reflect the adjustments which are necessary to conform them with accounting principles generally accepted in the United States of America.
 
(Continued)
 


Table of Contents

HONDA MOTOR CO., LTD. AND SUBSIDIARIES
 
Notes to Consolidated Financial Statements

 
(d)
 
Consolidation Policy
The consolidated financial statements include the accounts of the Company and its subsidiaries. All significant intercompany balances and transactions have been eliminated in consolidation. The investments in 20% to 50% owned affiliates are stated at their underlying equity value.
 
Minority interests in net assets and income are not significant and, accordingly, are not presented separately in the accompanying consolidated balance sheets and statements of income.
 
 
(e)
 
Use of Estimates
Management of Honda has made a number of estimates and assumptions relating to the reporting of assets, liabilities, revenues and expenses, and the disclosure of contingent assets and liabilities to prepare these consolidated financial statements in conformity with accounting principles generally accepted in the United States of America. Actual results could differ from those estimates.
 
 
(f)
 
Revenue Recognition
Sales of manufactured products are recognized when persuasive evidence of an arrangement including title transfer exists, delivery has occurred, the sales price is fixed or determinable, and collectibility is probable. Provisions for dealer sales allowances are normally recognized as sales reductions at the time of sale.
 
Interest income from finance receivables is recognized using the interest method. Finance receivable origination fees and certain direct origination costs are deferred, and the net fee or cost is recognized using the interest method over the contractual life of the finance receivables.
 
Finance subsidiaries of the Company periodically sell finance receivables. Gain or loss is recognized equal to the difference between the cash proceeds received and the carrying value of the receivables sold and is recorded in the period in which the sale occurs. Honda allocates the recorded investment in finance receivables between the portion(s) of the receivables sold and portion(s) retained based on the relative fair values of those portions on the date the receivables are sold. Honda recognizes gains or losses attributable to the change in the fair value of the retained interests, which are recorded at estimated fair value and accounted for as “trading” securities. Honda determines the value of the retained interest by discounting the future cash flows. Those cash flows are net of estimated credit losses and are discounted at a rate which Honda believes is commensurate with the risks involved. A servicing asset or liability is amortized in proportion to and over the period of estimated net servicing income. Servicing assets and servicing liabilities at September 30, 2001 and 2002 and March 31, 2002 were not significant.
 
 
(g)
 
Cash Equivalents
Honda considers all highly liquid debt instruments with an original maturity of three months or less to be cash equivalents.
 
(Continued)
 

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Table of Contents

HONDA MOTOR CO., LTD. AND SUBSIDIARIES
 
Notes to Consolidated Financial Statements

 
 
(h)
 
Inventories
Inventories are stated at the lower of cost, determined principally by the first-in, first-out method, or market.